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It's Time For PR Community To Grow Some Cojones And Out Silicon Valley Bullies

Vanessa Camones is a veteran PR professional. She is the founder of theMIX agency and today she did a very bold thing: she outed one of Silicon Valley's leading personalities, Mike Arrington, the editor of Techcrunch as a bully.

In her post titled: DIGIDAY:DAILY - Entrepreneurs Should Say No to Silicon Valley's Bully, she writes that many startups would love to have coverage by Techcrunch.

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Biz Stone's Departure From Twitter Was Predictable

Earlier this year I predicted that Twitter co-founders Ev Williams and Biz Stone wouldn't be around for long. How did I do this?

It was simple:

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IBM @100 Years - Global Innovation Is About Silicon Valley Not IBM

Congratulations to IBM and its 100 years in business - from making cheese graters to supercomputers, and much, much more.

IBM is seen as very much an East Coast company yet its history shows a strong and long connection with the Silicon Valley area, way before it was even called Silicon Valley.

Innovation is key to the IBM brand yet it does very little to promote that connection and its continued large presence in Silicon Valley. IBM has employed as many as 25,000 workers here, larger than Google (until fairly recently).

This region has become the global icon for innovation, every week I meet companies that are moving their headquarters here from all parts of the country and world, because they want to be where the action is.

It seems strange that IBM doesn't associate itself more strongly with this important center of innovation. Is it a cultural artifact?

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Really?! MoFo Tech - A Newsletter From Silicon Valley Lawyers

I just saw "MoFo Tech" (above) an edgy-designed newsletter from Morrison & Foerster LLP, a top Silicon Valley law firm.

It's certainly an attention getting title and look. And here's their web site, great design:

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Forsook! Google Can't Spell "Facebook"

I use GMail all the time and its spell checker is usually pretty good. But the other day I noticed it can't spell "Facebook."

I tried some other computer company names but only Facebook was flagged:

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The New Media Digital Divide... Study Finds Elites Continue To Dominate

A study by Jen Schradie at UC Berkeley found that the digital divide is alive and well in the new media world despite proclamations of a new democratic leveling of online media through blogs, Tweets, etc.

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TEDxSF - A Curation Of People And Ideas...

I've been to several TEDxSF events but the most recent one felt like a breakthrough event because of the mix of people and talks, plus the new venue.

The event was sold out with about 650 tickets for the Yerba Buena location, a larger theater than the Academy of Sciences, where it used to be held. The mix of people was eclectic as always.

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Notes From 8th Innovation Journalism Conference

Last week's 8th Innovation Journalism Conference produced a lot of interesting sessions and sparked a lot of ideas.

This year David Nordfors, the founder of the conference and Executive Director of the Stanford Center for Innovation and Communication, opened up the conference to public relations, a smart move because of the connection between journalism and PR.

Here are some of my notes from the conference:

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A Visit To SRI: Top Secret R&D In The Heart Of Silicon Valley

Tucked away in a quiet, tree lined residential neighborhood of Menlo Park, SRI International runs a massive 1 million square foot research lab in the heart of Silicon Valley, where many of its 2100 staff toil on secret projects for the US Dept. of Defense (DoD).

SRI's work might be top secret but it's not hiding. This 65 year old organization is hugely influential within Silicon Valley, with close ties with leading VC firms, and within the largest companies.

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Is There A Business Model For "Innovation Journalism?"

I'm spending much of this week at the 8th Conference on Innovation Journalism at Stanford University, speaking on panels, keynoting on ethics, and listening and discussing "innovation journalism" with journalists and academics.

But what is innovation journalism?

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Klout, PeerIndex, Empire Avenue, Et Al... Shortcuts Without Insights

Lots of people I know in PR and marketing are enamored by new services such as Klout, PeerIndex, and Empire Avenue, which seek to provide a quick assessment on any person's online influence.

If you want to know the top influencers in a specific niche market, these services will provide you with a simple number for each person, which you can use to rank the influencers.

Their goal is to provide information to publicists and marketers to help them target the right people in their markets.

But it seems to me that there's a big problem with this approach. If you, as a publicist or marketer, need to consult these services, this probably shows that you are clueless about who is important in the very markets that you are selling into.

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ADP - The Original Cloud Company - Is "Bored With The Cloud"

"I'm so bored with the cloud," laughs Mike Capone, CIO of Automatic Data Processing (ADP), the payroll processing giant and the original "cloud computing" company, also known as SAAS (Software As A Service).

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Oriella Survey: Most Journalists Shun Social Media And Blogs

A survey of nearly 500 journalists across 15 countries has found that some journalists use social media and blogs to source and verify stories. But the majority don't.

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Curation Is Not Cheap Content...

There seems to be quite a few people in marketing that look upon "curation" as an inexpensive and quick way to get content onto a site.

After all, how hard can it be to collect a few links and publish them?

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Fantastic Insight Into The Closed Box Google Culture From A Recent Xoogler

Douwe Osinga, a software engineer, recently left Google after seven years. He's written a series of blog posts explaining why he left and also describing what it was like working there, and he dispels some of the many myths about Google.

For example: The 20% time myth.

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Secondary Markets: Much Needed Liquidity For Silicon Valley Startups Or A Private Stock Market For The Rich?

Tuesday afternoon I was in the "Gulag," the warren of Venture Capital firms along Sand Hill Road, to attend SharePost's conference on "Market Issues & Opportunities for Private Companies."

The conference room was packed and for good reason. The lack of IPOs over the past ten years has created a liquidity crisis: how do investors and entrepreneurs get some of their money out of their companies, many of whom are profitable enterprises?

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Paper Or Electron ... The Medium Doesn't Define Journalism

MG Siegler, one of the top reporters at Techcrunch, recently wrote on his personal site about the silly distinction that some people make between bloggers and journalists.

It is similar to my experience of when I left the Financial Times to launch SVW in mid-2004. Many people said I was now a "blogger" but I pointed out that I'm still writing news, conducting interviews, writing analysis articles, in pretty much the same manner as I did at the Financial Times. I was still a journalist.

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Mike Arrington Replies To His Critics

Mike Arrington, Editor of Techcrunch, yesterday replied to his critics. In his post he said he would continue to make investments and that everyone in Silicon Valley is conflicted in one way or another.

I still believe that editors and reporters should not be investors in companies that they cover. I'd like to invite Mike Arrington, and anyone else that's interested in the topic of ethics in journalism, to join me at the upcoming 8th Conference on Innovation Journalism at Stanford University - May 23 to 25.

There will be lots of discussion about all aspects of journalism and how it applies to reporting about innovation. And there will also be sessions about the role of PR. Registration is just $50. Here is the agenda.

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Venture Capitalist Joanna Rees: San Francisco's "Innovation" Mayor?

Wednesday afternoon was one of those rare San Francisco days where it was too hot to stay working indoors, so I popped over to an event that Peter Hirshberg, a local entrepreneur, had told me about: a chance to meet Joanna Rees, a candidate for mayor of San Francisco, and hear about her "innovation" platform.

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Innovation Journalism: Why Silicon Valley Startups Deserve A Level Playing Field

Media coverage is very important for startups. It is how they gain respect in their community, it is how they can win investors, and it is invaluable in helping to recruit staff.

Positive media coverage will also help gain users of their products and services, providing valuable marketing services that could cost tens of thousands of dollars.

But the only reason media coverage of a startup and their product is valuable is that the media coverage is seen as a neutral third party -- it has no financial bias in its reporting.

The only acceptable bias is a thirst for a great story and selecting the best startups to write about.

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MediaWatch: Techcrunch Editor Disclosed Only After Swisher Questioned AOL

There is a widespread perception within the Silicon Valley community, that when it comes to the media, as long as everything is disclosed about potential reporting biases, then it's OK.

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More Thoughts On Curation And Rescuing Content From The Obscurity Of The Timeline...

Last week I wrote about the tyranny of the timeline and how good content disappears once it is pushed off the home page and into the archives.

[How Curation Can Rescue Great Content From The Tyranny Of The Timeline - SVW]

Of course, the content is still there in the archives, it is reachable, and it is searchable; but only if you know it is there.

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Bullshit: Arrington Claims Relationships Are Bigger Problem Than Money

Mike Arrington, the Techcrunch editor who was forced to disclose his investments by Kara Swisher, Editor of All Things Digital, is trying to prove that relationships are a larger problem than money in reporting.

In an interview with Nicholas Carlson, at Business Insider, he says:

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Wow! Kara Swisher Investigation Forced Arrington To Disclose Investments

Kara Swisher, editor of "All Things Digital," reported that Techcrunch Editor Mike Arrington disclosed his investments in startups following her questions about the matter, put to AOL senior management.

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Out And About: Techcrunch Bombshell Draws Lots Of Passionate Critics

I went out to several parties last night related to the AppNation conference that's in town and spoke to a lot of developers and others about the revelation that Techcrunch editor Mike Arrington is investing in startups and his admission that it will affect his coverage.

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What Year Is It? Try 1996...

History does not repeat itself but it does rhyme, as Mark Twain noticed. So as this current Internet boom builds momentum, and acquires some of the characteristics of the 1990s' boom-to-bubble years, at what stage are we in? What's the year?

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Twitter Congratulates Itself For Its Role In The "Renewal" Of San Francisco

After months of negotiations, late last week Twitter said it would stay in San Francisco, thanks to a multi-year cut in its payroll taxes on new hires.

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Do Jerks Do Better In Silicon Valley?

This morning on CNBC, Ryan Tate from Gawker and I, were debating "questionable ethics and jerk behavior by CEOs" it was related to my post last week: Questionable Ethics And The Next Generation Of Entrepreneurs; and Ryan's follow up: Why Are Tech Founders Such Assholes?

Ryan made a good point on the show that looking at some of the largest success stories in Silicon Valley right now, such as Facebook and Apple, it appears that you do need to be a jerk to win.

I disagreed. Being a jerk has nothing to do with success. In this business it is teams that win -- not individuals. If you are a jerk it quickly gets around and people will avoid you, they will choose to work elsewhere given the choice.

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More Thoughts On Ways To Free Ai Weiwei... Boycott Wal-Mart?

I spend way too much time in the tech and media echo chamber so it's always a pleasure to get away from it and explore different subjects.

I'm on a Christopher Hitchens trip at the moment. I'm really enjoying his autobiography. His prose is so well crafted, and effortless, there's a tremendous amount of pleasure in reading it.

He does a great job in presenting his principles and his reasoning on controversial subjects. And he doesn't flinch from taking moral and ethical stands on important subjects, such as the war in Iraq, and on calling a spade a spade, when he writes that Henry Kissinger is a war criminal and should be tried as one.

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How Curation Can Rescue Great Content From The Tyranny Of The Timeline

When I first started blogging in 2004, I didn't like the way blogging software gradually pushed older stories off the page and into the archives.

It tended to discourage me from writing some posts because I didn't want to lose better, or what I thought were more important posts, from the home page.

Because once articles enter the archives it is like disappearing into a deep well. They are gone. And search won't help because search only works if you know something is there.

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Questionable Ethics And The Next Generation Of Entrepreneurs

The film "The Social Network" has helped to make startups popular among young people the world over. It's just one factor inspiring new generations of entrepreneurs hoping to succeed through innovation and hard work.

But are they learning ethical ways of doing business?

The more we find out about Mark Zuckerberg and his behavior during the early days of Facebook, the more he reveals a cavalier attitude to ethics.

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Silicon Valley Is Back - Best Year Since Boom Of 2000

It's taken a decade but Silicon Valley companies have climbed out of dotcom dotbomb recession and reported their most profitable year in history.

The San Jose Mercury News reports that 2010 was a banner year for the 150 largest Silicon Valley companies.

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Google's Search For Quality... And The Art Of Motorcycle Maintenance

Google regularly changes its algorithm and it's a smart move because all the companies that were trying to game Google -- and were succeeding in taking advantage of the some 200 rules that make up the algorithm -- get shaken out of the results.

It's a quick way of finding the most egregious gamers of the system.

And Google's recent release of its "Panda" algorithm update was designed to find quality sites and raise them in the search rankings.

But Panda is causing a lot of pandaemonium for all types of businesses, those that played by Google's "white hat" SEO rules, and those that didn't.

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First Meeting Of SFCurators Salon...

Last Thursday was the inaugural meeting of SFCurators Salon in North Beach and I couldn't be more happier about the turnout (see below).

I set up the group with my colleague Oliver Starr as a place where like-minded people could discuss the topic of curation, which has become a hot topic this year as search falters, and as curation tools and services come out of beta and into more mainstream use. (Please see: Pearltrees Reaches Key Milestones: Largest Curation Community - SVW)

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Google Partner Sites Show Weak Growth - Bad News For Publishers

Google's Q1 2011 financial results show a significant shift in revenues away from its partner sites in its AdSense advertising network.

Google [$GOOG] typically relies on partner sites for about 30% of total revenues but over the past year it has managed to reduce that to 28%.

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Bubble Boy Blodget Blasts Bubble 2.0

Henry Blodget is very much a poster boy for the dotcom bubble. The former Wall Street analyst and now editor of Business Insider, knows bubbles very well. You could say he helped build Bubble 1.0 with his enthusiastic research reports, which supported lofty valuations of key dotcom stocks.

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Pearltrees Reaches Key Milestones: Largest Curation Community

(Patrice Lamothe, CEO of Pearltrees.)

I'm proud to bring you news about Pearltrees, the company I've been working with the past year: this morning it announced it has reached 100,000 members and monthly traffic of 10 million pageviews -- that's about 100 page views per month per member.

This makes Pearltrees the largest curation community on the web. That's a great achievement and it comes at a great time because curation has become a hot topic as Internet users struggle to find spam-free content.

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Some Thoughts On The Social Distribution Of Mass Media...(SoDOMM)

(Photo shows a meeting of the seminal Homebrew Computing Club - credit: Computer History Museum.)

Earlier this week I pointed out how "social media" has changed from its original promise of challenging the established order of mass media.

Where are the brigades of citizen journalists? What's become of the hope of the grass roots revolt against the gate keepers in our national and local media?

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The Demise Of Social Media And The Return Of Mass Media

There have been quite a few studies lately on what people Tweet and post on Facebook, and the large number of links that people share. Invariably, the links that most people share belong to large media organizations -- what used to be called mass-media.

For example, Nate Silver recently analyzed links to news sources and found that of the top 30 news sources, nearly all were traditional large news sites such as AP or New York Times, only TMZ and Politico were new.

A recent Yahoo! Research report found just 20,000 elite Twitter users produce 50% of Tweets (Twitter has 150 m users). Sounds very mass-media like to me, I bet 10,000 of those users are journalists Tweeting about their stories.

[Study Shows How Social Media Amplifies Mass Media - SVW]

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The World Has Room For Only Nine More Googles... Or 1,000+ Startups

Here's an interesting analysis of the advertising industry and Silicon Valley's growing bubble in new media by Rick Webb.

He argues that Silicon Valley is heading for a cliff in funding too many startups to provide new media channels for advertisers.

He writes that there seems to be a perception that there will be far more money in online advertising than there really is.

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MediaWatch: Newspapers May Have Even Further To Fall

It may seem as if the downward spiral of newspaper's fortunes has slowed, and maybe even stabilized but that could be a false observation according to a new study.

Alan D. Mutter in Reflection of a Newsosaur reports on an eMarketer report that newspaper ad revenues could be three times more than they should be, given the amount of time people spend reading printed news versus reading online content.

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Charlie Sheen To Join HP Board, Follows Appointment Of Will.i.am At Intel

Hewlett-Packard [HPQ] will announce that Charlie Sheen has joined its board of directors as part of a growing trend by Silicon Valley tech giants to harness the power of celebrity.

The announcement could come as soon as Monday allowing HP to avoid April Fool's Day and risk confusing investors and Wall Street analysts.

Hewlett-Packard now has a new CEO and has been expanding its board of directors to include a more diverse set of advisors. But some have criticized HP's appointments.

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Silicon Valley's Computer History Museum Launches Online "Revolution"

The Computer History Museum this morning launched "Revolution" an online exhibit featuring images, video, and stories chronicling the development of key computer technologies.

More than 4500 pages are avialable online on a diverse number of topics, from punched cards to the first computer games, such as the "Naughts-and-Crosses machine" (above).

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Support Good Journalism And 'Pay The Wall'

I don't understand the current debate over the New York Times paywall. Yes, it has holes in it and yes it is a bit lame but the question it asks is: will you support quality journalism?

That's an important question.

But it seems that the Geekorati believe that once something is free then it should be free forever, and that if you can get past the New York Times paywall, then you are smart.

I disagree and here's why:

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Here's How Google Avoids Paying Taxes...

There's a fascinating article by Lisa O'Carroll in the UK Guardian newspaper about corporate taxes and how Google [GOOG] uses Bermuda and Dublin, Ireland to shelter taxes.

Here's how it works:

- Google's HQ is in Dublin, which has the lowest corporate tax rate of 12.5%.
- Google, however, wants an ever lower rate so it charges its European business a massive administrative fee by its Bermuda subsidiary.

And that's how a profit of 5.5 billion Euros turns into just 45 million Euros that is taxable in Dublin.

Lisa O'Carroll explains:

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How Yuri Milner Made Billions In The New Bubble

Craig Mellow, at The Deal Magazine has a fascinating profile of Yuri Milner, the Russian investment banker who runs Digital Sky Technologies, a multi-billion dollar fund. Close connections (The Deal Magazine)

Mr Milner has garnered tremendous amounts of publicity for his investments in Facebook, Groupon and other high flying US companies.

These companies aren't public but their shares can be traded on private markets but only by individual investors and employees in the company, and prequalified private investors with a high net worth. These secondary markets have become larger over the past few years because there has been little demand for IPOs and they provide a capital exit for some shareholders.

At the time of Mr Milner's investments in Facebook, there was a lot of sniggering about the high valuation he was prepared to pay and his willingness to do it on lax terms. It was seen as a naive investment decision by an outsider.

But take a look at this extract from the article, it shows how Mr Milner managed to parlay his growing media profile into making markets, then shifting his investments. Seems like a classic "pump and dump" strategy.

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Study Shows How Social Media Amplifies Mass Media

Social media is touted by many as a way to get around the gatekeepers of media, the traditional old order of mass media setting the agenda for society has been tipped onto its head.

Not really.

A study from Yahoo! Research "Who Says What to Whom on Twitter | Yahoo! Research" found this:

We find a striking concentration of attention on Twitter—roughly 50% of tweets consumed are generated by just 20K elite users—where the media produces the most information, but celebrities are the most followed.

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Twitter Brings Back Jack To Fix Product Strategy

Twitter's seesaw problems with product development entered a new phase this morning as the company brought back former CEO and co-founder Jack Dorsey.

He will take over product development from co-founder Ev Williams, as Executive Chairman, but also run his own startup, Square.

The move makes sense. Ev Williams involvement in Twitter has been questioned by myself and others. He spends little time at the office and his use of Twitter is extremely low, Tweeting just twice a day and sometimes none at all. Co-founder Biz Stone is even less interested in Tweeting.

Take a look at my recent survey of the activity of Twitter co-founders:

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Color: A quick review...

It's a shame that the $41m funding of Color Labs has dominated the news about Color, a radically different type of mobile app, because that's what's interesting.

Color shares photos with everyone around you that has the app on their iPhone or Android device. There are no privacy settings and you don't need to "friend" or "follow" anyone -- it automatically creates an ad hoc social network within 50 yards of your location.

How will people use it?

Color Labs doesn't know -- it did no user studies, no focus groups, beyond letting 30 staff and family members use it. Which is very bold.

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Danish Startup Podio Makes A Splashy Entrance

Danish startup Podio made a splashy entrance this week into the US market and I'm not referring to the torrential rains soaking San Francisco.

In a week dominated by the news of the launch of $41m startup Color Labs, it was an impressive feat. Podio, which offers apps for small businesses launched an App store and opened a pop-up store in San Francisco-- and managed to attract many of the top digerati of San Francisco.

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Is Curation A Flash In The Pan?

It's clear that the interest of Internet users can be very fickle indeed. Sites and services can have sudden boosts of popularity and then pretty much disappear from view.

I'm thinking of Quora as one example. But also Digg, MySpace and many others...

And whenever there is a burst of hype around a topic it seems to be a precursor to a shortened life span.

Curation has recently emerged as a hot topic so does that mean it's days are numbered?

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Color: A $41m Bet On A Radical Social Mobile App

Last week I was in Palo Alto, drenched by torrential rains but happy to catchup with serial entrepreneur Bill Nguyen and hear about his remarkable new startup Color, which today launched its iPhone and Android based mobile app.

Color has raised $41 million from a stellar group of investors. This is a huge amount of capital for a seed/Series A round and it shows how much confidence there is in Mr Nguyen and his team.

But this is no ordinary startup. Mr Nguyen is a serial entrepreneur, his most recent venture was LaLa, the cloud-based music service that he sold to Apple for about $80 million.

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Google Opens African Startup Incubator Umbono

Nur Bremmen reporting on Memburn writes that Google has chosen Cape Town in South Africa for a pilot startup incubator called Umbono - Zulu for “vision”, “sight” or “idea”.

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Kevin Covert: Preparing For A Silicon Valley M&A Boom In New Media

Investment banker Kevin Covert is increasing staff at his company, Covert & Co, up to prepare for an M&A bonanza in Silicon Valley. He says that the conditions are great for M&A especially in new media.

Mr Covert lives in southern California but he is no stranger to Silicon Valley, having been very active here, founding investment bank Montgomery & Co in 1999, in the middle of the dotcom boom.

Over the past ten years he's had a hand in many large deals such as selling MySpace to News Corp, plus also raising money for many companies, such as Meebo.

Here are some notes from our meeting:

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Techcrunch Attack On SF City Government - Should SF's Tech Stars Avoid Local Taxes?

Mike Arrington at Techcrunch, has attacked San Francisco Supervisor John Avalos for insisting that tech superstar companies such as Twitter pay the city's 1.5% payroll tax.

Mr Arrington resorted to name calling in his post: San Francisco Doing Everything It Can To Drive Zynga And Twitter Away.

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Bill Davidow On The Dangers Of An Over-Connected Society

I recently interviewed Bill Davidow, the veteran Silicon Valley VC and co-founder of Mohr Davidow Ventures, about his recently published book: OVERCONNECTED: The Promise and Threat of the Internet.

The premise is that our modern society faces new perils because our computer technologies and the communications technologies of the Internet accelerate flaws in our systems. For example, the recent financial crash that was sparked by the mortgage crisis, was made easier by computers and the Internet.

Mr Davidow borrows from his engineering background the concept of "positive feedback". This describes systems that can feed on each other to grow out of control. It is these positive feedback loops that put us in peril, and as our use of computer and Internet technologies increases at a fast pace, this increases our vulnerability to unpleasant effects such as economic crises.

Here are some notes from our conversation:

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Silicon Valley Veteran VC Bill Davidow Says "No Bubble"

I just finished an interview with Bill Davidow on the subject of his new book "Overconnected: The Promise and Threat of the Internet." I'll post the interview later.

I took the opportunity of asking Mr Davidow about the state of Silicon Valley and questions such as "are we in a bubble?"

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Muckraking: A Disappearing Form Of Journalism?

The term muckraker has some negative connotations today but it used to be a noble term applied to a form of journalism that railed against injustice, corruption and the excesses of the high and mighty.

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New Media Business Models: How To Make $2K On $5m In Revenues

Business Insider, the popular news site founded by former Wall Street analyst Henry Blodget, this week revealed its 2010 finances.

