Broadstuff Blog

Interesting essay by Rolf Dobelli on the behavioural issues with news, especially in the light of the "future of quality news" angst I heard at the Financial Times conference this week. Essentially he argues that News is to the mind what sugar is to the body, and that our human conditioning to react to Scary! Now! is the opposite of what the world needs now, but news is sugar for our cave-brains, feeding us small bites of trivial matter, tidbits that don’t really concern our lives and don’t require thinking. He argues that unlike reading books and long, deep magazine articles (which requires thinking), we can "swallow limitless quantities of news flashes, like bright-colored candies for the mind." He argues that the following are the main problems (I have summarised for you short-attention spanned news junkies....):

No 1 – News misleads us systematically
News reports do not represent the real world. Our brains are wired to pay attention to visible, large, scandalous, sensational, shocking, people-related, story-formatted, fast changing, loud, graphic onslaughts of stimuli. Our brains have limited attention to spend on more subtle pieces of intelligence that are small, abstract, ambivalent, complex, slow to develop and quiet, much less silent. News organizations systematically exploit this bias. News media outlets, by and large, focus on the highly visible. They display whatever information they can convey with gripping stories and lurid pictures, and they systematically ignore the subtle and insidious, even if that material is more important. News grabs our attention; that’s how its business model works. Even if the advertising model didn’t exist, we would still soak up news pieces because they are easy to digest and superficially quite tasty.


No 2 – News is irrelevant
Out of the approximately 10,000 news stories you have read in the last 12 months, name one that – because you consumed it – allowed you to make a better decision about a serious matter affecting your life, your career, your business – compared to what you would have known if you hadn’t swallowed that morsel of news. The point is: the consumption of news is irrelevant to the forces that really matter in your life. At its best, it is entertaining, but it is still irrelevant.


No 3 – News limits understanding
News has no explanatory power. News items are little bubbles popping on the surface of a deeper world. News organizations pride themselves on correctly reporting the facts, but the facts that they prize are just epiphenomena of deeper causes. Both news organizations and news consumers mistake knowing a litany of facts for understanding the world. It’s not “news facts” that are important, but the threads that connect them. What we really want is
to understand the underlying processes, how things happen..... ....[But this is] complex, non-linear and hard for our (and the journalists’) brains to digest. Why do news organizations go for the light stuff, the anecdotes, scandals, people-stories and pictures? The answer is simple: because they are cheap to produce.


No 4 – News is toxic to your body
News constantly triggers the limbic system. Panicky stories spur the release of cascades of glucocordicoid (cortisol). This deregulates your immune system and inhibits the release of growth hormones. In other words, your body finds itself in a state of chronic stress. High glucocordicoid levels cause impaired digestion, lack of growth (cell, hair, bone), nervousness and susceptibility to infections. News consumers risk impairing their physical health. The other potential side effects of news include fear, aggression, tunnel-vision and desensitization.


No 5 – News massively increases cognitive errors
News feeds the mother of all cognitive errors: confirmation bias. We automatically, systematically filter out evidence that contradicts our preconceptions in favor of evidence that confirms our beliefs. In the words of Warren Buffett: “What the human being is best at doing is interpreting all new information so that their prior conclusions remain intact.” That is the confirmation bias. News consumption, especially customized news intake, exacerbates this human flaw. The result is that we walk around in a cloud of seemingly confirming data – even when our theories about the world and ourselves may be wrong. We become prone to overconfidence, take stupid risks and misjudge opportunities. News not only feeds the confirmation bias, it exacerbates another cognitive error: the story bias. Our brains crave stories that “make sense” – even if they don’t correspond to reality. And news organizations are happy to deliver those fake stories.

No 6 – News inhibits thinking
Thinking requires concentration. Concentration requires uninterrupted time. News items are like free-floating radicals that interfere with clear thinking. News pieces are specifically engineered to interrupt you. They are like viruses that steal attention for their own purposes. This is not about stealing time (see reason . This is about the inability to think clearly because you have opened yourself up to the disruptive factoid stream.
News makes us shallow thinkers.


No 7 – News changes the structure of your brain
News works like a drug. As stories develop, we naturally want to know how they continue. With hundreds of arbitrary story lines in our heads, this craving is increasingly compelling and hard to ignore.
Why is news addictive? Once you get into the habit of checking the news, you are driven to check it even more often. Your attention is set on fast-breaking events, so you hunger for more data about them. This has to do with a process called “long-term potentiation” (LTP) and the reward circuits in your brain.

No 8 – News is costly
News wastes time. It exacts exorbitant costs. News taxes productivity three ways.
- First, count the consumption-time that news demands. That’s the time you actually waste reading, listening to or watching the news.
- Second, tally up the refocusing time – or switching cost. That’s the time you waste trying to get back to what you were doing before the news interrupted you. You have to collect your thoughts. What were you about to do? Every time you disrupt your work to check the news, reorienting yourself wastes more time.
- Third, news distracts us even hours after we’ve digested today’s hot items. News stories and images may pop into your mind hours, sometimes days later, constantly interrupting your train of thought. Why would you want to do that to yourself?

No 9 – News sunders the relationship between reputation and achievement
Reputation affects how people cooperate in society. In our ancestral past, a person’s reputation was directly linked to his or her achievements. You saw that your fellow tribe member killed a tiger single handedly and you spread word of his bravery. With the advent of mass-produced news, the strange concept of “fame” entered our society. Fame is misleading because generally people become famous for reasons that have little relevance to our lives. The media grants fame to movie stars and news anchors for scant reason. News sunders the relationship between reputation and achievement. The tragedy is that pop notoriety crowds out the achievements of those who make more substantive contributions.


No 10 – News is produced by journalists
Good professional journalists take time with their stories, authenticate their facts and try to think things through. But like any profession, journalism has some incompetent, unfair practitioners who don’t have the time – or the capacity – for deep analysis. You might not be able to tell the difference between a polished professional report and a rushed, glib, paid-by-the-piece article by a writer with an ax to grind. It all looks like news. My estimate: fewer than 10% of the news stories are original. Less than 1% are truly investigative. And only once every 50 years do journalists uncover a Watergate


No 11 – Reported facts are sometimes wrong, forecasts always
Sometimes, reported facts are simply mistaken. With reduced editorial budgets at major publications, fact checking may be an endangered step in the news process. The New Yorker magazine is legendary for its fact checking. The story goes that when an article mentioned the Empire State Building, someone from the fact-checking department would go out and visually verify that, in fact, the building was still standing. I don’t know if the story is true, but it highlights a point. Today, the fact checker is an endangered species at most news companies (though still alive and well at The New Yorker). Many news stories include predictions, but accurately predicting anything in a complex world is impossible. Overwhelming evidence indicates that forecasts by journalists and by experts in finance, social development, global conflicts and technology are almost always completely wrong. So, why consume that junk?


No 12 – News is manipulative
Our evolutionary past has equipped us with a good bullshit detector for face-to-face interactions. We automatically use many clues to detect manipulation, clues that go beyond the verbal message and include gesture, facial expression, and signs of nervousness such as sweaty palms, blushing and body odor. Living in small bands of people, we almost always knew the background of the messenger. Information always came with a rich set of meta-data. Today, even conscientious readers find that distinguishing even-handed news stories from ones that have a private agenda is difficult and energy consuming. Why go through that?
Stories are selected or slanted to please advertisers (advertising bias) or the owners of the media (corporate bias), and each media outlet has a tendency to report what everyone else is reporting, and to avoid stories that will offend anyone (mainstream bias).


No 13 – News makes us passive
News stories are overwhelmingly about things you cannot influence. This sets readers up to have a fatalistic outlook on the world. Compare this with our ancestral past, where you could act upon practically every bit of news. Our evolutionary past prepared us to act on information, but the daily repetition of news about things we can’t act upon makes us passive. It saps our energy. It grinds us down until we adopt a worldview that is pessimistic, desensitized, sarcastic and fatalistic.


14 – News gives us the illusion of caring
Kathleen Norris (even if I don’t share most of her ideas) said it best: “We may want to believe that we are still concerned, as our eyes drift from a news anchor announcing the latest atrocity to the NBA scores and stock market quotes streaming across the bottom of the screen. But the ceaseless bombardment of image and verbiage makes us impervious to caring.”


No 15 – News kills creativity
Things we already know limit our creativity. This is one reason that mathematicians, novelists, composers and entrepreneurs often produce their most creative works at a young age. They are oblivious to much that has been tried before. Their brains enjoy a wide, uninhabited space that emboldens them to come up with and pursue novel ideas.
He notes that The public relations (PR) industry is as large as the news reporting industry – the best proof that journalists and news organizations can be manipulated, or at least influenced or swayed, and also writes that "I don’t know a single truly creative mind who is a news junkie – not a writer, not a composer, mathematician, physician, scientist, musician, designer, architect or painter. On the other hand, I know a whole bunch of viciously uncreative minds who consume news like drugs."

So What to do - how do you wean yourself off News? Dobrell suggests the best approach is Do Without, go without news, go cold turkey. However he relents a bit, and suggests a methadone method:

If you want to keep the illusion of “not missing anything important”, I suggest you glance through the summary page of the Economist once a week. Don’t spend more than five minutes on it.
Read magazines and books which explain the world – Science, Nature, The New Yorker, The Atlantic Monthly. Go for magazines that connect the dots and don’t shy away from presenting the complexities of life – or from purely entertaining you. The world is complicated, and we can do nothing about it. So, you must read longish and deep articles and books that represent its complexity. Try reading a book a week. Better two or three. History is good. Biology. Psychology. That way you’ll learn to understand the underlying mechanisms of the world. Go deep instead of broad. Enjoy material that truly interests you. Have fun reading.

And as with all changes of diet, the first week is the hardest, but persevere:

Deciding not to check the news while you are thinking, writing or reading takes discipline. You are fighting your brain’s built-in tendency. Initially, you will feel out of touch or even socially isolated. Every day you will be tempted to check your favorite news Web site. Go 30 days without news. After 30 days, you will have a more relaxed attitude toward the news. You will find that you have more time, more concentration and a better understanding of the world.

And the Good News?

