Broadstuff Blog

Intel bought McAfee fo 60% over share price today - GigaOm:

Intel CEO Paul Otellini said in a statement: “In the past, energy-efficient performance and connectivity have defined computing requirements. Looking forward, security will join those as a third pillar of what people demand from all computing experiences.” The price Intel agreed to pay for McAfee — which had revenue of $2 billion in 2009 and has gross profit margins in the 80-percent range — is a 60-percent premium to its trading price prior to the announcement.
Quite - its all about The Cloud - but McAfee? And a 60% premium - $7.7bn for the thing, in cash - at exactly the time when many newer, cheaper (and dare I say better) security software companies are popping out the woodwork? Elsewhere its been justified as a deal "about mobile" but I don't get that either for the same reason as above.

I rather liked a comment on TechCrunch:

It’s simple really. McAfee’s software slows down your computer enough that you need a faster Intel CPU. Intel now has direct influence over the main driving factor behind people purchasing new PCs…

That is about the only way this makes any sort of sense to me at the moment. To be watched.....

Declaration of Intent?

Today Facebook announced their much pre-heralded Location service, Places. The interesting thing is how they are treating competitors such as FourSquare and Gowalla - are they partnering with them or planning to eat them? TechCrunch:

Representatives from both Gowalla and Foursquare were invited to take the stage at the event to talk about how they plan to leverage Facebook’s new Places API. Both will allow you to check-in and publish the data to your Facebook feed. Your badges and pins from each of those apps will transfer over as well. As we expected, Facebook is playing nice with these guys — and they’re clearly excited to play nicely back given Facebook’s 500 million users.

Yelp and Booyah (maker of MyTown) are also launch partners for this new API. Booyah is actually making a new app called InCrowd build on the Places API. WIth Yelp, you’ll be able to transfer your check-ins both to and from Facebook as well.
Its easy to see why Facebook wants this, and the probable outcome is predictable (recall the wailing when Twitter started to eat its own ecosystem?).

Foursquare and Gowalla are cleft on the horns of a dilemma - collaborate and (maybe) get access to 500m users, but you are then on your large competitor's platfotm and at their mercy. Defect and you will probably struggle to recruit Facebook customers, unless of course users want independent alternatives (I would, as I'd prefer to keep my data split up among the dataminers, as a first line of defence). But the facebook logo - a pin through the heart of a 4 in a square - may say it all....

But they have clearly taken the Remora option - stick around to get scraps from the big fish, hope you can clamp on, and avoid being eaten.

Watch the body language of the Foursquare and Gowalla people at the announcement (its on the techCrunch link above), they looked somewhat uncomfortable as "guests" at the feast. There is no such thing as a free lunch, unless its you......

Yelp and Booyah are in a different position as they are not direct competitors.....yet.

Chris Anderson, Wired Magazine's editor, dreams up a new schtick with which to beat us every few years. First the Long Tail, then FreeConomics, the pattern is the same - lots of sturm und drang on the Wired platform, mo' PR off it, and then a book is out before the people who know it doesn't quite hang together can get a blog post in edgeways.

Anyway, with the Long Tail disproved and FreeConomics debunked and diluted to Freemium (or Paymiium, in the case of the book), there is a need for a new schtick to beat the Wired horse with. This is (possibly) that - "The Web is Dead - Long Live the Internet".. (To be fair, I understand that in the printed article* John Battelle and Tim O'Reilly give their ripostes).

[Update - the riposte is now online - styled as a Debate though i think Linkbate is more appropriate ]


Anway, the gist of the argument is that:

You wake up and check your email on your bedside iPad — that’s one app. During breakfast you browse Facebook, Twitter, and The New York Times — three more apps. On the way to the office, you listen to a podcast on your smartphone. Another app. At work, you scroll through RSS feeds in a reader and have Skype and IM conversations. More apps. At the end of the day, you come home, make dinner while listening to Pandora, play some games on Xbox Live, and watch a movie on Netflix’s streaming service.

You’ve spent the day on the Internet — but not on the Web. And you are not alone.

Now this is really going to shock the young 'uns, but this is not so much a Brave New Thing as The Way Its Always Been:

(i) There was a time the internet existed before the Web

(ii) We have been using the Internet without the Web all this time - think email, VoIP, Adobe Air, online gameworlds etc etc.

(iii) This will continue, and in fact its not impossible to imagine that the Web is a temporary phase.
In other words the correct response to this thesis is "We know. And"?

(OK, the 'And' is that some very succesful Today Web companies will wither and some new Tomorrow App companies will prosper. But that was ever thus)

Now the reason for all this excitement is Video and Mobile Apps

Video is exciting not because it Loses a Lot of Money (or more accurately uses a lot of high quality bandwidth that no one right now pays for) but because it puts a lot of traffic on the web, and that must be a sign that all is well, right?

Mobile Apps (or Programs That Run On Your Own Device, as Apps used to be called in old money) are going to replace the Web in the way we access functionality (Better tell Google - after all, Microsoft Office is just an App, albeit quite a big one). Yes, gentle reader, the digerati of today have effectively re-branded the Olde Client/Server tradeoff debate to now be the Apps/Cloud debate.

The reason for Apps is not because Smartphones are smart, but because they are still dumb. If they were smarter, with bigger screens, and better UI like Laptops are we would use the Web much more on them. Its just that smartphones are smarter than dumbphones which could only use very small Programs That Run On Your Own Device, which are called Widgets. And the reason everyone is so excited about Smartphone Apps is because they think they will make tons of money from them. Like they thought with Widgets. Except they won't. Like they didn't with Widgets.

Now to be fair, Wired have worked out that all these new App environments are not quite as open as the Web (part of the reason they will not do as well as expected, but more on that later) but that too is hardly New news. Still, it tells you something about the Wired (Print) Edition's reader base. Not quite the Digerati as they once were, methinks?

Anyway, it will take about 12 months for the market to realise there is very little money in Smartphone Apps, so I calculate a Book by next spring should get in nicely before the Apps hype cycle rollercoasters on down

Update - as Gawker delights in pointing out, this whole thing is even sillier than at first glance:

- Irony 1: Wired released its cover story package first to the Web, on Wired.com. You won't find it in Wired's iPad edition, and it's not out in print yet. The death of the web might be the "inevitable course of capitalism," but it apparently pays better to deliver that news via a dying medium.

- Irony 2: Revenue is up at Wired's profitable website this year, despite a fairly severe reduction in staff last year. Yet Anderson, who has no control over Wired.com, writes that most Web publishers haven't been able to "reverse the hollowing-out trend of analog dollars turning into digital pennies... and by the looks of it there's no light at the end of that tunnel ." That tunnel being the one Wired, itself, is not in, apparently.

- Irony 3: At the same time, circulation — and thus revenue, almost surely — are down for Wired's iPad edition, which was approaching (and possibly even surpassing) 100,000 copies for the debut issue but has since fallen off — to less than a fourth of what it was, one source claims. However large or small the decline, it could certainly be corrected; dropping off from a big bang launch is common enough in print and online media alike.

But Wired's iPad tumble does raise the possibility that Anderson is speaking as much from his hopes as from his analysis when he writes, "We are choosing a new form of Quality of Service: custom applications that just work." The iPad team belongs to Anderson, after all (unlike, again, the web team).

- Irony 4: Isn't this the guy who wrote a book called Free and noted, "You know this freaky land of free as the Web. A decade and a half into the great online experiment, the last debates over free versus pay online are ending?" Eh, maybe not so much; Anderson today writes, "Much as we love freedom and choice, we also love things that just work, reliably and seamlessly. And if we have to pay for what we love, well, that increasingly seems OK."
Even funnier, apparently Wired predicted the End Of the Browser in 1997 as well

There is Linkbait, and there is plain looking dumb...........