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Wow. Twitter's Response To Bad Press: Unfollow

Sean Garrett, Twitter's chief of communications (see picture demonstrating his media relations skills on me during happier times) has unfollowed me on Twitter. This was his only response to a series of posts here on SVW critical of Twitter and its support for corporate social responsibility yet following tactics described as "corporate blackmail" in pushing for huge cuts in local San Francisco taxes. That's a lame response to an important local story. I'm sure Mr Garrett has unfollowed others who have been critical of Twitter. What a great response to dealing with unpleasant news -- stick your head in the sand. If you can't see it it doesn't exist.

UPDATED: Sean Garrett is back following me, he tweeted: "Our long national nightmare is over. I'm following @tomforemski again. Http//bit.ly/f5rOgS."

:)

Corporate Social Responsibility In Action - Twitter Might Not Be Satisfied With SF Tax Break - SVW

Corporate Blackmail? - San Francisco Offers Tax Break To Twitter - SVW

Proposed Tax Cuts For Twitter Raise Questions Of "Corporate Blackmail," Worker Safety : News: SFAppeal

Twitter Touts "Social Responsibility" But Threatens To Leave SF Over Local Taxes - SVW

Editorial: No tax breaks for Twitter | San Francisco Bay Guardian

Analysis: Coming To A Web Site Near You - Apple's iPay Future...

There has been much written lately about Apple's rules for apps, that they must provide an in-app purchase function.

For example, Jason Kincaid wrote: Why Are You People Defending Apple?, MG Siegler wrote: Apple's Big Subscription Bet: Brilliant, Brazen, Or Batsh*t Crazy? and Frédéric Filloux wrote Apple's bet on publishing | Monday Note - among many posts on the subject.

Much of the focus on Apple's move has been on the 30 per cent cut it takes on purchases made through its online stores. That's a big chunk for providing a payment service, and for many companies, such as media organizations that re trying to transition their business models to a digital economy -- it's probably too much to pay.

And that's what the posts about Apple focus on -- the 30 per cent cut.

But that's a red herring.

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Analysis: AOL And HuffPo - Media's Race To The Bottom?

Dan Lyons over at The Daily Beast nails it in his look at the AOL acquisition of The Huffington Post for $315 million.

The big problem that everyone in online media faces is that advertising rates keep falling. ...

One response to that has been to say that if each page is worth less, then we must have more pages. Thus we now have "content farms" like Demand Media which flood the Web with low-cost, low-quality content that is basically spam. But this drives advertising rates down even further.

Last summer when I did my article about Huffington Post for Newsweek, I estimated that they had about 25 million monthly readers and would generate about $30 million in revenues in 2010. That meant they were getting a mere $1 dollar per reader per year!

Compare that to the world of cable TV or print newspapers and magazines which collect hundreds of dollars each year from each subscriber, and then generate hundreds of millions in ad revenue on top of that--and you see the difficulty of the business that AOL and Huffington Post and all the rest of us are in.

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Top PayPal Alumni: "Silicon Valley Lacks Radical Innovation"

It was a sold out event: Peter Thiel and Max Levchin at the Inforum Club SF - the club for under 36 year old members of the Commonwealth Club.

Mr Thiel and Mr Levchin are two prominent members of what some call the "PayPal Mafia." This is a large number of unbelievably successful entrepreneurs; the Paypal alumni have gone on to help found an extraordinary number of successful startups.

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IBM And Silicon Valley...

(IBM's Silicon Valley Lab - photo by Andrew Nordley.)

As IBM celebrates its centennial this year it is interesting to look at its association with the Silicon Valley area. Although IBM is considered an East Coast computer company it has a long history with this region, long before there was a Silicon Valley.

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IBM 100 Years: From Cheese Slicers To Supercomputers

Earlier today, IBM CEO Sam Palmisano kicked off the company's celebration of 100 years in business with a speech to students at his alma mater, John Hopkins University.

He spoke about how IBM started,"Making clocks, scales and cheese slicers, in addition to the punched card tabulator. After that, it's a blur: typewriters, vacuum tube calculators, magnetic tape, the first disk drive, the memory chip, FORTRAN, fractals, ATMs, mainframes, mini-computers, personal computers, supercomputers, services, software, analytics..."

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MIT MBAs Take 9 Lessons Home From Silicon Valley Tour

By Anagha Ramanujam

One hundred and nine students pursuing the Entrepreneurship and Innovation program at the MIT Sloan School of Management began their New Year in the Silicon Valley on the school's annual, Silicon Valley Study Tour.

The school firmly believes that business innovation must drive the economy in the next decade.

The visit, led by the MIT Entrepreneurship Centre Managing Director Bill Aulet, was designed to expose students with entrepreneurial aspirations to the Silicon Valley ecosystem. The tour enabled students to develop personal connections with the entrepreneurs, venture capital firms and CEOs in one of the most successful startup hubs of the country.

Over a span of three days, we visited more than 70 startups in the valley.

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Did US Companies Help Egypt Internet Crackdown?

Free Press, the non-partisan lobbying organization, reports that US companies are involved in providing technology that helps the Egyptian government monitor protestors on the Internet and mobile phones.

Free Press issued a statement that claims:

Boeing-owned, California-based company Narus sold Telecom Egypt, the state-run Internet service provider, "real-time traffic intelligence" equipment, more commonly known as Deep Packet Inspection (DPI) technology. DPI is content-filtering technology that allows network managers to inspect, track and target content from Internet users and mobile phones as it passes through routers on the Web.

...

Narus Vice President of Marketing Steve Bannerman said to Wired in 2006: "Anything that comes through (an internet protocol network), we can record. We can reconstruct all of their e-mails along with attachments, see what web pages they clicked on, we can reconstruct their [voice over internet protocol] calls."

Free Press is calling on Congress to take action on DPI.

The harm to democracy and the power to control the Internet are so disturbing that the threshold for the global trafficking in DPI must be set very high. That's why, before DPI becomes more widely used around the world and at home, Congress must establish legitimate standards for preventing the use of such control and surveillance technologies as means to violate human rights.

Congress would be opening a Pandora's Box in terms of looking at the US companies that provide equipment to foreign governments that could be used against protestors. Some of the largest US tech companies are suppliers to governments in China, Iran, Burma and other countries that have been accused of human rights violations.

But where do you draw the line? DPI has many uses, and not all of them are nefarious. It would be near impossible to control the export of network hardware and software based on its possible use by foreign governments.

However, a public shaming of US companies might have an impact and it would certainly be faster than waiting for Congress to act.

You can support Free Press and its call on Congress to investigate the use and sale of DPI technology by American companies by signing your name here.

Analysis: Here's Why Demand Media Valuation Is Greater Than NYTimes...

CNNMoney reported:

Shares of online content creator Demand Media closed 33% higher Wednesday, following an IPO that valued Demand at more than $1 billion.

...That gives Demand a valuation of $1.5 billion -- more than the New York Times Co (NYT), though less than other media stalwarts like Gannett Co. and Washington Post Co.

That's also the highest market capitalization for an Internet company since Google's IPO in 2004, according to research firm Renaissance Capital.

While its valuation might seem surprisingly high compared with the New York Times, it's investors clearly believe it has a brighter future than the Gray Lady. And here's why it deserves it:

Story continues...

Edelman Survey: Trust In Peers Falls...Trust In Experts Soars

The core of corporate social media practice is that customers trust their peers and thus if you enable them to tweet or write blog posts about your products or services, it will help boost sales.

In 2006 the Edelman Trust Barometer found that peers were the most highly trusted group. Richard Edelman, the head of Edelman, the largest privately held PR group, dubbed it the Me2Revolution.

But trust in peers has fallen considerably. From 68% in 2006 to 47% - a further decline of 4 percentage points in the past year.

Story continues...

Some Early Invites For Genieo - The Mac Version

I've been trying out the Mac version of Genieo - a cool app that helps you deal with the media tsunami out there and identify the news content that is relevant to you without any overt training.

Sol Tzvi, the co-founder of Genieo, has sent me some early invites for SVW readers. The first 200 people clicking on this link will have early access before the launch later this month.

http://www.genieo.com/mac/siliconvalleywatcher/?campaign=macSvw

Women In Tech: Sol Tzvi On Starting A Startup... - SVW

Genieo + My6Sense: The Media Tsunami And The Need For Self Organizing Filters... - SVW

Analysis: No Change At Google - Here's Why...

The departure of Eric Schmidt as CEO of Google has led to a lot of speculation about changes at the company as Larry Page moves back into that job in April.

But there will be no changes because there is essentially no change in the management of Google.

People forget that Mr Schmidt held the title of CEO in name only. The decision making was shared between the founders: Larry Page and Sergey Brin; and Mr Schmidt in what they termed a "triumvirate."

Here it is explained in extracts from Larry Page's 2004 Founders' IPO Letter:

Eric has the legal responsibilities of the CEO...

...

We run Google as a triumvirate. Sergey and I have worked closely together for the last eight years, five at Google. Eric, our CEO, joined Google three years ago. The three of us run the company collaboratively with Sergey and me as Presidents.

...

We hired Eric as a more experienced complement to Sergey and me to help us run the business.

Mr Schmidt always held the minority vote against Messrs Page and Brin. And there is nothing to suggest that they have dissolved their management structure beyond removing Mr Schmidt.

Mr Page gets to hold the CEO title for legal reasons but the power sharing with Mr Brin is still there. Both founders will continue to make the key decisions.

Why would we expect anything to change at Google if there is no new management?

The only thing that's changed is that the founders have regained some of their lost dignity. Mr Schmidt was brought in as CEO to provide the founders with "adult supervision" as he termed it. Google's chief investors believed that the coming IPO would do better if a veteran Silicon Valley executive was seen to be at the helm.

Continuing to have "adult supervision" ten years later when you are nearly 38 years old must be embarrassing for the founders. Especially since wonder kid Mark Zuckerberg has been doing great without having any official adult supervision. He's tripled the value of Facebook in less than a year and he's just 26.

This is the real reason Mr Schmidt was shifted, imho. And it's all plain to see in Mr Schmidt's tweeted announcement:

"Day-to-day adult supervision no longer needed!"

New Series: Writing Tips - 25 Years From FT to SVW...

The other day I was invited by the San Francisco Blog Club to speak on the topic of writing tips. My talk was titled "From The Financial Times to Silicon Valley Watcher- 25 years of writing tips."

I've worked in traditional media and in the "new media" so I've accumulated a few observations that have helped me in my work.

I came up with about 25 tips. It was a great turnout and I received some excellent feedback. It was interesting to see how people picked out different tips as being important to them.

I was also asked to write them down, so here is the first installment in a regular series that will appear on Fridays. I hope you'll find some of these tips interesting and useful. And please share your tips too!

Story continues...

GOOG Founders End 'Adult Supervision' As Schmidt Announces Exit

It's taken Google co-founders Larry Page and Sergey Brin many years to end their "adult supervision" in the form of Google CEO Eric Schmidt, who leaves in April.

Mr Page will become CEO and Mr Schmidt becomes Executive Chairman.

Mr Schmidt Tweeted:

Day-to-day adult supervision no longer needed! http://goo.gl/zC89p.

Mr Schmidt was brought in as CEO in August of 2001 because of pressure from Kleiner Perkins, one of Google's chief investors. His goal was to provide "adult supervision" to the young founders as Google was preparing for an IPO.

The VCs believed the IPO would be more successful if investors saw that Google was headed by a veteran Silicon Valley executive. The company created a "triumvirate" where the founders and Mr Schmidt shared responsibility for executive decisions.

Many years later, Google still maintained its "adult supervision" which must have rankled the founders, now nearing 38 years old. The situation must have become especially galling in recent months since Mark Zuckerberg, the 26 year old founder of Facebook is also CEO. He has managed to more than triple the value of Facebook in less than a year--without the need for any adult supervision.

One year ago I asked: Nine years later does Google still need 'adult supervision?' | ZDNet

The Google triumvirate has worked reasonably smoothly but there have been large differences of opinion between the founders and Mr Schmidt, especially over China. Mr Brin was in opposition to Google's entry into China and he advocated an end to its China operations, against Mr Schmidt's position that Google should overlook China's human rights record.

Mr Schmidt has served as a useful "lightning rod" at Google and he has consistently distracted the media from paying much attention to the founders. Sometimes Mr Schmidt's less carefully considered remarks have gotten him into trouble.

His unusual leadership style has attracted a number of critics. For example, Elizabeth Corcoran, senior editor at Forbes, once asked "Who's Really Running Google? - Forbes.com

...as charming as he is, Schmidt runs Google about as much as much as the Dalai Lama runs the world's spiritual life.

...he has defined his job not so much as leading Google but as running interference for it--placating the investment community, soothing nervous regulators and policymakers and doing whatever it takes to create a magical force field protecting Googleteers...

He hasn't had much success at "running interference" with Wall Street and policy makers.

- Google is facing increasing scrutiny from the US administration over possible anti-trust business practices. That’s despite Mr Schmidt’s very public support for President Obama.

- Google has run into big problems internationally with its books scanning project and with European anti-trust authorities.

- Its relationship with Microsoft is very bad, because Google actively opposed Microsoft's acquisition of Yahoo and other deals.

- Mr Schmidt has managed to upset newspaper companies both in the US and internationally. He has failed portray Google as an ally rather than as an adversary.

- Google’s relationship with Apple soured badly, especially after Google introduced its Nexus phone, and then dropped it. Mr Schmidt was forced to resign from Apple’s board.

- Mr Schmidt admitted that he persuaded the Google board to pay $1 billion more than YouTube was worth. Critics said that was to reward VCs who were investors in both Google and YouTube at the cost of GOOG's shareholders. Google is still trying to figure out how make YouTube profitable.

- Google has failed to diversify its business away from search and online advertising despite many acquisitions.

Mr Page will now have to step out of the shadows and assume a much more vocal and public role. That will be a challenge for a shy software engineer who is much happier working on engineering problems than schmoozing Wall Street analysts and building media partnerships with other companies.

Story continues...

Are European Startups Lazy?

The UK newspaper the Daily Telegraph is running a series of articles about startups and has commissioned several columns. Wendy Tan White is the founder and CMO of Moonfruit, a successful UK based startup that offers hosted websites. She wrote a column answering the question "Are European startups lazy?"

Certainly, we don't have a homegrown Google or Apple - yet - but European start-ups are definitely not lazy, as some people seem to think and as TechCrunch's Mike Arrington once said. In fact, there's a whole generation of hungry and talented entrepreneurs building amazing companies.

So what's the problem? Why don't we have as many successful companies we can point to?

Story continues...

Analysis: Facebook Gains Friends With Benefits From Foreign Investors

Reuters reported that Goldman Sachs will only allow non-US investors to take part in a private placement of Facebook shares because of "intense media coverage" in the US.

Felix Salmon explains why in his column: Analysis & Opinion |

Because of the media coverage Goldman could be accused of "front running their own private market" to evade securities laws.

One question is did Goldman mismanage the deal or is it part of a plan to make sure Facebook gets a large foreign shareholder base?

Story continues...

Coming Up: 25 Years Of Writing Tips...

I'm looking forward to speaking at the San Francisco Blog Club meetup this Wednesday evening in San Francisco.

The Title is: "From The Financial Times to Silicon Valley Watcher- 25 years of writing tips."

I hope to have 25 tips by Wednesday. Hopefully you can make it, there will be free drinks and some great networking.

Saturday Post: The Evolution Of Homo Extrovert

When our distant ancestors discovered cooking it spurred an evolutionary step forward. Our brains grew larger and our stomachs shrank, and we were better able to walk upright.

Cooking food made a big impact because eating raw food is hard work. If you look at other primates they spend much of their life eating.

In 2008 scientists in the UK tried an experiment with humans, putting them in a zoo and feeding them as much raw food as they wanted: berries, fruits, vegetables, etc. To fulfill their daily energy requirements required eating more than 10 pounds of raw fruits and vegetables -- it was taking them most of their day to get through chewing this much food and most were unable to finish their daily ration.

By the end of the two week experiment it was clear that raw foods alone cannot fuel a modern human. All the test subjects lost lots of weight and they couldn't finish all of their food even though they would eat well into the night... some would have likely died if they had stayed on this diet.

Story continues...

China, Russia, South Africa - And The Facebook Connection

By Matthew Buckland at Memeburn

There is something going on in China, Russia and South Africa. Via various internet investments and creations, these three countries combined have built up major stakes in some of the world's biggest sites and social networks.

Russian investment company, Digital Sky Technologies (DST), now owns about 7-10% of Facebook by various estimates, putting the company among Facebook's biggest owners. Via its sister company Mail.ru, another 2.4% of Facebook is held. Recently, according to the New York Times, DST ploughed a further $50-million into Facebook.

DST also owns about five percent of the popular social gaming company Zynga and another five percent of the prominent shopping-coupon company Groupon. The company is now apparently eyeing a piece of Twitter, but then again who isn't?

The Mail.ru Group, which has grown into the biggest Internet company in the Russian-speaking world, owns 100% of Russian social networking site Odnoklassniki, and has a significant stake in the country's other major networking site, Vkontakte. DST also owns the early-web era instant messaging service ICQ, an interesting investment because the service is somewhat of a fading star.

The Chinese and South African connection

Story continues...

Is Curation The Answer To Search Spam?

Much has been written lately about the lower quality of Google's search results. A poll by Lifehacker found that 77% agreed that Google search results had "become less useful to you lately."

If search is becoming less useful then how will we navigate the web?

The answer is by curation, by using the recommendations of others acting as curators.

Paul Kedrosky writing on Infectious Greed:

... the re-rise of curation is partly about crowd curation -- not one people, but lots of people, whether consciously (lists, etc.) or unconsciously (tweets, etc) -- and partly about hand curation (JetSetter, etc.). We are going to increasingly see nichey services that sell curation as a primary feature, with the primary advantage of being mostly unsullied by content farms, SEO spam, and nonsensical Q&A sites intended to create low-rent versions of Borges' Library of Babylon. The result will be a subset of curated sites that will re-seed a new generation of algorithmic search sites, and the cycle will continue, over and over.

Story continues...

"Silicon Valley" Turns 40 - Do We Need it?

David Laws writes at the Examiner:

January 11, 2011 marks the 40th anniversary of the first appearance of the name Silicon Valley in print.

Under the headline SILICON VALLEY USA, journalist Don C. Hoefler wrote the first of a three-part series on the history of the semiconductor industry in the Bay Area. His behind the "scenes report of the men, money, and litigation which spawned" the industry appeared on page one of the industry tabloid Electronic News on Monday January 11, 1971.

He points out that there is anecdotal evidence of the use of the name "Silicon Valley" prior to this date but that, "Author Michael S. Malone suggests that Hoefler's pioneering coverage of the Silicon Valley community as a collection of characters, dreamers, and eccentrics made him "the one that put the whole idea in our minds".

Story continues...

MediaWatch: FT Launches Tilt...

The Financial Times today launched "FT Tilt" a subscription based site focused on emerging markets.

Paul Murphy, editor-in-chief of FT Tilt explained the name of the new site:

Recent years have seen economic power shift—or tilt—south and east. This trend is accelerating rather than diminishing and we see strong demand from our core professional readers for increasingly granular news and insight in markets beyond the developed G3 economies.

The goal is to leverage the FT's global network of journalists and combine contributions from a community of financial professionals to publish their research and analysis.

Felix Salmon, over at Reuters does a good job in listing all the challenges:

Tilt is built to allow clients to republish their own work and to talk to each other and comment on stories. But because Tilt isn’t available on Reuters or Bloomberg machines, traders aren’t going to see its stories effortlessly shuffled in to their main feed of news and analysis...

...they want to change the way those professionals consume media on a day in and day out basis—adding an extra site where those professionals feel they must spend valuable time.

...Murphy is asking his overstretched journalists (just one person for all of Latin America, for instance) to tell financial professionals something they don’t already know: that’s a tall order.

Overall, Mr Felix says that "Tilt" shows that the FT is retreating to a newsletter model and that this is "a sad and narrow fate for what should be a proud and global newspaper.”

Curation - The Third Web Frontier

Here is a guest article by Partice Lamothe - CEO of Pearltrees (Pearltrees is a consulting client of SVW.) This is a lightly edited version of "La troisième frontière du Web" that appeared in the magazine OWNI - Digital Journalism - March 2010. The article argues that the founding pricinciples of the Internet are only now being implemented and that the next frontier is in organizing, or curating, the Internet.

By Patrice Lamothe

Everyone realizes that the web is entering a new phase in its development.

One indication of this transition is the proliferation of attempts to explain the changes that are occurring. Functional explanations emphasize the real time web, collaborative systems and location-based services. Technical explanations argue that the interconnectivity of data is the most significant current development. They consider the web's new frontiers to be closely related to the semantic web or the "web of things".

Although these explanations are both pertinent and intriguing, none of them offers an analytical matrix for assessing the developments that are now underway. Some ideas are too specific.

Story continues...

2011: Facebook Valuation Shows Conditions For IPOs Are Ripe

The high valuation of Facebook on secondary share markets might be out of line with its revenues but it does show one thing: a large investor appetite for investing in leading Silicon Valley companies.

The fact that the investors are making large bets without having access to the underlying financial information is similar to the wild days of the dotcom boom, when companies were able to IPO on the basis of very little proven financial information. Investors were happy to pay high multiples for a stake in a business that might have a bright future.

The comparison between now and the dotcom boom has been noticed by others.

Story continues...

VC Interview: Bob Ackerman Warns On Secondary Market Excess

I spoke with Bob Ackerman, managing director of Allegis Capital and a veteran Silicon Valley venture capitalist about some of the trends and issues in VC. He spoke about his concerns about the secondary market, and that innovation in the US is being constrained by bad regulations, taxation and poor education.

Here are some notes from our conversation:

Story continues...

Curation Becomes Social: Pearltrees Launches 'Team' Version

[For much of this year I have been working with Pearltrees, which offers a visual web site curation service based on the visual metaphor of 'pearls' please see below for an example.]

Pearltrees this week launched a "Team" version of its curation service that allows groups of people to collaborate on curating a topic. Up until now each Pearltree was the responsibility of one person.

Alexia Tsotsis at Techcrunch reported:

Ideally this goes down as such: You really care about fashion so you search for fashion in the Pearltrees search box and are confronted with really elaborate visual cluster displays of fashion blogs, each blog its own “pearl.” You decide that anyone who likes The Sartorialist is probably a good egg and click on the puzzle piece in the Pearltrees detail window in order to ask if you can join the team.

If the team leader accepts, you then can see all the Pearltree curation happening as it happens as well as comment on individual Pearltree decisions. You can also share your team curation easily via Facebook and Twitter.

Pearltrees is part of a growing number of companies that offer curation services. Others include Storify, Curated.by, and more are coming on the market in 2011. Pearltrees distinguishes itself from the others in that anything that is on the Web can be curated. Other services are limited in what you can curate, such as curating just Tweets.

In addition, pre-fetching of web site content means that it is possible to browse a Pearltree faster than surfing from site to site.

At the Le Web conference in Paris this week, Pearltrees will demonstrate a version that uses a touch interface.

Foremski's Take: Curation will become one of the most important topics in 2011 because there is a limit to what algorithms and software can do in terms of helping to organize and navigate the Internet. I like to define curation as the human layer on top of the machine/algorithmic layer.

Techmeme, the news aggregator, is a good example in that it uses an algorithm to collect links to breaking news stories but also has 6 people reviewing and choosing the links that it publishes.