Society needs journalism – but in a different way. Investigative journalism is relevant in any society. We need more hard-core journalists digging into meaningful stories. We need reporting that polices our society and uncovers the truth. The best example is Watergate. But important findings don’t have to arrive in the form of news. Often, reporting is not time sensitive. Long journal articles and in-depth books are fine forums for investigative journalism – and now that you’ve gone cold turkey on the news, you’ll have time to read them.
I must say this resonates quite a bit with my experience (and practice) - I hardly bother with "daily" news unless something major (like the once - in - a century events in the Arab world) is happening, and have drastically curtailed the blogs and real time stuff I read, and focussing on the more strategic writers. I think it isn't practical to totally cut it off though, so I tend to scan Twitter a few times a day (typically over a caffeine-filled beverage) and Techmeme and Hacker News likewise, as they are efficient aggregators of news with (some) less bias than curated news. I do find blogging about something forces me to focus on my thoughts about it, rather than just consuming it.

The irony though is that a blog like this probably counts as a "News" blog - but I hope that, by always trying to get to the "why" and the underlying the trends/threads/twists of the things I write about, is more than a simple news-mash regurgitation

Fred Wilson recording the trend we have also noticed, ie Techmeme is moving more towards being "GadgetMeme" (I read it on Techmeme):

We might as well call Techmeme news.apple.com many days. Or news.facebook.com or news.google.com or news.twitter.com. Techmeme is obsessive about the top companies and top stories of the moment.
He compares it with Hacker News, which takes a wider range of inputs and not all are from the main megaphones.

Way more stories above the fold. Way more diversity. Very geeky. But you get plenty of stories about non tech stuff and the stories move rapidly through the system. And not one story about Apple or Facebook in the top 20 right now.
I use both multiple times per day, but I really love what Hacker News is doing and I struggle with Techmeme which feels a bit like an echo chamber on many days.
I read both too, and I'm a great fan of Techmeme - I think it is the innovative newsform of the 2.0 cycle as it was a new media aggegator before most Noo Meedja aggregators could spell the word. And it, like many of the greater tech blogs, is steadily going more mainstream in its sourcing (just look at the sort of stories that were on top of Techmeme 5 years ago when it was polling blogs far more). That's where the volume, advertising revenues, etc etc are, after all.

But this is all part of the industry evolution as it grows - look at any Tech meedja index, and gadget news is always the top traffic item whether its dead tree magazines or blogs. Personally I'm not interested in tactical gadget news, so just like they split off Mediagazer, I wonder if its possible to curate GadgetMeme as a different "online magazine" to Techmeme. It's certainly big enough to have two streams now.

Fourth up on Wednesday at the Financial Times Digital Media & Broadcasting conference was "The Future of Music" with a panel discussion featuring:

- Geoff Taylor, CEO, BPI
- Richard Wheeler, Head of Music, Virgin Media
- Rob Salter, Entertainment Director, Tesco
- Paul Smernicki, Director of Digital, Universal Music UK
The after lunch slot, usually a time for a gentle snooze (unless you are presenting) and what better than The Future of Music long playing album, aka "The Song Remains The Same". We go to an indsustry that has been wailing about its woes, donning sackcloth and ashes and predicting Dooom for longert than any other media industry, yet, like the rest, seems to look much the same as it always has. So, what has changed in the last 2 years since I went to a Digital Music type conference last, I hear you ask?

Well nothing really. the same LP was played:

Track 1 - Piracy is killing music
Track 2 - People buying by the song is killing music
Track 3 - People not buying CDs is killing music
Track 4 - People not buying more music is killing music
Track 5 - Shops no longer selling music is klling music
Track 6 - People not behaving like they did in the 70's is killing music (Though my Teen son is buying vinyl albums, as i did in the 70's... )
Track 7 - Piracy is killing music (remix)
And yet, and yet - apart from the Great EMI Rock and Roll Swindle*, the same names, songs, structures, stories are all there from 2009 - hardly a sign of Collapse!

I did see a ray of common sense breaking out (common in the sense that most of the people up there on the panel agreed) - apparently the industry is dimly beginning to perceive that:

- Selling a customer a locked down, overpriced digital product is a poor choice vs a free one that you can put on all your devices and no-one can rescind. It's what we used to buy from them with CDs and Vinyl!

- There is only so long you can make a market in "heritage acts" and "harvesting tours" and in fact the musicians have just gone off and made their own markets elsewhere
A lot of the evidence is that actual consumer spend on all aspects of music is as high as it ever was in the last 30 years (ie after the Golden Years of the 70's and the Computer Game Invention Black Day), its just not pouring down the same old drains as much as it used to, yet the Olde Industry still seems to believe - systemically, rather than individually - the best solution is legislate the new channels of value back into the olde troughs.

Worked for Canute, after all.........

And it was ever thus - to quote Wikipedia:

In the late 19th century and early 20th century, the music industry was dominated by the publishers of sheet music. By the middle of the century records had supplanted sheet music as the largest player in the music business: in the commercial world people began speaking of "the recording industry" as a loose synonym of "the music industry". Since 2000, sales of recorded music have dropped off substantially, hile live music has increased in importance.

The chap from Tesco was a nice touch, as he looked at music as Just Another Hedonic Commodity - and its losing shelf space to booze, games, drrty sex aids and so on as its a tired format with virtually no industry innovation. He felt that when you buy a CD you should get the complete digital rights, and the CD is your backup copy. He noted that last Christmas they sold thousands of the "Fools and Horses" TV series DVD boxed sets, even though the series can be viewed on free TV channels on any one day, so you can see it free anyway.

* That is a clever play on words of the Sex Pistol's record, by the way.

Fifth up on Wednesday at the Financial Times Digital Media & Broadcasting conference was "Reinventing TV" with a panel discussion featuring:

- Fearghal Kelly, VP Media Solutions, ioko
- Florian Landgraf, Senior Vice President Content & Product Management Cable TV, Kabel Deutschland
- Shane O'Neill, Chief Strategy Officer, Liberty Global
- Simon Calver, CEO, LOVEFiLM
- Corey Ferengul, Executive Vice President, Product Management and Marketing, Rovi
Again, very little new, and I felt that Richard Waters didn't press Lovefilm boss Simon Calver hard enough on why they eventually sold to Amazon and what they implied for the current value chains. As with my earlier post on News, you feel the sackcloth and ashes spiel is somewhat overplayed given the dominance of Olde TV still in terms of audience and advertising share, and OTT TV is (five years later from The Great OTT Year at IBC 2006) is still about to win all - next year - and in the meantine Lovefilm sold in to Amazon, Netflix is bumbling sideways at $7.99 for the whole farm. The things that made me open one eye from my pre-lunch torpor to scrawl a note were:

- "Live" TV and "Catch UP" TV are actually two different markets, like say newspapers and magazines.
- 60% of people still mainly watch FTA TV (I think it was 67% when I did my first piece pf analysis on this market in 1995). The more things change......
- The OTT game will go to the Most Seamless Service (well I never - so, 5 years on, why is the industry still waiting for Apple to do it to them - youddathunk by now....)
- EPGs have to be simple, as the user and home devices are - Google's "TV Search"won't work until next-gen home equipment comes in
There was the obligatory Recital Of The Credo - that The Tablet will be the Great Gamechanger for Media (sadly no one pointed out that it still only has a c 2.5% market share - so I went back to energy-saving mode at that point.

Forgive the bored ennui of this post, but if you go to the MyPCTV posts we started writing in 2006 you can see how little has actually changed in this particular game - or arther, how the current players are sleepwalking to their own doom, much like Planet Mobile has. We did a major piece of work on the Future of Web TV in 2008, and -a part froma few minor edits - its pretty much good for 2011. It is with sad resignation that I await Apple coming in with an iTV offering in 12 - 24 months and show the industry how to do it.

Fifth up on Wednesday at the Financial Times Digital Media & Broadcasting conference was "The Real time Challenges of Media" with a panel discussion featuring:

- Marc Landsberg, Chief Executive Officer, MRM Worldwide
- Ian Rosarius, Managing Director- TV and Content, BT
- Kevin Walsh, Chief Technology Officer, Oracle Asia Research And Development Centers
One of the more realistic discussions of The Cloud that I have heard in a conference (probably because it wasn't a Cloud conference) - some notes:

- Cloud is an "Old New Thing" - it has failed before (think thin Client, Network Computer) for the same reasons it may still fail now
- It's still far harder than anyone thinks to orchestarte processes across multiple cloud platforms
- Main benefit is not OPEX economics but CAPEX - you don't have to build to peak load [Not tortally true in my experience, Amazon still wants us to predict our unpredictable peaks]
- There is as yet no demonstrable "consumer utility" over existing "good enoughs"
- However, the Cloud is forcing rational industry behavour by driving adoption of de jure and de facto standards
- Panel felt the Cliud's main role will be to enhance the capability of the relatively "dumber" mobile devices - smartphones, tablets - than the PC/laptop ecosystem
On the evolution of Web TV, which is a specific instance of The Cloud

- TVs and other simple black box devices will take over the role currently done by complex devices (STBs, PCs)
- However it is still very early days with standards, how EPGs work etc - it is like TV in the 1950's
- What will win is the ability to provide a seamless experience - the techniology will exist long before a decent experience (Chasm description)
- There will be a period of consumer confusion, that smarter players will use to gain consumer confidence
- There is a major battle emerging about who owns the (user) data in the value chain - everyone wants it
- There will probably have to be far more work done on people's privacy, and who conyrols the data - trusted providers may well have a market benefit
The irony is that history tells you that apple are the past masters at creating the first Seamless Exoerience in media vale chain after value chain (PC, Music, Smartphone, tablet...DTV next?)

Last discussion was on good old Net Neutrailty, the point was made very clearly by BT that the current UK backbone was sized in the early noughties for low end DSL speeds not broadcast scale High Definition video to a nation, the investment to upgrade to mass big bandwidth now will be huge, and the consumer cannot bear the entire cost. Content providers who use up massive amounts of the network capacity and want real time transport will have to pay more than users with small bandwitdh, low real time synch needs [As has happened with every other utility in history].

Fourth up yesterday at the Financial Times Digital Media & Broadcasting conference was "The Future of News" with a panel discussion featuring:

- Steven Brill, Co-founder, Press+
- Claire Enders, CEO and Founder, Enders Analysis
- John Ridding, CEO, Financial Times
- Arthur O. Sulzberger, Chairman and Publisher, The New York Times Company
Leaving aside that the issue is now moot in the UK with today's announcement about BSkyB, this panel to an extent was like a GroundHog Day session, I hear the same thing rehashed every time I go to a "Media meets Digital" type of panel/conference. The Olde Media (TV, Music, etc) wails and tears its hair out about the terrible things being wrought upon it, and yet - year by year - the industry structures look much the same, the people running it are the same, the complaints are the same. If this was an industry in dire straits I'd expect to see more major restructurings and radical changes (and I'm not talking about governments sponsoring News International takeovers).