*I haven't bought the Wired print edition for years....

Must say I am enjoying the Pronouncements of Chairman Schmidt, we have been following them ever since the Repeal of Privacy:

"if you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place"

......last year. This is of course the same Google that refused to speak to CNET journalists for months after they published stuff about Schmidt - obtained from Google searches. And then there was the contretemps about a certain lady.

More recently there were the glorious pronouncements on serendipity being calculatable, and various other things.

But now, we have two more - firstly, the removal of free will with a free (albeit Ad supported) algorithm:

"We're still happy to be in search, believe me," Schmidt told the Journal. "But one idea is that more and more searches are done on your behalf without you needing to type....I actually think most people don't want Google to answer their questions. They want Google to tell them what they should be doing next."

Secondly, the best way to avoid the Googleworld of zero privacy is:

that every young person one day will be entitled automatically to change his or her name on reaching adulthood in order to disown youthful hijinks stored on their friends' social media sites.
I haven't changed my name yet - but I have changed my router ID and WiFi net name to confuse those snooping little StreetSneaks. Next step is camo-netting and WW2 false building to confuse Google Earth....

Personally I favour legislation telling Google to cull the data after a while instead, as the EU proposes. But my favourite is:

"I don't believe society understands what happens when everything is available, knowable and recorded by everyone all the time," he says
They do actually - its called the Singularity - its when all that stuff happens, and you plug your brain into the matrix, and it knows serendipitously what you want next.

But what the Singularity lot don't realise, as they march off to their next Great Mind Meld, is that Google is planning on running it. Well, what other logical conclusion can you take from these pearls?

You heard it here first.......

Update - never mind Google, watch your Soap Powder (hat tip @socialtechno)

Piece in TechCrunch on the shifts in the startup funding markets changin from the old pecking order:

Today things are much more complicated. More funds are arguably in the top tier – guys like Accel, Andreessen and Greylock have risen. But more disruptive are the angel investors. It used to be that angels worked with venture funds, doing the very early rounds and then handing things off when a company did well.

But the last several years have seen the rise of the cheap startup. Internet startups can use open source software and new scripting languages to ship products fast and cheap. Often there’s no need to go past an angel round of funding until it’s time to decide between selling and doing a big marketing push. Either way the VCs lose, because even if they get in at that late stage the valuations are much higher and returns plummet.

An entire generation of entrepreneurs have stopped thinking about hitting up those top tier VCs as their first step in the startup process. Many now simply begin with Y Combinator, or take a small angel round. These angels are fast and nimble and they are hanging out with the entrepreneurs at events, incubators, etc. They are in the fray, while many of the old VCs remain above it all, waiting for the entrepreneurs to come to them, hat in hand.

In my view the main issue is that market re-structuring is all very interesting, but the big thing underlying this is that what is happening is that money is flooding in again, and that will lead to asset bubbles - as with the pre Crunch Private Equity markets, too much cash chasing to few opportunities pushes up the prices. To exacerbate this, it does cost less to get companies up and running (but probably more to make a market in a world full of many small companies0so the funding stages have to be changed as well.

But the one thing that caught my eye was a shift in the payback theory of the startup market - it would appear that the market is shifting to many smaller companies being sold for far lower prices, and this is impacting the traditional "1 in 10 is a home run" model:

Some venture capitalists think that this “think small” attitude is driving entrepreneurs who may otherwise build the next Google or Microsoft to create something much less interesting instead, and then everyone loses. No IPO. No 20,000 tech jobs. No new buyer out there for the startups that don’t quite make it.

And without those occasional but huge exits, the entire ecosystem can fail. Venture firms need big returns to raise new funds. Without venture money a lot of the innovation in Silicon Valley would end.
I have always felt that the "home run" model's returns fitted better with the big VC fund business model rather than the individual entrepreneur. For most entrepreneurs I would argue that - as a game theory payoff - a reasonable probability of a few million dollars exit for a few years work is a more enticing prospect than an exceedingly small probability of a vey large exit.

In other words, would you prefer to count your chickens as they hatch or wait for a very rare Black Swan to show up?

I suspect this shift in the rules of the game is because, as money flows in, the power is going to the rarer entity - the good startup.

(Update - and another TechCrunch article points out that you don't need home runs to create the new jobs - large numbers of small successes are doing most of the heavy lifting)

Incidentally, having run and/or turned around a number of Tech startups, I would point to Fred Destin's post here as the key to that succesful exit:

In startups the only real sin is running out of cash, and the cardinal sin is running out of cash UNEXPECTEDLY.
Exactly - never mind the team, market or product - they are irrelevant if the company cannot manage its cash.

It would appear that Rupert Murdoch will launch an Ipad/Tablet only newspaper - Paul Carr savages it, as is his wont:

“Rupert Murdoch To Launch New National Newspaper”.

As headlines go, that’s up there with “DeLorean To Unveil New ‘Gull-Wing’ Car”, “Freddy Laker Reveals Trans-Atlantic Airline Plans” and “Charge! says Light Brigade” – reading it, you assume either there’s been some kind of historical glitch in your RSS reader or that someone is making a wry joke about extreme business hubris. Surely no-one, not even a dyed-in-the-wool newspaperman like Murdoch, would be stupid enough to launch a new national title in the current climate.

But no – the story’s true, albeit with a technological twist that makes the move sound only 1% less suicidal: Murdoch’s new paper (launching ‘by the end of the year’) will be available only on tablets like the iPad. And readers will have to pay to view it. Oh, Rupert, you crazy old lunatic.
Love the crack about the Light Brigade....

This is an easy shot, but I would hold off with the snark just yet. After all, its not as if the current approach is of Free! or extremely low priced Ads is particular effective. Give News Corp their due, they are at least trying new things out.

Personally I don't think the web paywall will work (except with the WSJ) as there are just too many alternative sources. But the idea of specialist media for a mobile device (where people are more used to paying and there is a likely to be a premium on easy-to-use services on the limited capabilities of tablets, as their is for Apps on smartphones). Now as Paul notes, the initial aim may be a bit off:

Murdoch hopes that his new e-daily will ‘reach readers who increasingly consume their news on the go… offering short, snappy stories that could be digested quickly.’ Says the man himself: “We’ll have young people reading newspapers… It’s a real game changer in the presentation of news.”

Now where have I heard that before? Oh yeah. I heard it back in London, in 2006, when a company by the name of News International launched a new free daily newspaper called ‘thelondonpaper’ (punctuation theirs – the paper was aimed squarely at the ‘web generation’ who, like their 7th century counterparts, are too busy for spaces between their words).

But one of the commentators makes a good point:

I think Mr Carr doesnt get Wall street mentality. Mr Murdoch’s reader base are investors, wall street ypes, who earn like 300k a year and could care less about spending $17 a month to read the WSJ without annoying ads, and iPads are apparently super popular in the financial circle. So calling him a “lunatic” is stupid atleast and rude at worst
That is probably just the punt that Mr Murdoch should be making in my view.

Overall, it may not work, but then again it just may...... and if it does I suspect the payback is far bigger than the investment in repurposing NI content for a tablet.

Interesting article by Paul Carr in TechCrunch today, in essence he is pulling out of most forms of social media:

I’m probably not the first to have decided to delete Facebook, Foursquare, Blippy, Google Buzz, LinkedIn or Delicious either. I may be the only person this year to have deleted my Friendfeed account, but only because I’m probably the only person this year to remember that he has a Friendfeed account.