Pearltrees' team capability extends the usefulness of the service in that groups of people can collaborate on building more comprehensive collections of web sites.

I've been talking with PR firms about using Pearltrees to create a press kit consisting of links to an announcement; links to background information; links to video and audio materials; links to images, etc.

A reporter, for example, could grab that media kit Pearltree and use it in preparing a report. The dynamic nature of Pearltrees and its real-time capabilities means that if there is an error in the press kit, or if there is new information and it needs to be updated, the new information is automatically propagated in real-time to everyone that has the press kit Pearltree.

Over the next few weeks I will be launching some team Pearltrees and looking for help in curating various topics related to Silicon Valley. Here is the first one: a Pearltree for Silicon Valley PR firms (below).

If you would like to be part of this team just create a free account and send me a join request and I will add you to my team. Or create Pearltree for you PR firm and I will add it to this one.

- - -

Please see:

Curation And The Human Web...

Aggregation Is Not Curation - There Is A Big Difference

Analysis: Google Buying Groupon Doesn't Make Sense...

UPDATED: Faith Merino at VatorNews reported Monday that Google has purchased Groupon for $2.5 billion: "

... according to an unnamed insider who spoke with VatorNews. Neither Google nor Groupon could be reached for comment to confirm the report, but Vator's source is reliable and the report falls in line with the recent string of Groupon acquisition rumors.

Tuesday Kara Swisher at All Things D reported that her sources said that Google will pay $5.3 billion plus a $700 million earnout if Groupon meets sales targets.

... it is a killer move for Google-despite the high price-given it has long tried to enter the local advertising space, with decidedly mixed results.

The New York Times reported that its sources said Google will pay $6 billion for Groupon.

Google made an initial bid of $3 billion to $4 billion, these people said. But in the face of Groupon's resistance, Google raised its offer to $5 billion to $6 billion. The company is unlikely to offer more than that, according to one of the people with knowledge of the situation.

Foremski's Take:

The deal doesn't make sense for Google. Groupon relies on a large number of people to make the sales for Groupon to work.

Google is a business that relies on machines and algorithms -- not on managing large numbers of sales people.

Caroline McCarthy at CNet News makes a similar point:

Groupon's "secret sauce" is not its technology ... but its massive sales force and how that sales force is organized. It's not Google's usual cup of tea, but it's one of Google's own weak spots.

But she writes that Google needs to move beyond engineers and beef up its direct sales force. She quotes David Ambrose, co-founder of Scoop St, a Groupon clone, that Google might pay more than $2.5 billion because "Google has never really been able to do direct sales well at all."

I don't believe that Google can buy a direct sales force capability. If it does, that effort will fail. Google's culture is engineering based and the sales force will never have the clout of engineering.

Just because it makes sense to have a strong direct sales force doesn't mean that it makes sense for a company to acquire one. Company culture always trumps logic and reason. And company culture is the least agile part of any organization.

And Google's engineering culture is deeply wired. For example, Google has been encouraged by vocal observers to buy a newspaper, such as the New York Times. But again, something like that would never happen because Google doesn't want to manage editors, journalists, foreign news bureaus, etc. It knows how to manage servers and software.

At the bottom of every Google news page you see the following:

"The selection and placement of stories on this page were determined automatically by a computer program."

Placement was not determined by a person but by an algorithm.

Algorithms and machines are a far more scalable and profitable business than a people based business such as a newspaper, or Groupon.

In addition, the higher costs of doing business with a large sales force will lower Google's profitability and that will affect its stock price. In mid-morning trading Tuesday Google [GOOG] was down 4% or $23.45 to $558.66 in reaction to the news.

IPOs: Mary Meeker's Move To VC - And The Lack Of Wall Street Analysts

Mary Meeker, one of the top Wall Street analysts, has moved to Kleiner Perkins Caufield & Byers from Morgan Stanley.

Sarah Lacy reports:

Chegg's CEO Dan Rosensweig was one of many pinging Meeker with congratulatory notes this morning during my call with Meeker, Doerr and fellow KP partner Ted Schlein. He described it as "huge news" and a "big coup" for Kleiner.

"Mary's ability to spot the most important trends, evaluate-and-back the most effective entrepreneurs, predict the major pivots in the industry, and do it on a global basis has been unparalleled," he told TechCrunch via email.

While this is likely a lucrative move for Ms Meeker this is not good news for the return of the IPO market. The valuable role that Ms Meeker played in her "ability to spot the most important trends, evaluate-and-back the most effective entrepreneurs, predict the major pivots in the industry, and do it on a global basis" used to benefit the investors in public companies.

Now that benefit will go to a select group of elite investors in private companies.

However, if the IPO market is to return, and in turn, help fuel reinvestment in Silicon Valley startups by VCs such as Kleiner, Wall Street needs more Mary Meekers -- not fewer. One of the biggest problems public companies have is in having enough analysts following them and writing insightful investment reports.

Even large public companies such as Intel have problems in attracting enough analysts that understand their business. Newly public companies face an uphill battle in attracting analysts that know them and their markets. With the carnage among Wall Street analysts following the financial meltdown two years ago, the need for good analysts is even more acute today.

Kleiner could be shooting itself in the foot. The firm needs people like Ms Meeker on Wall Street talking about its public or soon-to-be-public companies, and helping to create the markets for that stock.

It's superstar analysts such as Ms Meeker that create the trading markets for public companies.

Talent Wars: Salesforce Builds On Its Momentum With Rangaswami Hire

Salesforce.com has been on a tear this year with financial results exceeding Wall Street estimates; a massive expansion of its headquarters in San Francisco; a gift of $100 million to build a Children's hospital; and now: luring JP Rangaswami, Chief Scientist at UK Telecom giant BT to assume the same position at Salesforce.

Larry Dignan, writing at ZDNet, reports:

...Rangaswami will contribute to the company's product strategy and be an evangelist for cloud computing around the globe. Rangaswami will focus on European customers and preaching real-time collaboration.

...In a statement, Salesforce.com CEO Marc Benioff said Rangaswami has "the rare talent of being able to see what the future should be, knowing what it takes to get there, and the enthusiasm to make it happen."

Mr Rangaswami's Telco background should be useful to Salesforce as it seeks to expand its business. Telcos around the world are moving into offering cloud-based IT applications and services to enterprises.

Softbank, the Japanese Telco, recently made a deal to offer Broadvision's cloud based Social Business suite to Asian corporations.

Giovanni Rodriguez, Chief Marketing Officer at Broadvision, said: "That's a very smart hire by Salesforce, it will help expand the "social" side of its business. JP is very good at starting trouble and getting people to talk about key concepts."

Mr Rangaswami is a well known blogger writing on confused of calcutta - a blog about information (and food).

He has also been spending considerable time in SIlicon Valley because he is on the board of Ribbit, an innovative web telephony Silicon Valley startup that BT acquired in mid 2008 for $105 million.

He has driven innovation within BT by opening up the BT communications platform to third-party developers. Last summer I visited BT's operations in London and met with key researchers.

(Please see: UK Diary: Tuesday - It Never Rains But It Pours . . . More BT Innovation - SVW)

Marc Benioff, the CEO and co-founder of Salesforce continues to do well in positioning the company on the commercial edge of the expanding wave of cloud computing growth and its acceptance by large enterprises.

He has built San Francisco's largest technology company.

Curation And The Human Web...

There is no doubt in my mind that the topic of curation and the Internet, is an important one and that it will be a dominant topic in 2011.

Curation is important because we are reaching the limits of what can be achieved through algorithms and machines in organizing and navigating the Internet.

Aggregation looks like curation but it's not. (Please see: Aggregation Is Not Curation - There Is A Big Difference - SVW)

I define curation as a person, or a group of people, engaged in choosing and presenting a collection of things related to a specific topic and context.

Aggregation employs software (algorithms) and machines (servers) to assemble a collection of things related to a specific topic and context.

Aggregation tools can be employed by curators but the human act of curation adds a layer of value that aggregation alone cannot provide.

A good example is Techmeme, the news aggregator run by Gabe Rivera.

Techmeme uses an algorithm to find and publish links to the most important tech news of the day.

For many years it was just Gabe and his algorithm. But now the site employs six people sifting through the results thrown up by Techmeme's algorithm and looking for news that machine aggregation alone cannot find. (Please see: Techmeme is six people now . . . - Techmeme News.)

Techmeme added people because it can produce a superior, curated product, than by machine aggregation alone.

Contrast Techmeme's curated approach with that of Google News' aggregation. At the bottom of each Google News page you will find this statement:

The selection and placement of stories on this page were determined automatically by a computer program.

And that's the reason Techmeme wins out over Google News because the quality of machine selected stories is not as good as that of a team of people curating the news together.

The human element is important but it's expensive, which is why Silicon Valley tech companies favor software and machines. Silicon Valley investors fund businesses that are scalable, that can be expanded by simply adding more servers and software.

People-based businesses are not scalable in the same way - you need to hire more people to do more. People add complexity, require management, vacations, and labor costs always trend up. In comparison, servers and software costs keep falling and their productivity increases.

The cheapest way to add a human layer is to improve machine aggregation by taking clues from what people do online, what they share, what they write, and what they discuss.

That's why tech companies talk about the "social web" and social graphs. These are ways of improving their technologies without having to employ people.

A good example is Flipboard, the popular iPad application. It searches for content by looking at what a person's Facebook friends and Twitter followers are sharing, and then publishing the content in an easy to browse magazine format.

However, such approaches reach a natural limit. Social networks share a wide variety of different content. Variety is ambiguous but curation needs to be focused.

Also, the technology of aggregation constantly trends towards becoming a commodity. It becomes a baseline rather than a differentiating factor. The value-add becomes the human layer.

And there are additional challenges to machine based aggregation: it becomes ever more easily gamed, as can be seen in the quality of Google search results and its unending battle with people seeking to manipulate the its results.

Google is forced to keep changing its algorithm in a bid to shakeout those that figured out how to game its system.

Techmeme, with its human curators, doesn't need to worry about others gaming its algorithm because commercial spam won't get published -- except by its sponsors.

The evolution of the algorithm and machine can be viewed as a way to use technology to distill the human essence. What is it about us that cannot be qualified and quantified within an algorithm?

I see curation as a one part of that human essence, a natural human activity that cannot be matched by technology. And curation is where the value lies in improving the organization and usefulness of the Internet.

- - -
Here is a Pearltree on "Curation."

(Please note: Pearltrees, a startup offering a visual and shareable curation service, is a client of my consulting services. If you'd like more information on Pearltrees, or SVW consulting services, please contact me: foremski (at) gmail.com.)

The Knight News Challenge: A Right-to-Respond Button Next To Every News Story...

The Knight News Challenge offers $5 million in funding to the best ideas that "use digital platforms to deliver news and information to geographically defined communities." It is now in its fifth year and the deadline is December 1. Here is my application, let me know what you think.

The goal of this project is to provide companies and individuals with the "Right to Respond" to an online news story no matter where it is published.

Having the right-to-respond to a news story should become a fundamental right to everyone on the Internet yet it is difficult to do because of the fragmented nature of the Internet, with news stories often appearing in many places on different sites, and the lack of commenting facilities.

- What if a company or individual is the victim of misinformation or allegations of one kind or another?

- What if a company wants to react to a story about a competitor?

- What if a politician wants to respond to a news story?

- What if a community wants to respond quickly to a news story?

- What if an individual is misquoted and wants redress?

Conventional means of response are poor and aren't very timely:

- Often, news stories don't have a comments section.

- Comments sections can be very busy meaning that any official response is lost in the crowd.

- News stories can be published in multiple places which means responding to each one is very time consuming.

The solution:

- The "Right to Respond" is a small green button that sits next to an online news story. If it is red it means that a "right to respond" has been registered.

- Clicking on the red "Right to Respond" button leads to a page where the response is posted.

- The response is right next to the news story and not buried in the comments section.

- It is real time, the response is immediate and occurs during the news cycle rather than days later.

- The "Right to Respond" content is hosted in a central location. This means the same reply can be sent to multiple sites at once.

- Corporations would pay the news publisher site for hosting the "Right to Respond" button. They would also choose on which sites they want to file a response.

- Individuals mentioned in the news story, without any company affiliation, would be able to post a reply for free.

It provides an additional revenue stream to publishers and it also conveys trust because legitimate news sites would want to host a "Right to Respond" button showing that they support fair and accurate reporting.

Any news sites deliberately publishing misinformation in order to earn money from "Right to Respond" would quickly lose audience and can be blocked by the companies paying for a response.

There can be several responses available for each news story that could be sold to different companies.

Mobile: It can be easily made available over mobile devices since there is very little space taken up by the "Right to Respond" button.

Communities: The activation of the "Right to Respond" button can be made location based so that it is activated in specific communities. Or specific communities could be offered access to use the "Right to Respond" button for free, encouraging greater communication.

You can view and respond to this proposal here.

Broadvision Relaunches Clearvale, Takes on Jive Directly...

Broadvision has relaunched its Clearvale social business platform; allied with Softbank, the Japanese telco; and has begun a marketing campaign that targets rival Jive Software.

Earlier this year, Broadvision reinvented itself as a social business platform that lets enterprises create multiple social business networks.

[Please see: Broadvision Reboots Its Business As A Collaborative Enterprise Platform - SVW]

The second generation Clearvale platform features new capabilities that allow businesses to use Clearvale as a platform for selling their services, called Clearvale Paasport, (for platform-as-a-service).

Giovanni Rodriguez, CMO at BroadVision, said, "The new capabilities of Clearvale will allow businesses to sell their services through the cloud. Softbank is one of our largest business partners and it plans to sell a lot of telco services using Clearvale Paasport. We believe that selling applications through the social layer will be a very successful business strategy for our customers."

Pehong Chen (pictured above), CEO of Broadvision, hopes to raise the company's profile in social business by targeting rival Jive Software in a series of ads, and a micro-site around the idea of "No Jive Talk."

Broadvision is part of an emerging group of companies that are targeting social business applications in the enterprise. As businesses around the world try to harness the powerful virality of social networks, Broadvision and others, are bring the tools and platforms to the enterprise. It is potentially one of the largest trends within enterprise software for this decade.

How The Cloud Will Bring The Future To The Global Masses

A simple wireless connection can bring the power of multiple supercomputers to a simple cell phone using cloud computing, the most powerful collection of technologies produced so far.

Yet the concept of cloud computing isn't well recognized even among some of our foremost technology leaders.

Take for example, Eric Schmidt, CEO of Google and Jared Cohen, Director of Google Ideas. They recently co-published a long article The Digital Disruption, in Foreign Affairs magazine, the flagship publication of the Council on Foreign Relations.

They also spoke at the organization's CEO Speaker series. Here is part of a report by Anne Nelson writing for PBS Mediashift:

"I'm extraordinarily excited about the scale of the mobile revolution," Schmidt said. "... There are four to five billion mobile phones of one kind or another and we are approaching a billion smart phones."

Schmidt added that the effect of Moore's Law will be to transform smart phones into the world's dominant communications platform in the near future.

The implications of the mobile revolution, he said, "are just beginning to be understood. But remember that these devices are more powerful than supercomputers were a few years ago, and we are putting them in the hands of people who've never had anything like it before."

In the article and the talk, Mr Schmidt focuses on the power of the smart phone, and that it has the capabilities of a supercomputer from a few years ago. That might be true of some smart phones, but not of the "four to five billion mobile phones of one kind or another" that are out there.

It's extraordinary that Mr Schmidt and Mr Cohen made no mention of cloud computing. Because with cloud computing, those four to five billion mobile phones can have the power of a supercomputer from today -- not from several years ago.

I recently spoke with Ram Menon, Executive VP of Worldwide Marketing at Tibco Software. He travels a lot in India, and other developing economies such as Brazil.

"It's incredible how many people can now afford a simple cell phone. And it's incredible what you can do with simple text messaging. Farmers can get real-time pricing information on their crops, and much more. There's even a whole grass roots industry around powering cell phones, such as ways to convert a bicycle into a cell phone charging station. In remote places where there is no electric power, people can still use their mobile phones."

With a simple text message system you can bring the power of a supercomputer to the cheapest and simplest mobile phones via cloud computing. For many important applications there is no need to place supercomputing power in the device itself.

Simple cell phones can act as smart phones today, thanks to the cloud. That's an amazing technological advance.

It's strange that Messers Schmidt and Cohen have failed to notice this technology, and what it can do -- especially since they work at Google, which operates the largest cloud computing platform.

- - -

There are more posts like this in my book: In My Humble Opinion

- - -

Please see the following Saturday Posts:

The Beatnik To Blogger Connection...

The West Coast Corridor: 1400 Miles Of Innovation - Disruptive Creation On The Fault Line

IMHO: We Are Becoming Nomadig...

The Internet Devalues Everything It Touches...

Aggregation Is Not Curation - There Is A Big Difference

Curation is becoming an increasingly important term and for good reason: the online world is increasingly messy, muddled and full of blind alleys.

Search used to be the best way to navigate online but today it is only one part of an Internet user's dashboard. Finding things is fine if you know what to look for, but search is increasingly less effective in judging the quality of links, or putting those links into a context.

Blekko, the recently launched search engine tries to provide a context for search terms but it's still not curation but aggregation

So what is curation?

Here is my definition:

Curation is a person or persons, engaged in the act of choosing and presenting things related to a specific topic and context.

An example of curation: the San Francisco De Young museums is exhibiting post-impressionist masterpieces from the Musée d'Orsay's permanent collection.

Aggregation is the collection of as many things that can be found related to a topic.

Aggregation would be a collection of any or all, post-impressionist masterpieces from Musée d'Orsay's permanent collection.

Curation is about choosing what's in a collection. Aggregation is just collecting.

On the Internet we see lots of examples of aggregation e.g. Google News aggregates all the news stories around a topic.

There is "smart" aggregation or "social" aggregation in which the algorithms for aggregation try to get clues from groups of humans about what to collect and how to present it.

- Google search is an example of smart aggregation in that the PageRank algorithm uses links on web pages to determine the importance of any link.

- Flipboard, the popular iPad based magazine, gets its clues from your social network about what content to present in its "Flip" format. This aggregation isn't about any topic or context, it is a miscellaneous collection - it's not curation.

Curation can use aggregation tools to uncover/discover things but aggregation is not curation.

There are lots of online curation tools out there and each one is good for certain things.

Some blog posts can be examples of curation: presenting a list of links around a topic.

For much of this year I've been working with Pearltrees and its team of developers, because it is the most comprehensive curation tool I've found so far.

- Pearltrees provides a visual "mind-map" metaphor that links relevant web pages, Tweets, videos, photos -- it works with any and all online content unlike other tools.

- Pearltrees is sharable and embeddable. You can grab my "Patti Smith in Golden Gate Park" Pearltree and add it to your Pearltree collection. I can't do that with any other curation tool.

- Pearltrees is dynamic. If I add new content to my "Patti Smith" Pearltree it automatically updates the same Pearltree in your collection.

- Pearltrees has a powerful algorithm for discovering similar Pearltrees, which is great for uncovering great content that you might have missed.

- Pearltrees can't be spammed. You make the selections, you control your Pearltree.

(There is some big news coming out from Pearltrees later this month that will take it to another level.)

Curation, as a topic isn't going to go away, it will be one of the most important subjects of 2011.

Curation is about the "human web" while aggregation is about the "machine web." Come back for more on this topic.

Here is a Pearltree on curation:

Paypal's Max Levchin: The Rise Of The Angels . . . And The Fall In Innovation

I'm a fan of Max Levchin and his fellow Paypal alumni because this group has spent the past five years creating many of the more interesting Silicon Valley startups.

Mr Levchin recently sold Slide to Google and he is an investor in Yelp and several other startups. And he is still young and has a lot more to add to his wikipedia page before he is done.

Mr Levchin writes on his blog, but only very occasionally. One such occasion was fairly recently, his first since mid-2008, a critique of Silicon Valley's angel community.

Angels have done very well for themselves over the past few years and this includes many of his former Paypal colleagues.

In his latest post: On ambition « You've gotta be kidding me he writes that the Angel method of investing in startups is considered a better method, "an antidote" to traditional VC investing.

Silicon Valley Angels have done well by choosing companies that can exit (sell themselves) fairly quickly, at fairly low values, $10 million to $20 million. While this approach makes money for the angels and their investments, it tends to discourage building breakthrough companies.

Angels advise startups to take smaller and earlier exits, which minimizes Angel risk but does little to develop startups with big dreams.

It's an astute observation and it is something that I've been thinking about over the past couple of years. I meet with a lot of startups and I remember meeting with Mr Levchin when I was at the Financial Times, and he was at Paypal; and hearing about Paypal's ambitions. Similarly with the founders of Yahoo, Salesforce, Google, Facebook and other groundbreaking companies.

Today, it is rare to find startups that think beyond being lucky to survive two years and be sold.

Yet even a few years ago we did have startups with grand designs. For example, I was an early admirer of Ribbit, a plucky startup that had the potential to disrupt the Telco industry.

Yet in mid-2008 it agreed to be bought by BT, the British Telecom giant. I was very disappointed: Are we seeing a disturbing trend in "blackmail" innovation...? | ZDNet

Since that acquisition Ribbit has launched a cool iPhone app but not much else. It has been dead quiet under the ownership of BT -- yet at one time this was an ambitious team taking on the world.

Mr Levchin sees the rise of the Angel and "Super Angel" investors as the key factor in the lack of "significant innovation" today.

At the moment, what amounts to lack of visible significant innovation seems to correlate with abundance of angel-funded startups shooting to get picked up for a fistful of dollars.

We should aim higher.

I agree.

It's easy to understand why Mr Levchin takes this position. He and his team built Paypal into a formidable company that eBay was happy to acquire for $1.5 billion. That's a hundred times more money than the $10 million to $20 million exit rounds of Angel investors.

Because Angel investors are investing smaller sums of money there is little incentive for them to take larger risks. However, traditional VC firms will invest at higher valuations and therefore will be less willing to sell for a "fistful of dollars."

The VC firms require a larger exit, and that's why they set a greater goal for their startups: to own markets of $1 billion and more -- this creates startups with far higher expectations. And that's what Silicon Valley needs if it is to produce the next Paypal, Google, Salesforce...

Mr Levchin makes an important point in correlating the rise of the Angel investors, with the fall in innovative startups.

Massive 8x Jump In Twitter Use By Twitter Co-Founder Ev Williams

Last week I went to see Twitter co-founders Evan Williams and Biz Stone talk at an Inforum meeting of the Commonwealth Club.

I didn't hear much that wasn't already known but there were a few gems. One was how little engaged Evan Williams seemed to be with Twitter

- Mr Williams said he only Tweets about twice a day and prefers to use Twitter for consumption. I thought this was extraordinary because he is in charge of product development at Twitter. If you aren't a "power" user that's going to make it difficult to make the right decisions on product design, I would think...

- Biz Stone commented on Mr William's lack of engagement on Twitter when he said that if he were buried in rubble, Mr Williams would not be the first person he would Tweet for help.

- Biz Stone commented on the failure of Odeo, a startup both had founded, focused on being a directory for podcasts. He said Mr Williams and himself had no interest in podcasts, they didn't listen to them and didn't make podcasts. This lack of engagement made it difficult for Odeo to succeed but... it was easy raising money for it.

That made me wonder about Mr Williams' lack of engagement on Twitter. What did that mean for the future of Twitter? After all, a lack of engagement doomed Odeo.

Up until the evening of the Inforum talk, from Oct 1 to Oct 11, Mr Williams had made only 20 Tweets, just a shade under his two-a-day average.