I believe it was Benjamin Franklin who said some 200 years ago that:

"The definition of insanity is doing the same thing over and over and expecting different results. "

So, I was looking for the "what's different" this time, but saw nothing except a datapoint Claire Enders made that attention paid to news was, per day, on average:

- 35 minutes on a newspaper
- 25 minutes per day on TV
- 15 min on Facebook if devoted, 5 min if not, average low (huge difference in behaviour bewteen addicts and normals on social media I suspect)
In other words they are not totally insane, it should still be possible to make the Olde Media work for some time yet. But not by carrying on doing the things that aren't working.

However, I will tell you the One Big Thing that I got out of this session - its not so much that anything new is emerging, more that something is clarifying, and that is this:

- High quality, unique content (FT, Economist) can charge money for subscriptions today

- You are not going to get curated truthful News for free, it will be Advertorial friendly opinions or subsidised via New Barons with Agendas. News will be what the (Ad filled) Internetz News Content farms wants people to want.

- Right now there is still not a workable business model for free online good quality "general purpose" news (New York Times et al). The market has a real risk of splitting into the above two areas unless it can find a different model for "paid for" truthful reporting than Ad funded, traffic chasing, linkbaiting cr*p. Timing to get a model I don't know yet, but lets say 3-5 years.
However, the Olde News media also needs to make sure it is actually processing good quality news, or else nothing will save it - as Craig Newmark pointed out in 2009, as to why the Old Media "Quality" was losing ground:

Firstly, the media failed its public's interest:

An increasingly media savvy online public sees that recent major problems involved some really good journalism, particularly the current financial crisis, and also that "weapons of mass destruction" thing. Good reporters told us that something was amiss in both situations, and we did see some really good journalism in both cases. However, the really good journalism was buried, not curated into the front pages, and then, infrequently if at all repeated. As news consumers, if big news is not prominently displayed, and then repeated, it's a tree falling in the forest.

So, these major news organizations reported on matters of great importance to the world, but the curation model failed to really warn the public about those issues, in any way that genuinely delivered the message.

Craig saw this as a failure to understand the role of trust and effective curation:

The new model for news curation and selection, I feel, will be a balance of professional editing and collaborative news filtering. In one incarnation, news organizations will look at feeds from highly respected news fans, and that will drive stories that are featured more prominently.

Now, remember that "trust is the new black."

Another issue is hiding unpleasant truth behind "objectivity", often used as a way of obfuscating commercial interests

In presenting two sides of a story, news organizations will allow both sides to present their positions. That sounds fair, but it's common practice to give those opportunities to "front groups," or "astroturfers," people who are paid to deceive the public in specific matters. This has been very well investigated, documented, and reported. It's a major problem in the public forum, for example, in the health care reform debate, badly hurting our country.

His proposed solution from 2009 is still very interesting:

- The successful news organizations of the future will pursue models for news curation/selection which is a hybrid of professional editing and collaboration among talented consumers [Add algorithms to that].

- A major opportunity is to be found by rejecting the involvement of professional disinformation groups. New models for fairness in reporting will balance the current vision. That's probably captured in the statement that "transparency is the new objectivity."
That was 2009, has anything changed with "quality" news in by 2011? If not, it is, as Craig implies, little better in realty than the hodgepodge of PR churnalism, sleb advertorial, mystic mumbo-jumbo and Content-Farmed Opinion that charecterises "free" news today.

And doing what he says would be unique.....

The third session today at the Financial Times Digital Media & Broadcasting conference in London had Joanna Shields (EU COO, ex Bebo) of Facebook up, again subtly pressed by the FT's Richard Waters on the basics of the Facebook business model, here are my notes:

- Facebook's value to the user is "Unique"

- As a platform it drove far higher demand for Al Jazeera English than otherwise would have happened

- Facebook shares data with companies but they can only see what you want thenm to see (Facebook sees all)

- Facebook's proposition is to "help people feel more engaged", i.e. stay on the site, and is thus is trying to bring as much content / functions / diversions onto the site so you don't need to leave - ever (and when you do, the Facebook tentacles follow you with Likes etc)
On Zynga - It is a great business because it "puts people at the centre of its business". Joanna was more demure when pressed about the gerfuffle about how much loot Facebook gets from Zynga for sitting on the platform.

On Facebook Credits - yes it is the only way people will buy anything on Facebook (aka why would you let anyone else in..)

On why Facebook has stopped publically reporting new users since last summer - Joanna dodged that one, instead saying that Facebook was:

- "Going Deeper" (aka trying to get more minutes onsite per user

- Now have 200m users on Mobile

- Has 30m UK users (c 60% of adult population - I wonder how many "users" are duplicate or corporate names) and 50% come back every day.

- Is growing in new markets
On $50bn valuation - based on:

- very tight knowledge of users

- increasing relevance to usesr based on this knowledge

- can target friends / friends of friends
My take - nothing new except that interesting dodge of "Growth" - that explains the huge activity to increase time on site, as if you do the maths, when growth starts to slow down, engagement on the site starts to drop off radically, which Joanna should know all about from Bebo days (new users spend more time on site and usage decays over time). I wanted to ask about why Facebook would last whereas Bebo didn't, but there wasn't time

Update - Facebook co-founder is selling 10 million shares - c $300m - hmmm, as they say.

....or is it just driven by accidental landings from spammy search results?

The second session today at the Financial Times Digital Media & Broadcasting conference in London had Shawn Colo of Demand Media up. He was pressed subtly by the FT's Richard Waters on the basics of the Demand Media business model, here are my notes:

Demand Media's official line is that they "Publish what the world wants to know and share". They do this by publishing "Data Driven, Crowd Sourced, High Quality content".

Data Driven in that they access proprietary and public data - Search results give a high indication of intent in real time, Social Media signals Interest - not quite as real time

Crowd Sourced in that they have a network of c 15,000 professional freelancers
The business has c 60 Editiors, c 120 Technologists for a total staff of c 600, so they are more a technology company - Colo reckons succesful media companies of the future will have big technology (aka user intention discernment and SEO optimisation) divisions.

Actually, I think Newspapers and TV companies had similar scribe to tech ratios in their formative years.....

When pressed on being "dependent on the Search Ecosystem" I think we started to see the "why we are not a Content farm" argument laid out:

- DM are only called a content farm by jealous journalists, its a new thing so current players tend to rubbish it

- They aim their content at their consumer base - 75-80% of hits are returns the site - thus they are merely giving the People what they want, and X million people cannot be wrong!

- Because this is what the majority of ordinary people want, Google should not block them (just because a few more sophisticated people are complaining)
When pressed on importance of Google searches for sending people on those re-visits, he said that it was "meaningful" but that the current Google algorithm change hasn't hurt them (and its only a small cabal of tech journalists complaining about spammy search anyway). I must say I am wondering about that too, especially as Mahalo was reportedly hurt so its not that it can't be done - is it that they are so big that Google doesn't want to take them on re above argument (or lose the revenue stream?). I can't help but think that its only when users can get Akismet style self-select site blocking that we are really going to see results from saerch spam

As to future revenues, he conceded Ad rates are falling, but that as they get better and better user data they will be able to serve people with better and better relevance, so CPM should keep steady.

I don't buy the idea that those 75% returns are delighted customers, I would bet that many are being sent via Google searches and getting out again asap, but of course the Ads count as being viewed - be interesting to see what the dwell time on the site is. My take is that these guys were very smart/lucky/both to IPO when they did, you can't help thinking that the rope is tightening on their business model.

He felt that mobile was not a big part of his plans, as there was too much proliferation of devices and standards and no real business models. On this thing, I can agree with them.

The first session today at the Financial Times Digital Media & Broadcasting conference in London was interesting given that today is Official iPad 2 Hype Day - there were very strong indications that the BBC will launch iPlayer on the iPad outside the UK this year, for a fee of several dollars a month. BBC Director General Mark Thompson said that the BBC was "exploring internationally what the right pricing and models are..." and said that it would be less than ten dollars per month to subscribe to it. He also said that content played over the iPlayer would be unchanged. Timing was unclear when he was pressed.

Speaking to people at the conference, opinions about the strategic rationality were mixed, and one pointed out they seem to have finally jumped out of bed with Microsoft, but just to jump in with Apple - a few pointed out that this was a pretty robust riposte to Her Majesty's Government for cutting licence funding. Having worked on the byzantine world of BBC content rights in the past, I think that will still need some settling.

One questioner asked about the BBC and YouTube, I interpreted Mr Thompson's reply as implying that YouTube is good for short-form media and trailers, but did not have the heavy lifting for long form content.

He also called for the UK mobile industry to collaborate to find a Mobile TV approach that worked and a believable roadmap. We aren't holding our breath on that one....

Lots of hot air expended on AngelList (a sort of Startup Souk, or startup buyer meets seller marketplace) over the weekend, summarised nicely by Mark Suster over here . That the hot air about this is pumping up BubbleWorld is better shown in this post by Dave McClure:

3 major points i plan to cover in this post:

1) Angel List Fucking Rocks. Period. it's the single greatest innovation in our industry in the last 5 years (aside from LinkedIn, Facebook, Twitter, & Quora) and it's great for almost all participants. and while social proof can be abused / misused, so can gasoline... doesn't mean you shouldn't fill up your gas tank and go back to riding horses. if you want to effect change, either Engage Fully, or Compete. inaction/boycotts are rarely useful & should be largely be ignored.

2) on average, "Spray & Pray" investing -- aka a High-Volume, Diversified & Quantitative Investment Strategy -- is not just "ok", it's actually BETTER than "Focused" investing (at least w/o insider or hidden knowledge). in fact, it is incredibly hypocritical and patently FALSE for the VC industry -- which has NEGATIVE IRR over the past 10 years, and historically poor performance -- to criticize high-volume strategies as being somehow crazy. if anything, their inaction and lack of innovation in the face of poor performance is the Insanity, and most of them (& their LPs) should be ashamed for lack of stewardship.

3) in the future, "Value-Added" investing will come more & more from domain-specific knowledge (engineering, product, design, marketing, customers) and less & less from investors with large networks & rolodexes who make "introductions", as their value is disrupted & marginalized by social platforms like LinkedIn, Quora, and Angel List.
Those of you who recall the buildup to the DotCom bubble will recall that the ground was laid by multiple people undermining all aspects of the "careful, prudent investment strategy" approach, which is the last thing the bubble promoters want, as they make their money by getting in - and out - early. This is because in an asset bubble you have 3 things going on:

- Firstly, too much money chasing the few decent "hot" assets, pushing their values far above any rational number

- Secondly, as the market abhors a vacuum, there is a rush to produce/find new assets for this money to chase.