No, I would hardly be the first person to decide to embark on a Social Shutdown (as Blippy’s Philip Kaplan termed it) having grown tired of the relentless look-at-me-ism of the Status Update Generation. And I wouldn’t be the first to realise that there’s more to life than feeding the insatiable blood-eating plant of social media – imagine Audrey II in Little Shop Of Horrors – just to keep the fifteen people who care appraised of my every move.
His reasoning is at first glance counterintuitive:

But that’s not why I’m doing it. Quite the opposite in fact: I may be the first person to decide to close down most of my social media accounts for purely narcissistic reasons.

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

As I shared more, though, I started to notice a funny thing happening. Rather than people becoming more fascinated by my life; the exact opposite occurred. “I loved your book, so I started following you on Twitter” people would tell me at parties. And then their expression would change: “your real life isn’t as interesting as you sound in print.”

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

Social media allows us to become familiar with people who in a previous life would be unknowable “stars” — and we all know what familiarity breeds. There’s a reason why reality stars fade from the limelight so quickly and why none of the movies on Project Greenlight became a success: to mix a metaphor, you can’t become a star if everyone has seen the sausage being made.

Now Paul is a self confessed media-whore, but he is also (i) fairly intelligent (he tries hard to hide it, I know ) and (ii) is in my view one of the earlier adopters in this game so its worth watching for that reason.

And I think this is a trend worth tracking, as another memetic swallow has just been spotted - Jeff Jarvis points out that privacy is now the scarce resource, not publicity:

At the latest New York Tech Meetup, Drop.io founder Sam Lessin did just that with my favorite topic: privacy and publicness. In a rebuttal to Clay Shirky’s Cognitive Surplus he said:

“Privacy was once free. Publicity was once ridiculously expensive.

“Now the opposite is true: You have to pay in a mix of cash, time, social capital, etc. if you want privacy.”

Whether your reasoning for Social Shutdown is contrarian media-whoring, a desire for a bit more privacy, or just that it is too hard to keep a profile going on so many and varied networks, I think this is a trend that will grow in social media usage - people will rationalise onto a few ( 2- 3 in my estimate) social networks. Probably one "professional" one, one "social" one, and probably something like Twitter which is more of an Alerts + Chatroom service. (I've pretty much rationalised to this blog, Twitter and Linked In - plus all the Yahoo special-interest email groups of yesteryear, but they are very easy to manage)

Add to this the growing worry about massively intrusive datamining from Facebook, Google et al (I wonder if that is actually driving this reaction in some indirect way) and I think we are possible seeing the start of a Social Mass Media backlash?

I'd like to claim we were as prescient in seeing Oracle sue Google over Java infringement as we were in working out that Google would break out of the Net Neutrality camp, but I can't - we don't really track whats under the hood in mobile OS.

(I suppose in that context we count as dozy bloggers )

What I can tell say though is that we weren't surprised at all to hear it - as we have written many times, the issue with Open Source and its IP rights is a very tricky area and a potential minefield once it becomes valuable. (see here and here for example).

Nor, it seems, were some of Java's original patent holders very surprised - from eWeek:

In an Aug. 12 blog post on the matter, Java creator James Gosling said:

“Oracle finally filed a patent lawsuit against Google. Not a big surprise. During the integration meetings between Sun and Oracle where we were being grilled about the patent situation between Sun and Google, we could see the Oracle lawyer's eyes sparkle. Filing patent suits was never in Sun's genetic code. Alas....
And Sun didn't survive, gentle beastie that it was.

You hav eto wonder what Google was thinking though - these are not stupid people, surely (we ask) they would have realised that:

Infringings patents + Making a valuable business = Lawsuit
It is, after all, the American way

But I am trying to understand their logic - I can see 3 options:

(i) Ignorance - Google techies build Android on Java patents while high on open source kool aid, not realising patent lawyers drink bitters (possibly based on Sun vibes, but then Oracle buys them....) and pointy headed managers don't realise what's at stake

(ii) Hubris - Google believes no one is smart enough to see what they did and/or no one would dare sue them. Again, may have been true for Sun, but Oracle is a different beastie

(iii) Economics - the cost of any lawsuit is chicken feed compared to the value of carving out a big position in the Mobile IP market.
Up till the Great StreetCam Debacle I would have plumped for 3, now I don't know.....

Reading the ongoing Net Neutrality debate, here are a few comments on some of what is going on:

Firstly, Google has defended its jumping the fence and says its still a Good Guy, but no one is buying it. You can fool some of the people etc etc.....

Secondly, Facebook and all the other "Aggregators Without a Stake In Networks" lambast Google - well they would, wouldn't they - the last thing they want is the Distributors (Telcos and ISPs) cranking up the rents on their (currently) underpriced rides and Google hops over the fence.

Fred Wilson weighs in with a view on Net Neutrality, when he says:

I don't want to see the Internet regulated. I don't want rules that require oversight and adjudication. But given that we now have an on ramp that is tightly controlled by a small set of access providers with almost identical interests, I would like to have one basic rule that is so simple that everyone understands what it means and we can simply follow it.

Our firm are fans of the work of Barbara Van Schewick, Professor of Law at Stanford, who argues for the following simple rule:

A non-discrimination rule that bans all application-specific discrimination, but allows all application-agnostic discrimination. Discrimination is application-specific if the discrimination is based on the specific application or content (e.g. Skype is treated differently from Vonage), or based on classes of applications or content (e.g. Internet telephony is treated differently from e-mail).

That is all we need. Nothing more, nothing less. That is net neutrality. A policy that maintains the way the Internet works today. That has brought us Google, Amazon, eBay, Yahoo!, Facebook, Twitter, and many many more innovative web services.
Now this is fine as far as it goes, but what it forgets is those great services - Google, Amazon, Facebook etc - grew up on an economically unsustainable transport network, ie the ISPs have spent most of the last 10 years massively underpricing their pipes and that is coming to an end as video starts to fill them up. And its that underpriced ride that is filling the key issue now, and what is behind the Net Neutrality gerfuffle.

If I may step back to the beginning (about 10 years ago or so......) and tell a little story of how we all got here.

Once upon a time, long long ago in the 1990's, there was a deregulation of old national Telcos, and a resultant speculative boom in "New Telcos". Many miles of cable were laid, acres of hosting space was built, and Sun handed over many months' production of its tins on credit to the Application Service Providers (an ancient term for Cloud Service providers). This whole panjandrum than went spectacularly bust in about 2001 - leaving all these assets at firesale prices, and they were picked up by the big survivors (the Telcos and ISPs of today).

"Net Neutrality" at this time was the argument about "equal access" - ie that the large oligopoly of surviving Telcos and ISP Ogres should not give their own services priority in the quality of service stakes. All bits were to be treated equally from ingress to egress.

Move onwards to about 2005, and Broadband is growing like topsy. The Telcos realise its a race for consumers so price it at ludicrously low to grab market share from each other. Ths allows all the aggregators (Google, the Social Networks et al) to get a near "Free Ride" over the pipes - which they immediiately priced into their long term business models and then persuaded all their VCs and other backers that the fairy tale that was "FreeConomics" ruled for ever and ever.

At the same time, another thing was happening - the arrival of internet Video meant the Pipes were filling up far faster than predicted, and the Telcos/ISPS started to look at the prospect of having to either (i) invest billions in new infrastructure or (ii) start to throttle traffic on existing capacity. Given the under-recovery due to low pricing, (i) was economically impossible unless some form of subsidy or long term guarantee was given, or unless they started to charge the upstream providers (mainly the content aggregators who had the money) more for access to the pipes.