Then after I published my Inforum report things changed, by a lot.

I'm pleased to report that Mr Williams is now very engaged in Twitter. I counted more than 110 Tweets in the past 7 days. That's nearly 16 Tweets a day, or a factor of 8 times Mr Williams' prior daily rate.

There is a healthy number of re-Tweets, showing that he is capable of spreading the love; and there are few conversational Tweets that mean little to observers. It's a reasonably decent quality Tweet stream.

You can take a look for yourself: Evan Williams (EV) on Twitter

UPDATED: Maybe I spoke too soon. Sean Garrett, Twitter's comms chief tells me I'm wrong:

@tomforemski the jump is because Ev did an #askev Q&A session on Twitter. Ev uses Twitter all day long but doesn't mean he always tweets.

However, it was encouraging to see the extra Tweets by Mr Williams. I always look at companies eating their own dog food, as unappetizing as that sounds, it is important, imho. It's important for us heavy users that the developers understand what we need and how we use the product or service.

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Please See:

Twitter's Ev Williams and Biz Stone At Inforum: Surprisingly Little Insight Into Twitter... - SVW

Winster.com: Dull Games Play Vital Life Support For Older, Single Women

Jerry Kaplan is a serial entrepreneur know for Onsale.com, Go Pen Computers, Egghead.com and his book, Startup: A Silicon Valley Adventure.

His latest venture, Winster.com was started by his wife in 2004. It's a social gaming site with an interesting twist - the games are non-competitive and designed to be minimally interesting. Yet they have attracted millions of players because they help build enduring online friendships.

The players are mostly older, single women that are largely home bound because of various circumstances and thus unable to easily build or maintain friendships. They form groups that play Winster games, and as they play they build their friendships.

The games are designed in such a way that each player relies on the other players to help them succeed in the game. Competitive play gets you nowhere.

It's counter-intuitive that such games would gain such a large following. More than two million people have played on WInster and many spend several hours a day playing with their friends.

I recently spoke with Jerry Kaplan and here are some notes from our conversation:

- The players are mostly older women who are widowed or have physical impairments that make it difficult for them to get out of their homes. The games rely on sharing and cooperation - competitive play is not possible because you need the other players. If players do engage in competitive play they tend not to be asked back by the group.

- An example of one of games is a variation on poker where players contribute to each other's hands so that they have the best hand.

- We only have ten games and the design of the games is deliberately simple and fairly monotonous. Groups tend to stick with the same game each time they play.

- Our most popular game is based on a slot machine, our least popular game is a form of Sudoku, it forces people to think which cuts down on conversation.

- As people play there is a chat screen and as they play they create very supportive relationships. They chat about their families, their illnesses, etc.

- I've had many emails from users thanking us for helping them make friends. One lady said she hadn't had a visitor in over a year, and that just the other day one of the women she met online spent the day with her. Others have said that Winster has literally saved their lives. It's hard to explain how emotionally attached people become to their groups.

- We became profitable in the fourth quarter of last year. We raised $3m earlier this year. Our revenue comes from subscriptions and virtual goods.

- Users are incentivized to recommend their friends but it's not easy to use viral means of promotion because users have a limited social circle.

- Our focus now is to reach out to find more players. As the population ages and families are dispersed, there is a growing need to help older people feel more connected with others.

- - -
Please see:

Winster - Games, Friends, Prizes

Facebook (1) | Winnie Winster

Twitter's Ev Williams and Biz Stone At Inforum: Surprisingly Little Insight Into Twitter...

If you missed Twitter co-founders Ev Williams and Biz Stone interviewed by Brad Stone from BusinessWeek, Monday evening -- you were fortunate.

The two executives spoke at a meeting of Inforum, which is part of the Commonwealth Club, focused on fostering discussion among people in their 20s and 30s.

The location was the stunning Julia Morgan Ballroom at The Merchants Exchange in downtown San Francisco, (a building owned by Clint Reilly, one of California's top political power brokers). And there was a huge fireplace, as advertised for the "Fireside chat" but little fire in the conversation.

Brad Stone was introduced as "known for asking the tough questions" but if the answers aren't forthcoming it takes probing -- which Mr. Stone was reluctant to do, preferring to move on to the next question on his list.

Overall, I did learn something: about a "social mission" at Twitter which was a surprise; and that Ev Williams isn't all that engaged with Twitter or knows much about his users. Biz Stone came across as much more tuned into Twitter.

Here are some notes from the evening:

- Is Twitter mainstream? Ev Williams came back with "what does mainstream mean?" Twitter has gone beyond pundits.

- How's the new site going? Ev Williams said it was a great success, not even a single protest group. We expected pitchforks. Even Biz liked it.

(I have heard from many people complaining about the new site and loss of some features. It was a little shocking that the Twitter co-founders were so self-congratulatory on not being able to find critics. Scratch a little deeper...)

- Ev Williams said he goes to Twitter for news and Tweets maybe just once or twice a day. (Wow! That's very low engagement.)

- Ev Williams dropped Conan O'Brien's name, said he was talking to him and his writers and they like the 140 character constraint because it produces better jokes.

- Malcolm Gladwell's recent post "Why the revolution will not be Tweeted" was politely received at first but then both founders laid into him. Mr. Williams said, "it was laughable" and that he confused Twitter with Wikipedia when he (Gladwell) complained about a lack of editorial control.

Biz Stone said that no one had claimed that the revolution would be Tweeted in the first place. And that the Iranian political protests weren't technically a revolution.

- They were asked about ads and they said all ads would be properly marked. They also mentioned a "resonance" algorithm so that if a major brand is Tweeting ads, and it doesn't resonate with Twitter users, they will pull the ads and not charge for the ads.

(Will they use re-tweets to measure "resonance?" What else do they have to measure and why do they need an algorithm for that? How many people will gladly re-tweet an ad? Only if bribed.)

- They will analyze users and who they follow so for example, someone following lots of video game related people will be offered to Xbox if it wants to gain more readers for its Tweets, for a price.

- Asked about censorship they said they don't want to moderate Tweets and that they have three simple rules, they will ban Tweets that have specific violent threats; links to child pornography; and links to copyrighted content specified by takedown orders.

Biz Stone said it would take considerable creativity to be "super porny" in 140 characters, therefore it's not a problem. They support free speech.

(If they had to moderate tens of millions of Tweets daily they would soon be out of business. It has nothing to do with standing up for free speech.)

- Twitter has a division that seeks to work with newspapers and other media organizations to see how "both can succeed." (Good luck getting money out of hard hit media groups.)

- Asked about not having a business model Ev WIlliams said he didn't like all the talk that they didn't have a business model because they hadn't been working on a business model in the first place(!) They wanted to take their time to eventually get to a point where they had a business model and try out different things that weren't obvious, like using Google AdSense.

- They said Twitter would get to a billion users, just like Facebook but it would be a different billion users.

- The failure of Odeo was brought up, a search engine for podcasts that both were involved in. They said they weren't emotionally connected with Odeo, and that they didn't produce or listen to podcasts, which didn't help. But it was easy to raise money for the venture.

(Ev Williams is not that engaged with Twitter, I wonder if that will be a problem down the line.)

- Not much interest in expanding into China, especially since Twitter is blocked. There are several thousand users in China using VPNs.

- They want Twitter to be relevant to users and connect with their information, they don't have to Tweet much if at all (a la Ev Williams).

- They have a big design and engineering team working on new products.
(Look out Twitter ecosystem!)

- Both, especially Biz Stone, spoke about a social mission for Twitter and that connecting people around the world would make people empathize more with one another and people would realize they are citizens of the world.
(The "Social Mission" aspect of Twitter sounded contrived especially since we are just hearing about it now... Why not earlier? Sounds like it was bolted-on.)

- Biz Stone spoke about some educational philanthropic projects. "If you can't read - you can't Tweet."

Q&A was lackluster.

I found just 1 Tweet about the content of the Inforum presentation:

@mikeyoshioka: "Twitter will get to 1billion users.... in the future - @biz #inforum #twitter#socialmedia"

UPDATED: There were more Tweets under the hashtag #InforumSF that I missed, my apologies, it was late at night... Thanks to Sean Garrett (@SG) for pointing that out.

Foremski's Take: Twitter is a "force of nature." It became successful despite its founders knowing much about what was happening. To hear the founders try to explain Twitter as a type of fait accomplis from the start was entertaining and ludicrous.

I would have preferred a more honest approach, something along the lines of:

"We tried Twitter as a side project, but we had no idea what it would do, or turn into... We thought about closing it down several times because people were Tweeting pathetic stuff and it was starting to cost a fortune in SMS charges ... but then it took off.

Now, we are scrambling just to keep up with our users, and we are trying to make money copying the best ideas in our ecosystem of app developers. We have a kick ass team to do that.

Plus, we don't really know what the heck is going on inside Twitter, we're just trying to ride it and not get thrown off. It's not like we spend that much time on Twitter anyway ... we're busy having a real life ; )"

Sadly, we didn't get that. It would have been far closer to the truth if we had, and far more authentic.

Analysis: Google v Facebook Is About . . . Fast versus Sticky - Which Strategy Will Win?

Google's most important launch this year was its recent debut of Google Instant search which cuts user search time by as much as 40%. Google users are collectively saving 11 hours per second. That means 11 hours per second being spent away from Google search.

Google is betting it that if its users spend less time on search then it will make more money.

This is a far different strategy from that of Facebook which wants to be the stickiest place on the Internet.

Nielsen estimates that each month, an average US internet user spends around 2 hours on Google, and more than 7 hours on Facebook.

It'll be interesting to see the latest Nielsen numbers following the launch of Google Instant Search. What's certain is that the disparity in user hours will widen, and so will the disparity in their respective business strategies.

How is less time on your sites better than more?

It seems very counter-intuitive. Shorter visits means less time that users spend potentially looking and clicking on advertising -- which can't be good. Yet Google is staking a multi-billion dollar a year business on the bet that fast is better than sticky.

And it seems to be working.

Facebook is very sticky yet its revenues are a fraction of Google's (as far as we can estimate since Facebook is a private company).

The Facebook strategy favors a more-closed-than-open platform approach that seeks to provide a semi-porous walled garden -- a type of post Internet-modern AOL strategy.

Google's strategy firmly supports an open web. It sees the Internet as its platform, it is Google's Internet. It is the by far most successful company at monetizing the scale of the Internet and also in promoting web standards.

Big "I" versus little "i"

Facebook has created a simulacrum of the Internet -- a mini-Internet.

Each Facebook user is essentially a single web site, each profile page is a home page for a personal web site.

Facebook makes it easy for each user to update and maintain their personal "web sites" and it helps promote and distribute that content through automatic feeds.

Which company has the larger business opportunity?

Which is a larger market, the Internet as a whole, or a subset of the Internet as represented by Facebook?

Clearly, Google has the greater business opportunity because it isn't as restricted as Facebook.

Clearly, there is more to be gained in trying to monetize the entire Internet rather than a subset of the Internet.

Sticky money ratios...

Google's efficiency in monetizing its users is truly impressive when compared with Facebook.

Google generated nearly $7 billion in revenues in its most recent quarter.

Since an average U.S. Google user spends 2 hours per month with Google, that represents about: $600 million per average user month per hour (in the U.S.).

This stickiness-to-revenue ratio, or what might be better called the "sticky money ratio" is an interesting benchmark.

If Google can get its users to spend less time through Google Instant Search, say 1.5 hours per month and raise revenues it could boost its sticky money ratio to $750 million per average user/month per hour. That's a tough act to follow.

Facebook's sticky and closed strategy is generating a fraction of Google's revenues. And it is Google's sticky money ratio that Facebook will be judged by investors -- like it or not.

Sticky and closed is a safer, if less profitable strategy.

By keeping a mostly closed environment, Facebook gains a large measure of protection against Google's great ability to use its scale to monetize large numbers of Internet users.

Google can only access relatively small parts of Facebook.

By keeping control over its mini-internet, Facebook has more time to figure out business models without any danger from competitors. After all, Facebook controls the entire economy within its walls. That's a very good position to have.

However, it is worth pointing out that if Google had users spending 7 hours a month -- as they do on Facebook -- at its current sticky money ratio, it would have reported almost $25 billion in revenues instead of the $6.8 billion in its most recent quarter. A potential $100 billion company.

Facebook has a long way to go to match Google's monetization efficiencies but that also shows off the huge business opportunity it has. And possibly, sticky money ratios will be a good way to measure the competitive performance of each company.

- - -
Please see:

Analysis: Google Sets Major Relaunch Of Search - SVW

Meet IBM's Jon Iwata: "Most Forward Thinking" Communications Professional...

I've been fascinated with Jon Iwata ever since he was appointed head of IBM's Corporate Communications and Marketing. It's highly unusual for one person to hold both positions and it could mark the beginning of a new trend.

As a senior VP of Marketing and Communications at IBM, the world's largest computer company, Mr. Iwata has a tremendous amount of influence within the computer industry and beyond.

- He holds a B.A. from the School of Journalism and Mass Communications at San Jose State University.

Here is an extract from a speech at the Yale Club in November 2009:

One day soon, every employee, every retiree, every customer, every business partner, every investor and every neighbor associated with every company will be able to share an opinion about that company with everyone in the world, based on firsthand experience. The only way we can be comfortable in that world is if every employee of the company is truly grounded in what their company values and stands for.

What are we doing about this at IBM? We have created a new discipline within my organization that puts together brand management and workforce enablement, or what we used to call internal communications. This may sound to some like external and internal messaging coming together - employee as brand ambassador. Sure, that's an aspect of it. But the centerpiece is something quite different. We call it the IBM Brand System.

Picture a framework with five columns. From left to right the columns are labeled what it means to look like IBM, to sound like IBM, to think like IBM, to perform like IBM and ultimately to be IBM.

"When you think about the PR profession -- what it'll look like 10 years from now - start not with PR but with the world at large; not with the decade, but the century," said Iwata, adding that a century from now, the world will look back on the early 20^th century as a time when "civilization took a great leap forward," marked by "changes in what people know, changes in what people expect and ultimately changes in behavior."

Though attempting to analyze such a period of change while simultaneously experiencing it continues to prove difficult, Iwata identified new disciplines in the corporate function, emerging from an environment characterized by transparency and readily available information. At the core of these emergent disciplines is a stress on behavior management--a sense of corporate integrity permeated down to and communicated directly from the individual employee.

"Lincoln said character is like a tree, reputation is like its shadow," Iwata said. "Many believe their job is to manipulate the shadow rather than tend to the health of the tree. In this world of transparency and democratized media, it is increasingly difficult for organizations and individuals to lead double lives. There can be no image management without behavior management.

"People care about the corporation behind the soft drink, or bank account, or computer - they do not divorce their opinions of that company from the company's products and services."

Iwata went on to suggest that the behavior and subsequent image of a company goes far beyond the surface, indicating a need for the instillment of unique corporate values among all employees, as "they only matter if lived and applied consistently by everyone in the company."

According to Iwata, it is through the consistent maintenance of and adherence to a brand's values and promise that they are able to succeed in another emerging discipline--that of building constituencies. The idea of merely reaching an audience and achieving message penetration is not enough. "Pumping out information only adds to the nosie and compounds the challenge of being heard... Value will come from offering perspective and useful information and providing a contribution to our audience's knowledge."

Citing Apple as a company that does this well, Iwata suggested, "They don't just advertise, they teach. They don't just sell, they create learning experiences in their stores. They want you to learn everything their product can do, so then you will teach others... In the process they recruit new and loyal customers that become advocates and evangelists."

Crafting and disseminating a valuable message and building this constituency is no longer, however, the task of solely communications professionals. Iwata described a third and final major shift as the development of the eminence of a company's workforce--training employees to act and communicate as experts who produce valuable information for the public and extend the power of the brand.

"2010 is the year that corps grapple with and ultimately accept that their employees are engaging with social media... But simply having your people on the net is not the differentiator. It's what they do once they get there."

(Jump to about 21.00 to cut out welcoming remarks.)

I hope this has whetted your appetite for finding out more about Mr. Iwata and his pioneering work at IBM and how that might influence the broad practice of corporate communications and PR.

Jon Iwata (coastw) on Twitter

3 Simple Steps In Gaining The Upper Hand In A Tweet Fight

Publishing online, whether it is tweets or blog posts, will occasionally upset some people. You can't please everyone and you shouldn't try to please everyone, sometimes the truth hurts.

If you find yourself in a Tweet fight here are three simple steps to ensure you come out on top.

Step 1 - Make sure it isn't a "Twit" fight because paraphrasing Confucius, if you engage in a public brawl with a mad person, those passing by and watching the spectacle will find it hard to tell the difference.

Step 2 - Step away from the keyboard. Passion and emotion is not your friend at this stage. Engage very lightly. Step away from the keyboard and your computer screen for several hours.

During that time the other person will have lathered themselves into a froth. By that time, they have likely also launched a personal attack.

You can then return to the keyboard calm and collected and look supremely reasonable while the other person has dug a massive hole for themselves, filled it with mud, and jumped in for a good wallow.

Step 3 - Write a post about how to gain the upper hand in a Tweet fight.

Cisco Plans Relaunch Of News@Cisco

Yesterday I met with Autumn Truong, Senior Social Media Strategies for Cisco Corporate Communications, and she told me about plans to relaunch the pioneering News@Cisco site.

I'm a big fan of what Cisco has done with its communications. Cisco was the inspiration for my "Every company is a media company" mantra.

More than five years ago, Dan Scheinman was running Cisco corporate communications and also head of Cisco's M&A strategy, a multi-billion dollar a year war chest for acquisitions.I met with him and was amazed by what I heard, that News@Cisco, the company's corporate newsroom, was getting more traffic than the top industry trade publications at the time. Cisco had more than 200 RSS feeds, and was employing a cadre of top journalists and editors to help tell its story and that of its customers.

Cisco now planning to extend its News@Cisco site and make it less about Cisco and more about the industry and SIlicon Valley. There will be articles on collaboration, social media, virtualization, video, network technology, and culture.

"Cisco is already producing a lot of content from its different divisions. We will be curating a lot of that work but also adding new content by commissioning work from outside of Cisco," said Ms. Truong.

The relaunch is planned for November of this year and it has been in preparation for about five months. It is part of a team project managed by John Earnhardt, Director of Social Media Communications at Cisco. More details to come...

- - -

Please see: Meeting Cisco's M&A Chief And Realizing Every Company Is A Media Company - SVW

Eric Schmidt - Google's Chief Lightning Rod

Eric Schmidt has an interesting job at Google. His official position is co-CEO with founders Larry Page and Sergey Brin but his job title should be CLR or Chief Lightning Rod because he is often entrusted with announcing unpopular policies or making comments that bring a lot of media attention, more than Messrs. Page and Brin would welcome.

Mr. Schmidt's lightening rod escapades extend to his off-the-cuff remarks. He's not known for his careful consideration of what he is about to say in public forums, probably because of his age, which confers a quality of stubbornness and a lack of tact often seen in older men.

One of Mr. Schmidt's less considered remarks was when he said children should change their names when adults, to protect them from online content that might surface and reveal youthful indiscretions.

He received a lot of criticism for this, but it turns out it was all a joke! That's what he told Stephen Colbert on the TV show "The Colbert Report." Danny Goodwin has more here: Google's Schmidt to Colbert: Comment About Kids Changing Their Identity 'Was a Joke' @SEWatch

I have a better idea. Everybody should change their name to the same name and use nicknames between themselves. When everyone is called I.M. Spartacus we won't have to worry about any unwelcome Google revelations.

- - -

The Two-Way Internet...

[Here is a draft of an article for the fifth anniversary of the Society for New Communications Research (SNCR) - a Palo Alto, California based think tank. I'm a founding fellow of SNCR.]

It's easy to forget that we are still in the very early stages of the Internet -- a basket of technologies that continues to evolve and affect nearly every aspect of our business and personal lives.

The first phase of the Internet emerged into the commercial space only in the mid-1990s, from military applications at first and then university research uses.

In this first phase of the commercial Internet, the development of web browsers meant that we could now publish a page of content: text, photos, video, to any computer screen regardless of the platform. It didn't matter what the operating system was, or the type of computer: mainframe, minicomputer or pocket computer -- as long as it can run a web browser we can publish a web page to it from anywhere.

That was a significant achievement because you used to have to be on the same network, for example AOL, or CompuServe to be able to publish the same content to other users. There was no cross-platform communications, even email was difficult. I remember it took years for gateways to be developed that could send email between CompuServe and MCI Mail - two popular email networks.

It took government funding and support for industry standard protocols to be able to achieve what we call the Internet. And once the rivalries between the competing self-contained networks could be bypassed, the Internet took off like a rocket.

The Internet's potential effect on business was extraordinary. In the mid to late 1990s, stock market investors built a massive "dotcom" bubble. A company only had to announce that they would launch a web site to have a massive spike in its market value.

Those days seem ridiculous in hindsight but only because we did not yet have the means to truly transform business operations, at least not yet. But the investors were correct in their prediction that there was a truly disruptive force at work and that those companies that were forging ahead would have significant advantages.

In those heady, early days, large corporations were faced with threats that the "dotcom" companies would "eat their lunch." Many companies panicked and launched expensive Internet operations without thinking things through; many companies were frozen in indecision and did nothing.

The dotcom dotbomb soon arrived and established businesses breathed a collective sigh of relief: their lunch was intact and most dotcoms disappeared overnight. A recession gripped the entire tech sector for several years as the excesses of those early years played themselves out.

Recessions, however, are excellent nurseries, it's where innovation emerges. And the early 2000s is where blogging started to emerge, and thats when the first social networks such as Friendster and MySpace appeared. And it is where the roots of what we now call social media emerged.

There is much written about, and spoken about, and tweeted about social media, social networks, social CRM ... "social" with everything. But the "social" part is a red herring because what emerged in the early 2000s was the second phase of the Internet.

The first phase allowed us to publish content to any computer screen. The second phase of the Internet is where any computer screen can publish back.

We now have a two-way Internet.

If you thought Internet 1.0 was impressive then look out because now we have a two-way Internet, and this time, the new "dotcoms" will be far more challenging to established businesses, they will eat lunch, breakfast, and anything else of value. It is an Internet on steroids.

For example, we now have a printing press in our pockets that can potentially reach tens of millions and soon billions of people. It's no wonder that Rupert Murdoch is pissed. You used to have to be a media mogul, buying ink by the barrel to have the potential reach an audience that anyone with a smart phone, or desktop computer can now reach.

The Internet is a powerful media technology, it's a publishing technology. And it has become very easy to use thanks to sophisticated development tools and services that anyone can use.

- You used to have to be a computer expert to set up and publish a web site, now anyone can do it in less than ten minutes.

- You used to have to build a large audience in order for your content to be seen now you can post something to Facebook or Twitter and your network of friends or contacts will republish it and potentially reach huge audiences.

The Internet has become a two-way medium.

What does this mean?

It means that "social" media is just one application of this next stage of the Internet. It means that every company, every person is potentially a media company and has to learn how to use this two-way Internet.

Every company, even if it makes diapers or ball bearings is also a media company because it publishes to its potential customers, employees, neighbors, etc. And it also has to learn how to listen and engage with those communities as they publish back.

Businesses that figure out how to use the two-way Internet will prosper and the ones that don't, won't.

New types of applications will emerge such as personalized advertising that is location based; and a whole host of other applications that have yet to be imagined.

- A two-way Internet means that anything and everything can become connected.

- A two-way Internet means that there is a huge amount of data to be mined that can provide businesses with incredible insights into their markets.