- Thirdly, a need to find new layers of Greater Fool money to get into the system to keep it inflating (and pay out the first layers in the pyramid)
The role of something like an AngelList is mainly to solve problems 2 and 3 - ie it is a way of exposing more assets to buyer view and make it easier to pave the way to get more "Greater Fool" money from outside the industry. No wonder it's a hot property, and if it wasn't AngelList it would be something else (actually it will - there are always multiple Phase 2 / Phase 3 "funding faciltators" founded during the Bubble Inflation period ) but it should be seen within the context of the mindset of Irrational Exuberance. This sort of business model (along with incubators etc) struggles to exist in non-frothy times. I will let Mark Suster have the last word on this sort of system:

My biggest fear is that people confuse the “social proof” of other prominent investors on AngelList for real insight. Indeed, in a bubble people generally chase what other people are chasing leading to group think. The most innovative ideas are the ones that other people aren’t doing yet. How’s that for irony?
Quid, as they say, Est Demonstratum.

Update - Dave McClure thinks I have misunderstood his strategy (see the comments below) so read his post (it's linked to above) - but I do suggest reading Mark Suster's (also linked above).

...is a reasonably inflammatory headline to describe this Foreign Policy Journal side by side precis of their positions:

Gladwell:

The lesson here is that just because innovations in communications technology happen does not mean that they matter; or, to put it another way, in order for an innovation to make a real difference, it has to solve a problem that was actually a problem in the first place. This is the question that I kept wondering about throughout Shirky's essay-and that had motivated my New Yorker article on social media, to which Shirky refers: What evidence is there that social revolutions in the pre-Internet era suffered from a lack of cutting-edge communications and organizational tools? In other words, did social media solve a problem that actually needed solving? Shirky does a good job of showing how some recent protests have used the tools of social media. But for his [Shirky's] argument to be anything close to persuasive, he has to convince readers that in the absence of social media, those uprisings would not have been possible.

Shirky

The competitive landscape gets altered because the Internet allows insurgents to play by different rules than incumbents. (Curiously, the importance of this difference is best explained by Gladwell himself, in his 2009 New Yorker essay "How David Beats Goliath.") So I would break Gladwell's question of whether social media solved a problem that actually needed solving into two parts: Do social media allow insurgents to adopt new strategies? And have those strategies ever been crucial? Here, the historical record of the last decade is unambiguous: yes, and yes.

Digital networks have acted as a massive positive supply shock to the cost and spread of information, to the ease and range of public speech by citizens, and to the speed and scale of group coordination. As Gladwell has noted elsewhere, these changes do not allow otherwise uncommitted groups to take effective political action. They do, however, allow committed groups to play by new rules.

.......

Even the increased sophistication and force of state reaction, however, underline the basic point: these tools alter the dynamics of the public sphere. Where the state prevails, it is only by reacting to citizens' ability to be more publicly vocal and to coordinate more rapidly and on a larger scale than before these tools existed.
Methinks the Shirky-ist "Yes and Yes" argument is more dubious than Gladwell's "Show me it woudn't have happened without SocMed" simply because the Gladwell view has at least 1,000 years of evidence that people have quite happily had revolutions pre the Internet Age, but Shirky is right when he says new comms restate the rules.

In fact I see that Mr Gladwell is no longer pushing the weak ties quite so hard, and in the Economist that Mr Shirky had moved from his position here a bit in his original Foreign Policy article:

He notes that the technology's primacy is measured in longer time scales. Its importance lies in lowering the cost of communication and coordination. The argument goes like this: enabling people to communicate among themselves strengthens civil society. This in turn exposes the contradictions between what the authorities say and what truly exists—creating what Mr Shirky calls a "conservative dilemma" (employing a term from media studies). Thus the groundwork is set for reform. The technology simply helped it happen.
Which is not far from Mr Gladwell's position, but it has the useful addition of the idea of timescales to build up the strong links.

Give em another month and they will be in Furious Agreement - with us

Update - my colleague Paul Lancefield expands in the comments on our view, ie both are right - and wrong:

It isn't binary. There is a third case; advances we would not ever give up or reverse are not always pressaged by a clear identified problem to be solved. It may seem like a mundane example, but I still remember clearly how years ago, when the company I worked for were considering implementing email, as difficult to understand as it might sound today, no business case could be made. The IT manager responsible didn't know what to put on the form under the section "Business Case" for justifying the purchase. But that didn't mean everyone, execs included didn't just know it would make anything other than a huge difference to the business. Some improvements are huge, profound, even sometimes critical for, practically speaking, X, Y, or Z are to occur but may be difficult to measure nevertheless. A profound / big impact advance doesn't have to have a big problem To solve before it can rank as such. This kind of advance is much more rare, but not unprecedented and usually seems to involve enhanced communication.

The social psychology by which e.g. Hitler came to power has been much studied and is still not fully understood. To think the volume of communications and comparative instantaneity of social networking might not have a substantial and profound effect on an area involving mass social psychololgy, for me, shows a distinct lack of vision. On the other hand to make unfounded statements lacks academic rigour, so it's clear this will be a thesis rich topic, I'm not sure it is one that will result in a provable, verifiable conclusion. The debate is surely set to continue for some time yet.

Methinks Fred Wilson is forgetting the Dotcom era:

A very experienced and successful entrepreneur came into our office a week ago to pitch his latest company. At the end of his pitch he showed us some numbers. Normally for a raw startup we see almost all product and engineering expenses (headcount). But his plan had a monthly budget for customer acquisition. After he left, we talked about his plan and my partners focused on the customer acquisition number. It bugged us. It felt wrong.

So a few days later, I called him. We talked about what we liked about his plan and pitch and what we didn't like. I brought up the customer acquisition line item at one point in that call. He said "every company needs a marketing budget." It seemed like a strong reply but in truth not one of our top performing companies had a marketing budget in their initial business plan.

Zynga has spent millions on customer acquisition and continues to do so. But in the beginning, when Zynga was three or four people and they launched Texas Hold'em on the brand new Facebook Platform, they didn't spend any marketing dollars. That was the beauty of that time and that plan. The Facebook Platform was free distribution. Zynga rode that free distribution to millions of users, profits, and additional games. Only then did they start marketing.

The rest of Fred's post is some sensible advice on where low cost marketing can be found today, but - if you believe our hypothesis that we are in Early Bubble stage - the need to increase marketing costs is entirely understandable - to recap, our (slightly tongue in cheek but still directionally accurate) "10 Steps to a Bubble" notes the stages one goes through to Bubblezenith:

1. There is a New New Thing that trancends the Old Economics, and you cannot value It the Old Way. This Time It will Be Different. Dumb Money companies start paying over the odds for New Thing acquisitions.

2. Smart people who have been there before start calling it a Bubble (or at least a "Frothy Market"), New New Thing apostles make ever more glowing claims of the dizzy heights available, while "Startup Networking Events" start to proliferate.

3. Companies with founders deemed to have "rubbed off the right stuff" (ie sons of, ex employees of, etc etc) get funded straight off at eye watering valuations for next to no product proof or traction.

4. There is a flurry of new incubators started by (newly minted) VCs

5. Companies start getting funded "off the slide deck" with no actual product

6. MBAs start leaving banks to start up companies

7. The "Big IPO" happens (Netscape et al)

8. The big Investment Banks start to make a market in the New New Thing, punting in your pension money, and have "entrepreneurial" options and divisions to retain les autres MBAs

9. Your Taxi Driver gives you advice on what stock to buy - you punt in your own pension money

10. A New New Thing darling buys an Olde Industry thing at Stupid $$$. This is the Top Of The Bubble.
One of the things that defines a bubble is that too much money chases too few assets (in this case decent startups) - but the market abhors a vacuum, so the next thing is a flurry of production of new (me-too startup) assets to fund - so more startup teams leaving MBA school, more First Tuesdays, more Incubators, the start of funding at silly values "off the slide deck" - and it means a vast increase in startups also scrabbling around in the darwinian mire that one has to kick off the slippery ladder to get one's own hands on the rungs - and that means more and more shouting.

As the bubble grew the last time, the old saw was that a dotcom was just a simple device to transfer (your) money from Wall Street to Madison Avenue via Silicon Valley. If our hypothesis is correct, we are heading that way again - so sorry Fred, it ain't gonna get better for a while I'm afraid

On January 2nd we wrote a post on "The Increasing Uselessness of Google Search" based on our experience on searching for commercial items over the holiday period. Matt Cutts of Google told us (and others who had noticed the same) that we'd never had its so good with Spam and later that month on TWIG a number of A Lister US Tech luminaries told us we didn't know what we were talking about. Roll forward to the 24 February, and Google announces the most brutal change to its search algorithm ever - Search Engine Land:

New Change Impacts 12% Of US Results

The new algorithm — Google’s “recipe” for how to rank web pages — starting going live yesterday, the company told me in an interview today.

Google changes its algorithm on a regular basis, but most changes are so subtle that few notice. This is different. Google says the change impacts 12% (11.8% is the unrounded figure) of its search results in the US , a far higher impact on results than most of its algorithm changes. The change only impacts results in the US. It may be rolled out worldwide in the future.

..........

Officially, Google isn’t saying the algorithm change is targeting content farms. The company specifically declined to confirm that, when I asked. However, Matt Cutts — who heads Google’s spam fighting team — told me, “I think people will get the idea of the types of sites we’re talking about.”
What can we say except Told Ya So

Actually, I do give Google a lot of credit for moving so far, so fast, and Matt Cutts did what he had to as a Corporate Droid - but it really is so frigging transparent, why no just 'fess up guys?. Anyway, Kudos! As for those A Listers, we know who you are....... and we're saying nowt more 'cos we know we'll mess up one day as well

There are some who suggest this is PR as much as real action - which may well be true, but I think Google now really understands it let things rot a bit too far......

On January 2nd we wrote a post on "The Increasing Uselessness of Google Search" based on our experience on searching for commercial items over the holiday period. Matt Cutts of Google told us (and others who had noticed the same) that we'd never had its so good with Spam and later that month on TWIG a number of A Lister US Tech luminaries told us we didn't know what we were talking about. Roll forward to the 24 February, and Google announces the most brutal change to its search algorithm ever - Search Engine Land:

New Change Impacts 12% Of US Results

The new algorithm — Google’s “recipe” for how to rank web pages — starting going live yesterday, the company told me in an interview today.