It was at this point that the Aggregators and their proxies started to conflate the original Net Neutrality debate with the "Equality of Assets" argument - ie the Telcos didn't really own their pipes, they were common goods and thus everybody's pipes, so everyone needed access (at the same price, and preferably a price of $0) regardless of whether they were shunting a few emails or megastreams of videos. This refrain was picked up avidly by what I term the "Net Hippies" who believed in free love, free services, and most of all - free access to big bandwidth for free content. A typical expression of this view was Cory Doctorow:

I say, it's our dirt, so we make the rules. If they don't like those rules, let them get their goddamned wires out of our dirt, off our streets, out of our basements. Let's give them 60 days, and if they haven't pulled up their wires by then, we'll buy them for the scrappage price of the copper.

Now, whether the "Net Hippies" were put up to all this by the Aggregators, or whether the aggregators just joined in (which is what I suspect is more likely) is unclear - but this view was in their interests so they enhusiastically promoted it.

(By the way, I don't disagree with the Net Hippie's view that internet infrastructure is a common good - in fact I think we are not going to get big pipes in any "free" market unless regulation or government intervention occurs - see below! I just disagree with any solution that says "shaft the Distributors and let the Aggregators get free reign)

Fast forward to about 2008 and you see two things happening:

Firstly, the smart aggregators (eg Google, Amazon) are building out their own infrastructure to reduce their dependence and costs in distributing their wares. While enthusiastically promoting Net Neutrality they are busy building their own distribution infrastructures. Others are not and some, like latecomers Facebook, Twitter etc, are still emergent and can't afford to. All of them keep on paying and playing for the Conflated Net Neutrality argument, but - as we predicted at the time - the smart aggregators were doing it to buy time as they bought infrastructure.

Secondly, the Telcos and ISPs were in a bind as their pipes filled up and they weren't charging enough to build out the serious infrastructure that video needs (market hypercompetition isn't helping either), and started to actively think about how to make enough money to pay for the next generation of pipes. The more planned digital economies (Japan, South Korea, Scandinavia, and later - after experimenting a bit with free markets - France) had seen this one coming and have effectively legislated for big pipes, giving the national Telcos sufficient incentives to build them out. In countries where "the market" is the solution the average broadband pipe speeds started to fall behind. It starts to dawn on all the Telcos and ISPs that they need to start forcing a 2-sided or multi sided business model, which - however you look at it - requires charging the upstream aggregators more for big volumes of higher quality of service traffic.

This, of course, the Upstream aggregators want like a hole in the head, so an enormous amount of smoke, mirrors, storm, drang, lobbying, etc etc is generated by them.

And now we are in 2010.

Google's massive foray into Mobile IP has forced its hand, it has to move into the distribution game or be strangled by the existing ISPS and Telcos. It can build hosting centres and peer at Tier 1 for backbone, bt it needs mobile distibution at preferential rates - hence tie up with Verizon.

The Telcos and ISPs know that they are damned if they do, damned if they don't - but if they don't they will be unable to invest in fat new pipes and they will wither on the vine.

The Aggregators Without Infrastructure know that if they can't continue getting a near vree ride then they can't offere near-free services to users anymore, and - worse still - some Aggregator/Distributor competitors like Google will pay less than them for higher quality distribution.

So what is the likely outcome?

Firstly, back to the original point Fred made - to my mind there is "White Hat" net neutrality, ie Equality of Access - that there should be no discrimination on access for any application (so Skype is treated the same as Vonage) is a no brainer and should be regulated.

However, if you look at "Black hat" Net Neutrality - Equality of Assets - ie the argument, that a video bit that needs to be streamed fast in sequence alongside all the other billions of video bits. is the same as an email bit, then I think that is far less fruitful ground. The eventual endgame of utilities is that they are eventually charged for by quantity of usage and quality of service (granted there is often a fixed price or even free "minimum deal") and thus as broadband becomes a utility - nay, a human right even - then this will increasingly become the case.

The other thing - pure and simple - is that unless the distributors can earn enough money to build the next generation of pipes and capture a return on investment, they won't do it. To this end, "Free markets" have (so far) failed to deliver the necessary security of investment. Thus, if the endgame of the current Net Neutrality spat does not, in some way, yield the cash and secure enough investment conditions to build more bigger pipes, then Net Neutrality will devolve to beggars fighting over access to dirt roads while private high speed networks are built for those rich enough to afford them.

Thus, my parting shot in this fairy tale to the "Black Hat" Net Neutrality defenders is "be careful what you wish for". Not all Ogres are always mean, and not all fairytales end happily ever after

Pretty Girl with Whiteboad says it all.....

Yesterday a "viral video" went round about a girl who (apparently) resigned by sending photos of herself to her boss (original here), and this was put up on a fairly small website and then picked up by some of the major blogs and touted round the 'Net as the real thing.

Except it was a hoax, and the original website did it just to prove they could.

And (if I may say, in patronising after-the-factness) it was pretty damn obvious just looking at it that it wasn't real. We all thought it was a standard viral vid doing the rounds, had a laugh, emailed a few friends that it would amuse, and left it at that (in fact yesterday the better resignation story was the air steward who opened a 'plane door, inflated the exit raft and slid away).

But Lo and Behold, it seems like many of the leading lights of the the Tech Blogosphere got taken in and pimped it as a real resignation, despite the far more common probability that it was Yet Another Daily Viral Vid:

“You get a pure thrill of watching your site go from 15,000 uniques to 440,000 uniques in a single hour, watching yourself sucker every site from a-z who didn’t do their backstory.”

It's that whole backstory bit - whether it is missing out a pretty obvious hoax, or being asleep at the wheel when it comes to Google and Net Neutrality, or not doing the hard analysis behind some of the PR guff that comes out, the "A List" Tech Blogosphere is - in my view - doing an increasingly lousy job on quality reporting (and not just the Blogosphere, some print media journos are becoming rather breathless regurgitators of the Kool Aid too).

As the original team noted, these people wanted to believe, probably needed to believe:

The purpose of the hoax was to entertain and inspire, not to inform, so what difference does it make if the story has a single ounce of truth? After our second hoax I remember a reporter telling me, ‘Well it looks like you’ve fooled us twice. Won’t get away with this nonsense again.”

But they will.....if you are chasing clicks, you can't be a laggard to the virals

As they chase the need to monetise, the Big Blogs seem to increasingly be blurring the distinction between journalism and PR channel - this was already highlighted as a problem in Print media in Flat Earth News, but my impression is its getting worse in the Big Blogosphere too (I just think the A List bloggers of 2006 or so would have seen this one coming)

But, to help the Big Blogs, a quick checklist for the next New News:

1. Does it come from a source that would benefit hugely from the clickstream oxygen
2. Does it look like a "too good to be true" story, or even more - a viral vid?
3. Is it fronted by a pretty girl or boy?

3 out of 3 means check the backstory..................

If you can't beat 'em - the Inevitability of Google making a deal with the carriers (from 2009)

I am somewhat bemused about the gerfuffle with Google's climbing down from being a champion of Net Neutrality. They signalled they would do this clearly in 2008 - we wrote about it here- I quote:

There are 2 bits to Net Neutrality - the initial idea was to assme that you got Feedom of Access no matter who you were. This was later conflated by some more Web 2.0 hippie types into Freedom of Assets - ie the right to pay no more for dumping shedloads of video traffic into the pipes than a few email text bits. It suited the NN lobbies' interests to conflate the two.

And the GYM club were all at it it, they only supported Net Neutrality to give them time to get their own assets into line, as is probably also the case with their strategies for Open (Most Other Stuff). Especially now that FreeConomic speculative funding is pretty much drying up and the hunt for real revenue is on.

If you look at the value chain, its clear that distributors will always (i) make money and (ii) control their pipes. Google knows this - it played Net Neutrality until it could effectively peer at Tier 1 level, and it will now do that until it has built its own backbone network.