- A two-way Internet can provide businesses with real-time responses to changing market conditions.

- A two-way Internet will unleash a tremendous amount of innovation in the forms of applications, new media formats, and new societies/communities.

A two-way Internet will also transform the way we consume and interact with media. The media is dying but long live the media because we now have more forms of media, in more formats than at any time in our human history.

How will that affect us? Media is how society "thinks" it is how countries develop policies, it is how we figure out solutions to important problems such as the economy, the environment, education, elderly care, energy and those are just the problems that begin with "e."

What are the new cultures being formed? What will the cultural changes mean to business?

A business that doesn't understand its changing culture won't be in business for long.

It is these types of issues that SNCR was formed to research and to try and understand.

We have plenty of technology and technologies in our world but so what? It's how these technologies are used, how they are applied, how they affect and effect our society that SNCR seeks to understand and to share with others.

We now live in a two-way Internet and that's an immense field of study and it is one that will continually surprise us with its near infinite permutations.

For journalists, for professional communicators of all kinds, these are troubled times but also extremely exciting times. At no other time in our professional lives will we see such huge changes in our jobs, our lives, our communities.

We don't know the answers, we know some of them but there are so many more to discover.

We all can take part in figuring out what those answers are. Those answers might keep changing or they might become the new rules for the next phase of the Internet. We don't know yet, we don't even know all the questions but it's sure exciting finding out.

And that's why SNCR has managed to attract some of the best people working in this area, eager and curious about the future and what it might look like.

- - -

If you liked "The Two-Way Internet" there are similar posts in my book: "In My Humble Opinion"

Is Apple's Porn Ban Damaging The Future of Media?

Everyone knows that Steve Jobs has banned porn and any sexual content from the iPad but is this a wise move?

I just started reading Nick Bilton's book "I live in the future & here's how it works" and the first chapter is about his investigation of the porn industry to see if there are any lessons to be applied to the media industry.

Every time a new technology has been introduced, way back to the printing press, sexual content has helped drive that technology and develop thriving business models that others have been able to adopt and prosper with.

Throughout the history of new media, from vernacular speech to movable type, to photography, to paperback books, to videotape, to cable and pay-TV, to "900" phone lines, to the French Minitel, to the Internet, to CD-ROMs and laser discs, pornography has shown technology the way. "Great art is always flanked by its dark sisters, blasphemy and pornography."⁽⁵⁾ The same is true of the more mundane arts we call media. Where there is the Gutenberg Bible, there is also Rabelais; where the U.S. mails, dirty postcards; where the three-volume hardback novel, paperback pulp fiction; where HBO, Midnight Blue; where CompuServe, the Plain Brown Wrapper library.⁽⁶⁾

Pornography,⁽⁷⁾ far from being an evil that the First Amendment must endure, is a positive good that encourages experimentation with new media. The First Amendment thus has not only intellectual, moral, political, and artistic value,⁽⁸⁾ but practical and economic value as well. It urges consenting adults, uninhibited by censorship, to look for novel ways to use the new media and novel ways to make money out of the new uses. Therefore, while it may be politically impossible and socially unwise to encourage computer pornography, legislators should at least leave it alone and let the medium follow where pornography leads.

I see this issue as one of the most important issues facing not just the Internet but society in general.

We still haven't solved the problem of how to finance quality media.

It's the Gordian knot of our times, whoever solves it will be rich, but whoever solves it solves it for all of us, because we can all take advantage of it.

6 Years Ago I Wrote My First Blog Post - About Intel's Backpacks...No Fish Smell This Year

About six years ago I wrote my first post on SIlicon Valley Watcher, it was about the quality of backpacks at the Intel Developer Conference.

Intel is notorious for being penny pinching. When times are tough cubicles get smaller, and the conference backpacks fall in quality. My tongue-in-cheek post was that you can divine how well Intel is doing at a particular point in time simply by assessing the quality of its freebies.

Here is an extract from my very first blog post: Tech Watch: The secret barometer of Intel's health reveals... - SVW

In lean times, the backpacks are flimsy and made from lower grade materials. About a year ago, the quality of the backpacks at IDF jumped dramatically. And for good reason, revenues were strong and growing faster than expectations. Intel was raising revenue forecasts, not cutting them.

The spring 2004 IDF again produced a top quality backpack, black and electric blue, with good quality ballistic nylon, and stylish use of yellow trim. It was clear that Intel was expecting a good year.

At the Fall 2004 IDF, the conference backpack looked to be of comparable quality. Closer examination, however, showed that there was some downgrade in quality, but that it was minor. Conclusion? Slight downgrade to Intel's fortunes, but still betting on a solid business outlook for the next six months.

... UPDATE-Thursday September 23

Joe Fay from Computerwire is reporting that there is a strange smell emanating from his IDF backpack. He has confirmed it with colleagues.

It was true, the slight fishy smell was there once it was pointed out and it became more noticeable over the next few days. I had to abandon my backpack to the neighborhood children by leaving it on a street corner.

This year I can attest that the IDF backpacks are of excellent quality with no fish smells at all. Things must be going well for Intel [INTC].

Interview: Zach Nelson, CEO Of NetSuite - The Last Great Software Market...

I recently caught up with Zach Nelson, CEO of NetSuite, a cloud computing company that offers CRM to mid-sized companies. The company is enjoying a surge in business thanks to the downturn and a growing realization among companies about the many benefits of cloud based IT.

Mr. Nelson is a 20 year Silicon Valley veteran. He has worked at Oracle, Sun Microsystems, and McAfee/Network Associates.

Here are some notes from our conversation:

- We have benefited from the recession. Companies have long known that they are spending way to much on maintaining their CRM systems and now the recession has pushed many to the cloud. We have had four quarters of accelerated business.

- I see tremendous opportunities in our markets, I see it as one of the last great software markets because no one vendor dominates the market. The largest companies own between 10 and 20 per cent shares and that's the same the world over.

- SAP is moving into this area with its Business ByDesign but it has a long way to go. We've been at it for ten years, we have a ten year head start. You can't just port your software to the cloud, you have to completely rewrite it. But that's just one small part of what you have to do, you have to figure out the data center issues. SAP is used to mailing a disk and getting the customer to set it up on their data center. It's not that easy. Also, the deal sizes are smaller.

- Social media capabilities will eventually be built into all software. We are adding such features, to help CRM data become more social. But we don't charge extra for that. Making customer data more accessible within corporations makes a big difference, it enables users to run their own reports, for example.

- Security is no longer the issue it used to be. Ten years ago it was the first question from customers but now it is the last one because we have more than 6600 customers. The top question is how does it solve my business problem? ANd it is a different question in each industry. We have many different versions focused on different industry sectors, and we help companies customize the application.

- We have made two acquisitions in the past and we will look at others so that we can gain domain experience. But we don't spend any time worrying that we may be a target.

- Our largest challenge is how do we reach the Fortune 5 million? If your target is the Fortune 500 you can hire a salesforce. But when you are trying to reach the Fortune 5 million you have to adopt different tactics. The deal sizes are smaller but you still have to offer services that help customize the application.

- Smaller companies aren't much different from larger companies, they have similar problems to solve but different resources.

- Large companies are using NetSuite for their overseas operations. It's far easier to deploy. We see a lot of demand at the departmental level.

- The Internet is very important to businesses and if you don't have the Internet in the core of your business you will lose out to competitors.

- We want to become the Salesforce of the medium sized business market, that's the opportunity.

The Holy Grail Of SEO: Google Instant's Alphabet - A is for Amazon... B is for Best Buy ...C is for Craigslist...

The Google "Instant" team showed off one-touch search. Othar Hansson, a senior Google engineer, demonstrated (twice) how typing the letter "W" gave "weather in San Francisco" as the first result.

Being a brand that is called up by Google Instant on the very first letter is now the height of search engine optimization (SEO). I took a look at what came up for each letter. Results will vary somewhat by your location.

A is for ... Amazon, AOL, Apple, ATT.

B is for ... BART, Bank of America, Best Buy, Bing.

C is for ... Craigslist, Costco, CNN, Chase.

D is for ... DMV, Dictionary, Droid X, Disneyland.

E is for ... Ebay, ESPN, Expedia, Evite.

F is for ... Facebook, Facebook login, Fandango, FIFA.

G is for ... Gmail, Google maps, Google, Great America.

H is for ... Hotmail, Hulu, Home Depot, HP.

I is for ... Iphone, Ikea, Inception, IMDB.

J is for ... Jet Blue, Jeremy Lin, Jamba Juice, Java.

K is for ... Kaiser, KTUV, Kayak, Kohls.

L is for ... Lowes, Lost, LinkedIn, Limewire.

M is for ... Mapquest, Myspace, MSN, Maps.

N is for ... Netflix, Nordstrom, NBA, News.

O is for ...Outsidelands, Orbitz, OSH, Office Depot.

P is for ... Pandora, PG&E, Paypal, Petco.

Q is for ... Quotes, QVC, Quicktime, Quinoa.

R is for ... REI, Ross, Redfin, Rosh Hashanah.

S is for ... Skype, SFGate, Sears, Southwest.

T is for ... Target, Twitter, Thesaurus, Travelocity.

U is for ... USPS, UPS, United Airlines, Utube.

V is for ... Verizon, Virgin America, VLC, Verizon Wireless.

W is for ... Weather, Walmart, Wells Fargo, Wikipedia.

X is for ... Xbox, XKCD, XM Radio, Xfinity.

Y is for ... Yahoo, Youtube, Yahoo Mail, Yelp.

Z is for ... Zillow, Zappos, Zipcodes, Zynga.

If you can get your brand into the one-letter list you are golden. This is now the holy grail of SEO.

Analysis: Google Sets Major Relaunch Of Search Yet Doesn't Measure Effect On Advertising

The launch of "Google Instant" represents the single largest change to Google's search services in its history. "For the first time search is interactive," said Othar Hansson, a senior Google engineer.

The company said it performed extensive studies of users and how they interact with Google Instant plus extensive eye-tracking studies. They all showed a much improved user experience and a lot less time spent searching for the right page.

Google says it now has 1 billion users per week and that the time saved by users worldwide from using Google Instant is 11 hours per second. That's the equivalent of 350 million hours of user time per year, said Marissa Mayer, VP of Search Products and User Experience.

During the question and answer part of the launch, the Google team could offer no data on how the change would impact its advertising business beyond saying that what's best for the user is usually best for the advertiser.

This is shocking. Google makes a major change to the search service and the user experience -- yet has no measurement on how that impacts click rates on its adverts!

Let me say this again: Google makes a major change to the search service and the user experience -- yet has no measurement on how that impacts click rates on its adverts!

Those text ads on the side of its results page represent about two-thirds of its revenues. Any change to the structure of the search page has to impact the click through rate of its advertising for better or worse. Yet Google did not measure this impact. Wow.

It seems that the company is divided between those working on improving the search experience and the rest of the company that is trying to sell advertising. And there appears to be no communication between the two sides.

If I were a GOOG shareholder I'd be very concerned that the effectiveness of Google's advertising has been compromised. At the very least, as a shareholder, I would want to know that Google's advertising business has not been compromised by this major change in serving search results.

There must be an effect on advertising.

Think of it this way: If Google could guide me to my intended destination in the shortest time possible then the amount of time I spend staring at Google ads decreases. In this case, it decreases by 11 hours per second.

How is it possible that this will not affect advertising revenues? If I spend less time looking at a page with ads on it then surely that means less time spent clicking on ads?

And if Google has indeed studied the effect on advertising from using "instant" then why did it not offer supporting data instead of just saying that what's good for the user is usually good for the advertiser.

Google may have shot itself in the foot.

- - -

Please see: Will "Google Instant" Distract From Google Ads? That's What Eye-Tracker Data Shows...

Updated: Could Hurd + Oracle Acquire HP?

Several weeks ago I asked if Oracle might try to acquire Hewlett-Packard, and I speculated that Oracle could hire Mark Hurd, the ousted CEO of HP, for the job of integrating the company.

At least one half of that scenario has occurred with Oracle saying late Monday that Mark Hurd has replaced Charles Phillips as co-president of Oracle.

Is the stage now set for Oracle to mount a bid for HP?

- HP remains leaderless and that makes it vulnerable to be acquired.

- HP would provide Oracle with enormous and highly profitable consolidation opportunities with its Sun Microsystems acquisition.

- An Oracle/Sun/HP plus the 45 plus other acquisitions over the past 10 years, would make a company capable of competing against all of IBM. It would create a West coast versus East coast tech rivalry that would span the globe.
(Chart is from Stephen Jannise at Software Advice.)

However, an acquisition of HP by Oracle would be terrible for HP staff and for Silicon Valley's already high unemployment rate. Tens of thousands of people would lose their jobs (especially all the anti-Hurdists at HP).

HP has a market value of about $93 billion compared with about $95.3 billion in the wake of Mr. Hurd's departure. Oracle stands at $121 billion, a $5 billion increase over the same period.

Yes, it is a big pill to swallow however, it would enable Larry Ellison, CEO and co-founder of Oracle to perform an end run in the massive global IT market and also leave a substantial legacy on his upcoming retirement.

If there is one thing we know about Larry Ellison is that he is motivated by big goals. Is this one too large for him?

That's for him to decide.

UPDATE: If Oracle is serious about going after HP it will begin a campaign of trying to devalue HP in a war of words. This may have already begun.

This morning HP said it had sued Oracle over the employment of Mark Hurd in a civil complaint that he has violated prior agreements to keep HP trade secrets confidential.

Oracle responded with:

“Oracle has long viewed HP as an important partner,” said Oracle CEO Larry Ellison. “By filing this vindictive lawsuit against Oracle and Mark Hurd, the HP board is acting with utter disregard for that partnership, our joint customers, and their own shareholders and employees. The HP Board is making it virtually impossible for Oracle and HP to continue to cooperate and work together in the IT marketplace."

HP could lose large amounts of business. The announcement was made after the close of markets. It will be interesting to see how investors react on Wednesday.

It will be interesting to see if Oracle makes further comments about HP that could lead to a loss of investor confidence in the company.

- - -

Please see: Could Mark Hurd end up at Oracle? Therese Poletti's Tech Tales - MarketWatch

Therese Poletti speculated that Mark Hurd could end up at Oracle just hours before the news was announced.

Could Mark Hurd end up at Oracle? Therese Poletti's Tech Tales - MarketWatch

Last week, a little-known analyst quietly unearthed some interesting news about Oracle. Ryan Hunter, an analyst with Wedge Partners, a firm with offices in Edgewood, Colo., and New York, wrote in a report that Charles Phillips, co-president of Oracle, has lost some of his turf, and speculated he could be on his way out.

Phillips, an Oracle co-president along with Safra Catz, was replaced as the head of global business units by Bob Weiler, a former CEO who came in via an Oracle acquisition, Hunter said. Weiler is the former CEO of Phase Forward, a developer of applications for life sciences and health care acquired by Oracle in April for about $685 million. The change leaves Phillips responsible only for sales and marketing, Hunter said.

"Usually when you see this type of boardroom shuffle, it's not a positive sign," said Hunter. "Oracle said they are just reshuffling the deck but they didn't really justify it." Hunter added that if Phillips were to depart, it would not be a big negative for Oracle.

Also, Wall Street Journal caught wind of it on Sunday:

Mark Hurd in Talks With Oracle - WSJ.com

Intuit's Innovation And A Role In Creating New Jobs

Last week I attended Intuit's "Innovation Walk" a collection of Intuit business groups and partners offering a range of services and products such as Mint's personal finance, mobile payment services, and much more.

Intuit is in a unique position. As the tax preparation service for tens of millions of individuals and small businesses, it has access to a lot of data -- data that can help its users.

I spoke with Tayloe Stansbury, Chief Technology Officer, and Kris Halvorsen, Chief Innovation Officer about some of Intuit's initiatives and plans for the future.

One of the new services Intuit offers its customers is the ability to benchmark their business against other similar businesses. The data is collected and shared in such a way as to prevent it being identified with any specific business. It allows companies to check that they are in-line with expectations for their category and that their operation is being managed well.

I pointed out that this type of data could also be very useful for people starting a business. With high levels of unemployment there are many that would like to start their own business and if they could do that with realistic expectations of expenses, payroll and profit margins, it would go a long way in helping small businesses become successful.

Small businesses are the largest employer in the US and thus such innovative use of business data could help improve employment numbers in the US.

Irving Wladawsky-Berger, a former senior executive at IBM and its chief strategist, writes that unemployment levels are the largest since the Great Depression. He writes that there is an urgent need for innovation in job creation.

He points out that: "Joblessness is more devastating to families and communities than poverty. Many of the social ills in inner cities can be attributed to their loss of jobs in the 1970s."

The same technologies that have enabled companies to shed jobs should also be used to help create new jobs.

We are living in a time of great innovations, as we are leveraging our sophisticated, new technologies to develop new products and services, transform just about every industry and achieve major productivity growth in the economy. We need to focus at least a portion of our innovation efforts to explore how these same great new technologies can be used to help us create new jobs, both in the short and long terms.

For example, we should explore how to better leverage social networks and collaborative platforms for training and education, to help teach new skills to job seekers that better match current business requirements.

Maybe here is a direction for Intuit to take with its focus on innovation, helping not only to distribute data on businesses but also take a role in the vital education process that a new workforce needs.

I was impressed with Intuit team and executives I met. Also, it was good to see an old friend, Annie Kim, now working at Intuit in a key role.

Influence On Twitter Is Linked To Quality Of Content And Not Quantity Of Followers

[Daniel Romero is a Ph.D Candidate at Cornell Univeristy in the Center for Applied Mathematics. He works with Hewlett-Packard's Social Computing Lab Bernardo Huberman and colleagues.]

By Daniel M. Romero

The importance of mainstream news has changed with the advent and immense popularity of online social media.

The mainstream media is now aware that they have to be involved in the social media in order to keep their audience engaged. They understand that they no longer have complete control on what information people will attend to.

With social media channels like Twitter, Facebook, YouTube, etc people can find the news they want even if the mainstream media may not be providing it to them. This is why today we see all major broadcast networks present and active on Twitter.

But are they as successful at social media as they are at mainstream media? Are they as influential as they are assumed to be in the offline world? Who are the most influential ones?

To answer these questions, we measured the influence of all the news media accounts on Twitter. We used the Influence-Passivity Algorithm discussed in a previous post at SVW: HP Twitter Study: Weak Link Between Popularity And Influence.

The data includes all tweets containing a URL from June 15^th through July 22^nd of 2009. You can find the list of the 100 most influential news media accounts here (and below).

Most of the major news broadcast networks are present in this list. However, they do not fully dominate it. We see blogs such as@mashable, @bigpicture, @gizmodo, @harvardbiz, among others with very high influence ranking and above major players from traditional media such as the New York Times and the Wall Street Journal.

The list also includes the number of followers each account has. The same observation about the weak link between popularity and influence made in the previous post can be made here.

Having a large number of followers does not imply having influence in news social media. Furthermore, not having a large number of followers does not mean lack of influence.

A particularly interesting example is @bigpicture, a photo blog for the Boston Globe; with a mere 23K followers it is the 3rd most influential account on the list. After taking a look at some of the very high quality photographs tweeted by this account it becomes clear why people are willing to re-tweet them and why this account has so much influence.

This demonstrates that to be influential on Twitter news media networks have to keep their audience engaged through valuable tweets and not simply convince people to "follow them on Twitter".

The work on this project was done in collaboration with: Wojciech Galuba (@wgaluba); Sitaram Asur (@SitaramAsur); and Bernardo Huberman (@bhuberman)

Follow on Twitter: http://twitter.com/DanielMRomero

- - -

Loren Feldman - The Jester In The Court Of Web 2.0

[From left to right: Loren Feldman with Mike Arrington, Loic LeMeur, Robert Scoble during happier times - photo from Loic LeMeur]

Loren Feldman is the New York City based publisher of 1938Media.com, a fascinating, irreverent and funny critic of the West Coast tech scene.

Loren used to be an insider, a close friend of the princes of the Web 2.0 world: Michael Arrington, Robert Scoble, Loic LeMeur, and others. But Loren has managed to upset all those people, and more; and so have I simply by retweeting some of his comic puppetry.

(I've been blocked and called names because of my re-tweets of Loren's material but that won't stop me. It's a guy with a sock (puppet) on his hand -- people need to lighten up.)

Loren's puppets are hilarious. He has puppets representing Robert Scoble, Loic LeMeur, Shel Israel, Peter Cashmore, Dave Winer, Mark Zuckerberg, Gary Vee, Larry Page and Sergey Brin, Steve Ballmer, and more.

Here is an example of Loren Feldman's puppetry: Steve Ballmer's iPad review.

Loren often hits the nail on the head and says things that I hear others saying privately. When he talks about how the West Coast tech scene is so fixated on incremental additions to operating systems; the obsession with the iPhone, iPad; the fact that we have enough technology and not enough useful applications of technology; and the overbearing shouting of some of our leading Web 2.0 evangelists.

The things he says are things that many would love to say but they have to live here, and they don't have a sock puppet to say things for them. Many of the things he says are funny and true.

Truth can be uncomfortable, which is why I get into trouble retweeting his work, and I know people who have gotten in trouble simply for retweeting my retweets of Loren's material (wow).

Court jester...

In my opinion, Loren is playing a key role, the role of the court jester. It's a vital role that keeps influential people humble, honest, and a reminder not to smoke too much of their own stash, drink their own koolaid, etc.

From: Fooling Around the World: The History of the Jester

Irreverent, libertine, self-indulgent, witty, clever, roguish, he is the fool as court jester, the fool as companion, the fool as goad to the wise and challenge to the virtuous, the fool as critic of the world.

The court jester is a universal phenomenon. He crops up in every court worth its salt in medieval and Renaissance Europe, in China, India, Japan, Russia, America and Africa.

Instead of getting mad at Loren we should be seeking out more like him. People get surrounded by minions who agree with everything they say -- that's not a good thing. We get caught up in our own echo chamber and it takes a court jester to pop our balloons, wake us up, slap us in the face metaphorically.

Jesters used to be prized by royalty and they would compete for the best jesters. Queen Elizabeth I of England once threatened her jester because he wasn't harsh enough with her.

Loren can seem to be pretty harsh but that's a subjective reaction; his nature is that he keeps it real. And that used to be a key quality of bloggers -- keeping it real, keeping things authentic. These days such qualities are rare and becoming rarer as commercial interests can take precedence over authenticity.

Loren Feldman is a big critic of many of the things the Web 2.0 crowd finds dear, such as Twitter, which he says is one long river of advertisements as people promote their own work time and again (true - I do it all the time).

Harsh truths aren't pleasant but truth is not harsh it is simply the truth.

The point is not to kill the jester but to celebrate the jester. That's why we need Loren Feldman and 1938media, imho.

Silicon Valley Culture And Burning Man...

{Rebecca Kaplan and team built the above 20-ft metal sculpture for Burning Man which travelled to San Francisco.)

There's a strange hush around San Francisco and the Bay Area. There's fewer people around, there's a little less traffic, and there are parking spots where there are normally none.

This week is the week of the Burning Man festival -- a celebration of abundance, creativity, the arts -- set within one of the most inhospitable places on earth, a place where NASA might test its Mars Rover because of the extremes of temperature, wind, solar radiation and dust storms.

About two hours drive outside of Reno, Nevada, a city of about 50,000 rises up from the bed of an ancient alkali lake where nothing grows. For about a week it is one of the largest cities in Nevada, and then it disappears, leaving no trace.