Google changes its algorithm on a regular basis, but most changes are so subtle that few notice. This is different. Google says the change impacts 12% (11.8% is the unrounded figure) of its search results in the US , a far higher impact on results than most of its algorithm changes. The change only impacts results in the US. It may be rolled out worldwide in the future.

..........

Officially, Google isn’t saying the algorithm change is targeting content farms. The company specifically declined to confirm that, when I asked. However, Matt Cutts — who heads Google’s spam fighting team — told me, “I think people will get the idea of the types of sites we’re talking about.”
What can we say except Told Ya So

Actually, I do give Google a lot of credit for moving so far, so fast, and Matt Cutts did what he had to as a Corporate Droid - but it really is so frigging transparent, why no just 'fess up guys?. Anyway, Kudos for moving so far, so fast. As for those A Listers, we know who you are....... and we're saying nowt more 'cos we know we'll mess up one day as well

There are some who suggest this is PR as much as real action - which may well be true, but I think Google now really understands it let things rot a bit too far......

The Broadstuff Bubble Curve, the role of J P Morgan et al is to jump that gap


Those who say there is no Tech Bubble point to the present situation where the money is currently just within the industry. What they are not seeing is that the current phase is just the start, the need for Greater Fools ensures that mechanisms will be found to allow other people outside of the industry to invest. And here it comes this time round, with JP Morgan first up:

J.P. Morgan Chase & Co. has quickly rounded up $1.2 billion for a new digital-growth fund, furthering Wall Street’s bold push to capture stakes in fast-growing private tech companies such as Facebook Inc. and Twitter Inc.

According to a regulatory filing, J.P. Morgan’s asset management unit raised $1.22 billion for a fund called J.P. Morgan Digital Growth Fund LP. That’s about double the amount reported last week by The Wall Street Journal, which, citing anonymous sources, stated the firm planned to raise between $500 million and $750 million for a digital-media fund to invest in Internet and digital-media companies.

.................

The new fund shows that Wall Street is placing a premium on hot Internet companies. Last month, Goldman Sachs Group Inc. raised $1 billion from its foreign clients to invest in Facebook at a $50 billion valuation.
Those who doubt there is a bubble coming are welcome to read this (10 Telltale Signs) and this (The dynamics of bubbles)

So the MPEG LA patent platform, whose members include the mighty Apple and Microsoft are seeking to establish if they can sue Google, who are establishing a rival Web M standard and promising to give it to the world at no charge. It’s perhaps unsurprising whose side the Tweet-Blog-O-Sphere is on. Indeed, read almost any comments on Patents these days and you would be forgiven for thinking the system has been created by big business, not to in any way foster innovation, but to cr*p all over the small guy and allow lawyers in their employ and backed by an apparently endless supply of cash to force anyone challenging them to enter into a competition where the object of the competition is to see who can last longest pissing cash onto a burning fire. One obvious problem being that for most non-corporate organisations and ordinary people don’t have a cash supply that looks like anything other than like a home with furniture and TV's inside and children living in it.

So patents are bad right, and MPEG LA is just more evidence that is so? Well no, they are not. We have to be very careful not to throw the baby out with the bathwater. Patents are a good thing, indeed I would go so far as to say, overall, they are a very good thing. A subset of patents, of the pure software kind, tend to be more problematic than the rest, but still, if (and this is the crucial point - so anticipating in advance the flames this article could stoke - don't bother unless you really understand I have said "if" here), I say again "if" they are treated properly by the patent authorities they do some good. The crucial point here being that currently they are not treated properly by the system, not even close. I argue this as someone who started up a patent intelligence business a few years back and did business with a blue-chip client in the European technology space with a large portfolio of patents. While I’m no legal expert, I am giving a considered opinion. I’m not firing from the hip.

To understand how I can begin to defend software patents we have first to go back over some of their history and understand why they now have such a bad wrap. Back in the 80's and much of the early 90's it was common knowledge that you couldn't patent software. Except it wasn't knowledge, it was actually wrong. It was possible, but it hadn't been done very much and there hadn't been test cases to prove software patents could hold water and there was a widespread somewhat misplaced belief they would not. Then during the early 90's there was a series of rulings in the US which tipped the balance. Some notable large corporations woke-up to the fact patents could be applied for and would be granted - the most notable of all being IBM and they started filing en-masse.

BUT, by this time, with regard to patents, the software space had become quite unlike any other technology space. In fact there were a number of factors that would combine to turn the whole enterprise into the grade-A disaster zone that would lead Amazon’s Jeff Bezos (who got the infamous one click patent granted) to do an about turn and criticise the software patent system at length and in depth. And now most of the non-corporate world whole heartedly agrees with him. Mention software patents to a lay-tech audience today and you are quite quite likely to be greeted by hisses boos and run an increased risk of assassination.

It’s worth looking briefly at each nougat of disaster which has contributed to this sorry state of affairs. First, during the 90‘s, the rush to apply for software patents came to resemble the privatisation of state assets by Russian oligarchs in post communist Russia. Surely I’m over egging the cake? Not at all. PriceWaterhouseCoopers have suggested intangible assets make up over 60% of the value of a company (at least in the UK, we can assume more for tech companies in the US), an estimated 70% - 80% of that value is attributable to patents and tech takes up a full 20% share of the US economy alone. Since the US economy is some 10 times the size of the Russian economy, my back of the envelope calculation estimates some 1.1 trillion of the value of the US economy to be attributable to tech sector patents. The share attributable to software patents in particular is difficult to judge but if you consider the biggest tech companies in the US are currently Apple, Google and Microsoft and a substantial proportion of their patent applications are for software, you get the picture. By any measure, the value of patents is a very, very big deal.

By the time business woke up to the fact software patents would be granted, unlike for any other area of the patent database, there was a massive hole. In other areas, patents were applied for as technology advanced and the patent database always reflected a general understanding of where the leading/bleeding edge was at. So in most (hardware tech) industries the culture of identifying patents evolved and was accepted.

But in the software industry, the vacuum on the patent database was balanced by an even bigger body of existing practice with lots of programmers/engineers happily co-operating and advancing the status-quo. Being software, the state-of-the-art for that body of practice was poorly documented and frequently maintained purely in the social domain, passing from brain to brain.

Following IBM’s lead, big tech companies, started to make a patent “land grab” and now the once bereft database is full. Along the way many patents have been granted for techniques and practices that have long been employed by the software industry. Now a simple Google search on the phrase “software patent” is sufficient to show this has resulted in a massive amount of indignation, hatred even.

Work I once did with a US supplier gives perfect illustration to the practical consequences of the resulting problem. A number of years ago I was working in a European company and wanted to implement a Program-Grid in a European Electronic Program guide product I was responsible for delivering (A Program-Grid shows TV channels in rows on the first column on the left and TV shows over time along each row on the right). However our TV software supplier, though they would have liked to be able provide us with a grid, was stymied by a cluster of US patents covering Grid functionality. As a result they wouldn’t provide an example of a grid working and we weren’t sure the software could support it. More than that, they wouldn’t talk about the possibility of implementing one at all. The way they evaded discussion seemed, by European standards, ludicrous. They literally blanked conversations in which the term “Program-Grid” used, changing subject as though it hadn’t been uttered at all. I can only conclude this behaviour was a direct function of the level of fear that exists in the US with regard to possible legal tangles and the possibility of being subpoenaed. I can’t help but think European employees would have sprinkled copious nudges and winks into the conversation, but I have to say the staff of this US supplier were always absolutely, and impressively consistent in avoiding doing so.

One day, one of their employees did however, without even the slightest hint of knowingness, show me how their software could be used to navigate a “plant-planner” with the months the plants would be in various stages of growth (seed, shooting, in bloom etc.) along the x axis of a grid type display and different types of plants on each row. This wasn’t shown on the TV Set-Top box we would be deploying but rather was shown on a PC running the same layout engine the STB used. Hmmm, I thought, this plant planner software can be rewired so it can display a grid of TV program data. So it was extremely helpful to know the software could run a plant-planner.

For me, this story illustrates in detail all that is wrong with Software patents as things stand. A Program-Grid is a specific instance of a more generalised design-pattern. The same pattern was already employed in software from spreadsheets to databases to play-out lists at broadcast headends, to train scheduling systems. Using this pattern more specifically, to display a time based grid of TV programs on a STB may have been a new specific application, but the time-grid pattern almost certainly wasn’t (proving that with paper based documentation of the state-of-the-art when the patent was applied for was a different thing though). The very fact plant-planner code could be used as a TV Program-Grid simply by changing the data piped into the grid, gives perfect illustration to this point.

The patent examination process has all too frequently wholly and manifestly failed to pick up on this kind of fatal weakness in software patents. Whilst usually thorough and skilled, examiners aren’t sufficiently trained in the process of generalising the nouns in the software patent claims and seeing what the actual functional design is that is being claimed (As an aside, I believe the best way to do this is to employ object modelling tools and techniques. The software architect process where systems are modelled using objects and decomposed into more general “inheritance” structures, provides a great technique for formally identifying precisely this kind of problem).

Most usually it is reasonable to assume the nouns used in Patent claims have been made as general as possible to make the patent as broad as possible. It doesn’t so often occur the other way-round. Fail to “see-the-trick” and you will fail to see there is no substantial technical merit in the new features. In the case of the Gemstar grid patents, when subject to challenge and further scrutiny, it turns out the courts, agreed with me. They have now been struck down in a number of territories.

But still the patent database “land-grab” resulted in many such patents being granted. And it is is now a huge problem for the tech industry as this figure probably runs into thousands, quite possibly tens of thousands. The very fact they are granted creates FUD (Fear Uncertainty and Doubt) and FUD is only a friend of big businesses with deep pockets. To understand the strategic power it conveys and how it gives advantage to the corporate behemoth, just consider this. If a small-guy has a questionable patent that can probably be turned over in court and goes to a big-guy and says “I have a patent and I can hurt you with it”, his approach will have little or no effect. Indeed the big guy may even welcome it, knowing the small competitor will suffer disproportionately with the outlay of lawyers fees. On the other hand if the big guy goes to the small guy, with an equally dubious patent, saying the same thing, the small guy has a terrible burden to bear. FUD is win-win for the big guy (and WIN-WIN for the lawyers).

If you didn’t already have a strong opinion on software patents, you may by now be wondering why the hell it is I am arguing for them.