Some people continue to think of Google as the cute startup that can Do No Evil, not the huge public limited Ad company and Microsoft - in - waiting it now is, and the tend to be bamboozled by the doublespeak, but the above strategy is very clear once one takes off the Googleglasses.
That was what we wrote in 2008....

We also wrote last year about the inevitability of end to end players making a settlement as the cost of creating alternative distribution systems is too high:

To explain, if I may - at the top of this post is a good old 4-market model. In the 1990's the Internet came out tops over a bunch of walled Online Service Providers (OSPs) who were trying to be monopolists (or at least warring oligopolists) at the Aggregation Layer. But it won only because of some strong forces helping it.

Firstly the distributors - Telcos (those people everyone accuses of Net Un-neutrality now) were totally neutral in allowing anyone with a modem to connect to anyone. Secondly, at the time the main consumer device players (Apple, Microsoft) were provider-neutral in that they allowed you to connect to AOL or Prodigy or the 'Net. Thirdly, content was neutral in that AOL et al - despite trying - could not lock up the content online.

The issue now is that the monopolist forces are operating at the aggregation layer again, but also trying to build end to end walled gardens, from content to device. (Think Apple i-Series, Google's various forays from content to mobile phone)

......

But I suspect that strong legislation - and a lot of [end] user campaigning the like of which would make the Net Neutrality debate look like a coffee morning - is also required [to ensure an equitable settlement]. But forewarned, as they say, is forearmed.
In other words if you (i) knew how the industry value chain worked, (ii) understood what Google was signalling, (iii) assumed they could execute, and (iv) were paying the teeniest bit of attention, then all this should come as absolutely no surprise by Q3 2010.

So all the gnashing of teeth and wailing, calling Google a "Surrender Monkey" is to me a sign of Tech bloggers being either largely incompetent or asleep at their terminals for the last 2 years (or - could it possibly be - wishing to get as much linkbait now as they can ).

Of course, the Net Neutrality Hippy community will wail and gnash their teeth, but that will ever be thus - and as we wrote in 2007:

What is more germane is that the battle about who will pay for switching on the bandwidth will become up close and personal in 2008, as the Telcos do feel that Service Co's make billions from "Free Ride" economics over their pipes with the emergent rich media services.

We can confidently predict that all the resultant issues - throttling, net neutrality etc etc - will not go away in 2008 either.
This is an attempt to influence the inevitable reglation to serve the interests of major players, who have thrown their lots together as the scary alternative is that the customer wins..

As you can see, we thought it would all come to a head in 2008, so if anything this has all taken longer than we thought.

So, as overnight shocks go, this has been around for some time.....

McKinsey on "10 Top Tech Trends" to watch - my take on them (in the form of a precis of their argument and my response plus scoring in italics):

1. Distributed cocreation moves into the mainstream

In the past few years, the ability to organize communities of Web participants to develop, market, and support products and services has moved from the margins of business practice to the mainstream. Wikipedia and a handful of open-source software developers were the pioneers. But in signs of the steady march forward, 70 percent of the executives we recently surveyed said that their companies regularly created value through Web communities. Similarly, more than 68 million bloggers post reviews and recommendations about products and services.

This form of loose confederation seldom copes with periods of real pressure well, especially where hard execution to deadline is required. A lot of the corporate "value creation" is better described as what Nick Carr calls "Digital Sharecropping" - ie people working for free in spreading the corporate load. It's fickle (people drift off or find the new new shiny) and also tends to get messy when IP distribution raises its head. And as for 68 million bloggers reviewing products and services, often the vessels making the most noise are the "paid" blogs trying to whip up an echo chamber.

Rating: Its a popular and comforting concept that the Digital Hippies love, so it will continue to resonate, but fails in delivery when the chips are down. Best used in one-off project based environments. Read the blogs by all means, but check out the quality press too. Caveat Emptor 4/10


2. Making the network the organization

In earlier research, we noted that the Web was starting to force open the boundaries of organizations, allowing nonemployees to offer their expertise in novel ways. We called this phenomenon “tapping into a world of talent.” Now many companies are pushing substantially beyond that starting point, building and managing flexible networks that extend across internal and often even external borders. The recession underscored the value of such flexibility in managing volatility. We believe that the more porous, networked organizations of the future will need to organize work around critical tasks rather than molding it to constraints imposed by corporate structures.

Today's networks are great for "weak link" tasks, but - as with point 1 above - tend to come apart at the seams when under any pressure to deliver something hard to a hard stop. In addition, Coasian theory has yet to really become practice, as the transaction costs of capital formation, branding and market making are still very high. Nonetheless for SME companies this structure is a godsend so they will continue to push it - the pushback is the (largely poor) deal that the networked agents get - low rewards and security.

Rating: Companies will push for it and the technology will continue to aid it, but it will be limited by inability to deliver predictably and reliability when chips are down. Also, watch out if you are one of the drones in the network without a value add of your own (see point below) 6/10

3. Collaboration at scale

Across many economies, the number of people who undertake knowledge work has grown much more quickly than the number of production or transactions workers. Knowledge workers typically are paid more than others, so increasing their productivity is critical. As a result, there is broad interest in collaboration technologies that promise to improve these workers’ efficiency and effectiveness. While the body of knowledge around the best use of such technologies is still developing, a number of companies have conducted experiments, as we see in the rapid growth rates of video and Web conferencing, expected to top 20 percent annually during the next few years.

The Taylorisation of knowledge work no less, moving it from a craft to a commodity. This will reduce the per capita value of the individual and remove the surplus to the organisation that commands their labour (sorry, invaluable creativity). It was ever thus. The replacement of physical comms with electronic ones is probably an irrestable force for lower value transactions.

Rating: Will increase, as the economic forces are irresistable, but - as with the point above - try to ensure you're not one of the drones in the knowledge assembly lines. 8/10


4. The growing ‘Internet of Things’

The adoption of RFID (radio-frequency identification) and related technologies was the basis of a trend we first recognized as “expanding the frontiers of automation.” But these methods are rudimentary compared with what emerges when assets themselves become elements of an information system, with the ability to capture, compute, communicate, and collaborate around information—something that has come to be known as the “Internet of Things.” Embedded with sensors, actuators, and communications capabilities, such objects will soon be able to absorb and transmit information on a massive scale and, in some cases, to adapt and react to changes in the environment automatically. These “smart” assets can make processes more efficient, give products new capabilities, and spark novel business models.

As the devices get cheaper and easier to integrate the IOT will become more pervasive, due to the efficiencies it can bring across a value chain. Forces against will emerge if this is used for widespread privacy abuse, or to gouge customers in any way. One can imagine all sorts of things akin to "region imprinting" on DVDs (means you can't play music you bought in country X on your media player in country Y) will be tried. Also, "location" based IOT services that hand away too much privacy will rapidly wane once a few scare stories circulate.

Rating: No brainer 10/10 but beware the backlash if gouging or inappropriate usage occurs

5. Experimentation and big data

Could the enterprise become a full-time laboratory? What if you could analyze every transaction, capture insights from every customer interaction, and didn’t have to wait for months to get data from the field? What if . . . ? Data are flooding in at rates never seen before—doubling every 18 months—as a result of greater access to customer data from public, proprietary, and purchased sources, as well as new information gathered from Web communities and newly deployed smart assets. These trends are broadly known as “big data.” Technology for capturing and analyzing information is widely available at ever-lower price points. But many companies are taking data use to new levels, using IT to support rigorous, constant business experimentation that guides decisions and to test new products, business models, and innovations in customer experience. In some cases, the new approaches help companies make decisions in real time. This trend has the potential to drive a radical transformation in research, innovation, and marketing.