Residents of what is known as Black Rock City build incredible buildings and art installations. The creativity and ambition of many of the projects is breathtaking. Yet there is no commercial involvement or commerce allowed at the event beyond being able to purchase ice and coffee from a central location.

There are several daily newspapers, several dozen radio stations, and hundreds of theme camps that offer experiences of many kinds, or simply a shady place to escape the sun or the dust storms.

Despite the grandeur of so many installations there is nothing labelled "Sponsored by Google" or "Intel" or "Oracle" yet there are many people from those companies and more, attending every year.

Burning Man's culture of openness, creativity, self-organization, sharing, and innovation plays a key influence in SIlicon Valley's culture, and one has influenced the other, countless times. The idea for the open source movement could very easily have come from the open collaboration that Burning Man started. There is a lot of common culture between the geek engineer community and Burning Man.

Burning Man is part of the mythology of Silicon Valley, for example, it is how Eric Schmidt got his job at Google, by showing up one year and impressing founders Sergey Brin and Larry Page, both avid "Burners."

Beach party...

Burning Man grew from humble origins. It started as a beach party in San Francisco in 1986 and then moved to the remote and desolate high desert of Nevada.

The early days were wilder than today, there were no rules. People would set up crazy things such as a drive-by shooting gallery. These days each ticket to the event warns in large letters that participants face possible death but there are lots of rules to prevent death and injury.

But despite some rules, it is still an open event where much of anything goes. And people do die in unfortunate accidents.

A blank canvas...

The vast expanse of the playa -- the empty space at the heart of Burning Man, acts as a canvas for spectacular art projects. My favorite part of the Burning Man experience is cycling across the playa and discovering new art seemingly coming out of nowhere overnight.

The huge playa is like the Internet, a massive blank canvas, a platform for people's creativity. And like the Internet, you often don't know who is behind the projects, or even like some of the projects...

The event is not a weekend getaway. Don't think you can throw a bag in the back of the car and head off to party for a few days because you will likely run into serious problems. Even a little alcohol starts to dehydrate your body very quickly. And many people are hospitalized for thinking Burning Man is just another party town.

If you plan and pace yourself then the experience can be transforming. You spend the day sheltering from the sun and the heat and the dust, and then Black Rock City comes to life as the afternoon sun wanes. The temperature cools and its night becomes as glittering and bright as Reno or Las Vegas.

It has been about 5 years since I last visited Black Rock City and each time it feels very fragile as if it might not be there again next year.

One of the most striking aspects is the lack of commercial messages for an entire week. You only notice it once you leave: the ads in magazines; the advertising on the radio; even the brand advertising on the side of trucks becomes very noticeable and oppressive after a week away...

If you ever get the chance to go, you should take it. The event's temporary nature and spectacle are a good metaphor for our times. And "leave no trace" is a great lesson we can learn from Burning Man.

- - -
Please see:

Burning Man - Wikipedia, the free encyclopedia

Burning Man: What is Burning Man?

If you are headed to Black Rock City this year you should check out "Burning Man Now" and watch for your tweets, photos, etc, showing up on the site.

Women In Tech: Sol Tzvi On Starting A Startup...

[Sol Tzvi is head of Genieo, an Israeli startup. She shares her story of starting a startup.]

By Sol Tzvi, CEO of Genieo

As a young CEO and Co-founder of a startup company I often find myself thinking of the path I chose and the destination I lead myself to.

Thinking of all those lonely times, when I'm traveling around the world in the middle of the night - sometimes even in the middle of nowhere really; crossing the world from one corner to another; scheduling meetings with different people from different cultures; speaking in a foreign language which forces me to concentrate not only on what I have to say but also on how to build a proper sentence, all in the cause of reaching out and touching these different cultures.

This is my idea of living: exploring, learning, teaching others, sharing thoughts and ideas, braking rules and lines I locked myself in years ago without even noticing, growing day by day and becoming the person I am today, re-inventing myself to with every new dawn - every day I am the person I am that day.

Our definition of ourselves as people is based on our past: past behavior, past experiences, past achievements. And yet, is observing a prior behavior really the best approach to understand who we really are? Well, to some extent - yes. But then this could lead us to live in a false impression and view of ourselves. After all, we humans are only trying to simplify complex questions, such as who we are.

Can we really do it?

Story continues...

Media Tsunami: How Much Media Should You Produce? How Much Is Too Much?

How much media content should I produce?

As a professional journalist this has been a question that I've struggled with over the past five years since leaving the Financial Times.

I can produce a lot of media content, and hopefully, it is all quality media content. But my concern is that if I produce too much it will cause my readers and subscribers to switch off because there is too much from one source.

I know that if some of my sources are too noisy on Twitter, Facebook, even on their blog or web site, I will switch them off because it is too much -- even if all their content is good. I don't want my readers doing the same to me.

This question of how much media is too much media is not just my concern, it should be a concern for others, especially companies. I've been writing about how every company is a media company, (EC=MC - the transformative equation for business) how every company has to get better at producing, distributing and responding to media content.

Media is important in establishing companies in their field, it is important in establishing their thought leadership. If you aren't seen by your potential customers then you don't exist.

But we have a media tsunami washing over us and this media tsunami is becoming ever larger as more people and companies discover how to produce ever more media. How do you stay relevant when there is an ever larger media tsunami crashing all around us all the time?

Do you produce more media? Do you add to the media tsunami hoping that your media will be seen as opposed to competitor's media?

The same questions apply to online advertising. And in online advertising the principle seems to be that more is better than less. That's why we are inundated with advertising that crawls across our screens blocking what we want to see; advertising that takes up ever more space on our displays; and advertising embedded in links in copy.

But there is a lesson here. More advertising is leading to less value per advertisement. More advertising is reducing advertising income for many online publishers because there are more places to advertise. More means less.

Does that apply to content? Does more media equate to less value? If a company produces too much media will that tire and turn off potential customers? There were 87 Old Spice videos in one day. Too much? Not enough?

I think it is too much. Even if every piece of media is quality content, I think that dealing with the media tsunami with your own media fire hose is the wrong approach.

No one is listening...

There is a very good lesson to be learned from a recent incident where Leo Laporte, a popular broadcaster, found that his Twitter stream wasn't broadcasting his Google Buzz posts. It took him more than two weeks to notice and he was upset that no one else noticed.

It makes me feel like everything I’ve posted over the past four years on Twitter, Jaiku, Friendfeed, Plurk, Pownce, and, yes, Google Buzz, has been an immense waste of time. I was shouting into a vast echo chamber where no one could hear me because they were too busy shouting themselves. All this time I’ve been pumping content into the void like some chatterbox Onan. How humiliating. How demoralizing.

This incident perfectly describes the media tsunami problem.

Louis Gray, who recently became VP of marketing for My6Sense, an Israeli based startup, wrote about Mr. Laporte's problem. He says it is an issue of engagement.

The person who shouts the loudest can get a lot of attention over a short time, but shouting is hard to listen to for long periods, and it is hard to sustain. You cannot replace engagement, true conversation, a give and take of ideas, and an exchange with a real community.

I agree that engagement is great if you can get it. But the media tsunami means that engagement becomes diluted.

Louis Gray has noticed that "many blog posts are getting no comments to fewer comments. Tweets are not getting replies. Shares on FriendFeed and Google Buzz that once got conversations in times of heightened awareness are lying fallow. Photos on SmugMug and Flickr are getting fewer views."

I think the answer lies right in front of Louis Gray and us all. I think that the right content will come to find us and not the other way around. If you create the right content, relevant to a person, it will find its way to them.

Loren Feldman from 1938Media hits the nail on the head in this quick video: Nobody Is Listening - 1938 Media

If you focus on creating media content that is relevant then it will find its way to the right people. And that will be true for advertising too.

And it will be very difficult to game media content. No amount of SEO or distribution via Twitter, Google Buzz, Facebook, etc will matter. If the content isn't relevant it won't get through to me.

The same goes for advertising content. Imagine a world where your ad copy finds the right targets each time: you won't have to pay huge advertising costs. It will dramatically reduce marketing costs for many companies and they will be able to concentrate on making products and services relevant to their customers instead of worrying about how to reach potential customers.

Will this mean an end to marketing and PR? Probably not but it will reduce their importance.

The technology to do all of that is already here and available from several sources: My6sense, Genieo, and others. These are self-organizing filters, self-organizing curators of content that will bring you the right content at the right times.

We are still at the early stages of deployment but these technologies will come because they can, and because it is the only way to deal with the media tsunami.

- - -
Please see:

Genieo + My6Sense: The Media Tsunami And The Need For Self Organizing Filters...

Genieo's Sol Tzvi: Why Doesn't My PC Know Me?

My6Sense Launches Attention API

My6Sense iPhone App - Insightful Search

2010 Prediction: The Media Tsunami Is Coming...

McAfee Mystery: Intel CEO Prioritizes Security Via Charlie Rose

There has been much written about why Intel offered an astonishing $7.7 billion for McAfee, the PC anti-virus maker.

I've been an Intel watcher for more than 25 years and I'm struggling to make sense out of this deal.

I've also been reading other Intel watchers trying to make sense of the deal. The most recent attempt is by Jon Stokes at Ars Technica: Why Intel bought McAfee

His article doesn't answer the headline but here is a fascinating snippet:

At the most recent Intel R&D day, Intel CTO Justin Rattner did a Q&A session with the press in which he was asked something to the effect of, "What do you spend most of your time working on these days?" Rattner didn't hesitate in answering "security."

He then told an anecdote about how he was watching Intel CEO Paul Otellini being interviewed by Charlie Rose, and Otellini told Rose, "I've given our company a charter to make [security] job one." Rattner laughed and told us that this statement seemed to come from out of the blue, and it took him and other Intel execs by surprise. But from that day forward, Rattner was focused on security.

Wow. Is this how Intel's CEO sets priorities within the company? Is this how he communicates Intel strategy? Through Charlie Rose?

Justin Rattner is head of Intel's research labs. You would think that he would already know what his priority should be directly from the top and not from a TV show.

How did Mr Otellini communicate to the company that its charter was "to make security job one"? Yet for one of Intel's top execs, and his colleagues, it came "from out of the blue."

What's going on at Intel? Does anyone at Intel, apart from Mr Otellini, know?

Startups: Angels Or VCs Or None Of The Above...7 Reasons To Bootstrap

There's been much written recently about angel investors and venture capitalists especially about the rise of the "super angels" such as Ron Conway, Jeff Clavier, Marc Andreessen, etc.

The VC community is disdainful of the angel investors and their puny funds but the angels can go into deals that the VCs cannot because they are too small for the large funds.

Today's entrepreneur has a choice: angels or VCs or none of the above.

It's worth considering the "none of the above" option because startup costs are very low.

Joe Kraus, co-founder of Excite, which was the Google of its day, told me that they needed $5m for a data center when they first started.

Today, with the ready availability of cloud computing you don't need to raise lots of capital to fund your capital costs.

Development costs are cheaper too, with high level languages and development platforms such as Ruby and even development platforms in the cloud from companies such as Engine Yard, development is quick and scalable.

Angels and VCs can be good in terms of getting access to an experienced hand in building a business, helping to recruit the right people, even mundane things like finding office space.

But a good network of mentors or board directors/advisors could provide similar help without the ownership and other terms that outside investors demand.

Bootstrapping is a viable option

Many startups could achieve a lot with just the founders pooling their credit cards for a year or so and then seek expansion capital, maybe with debt.

Sramana Mitra, writing in Forbes, says there is an assumption that only mom-and-pops businesses can be built with bootstrapping:

How very wrong! Ask Frank Levinson and Jerry Rawls of Finisar whose bootstrapped venture went public at a $5 billion valuation. Or ask Christian Chabot of Tableau Software, who raised his Series A from NEA at a $20 million pre-money valuation by bootstrapping the early stages, when typical valuations for that round are in the $2 to $5 million range.

From: Why B-Schools Set Up Entrepreneurs To Fail

This is a good time to reprint one of my favorite guest columns, written by serial entrepreneur Greg Gianforte, CEO of RightNow Technologies:

Seven Reasons Not To Raise VC capital
By Greg Gianforte

Raising venture capital for early stage start-ups seems to be the prevailing path for most entrepreneurs; however, most would-be founders should reconsider.

Here are some reasons why:

- If you start by selling your concept to potential prospects (rather than stock to VCs), you will either end up with initial customers or a conviction that your idea won't work. Why raise money and then find out which one it will be?

- Raising money takes time away from understanding your market and potential customers. Often more time than it would take to just go sell something to a customer. Let your customers fund your business through product orders.

- Adding VCs to the mix early gives you an additional set of masters you must serve in addition to your customers. It is always hard to serve two masters, especially in a startup.

- With no money you can't make a fatal mistake. This is a blessing. Without VC money, you are forced to figure out how to extract funds from your customers for value you deliver. Ultimately that is the only thing that really matters.

- Money removes spending discipline. If you have the money you will spend it - whether you have figured out your business model and market or not.

-Raising VC money determines your exit strategy. You will either sell the business or take it public. What if you end up with a very profitable, modest sized business that you want to just run? That is no longer an option once you raise VC money.

- You sell your precious equity very dearly before you have a proven business model. This is the worst time to raise money from a valuation perspective. I know this is a contrarian view. And some of you are saying that might be fine for a small company.

Don't forget Dell, HP, Microsoft all originally started without VC funding; you can build a big business with bootstrapping and without VC money. At RightNow, we doubled our revenue and employees every 90 days for two years before we took any outside money, and even then the employees retained more than 75% ownership after raising $32m.

Greg Gianforte is the author of:

"Bootstrapping Your Business: Start and Grow a Successful Company With Almost No Money."

Innovation At Risk: We Need Competition To The Luddite Telcos . . .

We won't be able to have net neutrality/open Internet because the Telcos will always have the right to prioritize their own services over their own networks.

So let's have real competition to the Telcos.

But the US has Luddite Telcos. The US has some of the slowest broadband and the least penetration.

A recent FCC report found that there are 14 million Americans without access to any high speed Internet service.

S. Derek Turner, Research Director of Free Press, a lobbying group advocating universal access to communications, said:

"The facts present a sobering reality of our broadband problem. We pay far too much for far too little, and the lack of meaningful competition among Internet service providers leads to delayed investment and slow technological progress."

The Telcos control the features available in smartphones often dumbing them down. That's Luddite behavior.

The Telcos have no real competition. As Danny Sullivan over at Search Engine Land points out:

The mobile marketplace... where providers unilaterally add on $10 surcharges just because you're using a smartphone, regardless of you actual data usage?

Where you can't take your expensive device and go elsewhere?

Where they deliberately cripple parts of a smartphone's OS?

Where they decide to charge you more for using your device as a modem even if that usage still comes under the same data cap as allowed by native use of your device?

If we can't have net neutrality then let's have more competition. But where is that competition going to come from?

Building a new Telecom infrastructure is expensive. Potentially, WiMAX could vault over the Telco walls but WiMAX rollout is slow and its performance is patchy. Plus, you need the customer facing support component and the billing relationship, which is labor intensive.

Another solution is to adopt open network policies as in Europe, where Telcos are forced by law to offer their platforms to third parties. But there is no way Congress will pass such a "socialist" law, especially with the Telco lobbyists making huge contributions to political campaigns.

Silicon Valley startups are in danger

Four years ago I warned that if the situation with the Telcos isn't changed it will impact Silicon Valley startups. We need competition not net neutrality otherwise Web 2.0 dies on the vine

Three years ago I wrote:

"Last mile = Golden Mile. This Telco/Cable cartel sits smack-dab in the middle of Silicon Valley's innovation efforts. The Telco/Cable cartel control the communications gateways, they control the wireless services, and they are the most backward element in our society in terms of resisting technological progress in the US."

In today's NYTimes.com, Brad Burnham and Fred Wilson, partners at Union Square Ventures, an early stage venture capital fund wrote: A Threat to Startups.

Between the lack of any protection on the wireless side and the qualifiers and complexity on the wireline side, young startup companies will have difficulty finding financing and building businesses of scale. If an Internet access provider discriminates against a startup directly or through its network management practices, it is unlikely the startup could afford a long and expensive process to seek redress. So this proposal favors the incumbent applications and access providers.

I can't see an easy way out of it.

Luddite Telcos seem bent on keeping us in the Internet dark ages with slow connections and expensive services that will drive innovation out of the US. Government regulation has no teeth and our politicians have incentives to keep the status quo.

Where are Cisco, Intel, HP, IBM on net neutrality?

You would think that the infrastructure providers: Cisco Systems, Intel, HP, IBM, EMC, etc would be all be big supporters for more competition in Telco markets but they remain quiet. They would sell a whole lot more kit if there was more competition.

I once asked John Chambers, CEO of Cisco, why doesn't Cisco criticize Telco policy and come out with support for more competition in Telco markets? He smiled and said, "We support all of our valued customers."

But surely Mr. Chambers, and the heads of the other tech giants, have a fiduciary duty to maximize shareholder profits?

An open Internet with healthy competition would do wonders for sales. Yet where is their voice?

Net neutrality threatens GOOG, et al...

It is worth pointing out that Google, Yahoo and Microsoft have little to gain from net neutrality. I explained in a post from May, 2006:

Why risk an open and neutral Internet and become vulnerable to smaller, swifter competitors? Yes, right now GOOG, YHOO and some of the others move reasonably fast in some markets, but as they grow larger they won't be as nimble.

If you are a well established Internet services company such as GOOG, it doesn't pay to expose yourself to any disruptive, innovative startups. Why make it easy for your future competitors by fighting for their right to a neutral Internet?

That is why you should not look to GOOG et al, to save the Internet from the gatekeeper telcos and cable companies.

The big boys can afford to pay the Telcos and in exchange the Telcos keep the startups at bay. If I were a shareholder of Google, I'd be against net neutrality and I would campaign for Google to make deals with all the Telcos.

It's clear that's where Google is headed anyway...

The situation for startups and innovation in the US doesn't look good. Maybe it is time to relocate Silicon Valley elsewhere.

- - -

Please see:

Tom Abate: Speed Bumps on the Information Highway

Net Neutrality: The shareholders of the IT tech giants are losing out to the "valued customers"

Corporate Luddites: Cable and Telcos versus Silicon Valley - SVW

Analysis: Bad News For Startups If ISPs Start Charging Google - SVW

The Fly On The Wall And Its Social Effects - A Short Story From The Near Future...

We live in a world of ubiquitous computing -- there are ever more computing devices everywhere.

We will soon live in a world of ubiquitous video cameras. You probably have one staring at you right now just inches away from your face -- the camera in your laptop or desktop.

There are video cameras on street corners, business premises, highways. The Brits have the most video cameras per head of population but other countries are catching up. The CCTV technology is cheap to install and operate.

Consumer video cameras are cheap and getting cheaper and better quality. A Flip HD camera from Cisco is under $200 and there are consumer HD video cameras for under $100. HD video is found in smart phones, such as the iPhone 4. Soon, every phone will have a high quality video camera, and not just phones.

The circuitry and the mechanism for a HD video camera is tiny. It can be fitted into ever smaller formats, such as pens: Brookstone sells a video spy pen for $99.95, and there are cheaper versions available elsewhere.

As computers become more ubiquitous so will video cameras. It won't be long before there are video cameras all around and in places where we aren't used to having them.

It won't be long before we have always-on video cameras operating in all our social spaces.

Imagine living in a world where nearly every conversation, every meeting, every step you take in the physical world is recorded and archived in the cloud.

If you knew that every conversation with your kids, with your parents, with your friends -- was possibly being recorded and stored -- would you think twice, maybe thrice about what you had to say?

The Facebook effect...

We have become used to the possibility that all our online conversations and interactions are recorded and stored somewhere. We are much more guarded about what we say or do online.

But we think of our offline conversations and interactions as mostly personal and private. We don't exhibit the same cautious behavior offline as we do online.

If I meet a friend walking down the street and stop to chat for a few minutes -- I'm pretty sure that that conversation and meeting isn't recorded.

That won't be true in the near future. And it won't be because of government "Big Brother" surveillance. It will be because of personal surveillance devices that people will carry out of choice for personal protection.

It will be as if there is always a "fly on the wall" watching and recording everything.

People will carry what I call a "personal fly" -- a personal security device containing a tiny video camera fitted into a pendant or broach, embedded in clothing, earrings, or in eye glasses.

If you are attacked it will have video and audio records of that event.

Why will people carry a personal fly? Because they can, and because the technology will be cheap enough and good enough to be used as a very effective personal security device.

A personal fly...

A personal fly will be able to wirelessly record many hours of video and audio onto a flash memory chip; some "flies" will use the cell phone in your pocket to send continuous video and audio data to a cloud-based storage service.

If you were mugged, your personal fly would record the event and police could use its images and audio to track down the mugger.

- A criminal could try to destroy the flash card storing that video -- but since some personal fly devices send their data into the cloud, a criminal could never be sure that destroying the chip covered their tracks.

Thus, all people wearing a personal fly would be protected as if they were all storing their data off-corpus.

- A personal fly might even be equipped with a panic button alerting the police, and local public surveillance cameras to retain their video footage to track escaping assailants.

- Children will be a prime market. Parents will use these inexpensive personal security devices to protect their kids. It might even be considered neglectful if parents didn't protect their children with such devices.

- Adults will wear a personal fly throughout the day for protection. At the end of the day, or week, the video collected could be erased, or not, depending on what settings you keep

-Telcos will market them as part of the many wireless applications and services they provide.

- Manufacturers will produce different types of personal fly, in different disguises, and with an array of capabilities.

I have no doubt that these types of personal security devices will prevent many attacks and other types of criminal acts.

(BTW, I'm working with potential partners on manufacturing this concept -- let me know if you'd like to chat.)

The social fly...

What interests me is how such personal security devices (PSDs) will affect our behavior in our social spaces. What will be the new manners?

- Will it be rude to wear a personal security device at a dinner party?

- WIll it be rude to ask someone to turn off their PSD?

- How can you know if someone's PSD is on or off? (You can't know for sure...)

- Will it be rude to archive all your recordings?

- Will it be illegal to use a PSD in situations without informing all persons in the vicinity, similar to getting consent to record telephone conversations?

- Will we need new laws?

- Will people getting together, have to sync up their personal archive settings and come to some kind of agreement over recording their conversation -- before any conversation takes place?

- How will we behave in our social spaces knowing that everything we say is being recorded and possibly archived for many years?

- How will kids grow up with such personal surveillance systems? Parents will likely want to peek into how they do in the classroom, their conversations with friends, etc.

Stunted conversations...

The number of personal attacks is rare but people's fear of them is much larger, and that will drive the sales of these devices.

Surely, it will have a chilling effect on our society and our behavior...

The threat here is not from "Big Brother" but from each other; we will constantly be aware of a shadow haunting all our interactions, recording everything we see, hear and say. We will always be on guard, second guessing ourselves in all our social interactions

Surveillance by Big Brother is less scary than surveillance by each other, by people you know and know you.

- Say goodbye to casual drinking or anything at casual at parties.

- The opportunities for mischief by disgruntled friends and lovers are immense.

- The question of trust between friends and family members will be tested to the extreme.

- Living in an ambient surveillance world policed by the people around you is going to be challenging.

These things can't be good. But they will happen because they can.

Welcome to your future.

- - -

[If you like this post you might like some of my other posts, collected in my new book - In My Humble Opinion: Notes from a Silicon Valley Watcher - available in paper or electron.]

Pearltrees: The Latest Mark Hurd News In Real Time...Here

I'm discovering new uses for Pearltrees, a cool media technology from a French startup I've been working with the past few months.