The answer is, in my view, everything I have discussed so far that is wrong with software patents, is a problem relating to how they have been implemented. Not a problem intrinsic to the very notion. I know many people will have a disagree with this, but there are I think several important points that are consistently missed and misunderstood in the whole debate.

First, note how the number of “stupidly simple” software patents the media is reporting has gone down considerably from the days when it seemed every month brought a new equivalent to a Gemstar Program-Grid patent, Amazon one-click patent, or BT hypertext-link patent. Yes there are still the headlines, but in most cases delve into the detail and you will find what is claimed is actually quite specific, often (dare I say it) has merit and doesn’t put the well established practices of entire industries at risk. This is because the morally dubious patent database in-filling process is now complete. The database is now full up to the state-of-the-art and the gaps are gone. This isn’t to any measure justification for the bad patents that remain granted and unfortunately the database remains a terrible mess but moving forwards the same opportunities to grab well established programming techniques and patterns simply don’t exist. Most people don’t bother to look beyond the headlines and see for themselves whether the patent claims have merit. To see my point all you have to do is actually try to think of something new to register, and then actually go through the process of researching prior art and you will find it is not at all easy. Indeed, you will quickly discover the best way to do it is to do hard work on prototypes so you are actually advancing the state-of-the-art and genuinely getting into new territory armed with new use cases that come about through the hard work of prototyping evolve new highly innovative features. i.e. the best way to identify patents to file is through doing real innovative work.

Another point is that the headlined bad patents ended up not being so bad. [The only one of the three that has stood-up is the Amazon one-click patent.] [- EDIT, this is in fact wrong - I was forgetting even this one has been overturned, so in fact all three of the most notorious cases have - further making my point] The problem in at least one of the other cases, was that with proper examination processes (using object modelling) the patents wouldn’t have been passed in the first place.

My second point is, even though now we have moved beyond the dubious low-hanging fruit “in-fill” patents even viable ones always appear simple after the event. This is just as true for mechanical inventions. The Black and Decker workmate for example, was an excellent invention which made it’s inventor a small fortune. The fact is he combined the idea of two existing objects, a clamp and a table, in a way that will now appear obvious to many. But it is the hallmark of many of the best inventions that they appear simple in this way after the event (and in most cases after the work of innovation). This same perceptual adjustment as to the difficulty of solving the problem after the event applies just as much to software patents as any other branch of technology. But, software patents now have such bad press and the patent industry sits on a database with so many patents of questionable validity, there is far less goodwill and willingness to acknowledge the “good” patents have merit.

My third point is how the Free Software movement is being unwittingly co-opted by the big corporations into getting the regulations the big corporations want on the statute books. I’m referring in particular to the oft used phrase “Patent Troll.” A phrase coined by Nokia in particular in the early noughties as they were lobbying for patent reform - but only of a kind that suited them - and that is now used frequently and liberally by all sides of the debate.

In the climate of negativity surrounding software patents the phrase carries heavy emotional weight and that is why Nokia promoted it. In the body politic of the tech ecosystem (as with any political space), the lobbying of incumbent powers is balanced out by the lobbying by radicals and hopefully the legislation passed implements some middle way acceptable and in the interests of the greatest number of people. The phrase “Patent Troll” makes any organisation so referenced sound even worse than the corporate multinational. A special kind of evil of pure legal kind. The phrase has since come to represent in the lay mind the worst kind of opportunists and despots responsible for making the unfair “land-grab” that don’t even have any means of production and so contribute nothing of net-value to the economy. Nokia has been arguing that Patent Trolls - patent owning organisations - must be stopped and the way to do that is to restrict granted patents to companies which own a means to produce the invention. A variant of the “use or lose argument.”

However stand back an look at who many of these so called “Patent Trolls” are and you will find amongst some undoubtedly aggressive and bad organisations, they include patent portfolio licensing companies that have collected and enforce patents owned by small innovators. These companies offer a channel for the small guy to retain and enforce the value of his patents through sharing costs. Naturally the portfolio owning company takes a share of the profit of licensing the patents to others in the industry but all businesses have costs to bear and the technique is as legitimate as, for example, selling on your debts to a debt recovery service.

Finally, consider if you come up with a really great new piece of software together with some friends/colleagues. The three of you work for six months delivering a first-cut product implementing innovative new features. Imagine doing this in a world without patents, a world where multimillion dollar corporations with deep-pockets and large armies of software developers can shamelessly rip-off your work and with the prototype you have provided in hand, quickly copy it with an even richer feature set and integrated into a full tech ecosystem. The real advantage Nokia’s proposals confer is the ability to impose a barrier to entry that will help prevent upwards competition from agile smaller start-ups. Sometimes in arguing the detail we forget the simple stuff. Patents provide a vital part of the paltry protection small business can wield against big business.

The use of the phrase “Patent Troll” benefits big business two ways. Not only does it play very nicely into the notion only companies owning existing means of production should be able to play, it deflects attention from the fact most of the morally dubious patents stored on the patent database are owned not by so called trolls, but by the corporate leviathans themselves. Patent reform lobbying is unlikely to result in the removal of the patent system altogether, but is much more likely to follow the kinds of proposal a company like Nokia put forward.

By all means lobby to amend patent law, but in doing so, don’t dismiss patents lightly, even software patents. If the system is properly implemented and the problem of poor examination standards and the legacy problem of “land-grab” patents addressed, they can be the friend of the small guy, the friend of the true innovator and will help competition more than hinder it.

Twitter: TheBasicMind

Ryan Spoon wrote something I've been increasinglty thinking for a week or so about the New Techmeme, and it's pointing to Twitter and Quora:

Techmeme has been making an increased effort to move beyond blog posts by integrating Twitter and Quora conversations. Conceptually it is attractive, but figuring out how to cohesively merge the different conversation types is quite difficult.

Techmeme will test their way into the right solution… and I give them credit for integrating Twitter beyond a side-bar widget (most attempts)… but I am not sure examples like this add value to the experience (other than getting to headlines very quickly):
He goes on to show a conversation on the board that was a bit circular and unhelpful (the inevitable impact of pointing to a microblog and an aggregator if one is not carefu)l. Curiously enough, he then looks at yesterday's gerfuffle with various Uber-reaching Twitterclients, and felt they they had kinda got it right...

And as it broke on Friday, there was a mixture of real-time commentary, news and updates from the companies themselves (namely Twitter / @Support and Bill Gross).

Whether in real-time or as a digest, Techmeme was the best way to follow. Why? Because Techmeme had figured out how to appropriately (and immediately) combine the different news sources and formats… most of which was blurred between news and tweets.
...which was interesting because just before I read his article I was putting pen to paper to observe similar frustrations to him, but I was writing about the frustration of navigating around the news item he felt was "getting it right". Having compared the two experiences I think I know why - when he was writing it was a breaking item on a sidebar (see below)



Great, pithy early warnings. However, by the time I woke up in the UK, it had mutated to this:




That's Techmeme the same as it's ever been, I hear you say.....amd on the surface, you are right - but now click on "expand discussion" on that big story from TechCrunch....this is about 1/4 of the expansion ( I have highlighted the twitter input in yellow, its nigh on half the input - btw I missed one, fourth from bottom):





The issues I had were the following, from a user experience point of view - firstly, Twitter:

(i) There is a hell of a lot more stuff there now to wade through, and that real estate is precious - I want to read the blogs I like and trust, and scanning through the longer twts (some of which look like txt speak) is more jarring than blog post headings in my opinion

(ii) Personally, I don't find the twts high value, as they all tend to say roughly the same thing, which typically I've already seen on Twitter or wherever - there are only so many ways you can say "ZOMFG Twitter kicked off UberTwitter go here [link]." in 140 characters, and there is precious little analysis in a twt after you've read 2 or 3
Secondly, Quora - I am not sure of the wisdom of an Aggregator linking to another Aggregator, because - in my experience anyway:

(i) You sort of just get the same news review you have just read on Techmeme again (especially as many of the Quora participants have typically made a Twitter post that has already been picked up on Techmeme), and then you have to go scanning the Quora page to see something new and its just sloppy seconds of the same stuff (in this case anyway, maybe other discussions are better).

(ii) I prefer different aggregators for news - Hacker News, Slashdot for example - to me Quora is just FriendFeed 2.0 - same people (who are everywhere anyway), same conversations, and with the interconnected twts and often blog posts from the same people all linking to their other posts in different media it all became a bit like a "mini link farm" around this story in my opinion (I should draw the lines between the items that are interlinked on the above page)
But to take Ryan's point, clearly there is a need to bring the real time into Techmeme - my take on it is this:

(i) Twitter feed is useful when Ryan saw it - on the sidebar as an early warning. less so when I saw it later, spamming the picture. IMO Twitter's value is speed, not content. I wonder if there is some way of killing tweets after they have been on a while, or showing them as a separate grouping / having a "show no tweets" filter option?

(ii) Quora is both easier - I can ignore it - and harder: I really question the use of another aggregator as a major news source, because the screen real estate and my attention are the limited resources. I would probably prefer to see it as a another link to the main story in the commentary section (like Slashdot sometimes is) rather than a destination in its own right.
But it is an interesting UI/UX question, and like Ryan, I think if anyone can get it right its the Techmeme team, but the fundamental value Techmeme has had to me is that it reduces, not increases the stuff I have to wade through...until now. . I shall watch with interest.

Bubbledynamics adapted from Geoffrey Moore's Technology Adoption Curve (Broadstuff Analysis)


More evidence that we are in the inflation stage of the Next Bubble - Mark Cuban argues that we are in a pyramid scheme, not a bubble (we are about to float over The Chasm - see above diagram - in my view. Also see our Ten Step Bubble Beaufort Scale explanation):

Over the last three months alone, Facebook’s roughly $33 billion valuation has roughly doubled, to an estimated $60 billion. Zynga’s reported valuation has jumped to upwards of $9 billion from $4 billion last May. And both pale in comparison to Twitter, which generated an estimated $150 million in revenue in 2010 yet has reportedly received overtures that peg its worth at between $8 billion and $10 billion. (Just two months ago, when Kleiner Perkins led a $200 million investment in Twitter, its valuation was $3.7 billion.)

Fueling the fire are firms like Andreessen Horowitz, which last week sunk $80 million into secondary shares of Twitter, and Kleiner Perkins, which this week threw $38 million at Facebook shareholders to (finally) add the company to its portfolio. But they’re certainly not alone. According to the secondary shares marketplace SecondMarket, VCs have represented the majority of SecondMarket’s buyers since the third quarter of 2010 and they accounted for more than 40 percent of its transactions in the fourth quarter.