We (humans) are still largely structured for a world of data scarcity so dealing with data over-abundance is a new thing. Handling it well is critical, but there are 3 key requirements for this to become a trusted and deployable technology:

(i) Trustable filtering - filters that get a high level of choices right, without too many false negatives and positives.
(ii) Moderation of "black hat" datamining - which, if Google and Facebook are anything to go by, will be quite an ask. Probably needs regulation
(iii) The power cannot be too asymmetric, if users feel it is astacked against hem and used for gouging they will walk away. Already movements like VRM are looking at ways to make the power more equal, this will increase too

Rating: Fairly inevitable, should be largely beneficial, but beware the backlash if there is too much "black hat" datamining 9/10

6. Wiring for a sustainable world

Even as regulatory frameworks continue to evolve, environmental stewardship and sustainability clearly are C-level agenda topics. What’s more, sustainability is fast becoming an important corporate-performance metric—one that stakeholders, outside influencers, and even financial markets have begun to track. Information technology plays a dual role in this debate: it is both a significant source of environmental emissions and a key enabler of many strategies to mitigate environmental damage. At present, information technology’s share of the world’s environmental footprint is growing because of the ever-increasing demand for IT capacity and services. Electricity produced to power the world’s data centers generates greenhouse gases on the scale of countries such as Argentina or the Netherlands, and these emissions could increase fourfold by 2020. McKinsey research has shown, however, that the use of IT in areas such as smart power grids, efficient buildings, and better logistics planning could eliminate five times the carbon emissions that the IT industry produces.

The environmental impact of the ICT industry is a large and growing probem that it will have to take on board, but ultimately nearly every country will opt for digital dark satanic mills that drive economic progress over bucolic underachievement. And the technology to solve these issues will emerge where the costs are seen to justify it.

Rating: Overhyped - over time technology will reduce energy usage where it is economcally useful to do so, with or without any Green agenda - it's best option is to deploy subsidies in the areas that drive maximum sustainability. Sustainability PR will be the major industry here as companies compete to look Greener Than Thou. I would give it a lower mark than 6, except there will be subsidies so it will look more attractive than it actually is 6/10.

7. Imagining anything as a service

Technology now enables companies to monitor, measure, customize, and bill for asset use at a much more fine-grained level than ever before. Asset owners can therefore create services around what have traditionally been sold as products. Business-to-business (B2B) customers like these service offerings because they allow companies to purchase units of a service and to account for them as a variable cost rather than undertake large capital investments. Consumers also like this “paying only for what you use” model, which helps them avoid large expenditures, as well as the hassles of buying and maintaining a product.

Asset owners like to rent them out, users like to control the assets themselves until they are absolute commodities. Cloud based ICT assets are no yet simple, reliable or fungible enough to be consumed like water or electricity, and won't be for quite a few years yet.

Rating: It will come, but with lower penetration, will take longer and cost more than xAAS and Cloud enthusiasts believe (I say that with 10 years of close experience of the server-side of the industry, which renames itself every 2 years as the last "big hype" push crumples). Grid yesterday, Cloud today, what tomorrow? 7/10


8. The age of the multisided business model

Multisided business models create value through interactions among multiple players rather than traditional one-on-one transactions or information exchanges. In the media industry, advertising is a classic example of how these models work. Newspapers, magazines, and television stations offer content to their audiences while generating a significant portion of their revenues from third parties: advertisers. Other revenue, often through subscriptions, comes directly from consumers. More recently, this advertising-supported model has proliferated on the Internet, underwriting Web content sites, as well as services such as search and e-mail (see trend number seven, “Imagining anything as a service,” earlier in this article). It is now spreading to new markets, such as enterprise software: Spiceworks offers IT-management applications to 950,000 users at no cost, while it collects advertising from B2B companies that want access to IT professionals.

Having worked on multisided business models in IP Telcos 10 years ago and done some work with the Telco 2.0 Initiative and their 2 sided business mdel, my take on this is that:

(i) The concept is very seductive, the execution is very much harder
(ii) There is a limit to the industries it can be applied to in ICT (or anywhere in fact) as you have to be in the middleof a supply chain that has revenue opportunity on 2+ sides
(iii) Complexity and transaction costs are higher than simpler models, which increases risk. My observation is that this solution largely seems to arise in "duck and weave" markets under pressure, so I suspect it is evidence of a transitional phase in any market evolution
Rating: A few companies will be able to use this very well, some will get a small benefit, but many will find it impossible to manage as they are in flux 5/10

9. Innovating from the bottom of the pyramid

The adoption of technology is a global phenomenon, and the intensity of its usage is particularly impressive in emerging markets. Our research has shown that disruptive business models arise when technology combines with extreme market conditions, such as customer demand for very low price points, poor infrastructure, hard-to-access suppliers, and low cost curves for talent. With an economic recovery beginning to take hold in some parts of the world, high rates of growth have resumed in many developing nations, and we’re seeing companies built around the new models emerging as global players. Many multinationals, meanwhile, are only starting to think about developing markets as wellsprings of technology-enabled innovation rather than as traditional manufacturing hubs.

Necessity is the mother of invention, and developing economies' necessities are more urgent than rich economies - ergo higher innovation. It is also our view in fact that too much of what the OECD calIs it's "Innovation" is better described as "Continuous Improvement that doesn't rock the status quo". There is thus no doubt that a huge amount of potentially disruptive innovation is going on in the developing world, I've been watching mobile and payment services in Africa an Asia for example.

But I also know that there are 3 barriers:

(i) "Not invented here" syndrome
(ii) Most rich countries erect barriers to keep developing country "low cost" technologies from queering the pitches of their (lobbying) champions
(iii) Just because an X is extremely relevant in Africa, does not mean it will tranfer to America
Rating: Not as big or as quick as the enthusiats think, but there will be some real home runs 7/10

10. Producing public good on the grid

The role of governments in shaping global economic policy will expand in coming years. Technology will be an important factor in this evolution by facilitating the creation of new types of public goods while helping to manage them more effectively. This last trend is broad in scope and draws upon many of the other trends described above.

Its hard to argue with this as it is so broad, it is inevitable that governments will try and manage national assets better and there is a whole Government 2.0 movement going on. The difficulties will be all the ancillary efforts required to make it happen (eg making the water grid more efficient requires massive investment in new meters), and what to do about the 25% or so of any population who will be "digitally excluded" and cannot use the new services, thus removing a large swathe of the possible benefits

Rating: 10/10 for likelihood something will be done, but its a trend in the same sense as "I grow older every year" is a trend. Likely to take longer in many cases owing to upfront investment costs required, so 7/10 overall.

These things are always thought provoking though.

Skype on the blocks for an IPO - GigaOm:

Skype, the Internet telephony company, is looking to raise up to $100 million in an initial public offering, according to an S-1 filing with the U.S. Securities and Exchange Commission. The company will be selling American Depositary Shares (ADSs) and will trade on the NASDAQ Global Market. The offering will be managed by Goldman, Sachs & Co., J.P. Morgan, Morgan Stanley and others. The offering was widely viewed as in the cards, though I admit it came sooner than I thought.

This is of course after it was sold to eBay for $2.6bn in 2005, and eBay sold on 3/4 for $2bn in 2009. A great example of major value add. And now it's back on the market lerss than a year after its sale/buyback?

At the "Constant $2.6bn" valuation model the last few years would suggest, this new IPO plan means they are looking to sell about 4% of the business. That's not really a big % (or amount) to IPO for, or to get both Goldmans and Morgan Stanley in the game.

Hmmm.......(as in, there is more to this than meets the eye)

Question hit me this last week when I helped the No 1 son build hs first "hot" gaming machine. Research was done, budgets set, parts specced and ordered, the obligatory pilgrimage to Maplins made to pick up last minute stuff, and then Lo! inside an old PC Tower carcase there now throbs the multicored heart of a Beast.