Above, you can quickly browse the latest news on Mark Hurd from ZDNet, Techmeme, Google, and specialist commentators. This Pearltree is dynamic, you can add it to your Pearltree account (free) and it automatically updates in real time.

Let me know what you think of Pearltrees. I've got more uses for it coming up...

HP Twitter Study: Weak Link Between Popularity And Influence

I'm a big fan of Bernardo Huberman, director of HP Labs' Social Computing Lab, and the work of his team. HP has been applying rigorous scientific practices to the study of social media and it has a gold mine of research open to the public.

It is worth emphasizing that HP's studies are designed to the highest scientific standards; they are not isolated case studies or the musings of a "social media expert." They typically involve the study of very large numbers of people and thus they reveal some fundamental aspects of our increasingly online culture, and our common humanity.

The latest study from Dr Huberman and team is on what makes a Tweet or a Twitter user influential. More than 22 million tweets were analyzed and it has led to the creation of the IP Algorithm, which measures the influence and passivity of Twitter users.

The study found:

- Most Twitter users are passive, they do not re-Tweet.

- There is a difference between popularity and influence. High numbers of followers does not equal influence because those followers do not re-Tweet.

- To become influential, Twitter users must somehow persuade their followers to re-Tweet.

To measure influence, the study looked at how much traffic a Tweeted URL received, using the Bit.ly shortening service, which also tracks clicks.

From the paper Influence and Passivity in Social Media - HP Labs Research:

This reveals interesting implications about the relationship between a person's popularity and the influence she has on other people. In particular, it shows that having many followers on Twitter does not imply power to influence them to even click on a URL.

The Conclusion:

Given the mushrooming popularity of Social Media, vast efforts are devoted by individuals, governments and enterprises to getting attention to their ideas, policies, products,and commentary through social networks.

But the very large scale of the networks underlying Social Media makes it hard for any of these topics to get enough attention in order to rise to the most trending ones.

Given this constraint, there has been a natural shift on the part of the content generators towards targeting those individuals that are perceived as influential because of their large number of followers.

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 prop-agate 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.

Moreover, since our measure of influence is not specific to Twitter it is applicable to many other social networks.

This opens the possibility of discovering influential individuals within a network which can on average have a further reach than others in the same medium regardless of their popularity.

Foremski's Take:

The fact that this study's findings can be applied beyond Twitter is fascinating, especially applied to the work of PR and advertising firms.

For example: If a PR firm succeeds in placing a story abut a client on a popular news site, it means little in terms of that story being influential and reaching potential customers, investors, or others.

Popularity and influence are two separate issues. Targeting the right media outlets based on influence is more important than the popularity of any one publication.

The same can be applied to online advertising. Advertising agencies buy "numbers" when placing ad buys. But they should be concentrating on targeting in regards to influence.

The HP study shows that there is a significant arbitrage opportunity for those PR and advertising firms that understand the distinction between popularity and influence -- and know how to act on it.

- - -

Please see SVW:

Twitter Study: Interview With Bernardo Huberman, HP Social Computing Labs Chief


HP Study Shows Twitter Predicts Success Of Movies

Thought Leader - HP's Bernardo Huberman: Studies Of Mass Social Behavior On The Internet

HP Labs: A Gold Mine Of Original Research Into Online Social Behavior

HP Labs : Research: Social Computing Lab

Video: Social Dynamics In The Age Of The Web

The Stunning Achievements Of PayPal Alumni...

Sarah Lacy reports:

... Google has agreed to buy Slide for $182 million, in a deal to be announced Friday. And sources also tell us that this is not the last move Google is going to be making to cobble together a serious social gaming and apps strategy to counter Facebook.

... No word on whether Slide founder Max Levchin will be joining Google or what his continuing role will be. $182 million is a nice exit no doubt, but it’s a come down from Slide’s $500 million valuation in 2008. And Levchin has said many times that success to him was Slide becoming bigger than PayPal.

In the comments of Sarah Lacy's story there is much discussion whether Slide is a failure for Max Levchin, the founder.

I'm sure he made money. But Slide is just one small part of Max Levchin's story. He's had many failures. He was in 6 startups before he struck it rich with PayPal. It's the life of an entrepreneur.

He still has Yelp and other companies such as Adroll. And he is young -- just 35. He has plenty of years to make more PayPals.

I'm a fan of Max Levchin and his colleagues. He and the rest of the "PayPal Mafia" made a ton of money when EBay bought PayPal for $1.5 billion. And they've been ploughing much of that money back into Silicon Valley, founding and financing dozens of new companies.

They have used their experience and money to Angel fund and lead many successful companies: YouTube, FaceBook, LinkedIn, Tesla, Zynga...are just a few examples.

And they are all still relatively young, and in the peak of the their form. I expect a lot more of the same from all of them.

Here is a partial list of the PayPal alumni and some of their achievements:

- Reid Hoffman, founder of LinkedIn and a very successful angel investor: Facebook, Ironport, Digg, Flickr, Ping.fm, Last.fm, Zynga.

- Peter Thiel and his hedge fund Clarium Capital. Not all of his bets have paid off but he is investing and funding some interesting organizations.

- Elon Musk - Head rocket designer at SpaceX and CEO of Tesla.

- Steve Chen - Youtube co-founder.

- Chad Hurley - Youtube co-founder.

- Premal Shah - founding president of Kiva.org.

- Jeremy Stoppelman - co-founder and CEO of Yelp.

- And there are plenty more in this group: Dave McClure, Jared Kopf, Eric Jackson, Kieth Rabois, Ken Howery...

I created a Pearltree that has more info and lists more people:

Silicon Valley PR Firms! Send Me Your Pearltree For My Directory...

The last couple of months I've been working with a very cool French startup called Pearltrees in an advisory capacity. It's part of my nascent consulting services business which helps me continue publishing and funding Silicon Valley Watcher.

I'm a big fan of Pearltrees because it is a fascinating media technology. It allows anyone to curate their own section of the web by using a visual metaphor that looks very much like mind maps: users create a Pearltree and attach pearls to it; each pearl represents a web page or site, a video, image, or even a Tweet.

With so much content on the Internet it is becoming very important to identify trusted sources of information and to have people curate sections of the Internet. Google tries to do it by looking at trusted sites and who links to who but it is constantly fighting spammers trying to game the sysem -- the Pearltrees approach is spam-proof.

Pearltrees are also very social, they are extremely easy to create and share. They can be Tweeted, emailed, or embedded in any web page or web document, creating a live window (see below).

One of my goals is to build a Pearltree about Silicon Valley so that people can quickly find the best information about this region. As part of that project I have put together a Pearltree that acts as a directory of Silicon Valley PR firms.

People looking for a PR firm can browse my Pearltree and hopefully find a compatible business partner. In the short space of time since I created the Silicon Valley PR firms Pearltree it has had nearly 2300 views.

But I'd like to improve it. I'd like each PR firm that does business in the Silicon Valley/Bay Area to create a Pearltree about their business and send it to me.

If you are in PR here are some reasons why you should make a Pearltree about your company:

- It puts you, rather than me, in control of the information about your firm.

- You are the one that receives notifications on who has shared it or picked it for their collection of Pearltrees.

- You can see and respond to comments on your Pearltree.

- You can be creative about how you build your Pearltree.

- By creating your own Pearltree it shows you as the author rather than me.

- You can use your Pearltree for communications with clients. Again, being in control of the information in your Pearltree is key.

- This is the important part: each Pearltree is dynamic. Any changes are updated in real-time everywhere that Pearltree is used. You won't have to wait for me, or rely on me, to update a Pearltree about your company.

Here are two examples:

I created a Pearltree for the Horn Group:

It shows clients, newsroom, blog, contact info etc.

Because each Pearltree is controlled by the author, each firm can be creative about how it organizes their Pearltree. For example, in this Pearltree about The Hoffman Agency, there are links to client web sites that Hoffman might like to highlight, rather than just a simple client list.

So please send me your Pearltree. It's the simplest way to get into my Silicon Valley PR directory. And also, send me the categories that you would like to be included in. Email foremski at Gmail or send it to me through Pearltrees.

And if you are an independent PR professional/consultant, send me your Pearltree too.

You can show who you work with, your past and current clients, and whatever else you'd like to include, such as your LinkedIn profile, portfolio, etc.

- - -

It's a very flexible technology and I can think of a variety of ways of using it.

For example, using Pearltrees as a media kit. Here is a Pearltree about an Intel press event, containing links to media assets such as video, and also the resulting press coverage.

And Pearltrees has lots of great new features coming very soon, including a private version that controls who can view it; and a community version that enables teams to collaborate on a Pearltree.

It's also great as an organizational/research tool. I've used it for a book project, and I'm exploring other uses, including an online store.

I use it for business and for recreation, such as this Pearltree about the upcoming Outside Lands music festival in Golden Gate Park so I can get to know some of the acts before the event.

  
The beauty of a flexible media technology such as Pearltrees is that you can be the first person to use it for a particular task. It's like making the first footprints in fresh snow :)

So please send me your Pearltrees so I can include them in my PR firms Pearltree directory. And send me examples of any new uses you come up with.

Just click here to start: http://www.pearltrees.com/

MobyNow: A Media Platform For Fractured Media...

Mathys van Abbe, one of the top entrepreneurs from the Netherlands, is in town this week. He's the founder of Moby Picture, the largest European photo sharing site.

He has also recently launched MobyNow, which is a media platform for bringing together all the social media that is represented in the photos, videos, Tweets, blog posts, etc, that people post around a subject.

It's a great media platform for any media organization, or any company or group that wants to create a live site that reconstitutes all the fractured media around a topic or subject.

For example, Holland MobyNow was created in just one day, to aggregate all the postings, photos, etc around Holland's final World Cup games. The site was an instantaneous success with more than 270,000 views and three large sponsors signing up from a single Tweet!

Mathys has some interesting statistics here on his blog: Over 575k social media updates were aggregated by Holland MobyNow during the Worldcup final.

There are MobyNow sites set up around sports teams and Mathys is also talking with Hollywood studios and large companies interested in setting up similar sites.

It's a great idea because Moby is able to take advantage of the relationship it already has with hundreds of thousands of users of the Moby Picture site. It can use those relationships to effortlessly link people up and their social network accounts, with each other, and with new users on new sites.

This underlying social networking technology is already being used in more than 750 other applications.

For example, a baseball team such as the Oakland A's could host a MobyNow platform on its own site, featuring the pictures, video, Tweets, blog posts of its fans, all in real-time. The content is fresh, and fans are happy to see their postings featured on the main site.

I can think of plenty of uses for the MobyNow platform. It represents a next stage in web site development: bringing together all the fractured media that exists in social networks, blogs, Twitter, Facebook, etc. It's also a way for the core brand to celebrate all the ways people show their appreciation - plus they are also aggregating all the pageviews - very important for media companies where page views are the new currency.

I'm looking forward to seeing all the many ways this platform can be used.

- - -

Additional Info:

- The Rabo cyclists and their progress in the Tour de France combining geo-loco data: RaboSport

- TMF awards MobyNow platform

- Launching the first MobyNow Real-Time Web platform

Genieo + My6Sense: The Media Tsunami And The Need For Self Organizing Filters...

It was great to catch up with Sol Tzvi, co-founder and CEO of a fascinating startup called Genieo. She's in town this week for meetings with several large companies interested in her company's technology.

Genieo installs on a PC and it helps you find all the news and information that is relevant to you from all your sources. It does this without needing any keywords or any specific settings from the user, and it works across all your computers and smartphones so it never duplicates content already seen.

I first met Ms. Tzvi earlier this year: Genieo's Sol Tzvi: Why Doesn't My PC Know Me?

Genieo is one solution to the media tsunami that is building into towering proportions.

The media is not dying, we now have more media, in more forms, at more times of the day and night than at anytime in our history -- and there's more to come as individuals and companies learn how to use inexpensive media technologies to produce and share masses of content (87 Old Spice videos in one day...). (Every company is a media company.)

Using old style filters to try and manage all this content won't work: it requires sophisticated algorithms that can manage all of this for us, transparently and in the background. These algorithms must also bring to us serendipitous content - the stuff we didn't know was there and thus can;t search for - another reason why traditional keyword filters are of little use.

Last week I met with another favorite entrepreneur, Barak Hachamov, co-founder of My6Sense - an iPhone application that seeks to do the same as Genieo but takes a different approach.

Mr Hachamov says that there is tremendous interest in the My6Sense API. Many companies are very eager to add My6sense capabilities to their online services. I can't reveal the names of the interested parties but they are household names.

There are other companies that have similar capabilities but different approaches. One of these is Sidebar, which offers technology for e-commerce sites serving mobile users.

These are all part of a very important trend because without such solutions we will drown in the media tsunami, and we won't be able to find the content that we want to see. Without such solutions the Internet is a giant mess where search doesn't help much: search only works if you know what to look for.

We need systems that know us and work for us.

UPDATED: Google Exec Says It's A Good Idea: Open The Index And Speed Up The Internet

When I was in Brazil recently, I met with Berthier Ribeiro-Neto, head of engineering at Google Brazil. During our conversation I mentioned an idea I had about making the Google index into an open database that anyone could access, I said that this could dramatically speed up the Internet.

He said it was a good idea and that I "should write a position paper" on this subject.

(As a further thought, maybe it could also serve to take away some of the heat Google is feeling lately, in terms of its index rankings potentially favoring its own business interests.)

Here is my logic:

Looking at my server logs shows that 20 different robots visit my site, one of the more frequent ones is the Googlebot. Each of these robots is trying to create an index of my site.

Each of these robots takes up a considerable amount of my resources. For June, the Googlebot ate up 4.9 gigabytes of bandwidth, Yahoo used 4.8 gigabytes, while an unknown robot used 11.27 gigabytes of bandwidth. Together, they used up 45% of my bandwidth just to create an index of my site.

These robots are all seeking the same information and they use nearly one-half of my bandwidth, slowing the site for all my readers. This is also the same for tens of millions of web sites.

What if there was a single index that anyone could access?

You would get an immediate speed increase in the Internet for no additional investment in infrastructure.

Google and others, could perform their own analysis of the index using their secret algorithms. After all, the value is not in the index it is in the analysis of that index.

Mr. Ribeiro-Neto said, "That's a good idea. You probably wouldn't even need to spider the web sites."

Each web site could update the central index automatically each time something changed. This would result in a massive savings in bandwidth used by dozens of robots scouring the Internet for new information.

What if Google opened up its index to the world as a goodwill gesture because it has the best index? It could still maintain the privacy of its algorithm but everyone would have the same information on which to perform their analysis.

It would show that there was nothing unusual or unethical in how Google collects information for its index. This might relieve some of the pressure it has come under this week to reveal more about how its search service is presented.

Also, Google founders were once strong advocates that the search index should be run as a non-profit.

On page 39 "Inside Larry and Sergey's Brain" by Richard Brandt (referral link).

Andrei Broder, who led the team that created the AltaVista search engine, the best of its time, talks about meeting Larry and Sergey. "When the discussion turned to the topic of making money from the technology, Broder found that Page had a profound difference of philosophy on the subject. "It was a very funny thing about Larry," Broder recalls. "He was very adamant about search engines not being owned by commercial entities. He said it should all be done by a nonprofit. I guess Larry has changed his mind about that."

Brian Lent, now CEO at Medio Systems:

"The problem with the Google search engine at the time, Lent recalls, is that Larry and Sergey didn't want to commercialize it, and Lent was anxious to become an entrepreneur. Their mantra at the time was more socialistic than entrepreneurial. "Originally, 'Don't be evil' was 'Don't go commercial,'" says Lent.

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UPDATED:

Don MacAskill, CEO of SmugMug writes:

Great idea! Google *should* open their index! « SmugMug's Don MacAskill

... I would estimate close to 50% of our web server CPU resources (and related data access layers) go to serving crawler robots. Stop and think about that for a minute. SmugMug is a Top 300 website with tens of millions of visitors, more than half a billion page views, and billions of HTTP / AJAX requests (we're very dynamic) each month. As measured by both Google and Alexa, we're extremely fast (faster than 84% of sites) despite being very media heavy. We invest heavily in performance.

And maybe 50% of that is wasted on crawler robots. We have billions of 'unique' URLs since we have galleries, timelines, keywords, feeds, etc. Tons of ways to slice and dice our data. Every second of every day, we're being crawled by Google, Yahoo, Microsoft, etc. And those are the well-behaved robots. The startups who think nothing of just hammering us with crazy requests all day long are even worse. And if you think about it, the robots are much harder to optimize for - they're crawling the long tail, which totally annihilates your caching layers. Humans are much easier to predict and optimize for.

Worst part about the whole thing, though? We're serving the exact same data to Google. And to Yahoo. And to Microsoft. And to Billy Bob's Startup. You get the idea. For every new crawler, our costs go up.

We spend significant effort attempting to serve the robots quickly and well, but the duplicated effort is getting pretty insane. I wouldn't be surprised if that was part of the reason Facebook revised their robots.txt policy, and I wouldn't be surprised to see us do something similar in the near future, which would allow us to devote our resources to the crawlers that really matter.

Anyway, if a vote were held to decide whether the world needs an open-to-all index, rather than all this duplicated crawling, I'd vote YES! And SmugMug would get even faster than it is today.

Please see:

- The NYTimes: The Google Algorithm

- FT.com / Comment / Opinion - Do not neutralize the web's endless search (Subscription required.)

Google Says That Employees Change Search Rankings

Richard Waters in an article at FT.com (Subscription required):

Groups magnify chances of Google hits

Companies with a high page rank are in a strong position to move into new markets. By "pointing" to this new information from their existing sites they can pass on some of their existing search engine aura, guaranteeing them more prominence.

This helps companies such as AOL and Yahoo as they move into the low-cost content business, says Mr Bonnie. "They can use their Google page rank to make sure their content floats to the top," he says.

Google's Mr Singhal calls this the problem of "brand recognition": where companies whose standing is based on their success in one area use this to "venture out into another class of information which they may not be as rich at". Google uses human raters to assess the quality of individual sites in order to counter this effect, he adds.

I've known about this for several years but wasn't able to get anyone from Google on the record. These Google employees have the power to promote or even completely erase a site from the Google index.

This admission is potentially a very large problem for Google because it has maintained that its index rankings are unbiased and are computed from a natural pecking order derived from how other sites find a specific site important.

The Google algorithm is a mathematical expression drawing on the PageRank patented method (named after Larry Page, co-founder). It counts how many links to a web site come from other web sites and determines the importance of that web site for millions of search terms. These rankings are worth huge amounts of money to many web sites and changes in rankings can put companies out of business.

Google is currently being sued by several companies claiming bias in Google results.

Scott Cleland, whose blog "The Precursor" has been critical of Google, writes:

"... this first-ever disclosure by Google that "human raters" manually discriminate in the "quality scores" that determine a website's supposed neutral and unbiased search ranking, exposes a rats nest of conflicts of interest that Google has in its "black box" business model."

He says that antitrust authorities are bound to ask key questions such as:

"If links are a factor in determining the rank of content, and Google's advertising revenue is derived from sites' search rankings, how does Google ensure the human raters of the SDB are not influenced to reward Google-owned content or Google partners' content that Google revenue shares with?"

It's a huge can of worms.

EE Times Relaunches With An Army Of Moderators

Monday evening I was moderating a panel on social media in the semiconductor industry and one of the panelists was Paul Miller, CEO of EE Times Group, a large electronics trade publisher with 1.1 million electronics industry decision makers.

EE Times this week completed a relaunch with a strong emphasis on user content. It has 70 moderators with a goal of recruiting more than 400 moderators.

"We're putting user content at the same level of importance as editorial content," said Mr Miller. "We are the only ones doing something like this."

The move reflects the importance of readers trusting the opinions of other readers. "Engineers like to help each other. But it is important to have high quality content and that's why we believe moderators are important to our success."

EE Times is an interesting media company to watch because it is one of the old school publishers, nearly 40 years old. It has worked hard to reinvent itself and it seems to be paying off.

"We're having our best year in a decade," says Mr Miller. "The pendulum has swing back towards what we are doing and companies are beginning to spend again."

EE Times Group has bolstered its business through many savvy acquisitions. Since 2007, Mr. Miller has spent more than $50m on acquisitions that include events and also a legal services firm in the IP area.

I mentioned that when people ask me what the new media business model will be I say it is a "Heinz 57" model -- 57 varieties of revenues.

"I totally agree," he says. "Some people think Africa is one country but it's a large collection of countries and cultures and that's how varied our business model has become."

He also said, "Content creation is hard. Finding interesting things to write about is very difficult. I have a new appreciation for content creators and we have begun hiring back some people as editors."

- - -

Additional Info:

EE Times unveils network redesign, resurrection of Electronic Buyer's News |

EE Times launches new website | Napier News

Paul Miller (Stumpy1964) on Twitter

MediaWatch Monday: Newspaper Paywalls Are Freemium Business Models

Newspaper paywalls have been criticized by lots of people in the Geek communities and also by popular journalism bloggers such as Clay Shirky, Jeff Jarvis and Jay Rosen but they follow the best practices of "Freemium" business models used by thousands of tech startups.

Freemium has been a successful strategy used by many tech companies. Please see: Emergence Capital: Profitable Lessons From Freemium Business Models - SVW. And: Case Studies in Freemium: Pandora, Dropbox, Evernote, Automattic and MailChimp

Freemium is based on a simple plan: give away a great service for free and up-sell some users to a paid subscription service.

Yet strangely, newspapers are facing huge amounts of criticism for trying to follow a freemium business model.

Clay Shirkey at The Guardian:

"Everyone's waiting to see what will happen with the paywall - it's the big question. But I think it will underperform. On a purely financial calculation, I don't think the numbers add up."

Jeff Jarvis at BuzzMachine:

"Rupert Murdoch has declared surrender. The future defeated him. By building his paywall around Times Newspapers, he has said that he has no new ideas to build advertising."

Surely, it is good for newspapers to explore new business models and they should be encouraged. I've long been an advocate of what I call a "Heinz 57" business model for newspapers. Their future will be defined by how well their publishers can manage multiple revenue streams from a range of sources from advertising to virtual currencies.

Please see: The "Heinz 57" Media Business Model - SVW

Tim Gentry, head of optimization and effectiveness at the Guardian:

"It's all about working out what's right for different businesses. There isn't one right and one wrong path, the fact we are committed to keeping our main site free doesn't mean we don't charge for some digital features."

David Mitchell's recent column:

Rupert Murdoch may be evil, but that doesn't mean his paywall is. The media mogul has been dismissed for introducing his Times paywall, but what if it actually works?

If newspapers are to survive they should be encouraged to try many business models.

- - -

Saturday Post: The Beatnik To Blogger Connection...

It's interesting that blogging started off in the San Francisco area because here, there is a long tradition of new forms of writing. I've long been fascinated with the literature of the Beatniks -- a word coined by San Francisco columnist Herb Caen in 1958.

Here are a few of my prior posts exploring the Beatnik to blogger connection.

For a long while I've felt a strong connection between the culture of the Beat generation and the Blogging generation. Both celebrate a raw and passionate expression, and a use of language that is both novel and designed to snag the reader's social sensibilities.

Both communities found themselves at the forefront of major changes in their societies. And both took advantage of a lapse in the controls that societies usually place on publishing outsider ideas.

In October 1955 Allen Ginsberg performed his "Howl" poem for the first time in public at the "6poets at 6 Gallery" in San Francisco.