Maybe the VCs truly believe that Facebook, Twitter, Groupon and Zynga are on the cusp of becoming among the most valuable companies in the world. But it may also be true that they believe they can sell their shares to a greater fool. (JPMorgan’s planned social media fund jumps to mind.)

Either way, when the chain ultimately ends, few, including Cuban, will feel terribly sorry for those left holding empty envelopes.

“When the market has a correction, stock prices will correct dramatically, and that sound you’ll hear from the Valley?” says Cuban. “[It] will be of a fund manager screaming, ‘Sh_t!’ as he turns out the light on his fund.”
I would argue that all bubbles start with an In-Industry Pyramid scheme, which is the stage we are at now. We are seeing massive inflation in value of companies that probably can make it (Facebook, Groupon etc) and the production of large numbers of new startups (witness the rise in new incubators, I eagerly await First Tuesday 2.0) It only becomes a real Bubble, however, when those Fund Manager In-siders who came to the party late, who do indeed "believe they can sell their shares to a greater fool", actually need to find the next tranche of Greater Fools to unload onto. JPMorgan’s planned social media fund does indeed jump to mind. And of course the JP Morgan scheme and it's kindred (and there will be) are a way of finding the next layer of Greater Fools, from the early mass market. Howard Lindzon does an excellent job of explaining the rationale of the Pragmatics as they decide to Enter The Bubble:

Americans LOVE to speculate. Read my pal Michael Bigger’s post and don’t forget it!

I am too happy to be cynical right now. I will save the cynicism for when it’s trendy again. Right now, dumb is winning.

This bull run is very real and very liquidity driven and the gains in my portfolio are shockingly real. They would be more real if the cynic in me had just died a horrible death in 2010.

If your cousin is pitching you startups, heed Mark’s advice. If your cousin is telling you the market is a scam, thank him and buy some more $aapl .
....the last line of Greater Fools being the Great Unwashed Public, so when your Taxi Driver or Dull Cousin stars to tip you about stocks its time to run.

However this Pyramid still has to cross the "Chasm", ie the event that persuades the early mass market to start sending ther hard earned cash into the New New Bubble. The deals like J P Morgan's are bridges, but to really cross the divide you need something bigger. In the past this has been a Major Greed Event like a major IPO (Netscape anyone?) that persuades Lindzon's Rational Pragmatist that there is money to be made.

Facebook IPO, I'm looking at you......

(Update - the Guardian asked us to say a few words, its over here - also refers to the earlier Ten Ways To Know if You are a Bubble post referenced at the top of this post)

There was an educational article in the Undiependent yersterday, in a sort of "OmiGod" way. It was about the UK "Top 100 Twitterers", and was ostensibly based on the PeerIndex algorithm. Now those of you who know about measuring influence on Twitter will know we are in Iteration 4 of Influence Monitoring.

Iteration 1 was "how many followers do they have" - the logic being that if you have lots of followers, you are influential. Turns out that lost of peopel gamed the system by following as many peopel as that can, and as so many had "autofollow" on, they got followed back. Ergo Joe Social climber is now instantly influential.

Iteration 2 was to try and gauge influence by the "Follow/followed" ratio - ie if you were truly influential, then lots if people follow you and you follow no one else. Cue above spammers to start unfollowing many of the people thay had followed to get their ratios up. Given no auto-unfollow, all their "audience" remained. The only problem was, it was also becoming clear that ratios were not the be all and end all, people actually had to say something (ie volume of twts) and make it interesting enough to actually influence other people. Not only that, it was becoming clear that on social media you were having to be social - the "pimp and dump" mode was in fact counter-pruductive.

Iteration 3 was to be a bit more sophisticated, and to see how often other people repeated (re-tweeted) what you said. This of course led to a Retweet Explosion by the sort of people who want to be Influential on Twitter (The Social Media Climbers) , but the only measurable influence was lots of p*ssed off people saying "stop retweeting everything or I'll unfollow you, you eejit" or similar, and changing of Retweet rules on Twitter. Also, as many grumpy people pointed out when Ashton Kutcher and friends had a "race for a million followers", people may let him influence their decision on a movie to watch, but not really on things they felt he knew nothing about. But this was the Explosion of Corporate interest in Social Advertising, so the newly minted Social PR agencies had to have something to feed the beast, so needs must and many attempts - some very good (eg Mat Morrison) and some much less good - were made to understand more deeply how influence works on a social network. And guess what - it's complicated

Iteration 4, where we now are, is trying to be more sophisticated - trying to blend in all the above approaches, plus add some form of "where is this person an authority", some understanding of "when is a retweet an influence and when is it just some prat trying to curry favour with the person they are channeling" etc, and even looking at outside calibration in other social media systems.

Anyway, the Independent yesterday invented Iteration 5 with its Top 100 UK Twitter methodology. It is so breathtakingly simple we wonder why people didn't think of it before:
Twitter is not yet evenly distributed: some fields, like technology and science, have very large communities of fans; others, like literature or art, have more incipient Twitter communities – but are none the less plainly influential. So we also searched specifically (further down the rankings) for people who had particular resonance in certain fields; and further refined our list by focusing on those who were especially trusted by other experts. This was where the advice of our expert panel came in.

Our five-person panel comprised Azeem Azhar, founder of PeerIndex; Ian Burrell, media editor of The Independent; Julia Hobsbawm, founder of Julia Hobsbawm Consulting and the media networking business Editorial Intelligence; Steve Moore, director of the Big Society Network; and Stefan Stern, cultural commentator and director of strategy at the Edelman PR agency. They analysed the initial results of PeerIndex's calculations, made recommendations and disqualifications, and argued for extra weighting for certain key tweeters whose significance to the medium is, in their expert judgement, greater than the numbers imply. Such interventions were kept to a minimum but give our final list the crucial virtue of having been assembled through the prism of human intelligence.
So, what you do is you take the output of an Iteration 4 algorithm system (Peerindex in this case). you take a long, hard, considered look at the algorithmic output and say "f*ck that for a game of soldiers, who are all these odd people - we need more people like us and some slebs with big t*ts". In other words, get a small closed circle of meedja types, look at the output, and chuck away anyone who doesn't look like a sleb or a current meedja darling, as those are the Right Stuff - the people who are (to quote) "plainly influential" and "especially trusted by other experts".

Well no, because if they were they would have higher scores on the algorithm, surely? - the population on Twitter is now quite large, its goes way beyond early techies. The reason - I would argue - that their scores are not higher is that people on Twitter are not being influenced by them as much, and there are (I propose) two main reasons for that:

(i) The Mainstream media is sleb-obsessed, but its mainly because slebs are walking advertising billboards, whereas said media have no tight feedback mechanism for measuring (a) what their readers really think of said slebs and (b) how influential they are (For example some slebs are influential insofar as their lives are total train wrecks - but no one would actually buy anything on their say so)

(ii) Twitter is (largely) still ABC1 demographic - people of wit, discernment and taste - or at any rate, they expect to see interesting interaction with their favourite famous ones. Going from Mass to Social Media is a bit like the jump from Silent to Talkie movies - suddenly one finds some of the stars of the silent screens sound ridiculous, and the 'Net effect is people run away from them.
The fundamental problem is that the Mainstream Media is unable to recognise anyone that the mainstream media doesn't recognise, if you get my drift - which is of course why it is becoming daily less relevant, while a new lansdcape of media performers have come up via blogging, Web TV et al.

Now I believe the algorithm is probably as good as any of this Iteration (It has to be, my Peer Index score means I should have been on that Indy Top 100, in about position 75-80* ) but you have to ask, why bother with an algorithm method if you can just grab a quick coffee clatch and over a circle-jerk decide, based on (your perception of) mainstream media fame, who is influential on an entirely new medium. Straight up Hello or Cosmo's alley I'd of thought, but the Erudite, Intellectual, Independent?

Or is it now the Obeisant, Populist, Undiependent?

Update - a few days later, Jeremiah Owyang makes the same observation


* Hence this post - and the grapes were sour as well

Media Value chain during Epyptian Revolution

There has been quite a lot of hoo-ha about the role of the Intenet / Social Media in the Tunisian and Egyptian revolutions, with Pro-Apostles calling them "Twitter" or "Facebook" or "Internet" Revolutions, and Pro-Agnostics taking strong issue. The nuanced truth, as always, is in the middle but never generates the same copy and linkbait. To try and get some of the nuance into the open, therefore, I looked at the media production and delivery supply chain, and how it worked, as we would for any market analysis. To really understand it we also have to look at events leading up to, and during the actual on-the-streets activity. A caveat - this was done over an hour or so over a cup of coffee, so is very much a first cut, but even so I think it gives some insights.

Before the Revolution:

The above value chain was all fully connected, (we can assume some filtering of sites was done by the Governments) so the messeges and mediums were in full flow, and undoubtedly were being used to organise revolution. Looking at where the New Media had an impact, its worth looking at the areas:


(i) Content production

As we noted, people have been able to create seditious content for centuries, thus it is unlikely that the Net per se helped here, its more likely that user owned devices - PCs, Videocameras, phones, cameras etc were the more imortant element in content creation. What the Internet probably did help with was rapid transmission of the text/graphic form ideas (rather than the lower bandwidth of voice), both within Egypt and with outsiders. Fahmy puts it well:

Through this, an even greater underlying principle emerged: Social media is built and designed to support social movements. The social media framework itself is a powerful underlying force that allows the momentum of movements to surge uncontrollably and organically. A revolution, a movement, or any major social cause nourishes on unity, “people power,” advocacy, connectivity, grassroots mobilization, free expression and shared aspirations… all of which are inherently embedded within the social media skeleton and system. (Best example lies within Facebook). It is almost as if social media perfectly fits as a layer within a movement’s structure.


(ii) Aggregation

This is probably where the 'Net was most productive, creating fora for idease and planning to be aggregated and co-ordinated. Modern social media is more atttractive (graphics, multiple functions etc) is no more efficient than the old, but by dint of attracting very large user groups was arguably very effective. Fahmy again:

If anyone wants to challenge a status quo, energize and mobilize their network towards a cause…

- Where do you think they will go first?
- What will help them gather supporters and resources faster and more efficiently?
- What will allow them to connect, notify, and engage their base?
- What will help them easily organize events, rallies and get donations?
- What will help them recruit other activists and get their voices across?
Wael Ghonim notes a similar story (quoted on CNN):
I’m talking on behalf of Egypt. This revolution started online. This revolution started on Facebook. This revolution started in June 2010 when hundreds of thousands of Egyptians started collaborating content. We would post a video on Facebook that would be shared by 60,000 people on their walls within a few hours. I always said that if you want to liberate a society just give them the Internet…. The reason why is the Internet will help you fight a media war, which is something the Egyptian government regime played very well in 1970, 1980, 1990, and when the Internet came along they couldn’t play it. I plan to write a book called Revolution 2.0… that will highlight the role of social media.