You just can't do that with an Apple computer (probably can't get that sort of performance either...)

(Update to above - you can get similar Apple performance specs, but at c 4-5x the price - but you can't build your own machine, its Apple defined. Would The Woz have started off with Apple gear if he was a kid in a garage today?)

So the question is this - can you call yourself a real Geek if you can't build your own computer to spec? Or program in a "real" language? Or know your way round the operating system's arcana?

Putting it another way - has Geekdom moved up the layers from the infrastructure to the applications, or has it become revalued socially (its sexy to be geeky now) and devalued technically (we don't want those - eeeew - technical bits)?

(An aside - the root of the word "Geek" comes from the Old English/Dutch/German word Geck, or fool)

Anyway, I put the question out to the Twitterverse and Benjamin Ellis came back with an interesting response:

Geek 1.0: We build cool technology. Geek 2.0 we use cool technology.

....which seems to fit the semantic shift in Geekery - you no longer need to know how technology works anymore, its all about using it. To be fair, it was ever thus - each tricky new layer of technology becomes simplified, then commoditised and eventually just disappears into the infrastructure. Old PC hands will recall how "interesting" it once was just to set up printers properly.....

The good news about this is that one don't have to master the technical skills to get something else done.

The bad news is that one loses control of what can be a fairly major levers of performance.

But clearly trading off the former for the latter has made geekery more socially acceptable. Although I do worry that the next semantic shift will start to call the Geeks who can build their own stuff "Nerds", and then we have gone fulll circle again.....

Back to the original question re Apple, you do risk giving the term "Geek" a bad name when, as "Stuff White People like" puts it:

It is also important that white people are reminded of their creativity, and remember you need a Mac to creatively check email, creatively check websites, and creatively watch DVDs on planes.

So where to draw the line? I guess to me its comes down to "are you a creator or a consumer".

(Update - nice post leading the charge for the New Geeks from Ian Betteridge - killer line "the less people are required to learn programming in order to be creative with computers, the more creative work you get.")

(Another Update - it seems I wrote this on the day Apple announced its new 12 Core machines are ready for sale but, as many commentors in the Engadget article point out, its more expensive - though not 4x more expensive - than the similar PC)

Today Twitter released its new "Who to Follow" List (I saw it on Techmeme). If you sign on to the Twitter Page for your account, on the right hand sidebar you will see it - 2 or so recommends amd you can click through to a whole list.

It seems to work on the logic that if several peopel I follow also follw X then logically I also should like X. It is the same problem I had with Last.FM's view of my taste in music - if 3 of my friends had the appalling bad taste to like Led Zeppelin, then so should I.

It is also, as Stowe Boyd points out, probably optimising around "most popular" which just makes it another Digital Social capital "Rich Gets Richer ratchet".

(By the way, my Twitter Inbox is deluged by people I follow who are p*ssed off with the Twitter "Who to Follow" function for the above reasons. So I don't think its a success, as yet anyway, except in the posts by the paid-for press and tame bloggers)

But that was not what intrigued me - no, what was more interesting was that of the 30 or so people it suggested I follow, I counted 21 people I was pretty darned sure I was following already! Now I didn't deliberately unfollow them, I don't think they can do a reverse unfollow of me (Can they? You b*stards?). Also, none of them are the sort of sleazoids (well, not on Twitter anyway) that Twitter picks up and automatically rubs out.

So how are they being unfollowed if I am not doing it?

Paul Clarke hypothesized that Twitter was doing it deliberately, a bit of Socal Fuzzines, a White Lie in the machine, so we can oil the wheels of online social intercourse with the "no - sorry - never saw that" or "odd, I was sure I was following you" gambits and the other person knows it might be true and takes no offence, rather than thinking that you are a b*stard who doesn't want to know them anymore.

And if so, how does it decide who to (randomly?) unfollow. I would love to have a "time-out" unfollow algorithm - 3 in a row of Sleb RT's, cats, lunch or using the word "Awesome" and you're in Purdah for a week

Or is it just glitches in the machine?

Interesting post by Ethan Bauley on HP Labs' research on Influence on Twitter - confims something our own analysis was telling us:

According to the research, it is important to separate the concept of “influence” from “popularity.” While a user on Twitter may have a large number of followers, his or her influence is more strongly associated with their engagement with the network, rather than the raw number of followers or retweets.

To automatically identify influencers, the authors devised an algorithm called the IP Algorithm. This algorithm assigns a relative influence score and passivity score to every user:

- “Passivity” is a measure of how difficult it is for other users to influence him or her

- “Influence” depends on both the quantity and quality of the user's audience

The paper concludes: “This study shows that the correlation between popularity and influence is weaker than it might be expected. This is a reflection of the fact that for information to propagate in a network, individuals need to forward it to the other members, thus having to actively engage rather than passively read it and cease to act on it.”
As we remarked about a year ago, our initial analysis showed that the then-popular metric used by all the PR agencies of equating "Influence" and "Social Capital" on Twitter with "Followers" was miidly correlated (ie lame) at best.

The actual HP paper is over here and makes for interesting reading. I'd love to see their algorithms

Twitter is becoming quite the Digital Anthropology testing ground, the Digital Rwanda, as we noted a while ago on Twitterers in the Mist dealing with recent research on monitoring Twitterer happiness.

Also, at our TEDxTuttle 2 session we had the fascinating Dr Caroline Wiertz of Cass Business School giving us a sneak preview of their work looking at how Twitter influences consumer reaction to things like movie selection (especially opening weekend movies - Movie Critics beware).

It's interestng to think about why Twitter is such a good research ground. Our own experience is that it:

(i) Is very easy to parse as it is all easy to scrape
(ii) The tiny message size is (relatively) easy to analyse for meaning
(ii) The linkages are very easy to analyse and map so it really lends itself to mathematica analysis
(iii)There is a a large heterogenous population which is growing so it is increasingly representative
(iv)Topics covered are vast, from the sublime to the ridiculous via the intelligent and the lame.
I predict a plethora of PhD's in Digital Anthropology using Twitter. I do recall a piece of work done some years ago on predicting infidelity from telephone call patterns, so not all of this new analysis is going to be comfortable reading.

You have been warned

Update - by the way, my Twitter Inbox is deluged by people I follow who are p*ssed off with the new Twitter "Who to Follow" function. Could be that Twitter needs to get HP Labs and Dr Wiertz in there fast!

People are not ready for the Technology Revolution says Eric Schmidt - RWW:

Eric Schmidt spoke at the Techonomy conference in Lake Tahoe today and dropped some serious rhetorical bombs. "There was 5 exabytes of information created between the dawn of civilization through 2003," Schmidt said, "but that much information is now created every 2 days, and the pace is increasing...People aren't ready for the technology revolution that's going to happen to them."

This does't really bear up under scrutiny - what he means is that (i) more of the information is created digitally today (people have been creating information since the dawn of time, its just that until Twitter your inane witterings about your cats and lunch were lost on the wind - probably a good thing really), (ii) there are more people on the planet than ever (talking about lunch and cats etc) and (iii) more of it is stored online - and searchable by Google - than ever (I have had photos in my computer for at least 15 years, its only more recently that Flickr, Facebook etc arrived).

As one wag remarked in the comments, most of the new information exabytes are arising because the web porn industry is converting all its pictures to HD. (It also begs the question about whether a lot of this newly capturable information is worth having).

But that is just standard corporate stuff, and serves more to illustrate how dim many of the pundits are when they don't pick up on the obvious logical fallacies in the argument. Far more serious is his latest broadside in his War on Privacy:

"If I look at enough of your messaging and your location, and use Artificial Intelligence," Schmidt said, "we can predict where you are going to go."