Its worth pointing out that the the "intelligentsia" is historically at its most effective during this phase of a revolution, so the low % of 'Net connected population is not a major disadvantage


(iii) Distribution

As can be seen, the Internet has a fairly low penetration within Egypt compared to Mobile or TV, so we would hypothesize that more people were touched by the latter. However, it is perfectly believble that there was a 2-phase supply chain, with the 'Net being used by organisers/intellectuals to generate the initial revolutionary content and co-ordinate on a macro-scale, and the other media used to co-ordinate at a local scale.


(iv) Customer Equipment

Distribution channels are all very well, but if no-one can receive it it is irrelevant. Satellite TV distribution is lower than Aerial TV, but people do tend to group around satellite TV to watch Al-Jazeera. Penetration of PCs is higher than Internet itself (though PC's, with the ability to desktop-publish, probably had an impact on non-elecronic distribution too). Radio and good old printing presses are probably unsung media in this revolution


During the Revolution

I would argue that during the actual on-street activity, most of the "why" content was already produced (ie the ideas were largely known), the issue was more around "how/who/where" ie tactical aggregation (especially co-ordination) and distribution of data about the ongoing situation - Twiter user @alta1989261 on the Twitter 140 blog:

Twitter is a very important tool for protesters, as evidenced by the fact it and Facebook were repeatedly blocked in Egypt as the protests flared up. We use it to campaign and spread the word about protests/stands–hashtags are invaluable in that respect, and to share news quickly and efficiently, with our own 140-char commentary on them, and subsequently have conversations with random people/complete strangers. But most importantly, it allows us to share on the ground info like police brutality, things to watch out for, activists getting arrested, etc.

As most customer equipment was stand-alone (like the smartphones used for the above example) and owned by the users, it was fully functioning (imagine if all the devices were "dumb" and run via a cloud and/or or could have all their data locked like a Kindle can do). The main change during the revolution was that the Egyptian government shut off large tranches of the Comm Distribution system (so I'm not clear on how long/how the twittering went on for) - as the New York Times notes:

As in many authoritarian countries, Egypt’s Internet must connect to the outside world through a tiny number of international portals that are tightly in the grip of the government. In a lightning strike, technicians first cut off nearly all international traffic through those portals.

In theory, the domestic Internet should have survived that strike. But the cutoff also revealed how dependent Egypt’s internal networks are on moment-to-moment information from systems that exist only outside the country — including e-mail servers at companies like Google, Microsoft and Yahoo; data centers in the United States; and the Internet directories called domain name servers, which can be physically located anywhere from Australia to Germany.

The government’s attack left Egypt not only cut off from the outside world, but also with its internal systems in a sort of comatose state: servers, cables and fiber-optic lines were largely up and running, but too confused or crippled to carry information save a dribble of local e-mail traffic and domestic Web sites whose Internet circuitry somehow remained accessible.
In fact the ability of a Government to turn off the internet has got a lot of people around the world, who thought the 'Net was very robust, quite worried. It still worked here and there, but it was clearly largely crippled.

Also, the foreign owned mobile operators in Egypt proved to be effectively state controlled and rapidly closed themselves down (as we saw with various Cloud services in the Wikileaks affaire)

If you look at the loss of the distribution system vs say the 1980's Russian revolution (where comms was via carefully hidden Samizdata methods), or the !980s/1990s South African and Velvet revolutions (mainly pre internet) then clearly the big difference here was the Net, and (in 2011) Social media. However, in Egypt the 'Net was fairly effectively shut down, but the Egyptians still had their revolution, so its hard to argue it had any real impact. Looking back it is also clear that even with the huge restrictions of Samizdata, the Russians were perfectly able to run a revolution - as were the Czechs, Poles, South Africans etc with mobile phones and old fashioned fly-printing and word of mouth. Going back in history to the first Russian revolution (1917) and beyond to the various nationalist movements in the 1800's and the French Revolution of the 1790's, it is clear that if people want to have a revolution, they will have one!.

Thus if you compare Egypt and what has gone before, it seems fairly clear that closing of the 'Net during the actual on-street activity was probably fairly ineffective. There was data coming out (the most effective being YouTube video) from the small amount of systems still up, but the heavy lifting in Egypt at the critical time was via distribution systems that were harder to shut off (as it was since the 1980's), ie other foreign people's broadcasting systems - specifically Satellite TV (Al Jazeera, take a bow) and (probably, but much less glamorously) radio. This was also true in Russia, South Africa etc. and of course if you go pre-internet, the number of revolutions that got on quite happily without any electronic mediation of any sort is vast.

Another impact of the events spreading to the West via the various media was that it made it harder for Western governments to behave with Realpolitik and prop up their old friends, as it was clear that their own citizens by and large supported the Egyptian revolutionaries (I noted this in my notes on the silence from Davos and thereafter when the events in Egypt broke out). However this was not purely a Social Media thing - TV and Newsprint were as much a part of this phase, though getting videos and liveblogs out via Internet helped create content for these stories. But I would argue in this case the heavy lifting was by Satellite TV, especially in the English language.


After the Revolution

I was interested in the excoriation of Malcolm Gladwell when he pointed out the Weak Links of Social Media don't make revolutions. To my mind he is merely repeating (in another way) what many observers through the centuries have noted, ie that regime change without significant high risk commitment (ie bloodshed) is fairly unusual. The pen may be mightier than the sword, but at some point you need the sword..... (Eastern Europe being an interesting exception, but the governments there had largely given up already). To my mind what is provable is that Social Media is a more efficient way of building up the latent will of a group will to move from a "weak link" to a "strong link" mode by making them realise there are vast numbers of like minded people (by dint of reaching more people, much faster). But it not the spark to action, that is elsewhere and is usually an heroic act (setting yourself on fire), the creation of a martyr via state violence, or committed organisers getting people on the streets - ie strong links.

Some argue that state violence is less possible today as modern media makes it clearer what atrocities are being committed. I would argue that Tiananmen Square and lately Iran showed the opposite - a modern regime is quite capable of behaving brutally, no matter how many distressing videos on YouTube or green avatars on Twitter. History tells you that Regimes change by and large when the army fails to shoot its own citizens, at that point the Regime no longer has a sword. (History also tells you that the replacement is very often people with swords that the army promotes, at least for a while, but that is for a future post). I strongly suspect Egypt's reluctance is also more because of realpolitik (ie US subsidies, trade links) - which China and Iran do not need as much - or it could be that the Egyptian state is just far more subtle, or divided, or just a more ethical society (looking at their behaviour during the revolution I can believe the latter, most of the high value looting seems to have been state sponsored robbing of the coffers and Egyptian Museum).

Of course, strictly speaking the Egyptian revolution is not complete, in effect there is a military coup with promise of future democratic options. If the intentions are benign I would expect to see no more censorship of people expressing themselves via media, if it were not I would expect to see censorship and increased filtering.

I also suspect that the reason that Western "Pro Social Media in Revolution" pundits see the 'Net as such a large factor (apart from self interest) is that they were largely interacting with the 'Net enabled Egyptian educated class, rather than all the locals interacting at a local level on local (non english speaking) media. The medium may be the message, but make sure you are looking at all the media. This was probably even more so in the US, as I understand they could not easily get Al-Jazeera TV so were largely watching it unfold on Social Media. In fact I note with interest that Wael Ghonim, who has been channeled as the voice of the Internet Revolution, has been at great pains to point out that a lot of factors were driving the revolution. There are dissenting voices in Egypt about media usage, but they are not getting amplified, especially in the US:

“I think it’s been incredibly condescending to diminish, if you will, what was an incredibly popular revolution the likes of which the Arab world has not seen, perhaps the whole world has not seen, and just to say that it was a Facebook event or a Twitter event.” — Parvez Sharma, filmmaker and writer
I will go into more detail in a subseqent post about the real causes and modes of a revolution, using the same research techniques we do for market analysis (I believe the new word for this approach is cliodynamics), but what I think we would conclude as an initial hypothesis is that the Internet, and moer specifically Social Media is:

- a good way to create and aggregate "Seditous Content" before the actual "Street Phase" of a revolution, however, the reasons for dissatisfaction have to exist already
- a way of building up "weak ties" into a point where "strong ties" may be possible. However, it does not (yet) seem to promote the spark of actual open revolt
- is probably overstated by Westen proponents as a force in Egypt as (i) penetration is low, (ii) western (especially US) observers are getting a disproportionate amount of their data via this source and (iii) there is quite a bit of self interest in advancing the cause (and opposing it, for that matter) so claims tend to be over-optimisitc
- not as useful once people are on the streets as before
- is more prone to shutdown as most 'Net distribution assets are "in country" than "out country" and can be blocked - Foreign assets like satellites, or unjammable assets like paper, word of mouth, etc are more reliable. Rely on teh 'Net at your peril
- is a useful component of the data fed back to Western peoples, to rapidly dissuade their governments from propping up the Old Regimes

In other words, I would argue from this analysis that the 'Net is just another layer of the comms systems, and is a tool of, rather than a cause of, any revolutionary movement. It is more efficient and effective than what has gone before to connect and aggregate, but less useful once the people hit the streets, so ultimately it is definiely not the "killer app" that allows a revolution to occur.

What I think it has done is shifted the balance of media power to citizen, from State. I would however argue that its gone back to a level of c 70 years ago, before (largely state controlled) broadcast mass media emerged. In say the 1920's politics was a far more local issue, carried in town halls and on the stumps - you saw your opponenst up close and personal - and I would argue that modern 'Net media is a return to that era. But that era was unable to stop the march of Stalinism and Fascism, because - as I will argue subsequently - far larger forces are at play than the means of communication.

Update on that last comment about shifting the balance - it appears even in Egypt, the state was starting to use social media - TechCrunch:

Alyouka also notes how the Egyptian authorities themselves were trying to use Twitter to spread propaganda and misinformation in a “painfully awkward” manner (the fake accounts are always easy to spot, aren’t they?). The tell-tale signs: always repeating the same Tweets, word-for-word, over different accounts about how bad the protests were for the country or praising Mubarak with few followers and very few tweets per account.

So there will be an arms race, clearly....