"Show us 14 photos of yourself and we can identify who you are. You think you don't have 14 photos of yourself on the internet? You've got Facebook photos! People will find it's very useful to have devices that remember what you want to do, because you forgot...But society isn't ready for questions that will be raised as result of user-generated content."

In addition to predicting personal behavior, diseases and other crises will become predictable as well, Schmidt said.

On the misuse of information for criminal or anti-social purposes:

"The only way to manage this is true transparency and no anonymity. In a world of asynchronous threats, it is too dangerous for there not to be some way to identify you. We need a [verified] name service for people. Governments will demand it."
Lets just unpick that line of reasoning:

- Firstly he is arguing that if Google et al can see enough of your on-net activity they can predict our behaviour very accurately

- Secondly, he is arguing that you have a duty to be totally transparent and visible to make it easier to do this

- Thirdly, that this is OK as its being "ready for the Tech Revolution" and because Governments will demand it anyway.

In other words its Big Brother Time (and I mean of the Orwellian variety, though it may look like turning everyone into a contestant on Big Brother in execution - Reality TV becomes Reality).

Of course, one could be a mite cynical - as one RWW commentator put it:

Once again, the end of anonymity predicted by a tech entrepreneur who personally stands to gain many billions of dollars just as soon as people give up their privacy (or have it banned). Never would have seen that coming.

One could also argue that ths is typical Google in its lack of a "social" DNA - if the Algorithm can't be reprogrammed to predict The People, then godammit we need to reprogram The People until it does.

Nevertheless, this is quite worrying stuff given that (i) this chap runs Google who is spending a lot of lobbying and influencing money globally, (and is given "Techonomy" platforms and the like), (ii) he is not the only tech entrepreneur who can make billions out of reneging privacy and (iii) so few people are protesting about all of its implications.

But for the record, you do not have to believe in the wholesale loss of anonymity, 100% transparency and total subjugation of your data to Google and Government to be "Ready for the Technology Revolution. In fact I'd argue that any "Revolution" that demands this is more about Enclosure and Control than any form of Liberte, Egalite and Fraternite.

Overhyped, overspecced, and....over:

Maybe it was just ahead of its time. Or maybe there were just too many features to ever allow it to be defined properly, but Google is saying today that they are going to stop any further development of Google Wave.
No, it was just over-egged - like Friendfeed before it.

The lessons were there for the learning, but Google didn't. As we noted earlier, Social isn't yet in their DNA and this was Social Networking by Numbers.

What is encouraging is that Google is prepared to experiment, but even more that it is prepared to kill it.

Update - Dave Winer makes a good point - when Google elsaed Wave, it was "Invite Only" anfd oogle controlled the invites so you couldn't invite your friends. Worked for hyping Gmail etc, but not for systems where the value is having your social network on the same system. Talk about not "Getting" Social Media.

.....("It is magnificent, but it is not war.") said French Marshal Pierre Bosquet watching the British light cavalry wipe itself out in The Charge of the Light Brigade at Balaclava.

Michael Arrington of TechCrunch writes about the Google v Facebook contest for The Social Web and uses a Very Dodgy reading of World War 2 history in an article entitled "WAR! It’s Patton v. Rommel":

The Third Reich was to take over the world, as Facebook is poised to do today. All that stands between them and victory is a somewhat slow to move giant called Google (America). And our hero is also fighting another war to the death with Microsoft/Japan, making things more complicated.

.........

You can create any kind of playing field you want to watch this all play out. I take Europe and Africa in WWII and pit the underdog Gundotra/Patton against the guy who had everything to lose – Rommel/Facebook.
Oh dear - firstly, with a 7:2 advantage in numbers (and a 4:1 advantage in armour) and total air superiority the Allies after D-Day were hardly underdogs. (And, this may shock our US readers, but a number of other countries also fought the Germans in World War 2 - in fact the Russians took by far the most of that particular load ). Secondly, Patton was under the command of one Bernard Montgomery, the (British) general who beat Rommel twce - once in North Africa, and again in Normandy.

Not an auspicious start to the analysis methinks. Anyway, I digress. TechCrunch notes re the Google Invasion of Fortess Facebook:

Google has chosen a General in their War With Facebook – VP Engineering Vic Gundotra, we’ve heard from multiple sources. This is the person who will control overall product strategy and execution around their new efforts to find relevance in a quickly changing Internet landscape that is increasingly dominated by Facebook.

........

Google hasn’t officially revealed any of its plans in social, but we’ve heard to expect them to be making a significant effort. The type of effort that suggests they’ve mortgaged the farm and have just the one crop left to plant. Their backs are against the wall. Etc.

Lose and they give control over the way the web is organized, and monetized for the next decade or so. The Age Of Facebook will begin. We’ve got an aggressive, zealous Facebook army controlling a third of the world’s Internet population, and they want more. Meanwhile, The old bully on the block, Google, can still rumble pretty well when he gets worked up enough.
To be fair, Mr Arrington is mainly looking at creating a playing field narrative to watch this all play out, and chose the Normandy invasion - just his history is a bit off.

In fact, you could better argue that Google is Germany - fighting another front with the Allies (Microsoft and Yahoo) already, it now wants to invade Facebook (Soviet Russia). This is probably more apt, as its an ideological fight for hegemony between two structured ways of organising the Web citizens. In which case Wave is Stalingrad and Bing is El Alamein..... (and followin this, Google is eventually partitioned between Facebook in the East and a Microsoft/Yahoo alliance that lands in their back yard.

But I think there is a better narrative - go back 15 years and look at how Microsoft didn't "Get" the Internet and the Web. They continually handed the resposnsibility for attacking "The Web" to underlings, who kept on failing because Microsoft as a whole was not on a "war" footing and mobilised to take on Netscape.

This changed only when Bill Gates himself turned the company around onto a "war on Netscape" footing (on Pearl Harbour day in 1995, as it happens), ordering Microsoft to throw everything at the Internet browser market. At the time, Netscape's share of that market was close to 90%; by early 2000, Netscape's share had plunged to 20%, and Microsoft's browser appeared to have won this war.

So, on this narrative path, where is Google?

Google has chosen a General in their War With Facebook – VP Engineering Vic Gundotra, we’ve heard from multiple sources. This is the person who will control overall product strategy and execution around their new efforts to find relevance in a quickly changing Internet landscape that is increasingly dominated by Facebook.
Nope, Google are not yet on a "War on Social" footing. They will only really start to win this one when The Triumvirate issue a similar Pearl Harbour memo to show they are really serious and prepared to shift the company's DNA, and take charge themselves.

What they are doing now may be Magnificent, but its not War and will likely be as ineffectual as the Charge of The Light Brigade.......

George Santayana once said "Those that cannot remember the past are condemned to repeat it". Nowhere is that more clear than in the breathless excitement today that Android has caught up with iPhone sales:

NPD's number crunchers have just announced their findings for Q2 2010, concluding that 33 percent of phones sold during the period had Android on board. This marks the first time in eons (Q4 2007, to be more precise) that RIM has not held the crown of most purchased smartphone OS on US soil, with its BlackBerrys accounting for 28% of the market and Apple's iPhone occupying third spot with 22%. Motorola and HTC are the key suspects fingered for Android's continuing ascent, with the "large screen allure" of their handsets playing well with the buying public.
This has of course led to lots of speculation about The Rise of Google, The Death of Apple, etc etc. But that totally misunderstands Apple's 4 decade old strategy - to go for maximising market return, not market share. This started in the 1970's with the original Apple II PC market and continues to this day - Apple like to take the 15 - 20% top margin customers in the market and leaves the (continually commoditising) remainder of the market to be fought over.

So, Tech pundits of today - get out your (Internet and Computing Technology) history books before penning another line.....