The performance was in a dilapidated storefront on Fillmore Street in San Francisco. Yet this small event had a huge effect on the entire country. It eventually led to a show trial on obscenity charges and propelled a small writers colony, dubbed "Beatniks" by San Francisco columnist Herb Caen, into media superstars.

This period of the late 1950s was a tumultuous one because of the escalating Cold War. Although the Beatnik writers had begun developing their ideas and their works in the late 1940s, it was now that their seed fell on fertile ground. Their message of rebellion and a world gone mad was now easily understood and the mechanisms of mass media enabled it wide distribution.

The Beatniks were mostly white middle and upper class kids and completely out of odds with the confined culture that limited nearly all forms of artistic expression. It's a familiar story to us today, of youth in rebellion, but there is much more about the 1950s that is familiar too.

The Second World War had created a massive government propaganda machine with help from newspapers, radio, TV and Hollywood. This seemed necessary during a time of war but it kept on going after the end of the war, and it created a belief that there was a permanent state of war - the Cold War. It's similar to our "unending" state of war against terrorism.

The writers of the Beat generation were initially apolitical, amoral, and hedonistic. That was all you needed to be a rebel in those days. They found they could shakeup society simply through their hedonism, their joy in the creation of literature; and the overall exploration of the edges of our mortal experience.

In the mid 1950s there was a thaw in the Cold war and this helped thaw American society and helped it discover the Beat Generation.

This thaw showed itself in events such as the Hungarian uprising in 1956, which led to liberal reforms in neighboring countries and a general cultural and artistic renaissance.

1956 is the time when my parents managed to escape Poland. There was a slight raising of the Iron Curtain that divided Europe. For the first time Poles were allowed to visit Western countries. My parents queued up for three days, (not to buy an iPhone) to get onto the first organized vacation trips to Vienna, Austria.

They were part of a group of 60 tourists. And once they were in Vienna, they and their friends snuck away in the middle of the night and took a train to Salzburg where they turned themselves in as political refugees.

They were housed in one of the refugee camps still in place from the war. Six months later I was born in that refugee camp and six months later we left for London, where I lived until I moved to the US in 1984.

This period of my parents' escape from Poland and the Beat Generation's newly found success came during a time when there was a global lifting of the normal restraints on politics and the arts.

By the mid-1950s McCarthyism had run its course and the Beatniks found themselves in the vanguard of a new culture, and become a new intelligentsia that felt able to challenge the rules of the day and win. That challenge came in the form of an authentic literature that still holds its power.

Today [March 2006] blogging challenges the rules of today -- is it journalism? Is it rubbish? Is it a new literature? Is it all those things?

I used to think blogging might be a subset of literature, a cousin to journalism. Now, I think of it as a superset of all other forms of writing because all other forms of writing can fit into its format.

We are entering another period of big changes, just as in the late 1950s, and blogging is the most revolutionary and most exciting literature to emerge since the Beat Generation, imho.

- - -

I get to meet the son of Neal Cassady, the most fascinating character of the Beat Generation...

It's a warm Wednesday evening in North Beach, San Francisco, and it is Neal Cassady's 80th birthday, and the remnants of the Beat generation, including Neal Cassady's son John are inside a small storefront.

The event also marked the opening of the Beat Museum. I've lately become very interested in the Beat generation, the mostly East Coast/New York intellectuals that came to San Francisco in the 1950s and were chosen by the media to represent the rebellious youth of those times.

From Wikipedia:

"The members of the Beat Generation were new bohemian libertines, who engaged in a spontaneous, sometimes messy, creativity. The beat writers produced a body of written work controversial both for its advocacy of non-conformity and for its non-conforming style..."

The Beat Generation influence has lasted a long time, reflected in the Hippie and Punk cultures, and I see its influence in blogging too.

The Beat Generation created a literature that was passionate, raw and emotional. Blogging can be like that too.

I've become interested in Neal Cassady who was somewhat of a mysterious character because his writings are rare. Yet Neal Cassady became a very important muse for many, influencing the writings of many of the Beat Generation such as Jack Kerouac, Michael McClure, Allen Ginsberg, Lawrence Ferlinghetti and in later generations Ken Kesey, Tom Wolfe, Hunter S. Thompson and many more. Yet Neal Cassady did not write much himself.

What makes him even more interesting is that Neal Cassady was not of their world -- the privileged, well educated, middle class world of the Beat Generation's intellectuals. He was a working class kid, or rather a skid row kid.

When he was six he came under the care of his alcoholic father, a part-time barber, and lived with him in Denver's skid row. These were depression times and brutal to families living on the edge. He learned the survival skills of a hobo, train hopping, etc.

I had just finished reading a book by Neal Cassady, called the "The First Third" so it was great thrill to chat with his son John.

John Cassady looks to be in his mid-50s, white hair, lots of energy, and he talks a mile a second. I asked him about the book. "That was something we found in the corner of his closet, very little of his writing survived. But I'll tell you what happened to his writings...I don't think this story has been published yet."

Brilliant. A potential scoop.

John tells me that most of his father's written work was lost when he parked his car for two weeks at a friend's place then took off for two or so weeks of carousing -- in the very same North Beach neighborhood that we are standing. When he returned to pick up his car it was gone. And so was nearly all of his father's literary work.

Wow. I wondered if they might still exist in some garage, attic or in the trunk of some car in a junkyard.

John Cassady went on to tell me about how the term "Beatniks" was hated by his father and his friends.

John adds, "The bongo playing, dressed in black, and beret wearing Beatnik was a complete invention of the media. The closest they got to bongos was one time at a rent party just around the corner from here. ...[A rent party charged a modest admission to help the hosts pay their rent]. Jack (Kerouac) was handed some bongos and he noticed the skins needed tightening so he went to the kitchen and lit the gas burner to heat and tighten the skins. He was distracted and he burnt right through the skins."

More stories followed and then Wavy Gravy showed up and held court, telling more stories as people passed a jug of red wine around... Neal Cassady would be very pleased.

- - -

Evelyn Rodriguez, a blogger friend at Crossroads Dispatches, found a fascinating essay about writing authored by Jack Kerouac. In it you can see some of the connection between Beatnik and Blogger.

Here is an extract of Jack Kerouac's writing advice from "Essentials of Spontaneous Prose." It's worth reading the essay in full.

PROCEDURE Time being of the essence in the purity of speech, sketching language is undisturbed flow from the mind of personal secret idea-words, blowing (as per jazz musician) on subject of image.

METHOD No periods separating sentence-structures already arbitrarily riddled by false colons and timid usually needless commas-but the vigorous space dash separating rhetorical breathing (as jazz musician drawing breath between outblown phrases)--"measured pauses which are the essentials of our speech"--"divisions of the sounds we hear"-"time and how to note it down." (William Carlos Williams)

SCOPING Not "selectivity' of expression but following free deviation (association) of mind into limitless blow-on-subject seas of thought, swimming in sea of English with no discipline other than rhythms of rhetorical exhalation and expostulated statement, like a fist coming down on a table with each complete utterance, bang! (the space dash)-Blow as deep as you want-write as deeply, fish as far down as you want, satisfy yourself first, then reader cannot fail to receive telepathic shock and meaning-excitement by same laws operating in his own human mind.

- - -

There are more posts like this in my new book:

In My Humble Opinion

The Lack Of Tech IPOs Is Holding Back Job Expansion Says Leading VC

Robert Ackerman, a leading Silicon Valley venture capitalist and founder of Allegis Capital, says that tech IPOs will remain scarce and that this will curtail job creation in the US.

A continued scarcity of tech IPOs means that the Obama Administration won't be able to count on Silicon Valley startups to help spark a job boom and help alleviate tough economic conditions for millions of unemployed.

Mr. Ackerman told SVW, "These days, tech startups have to rely on being acquired by a larger company once they reach a certain size because there isn't an IPO market to help them recapitalize and grow to the next stage. The largest expansion in jobs for a young company comes in the period after an IPO. If a company is acquired it doesn't lead to the same job growth."

But tech IPOs are unlikely to return to their former high levels because the infrastructure that supported and financed them has changed.

There used to be many boutique investment brokerages that had analysts following companies and sectors. After the dotcom bust many of those boutique brokerages disappeared or were acquired and now there is a massive shortage of analyst coverage. Without analyst coverage there is little liquidity in the trading of shares of small companies, and this discourages larger investors.

Mr. Ackerman said, "In 2007 we sold IronPort to Cisco for $830 million. This is a company that could have easily gone public but we chose to sell it. The lack of analyst coverage was a large factor in that decision."

Sarbanes-Oxely is another issue. Young companies have to bear the very large costs of compliance, reducing their earnings, which makes them look less appealing to investors.

And there are significant challenges in attracting investors in startups because of tax policies.

Mr. Ackerman has spent a lot of time in Washington, D.C. meeting with politicians and lobbying for the VC industry, seeking favorable tax benefits that would encourage investment in innovative companies. He says that venture capital is being regulated in the same way as hedge funds and private equity funds, which is wrong.

"Washington is trying to regulate the risk out of everything. We need policies that encourage risk taking, that encourage risks by entrepreneurs -- that's the way to create jobs."

He says that one staffer admitted to him that, "We don't really understand the issues around investing." His reply was, "That's fine but then don't pass legislation about issues you don't understand."

He is also highly critical of US immigration policies because they restrict US access to the world's most talented people. Attracting the best human capital is essential to maintaining US innovation yet many foreign-born top graduates of US universities are forced to return home.

"Every advanced degree issued by a US university should come with a green card attached," he says. "Otherwise we will lose our lead in innovation to China and India. Investment in startups is already pouring into those countries and it wont be long before it overtakes the US."

Oriella Survey: Journalists Are Working Harder, Better, Faster, Longer

The Oriella PR network concluded its third annual survey of journalists. This year the survey was expanded beyond Western Europe to Eastern Europe, the US and Brazil. More than 770 journalists in 21 countries responded.

Here are some key findings:

- Nearly half of the respondents (46 percent) to this year’s study said they are expected to produce more content than before.

- One in three (30 percent) are working longer hours.

- Nearly half (46 percent) said their work has improved as a result of digital and social media – an increase from 39 percent in 2009.

- Just 17 percent said their job satisfaction had declined as a result.

Many have concerns over the economic effects on their profession:

- Forty percent of the respondents expect advertising revenues to fall by more than a tenth.

- Over half of the respondents expressed the belief that their publications’ current offline formats may fold at some point in the future (2009 figure: 32 percent).

- 40 percent – and more than half of those polled in the U.S., the U.K., Spain, Brazil and Eastern Europe - believed that the transition to new media would create new opportunities.

Their employers are looking for new forms of revenue:

- growing numbers of publications are researching, or have implemented paid-content strategies. Nearly one respondent in four (22 percent) said their publication is researching or has launched smart phone apps in order to deliver paid-content to mobile users.

- 16 percent are researching paid-content for iPads and e-readers.

-Twenty-five percent said their publication is considering flat-rate subscriptions and nearly a third (30 percent) only offer online content to existing print subscribers.

- Fewer than 15 percent of the journalists surveyed said their publications support no social or digital media at all – down from nearly a quarter two years ago.

- Adoption of blogs and Twitter has continued to grow, with 47 percent saying their publications have journalist-authored blogs, and 40 percent saying their publications use Twitter.

Shannon Latta, co-head of the Oriella PR Network and partner at Horn Group, said: “It is clear that publications see the greatest opportunities in their digital operations – not just in terms of offering new platforms for publishing content, but also in terms of making that content pay.”

Ms. Latta added:"As these changes play out in newsrooms, communicators should expect journalists to become more demanding: their content needs to be high quality to attract the revenues media bosses expect."

Her conclusion that journalists will be focused on high quality content runs counter to the current pressure on journalists to "pump" stories out and the move toward large scale "content farms" where large amounts of low quality content is created.

The problem with the current page view economic model is that a page view is a page view and there is no reward for quality.

(The full report can be downloaded from: www.orielladigitaljournalism.com (registration required).)
Additional Info:

The Oriella PR Network is an alliance of 17 communications agencies in 20 countries around the world.

Are Silicon Valley High Fliers Sucking Up All The Talent?

Google, Facebook, Twitter, even Yahoo are all hiring at a rapid rate. The following chart form Indeed shows a hockey stick hiring binge. Are they making it difficult for thousands of Silicon Valley startups to find the engineers and other talent they need to grow? Let me know: foremski at gmail.com.

The Telcos Hate Silicon Valley (And San Francisco)

I first came to San Francisco/Silicon Valley in 1984 and over the years I've marveled at how behind the times this high tech region of the world truly is when it comes to broadband access and cell phone networks.

You would think that the world's capital of high tech would be well served with great broadband and also great cell phone connectivity. Yet it's not.

The same cell phone black spots are still in the same spots year after year; we have the same lack of broadband access in most areas of the Silicon Valley region.

And even though there are many vocal complainers nothing much changes. For example, because there are now so many iPhone users in this region you get to see a lot of chatter and complaints about AT&T's network. Yet AT&T could avoid all this negative publicity if it simply invested more in its network here, and elsewhere such as New York and LA, where the chattering classes of the digerati Tweet and blog.

A relative small investment in key regions and much of AT&Ts negative publicity would pretty much disappear, even if the problems were shifted to other parts of AT&T's network. The digerati don't really care about the the middle states, for instance, AT&T could pull some money from there and invest it in the places where people have the loudest complaints - here. But it doesn't.

For years people living in Silicon Valley have complained about the lack of broadband, and how they can't get decent cell phone coverage in their homes, or have to stand in the street to get a signal.

This all has to be deliberate - how else to explain ignoring such an influential region. There has to be a systematic policy by the Telcos to make sure that Silicon Valley has some of the worst connectivity in the US and that this poor state of connectivity is maintained year after year.

It's statement by the Telcos that says, "We are in control, you can't disrupt us Silicon Valley, with your fancy shmancy technology, and your startups. Try calling your Congressional representative on your cell phone."

I've often said that the Telcos are modern Luddites, interested in keeping us a decade or three behind the rest of the world because it's profitable. The US Telcos charge some of the highest rates in the world for phone, mobile, and cable TV (France Telecom for example, charges just 30 Euros ($37) for all three, I can't get one service for that price.)

The Telcos hate Silicon Valley because it wouldn't take that much extra investment to make sure it's wired right.

How else can it be explained?

IMHO: We Are Becoming Nomadig...

Mobile, fragmented, and unrooted. These days our culture is becoming more mobile because we are more mobile.

We have a vast torrent of mobile digital devices and the infrastructure to allow us to be on the move constantly, to become more nomadic.

We are no longer tied to the desktop PC, nor to the laptop; and we can have access to our digital lives from nearly any device anywhere, anytime and anyplace. Anything with a browser and an Internet connection allows us to access our applications and our files, and our networks of colleagues, friends and families.

We are becoming digitally enabled mobile/nomadic peoples. Airliners will fly the equivalent of the entire population of the earth in the next three years.

We are also more mobile in our thinking, more able to spot the obstacles to progress that regional based gender, ethnic, and economic divisions create.

Is this a return to our nomadic roots?

The first humans lived as nomads for more than 100,000 years, that's how humans spread and colonized new regions, moved across glacial wastelands, and found passes through massive mountain ranges.

Papa was a rolling stone, wherever he laid his hat was his home; and papa before him, and on, and on, into our common ancestry. It's in our blood.

We seem to be going back to our roots and becoming nomadic peoples again -- or maybe it's "nomadig" people: nomads living in digitally enabled groups.

We are no longer tied to a specific geography, and nor is our thinking. We can easily pull up and move from the West coast to the East coast or anywhere else. And we can easily collaborate in teams across huge geographies and multiple time zones.

We often travel thousands of miles in the course of a month, a week, even a day. It doesn't matter where we are physically, we can still maintain our family connections, friendships, and business contacts.

We're in constant motion yet we remain rooted within our online worlds as if we hadn't budged an inch. Our physical address changes more often than our online address.

We're nomads again.

- - -

If you liked this post you can find another just like it next Saturday at 4pm PDT, and also in my new book:

In My Humble Opinion

Saturday Post: The West Coast Corridor: 1400 Miles Of Innovation - Disruptive Creation On The Fault Line

California has by far the largest number of tech workers. According to TechAmerica Foundation's Cyberstates 2010 report, it has 993,000 tech workers, and its largest center is Silicon Valley.

But it's not just Silicon Valley that impresses me. If you fly north along the West Coast starting at San Diego, take a look at what you'll be flying over:

- San Diego, with its large communications, biotechnology and pharmaceutical companies. This is where Qualcomm is based, the world leader in mobile communications technologies.

- Orange County has a very large number of electronics companies. This is where Broadcom, one of the largest chip companies is based.

- Hollywood with its massive entertainment businesses, all incredibly creative and innovative (3-D movies, animation, etc).

- Santa Monica, where the entertainment industry and technology combine to produce leading online media ventures. This is where Yahoo, AOL, and many others have large centers.

- Silicon Valley and San Francisco, with its huge number of tech, biotech, clean tech companies.

- Portland, Oregon, a rapidly expanding tech community anchored by Intel, which is larger here than its HQ in Silicon Valley.

- Seattle, Washington, with Microsoft and all the other tech companies and aerospace.

- Vancouver, British Columbia, and its large software and graphics technology companies.

From San Diego to Vancouver, you'll be flying along a narrow corridor 1400 miles long, packed with some of the world's most innovative and creative communities.

I can't think of any other region anywhere in the world that is crammed with so many incredibly successful companies, generating so many ground-breaking technologies, decade after decade...

But that's not all...

This West Coast Corridor of innovation, is sitting on top of one of the most unstable fault lines in the world. It's the western edge of the North American Plate, part of the Ring of Fire, where 90% of the world's earthquakes occur, and where 75% of all volcanoes are found.

It's one of the most disruptive geological zones on the planet.

Is there a connection between living in an area of such abundant innovation and where physical reality is disrupted so often?

I've always believed that innovation must contain a strong disruptive element otherwise it's not really innovation.

- - -

Backstage Pass- Tom Foremski says disruptive tech linked to fault lines - Sky's Blog

If you liked this post you can find another just like it next Saturday at 4pm PDT, and also in my new book:

In My Humble Opinion

SDForum: My FastPencil Book - "In My Humble Opinion"

The SDForum Awards marked the launch of my first book: "In My Humble Opinion - Notes From A Silicon Valley Watcher." Here is Susan Lucas-Conwell, CEO of SDForum, (and its heart and soul) introducing my book!

The book was commissioned by FastPencil.com, a fast growing online book publisher in Silicon Valley, which has some great social media collaboration tools.

I'd like to thank Steve Wilson, CEO of FastPencil, and Ms. Lucas-Conwell from SDForum, for their generous support, and especially: Seana Norvell from FastPencil, whose patient persistence made this project a reality.

In My Humble Opinion

I'll be publishing extracts from the book next week.

Bill Gates' Nightmare: Web Apps That Perform As Well As Native Apps...

(MSFT executives preview Internet Explorer 9 in San Francisco while Gabe Rivera from Techmeme watches.)

Microsoft previewed Internet Explorer 9 this morning, which has strong support for HTML5 and makes use of hardware acceleration to dramatically improve the performance of video and animation.

Microsoft executives said that web browsers normally only use about 10% of the power of a computer. “We want to make the other 90% available to web applications so that they have the same performance as native applications,” said a Microsoft representative.

The demos showed very high performance of the latest version of Internet Explorer compared with Firefox and Chrome because of the hardware APIs that make use of graphics co-processors in the system. A Microsoft representative said that this approach can dramatically speed up the web browser performance of low-end netbooks and other systems because the technique makes use of graphics co-processors instead of software based decoding of video and graphics.

Future Firefox and Chrome will also be able to make use of the hardware APIs.

What was especially interesting was that Microsoft is trying to provide web applications with the same performance as native applications.

This is exactly the nightmare scenario that Bill Gates, co-founder of Microsoft, feared would happen, that the web browser could substitute for the operating system, and that's why he aggressively went after Netscape Communications in the 1990s, resulting in an anti-trust conviction against Microsoft.

Although Microsoft is still making use of its Windows operating system combined with IE9, it potentially separates the browser from the underlying platform.

This could enable non-Microsoft operating systems and non-Intel compatible hardware platforms to run high performance web applications at native speeds.

It’s unclear if Microsoft intends to move in that direction but it has certainly opened a Pandora’s Box with its support for graphics hardware accelerated web browsers.

Nathan Brookwood, principal analyst at Insight 64, said that tablet platforms based on ARM microprocessors, making use of graphics hardware accelerated web browsers, could become very competitive with notebook and netbook platforms based on Intel chips.

“Market research firms such as Gartner are still tracking tablet sales along with PCs but this is clearly a different class of computer,” said Mr Brookwood. Apple’s iPad is based on a custom ARM microprocessor.

Intel’s Atom is positioned as a competitor to ARM but it has failed to win any significant customers, and Atom isn’t customizable in the same way as ARM chips. Intel had an agreement with TSMC, the world’s largest chip foundry, to produce custom versions of Atom but it could find no customers, largely because Intel reserved the right to approve customers.

This provision was in place to prevent Nvidia, the world’s largest discrete graphics chip maker and a competitor to Intel in graphics, from using Atom in custom chips. But it also was a deal breaker for other companies.

ARM, based in the UK, has no restrictions on who is allowed to use its designs.

Mr Brookwood said he expects Google to produce a version of ARM optimized for Android operating system smartphones, and tablet computers. In April, Google acquired chip company Agnilux, which is staffed by engineers from PA Semiconductor, a company Apple acquired to build its A4 ARM custom chip used in iPad and in future iPhones.

More info:

Microsoft’s next web browser will display rich 3D graphics (demo videos) | VentureBeat

Intel Wrestles ARM For Smartphone Markets With Latest Atom

Analysis: Intel Faces Challenge In Smartphone Markets As Alliance with TSMC “Fizzles”

Google Dislikes Marketing And PR - Which Is Why Its New Services Fail

Google has had a long string of failures. It encourages its engineers to spend 20% of their time developing side projects but when those projects reach launch stage, their take-off is nearly always very disappointing.

Take a look at some of Google's failures.

Colin Gibbs reporting on GigaOM:

• Google Lively was a web-based virtual environment that allowed as many as 20 people to sit in a virtual room and chat with each other. The offering debuted in July 2008 only to have Google pull the plug a mere four months later.
  
  
• Google Print Ads was dropped earlier this year after the company's vision of bringing web-like automation to the world of traditional media failed to materialize. The effort went belly-up just three weeks before the death of Google Audio Ads, which ended a three-year run in February after the company failed to gain traction in the radio ad game.
  
  
• Google Answers spent a year in beta before a full-blown launch in May 2003, but the effort to create a fee-based knowledge market never gained much traction outside a small base of users and the service was dropped in late 2006.
  
  
• The social networking site Orkut launched early in 2004 as an independent project of noted Google developer Orkut Büyükkökten and has caught fire in Brazil, a market that accounts for roughly 50 percent of its membership. The site reportedly claims roughly 100 million users, which is impressive, but Google can't be happy that its effort is virtually unknown in Europe and North America while Facebook, LinkedIn, MySpace and others have gained such impressive traction.
  
  
• Google Catalog Search debuted in 2001 as a way for consumers to go online to check out their favorite print catalogs that had been scanned and uploaded. Of course, retailers were already taking their inventories online themselves, and the effort was put to rest earlier this year.
  
  
• Google Health was released as a beta test in May 2008, but the service has yet to find much of an audience among insurers or the general public. Which may have something to do with the combination of the words "health" and "beta test."
  
  
• The location-based service Dodgeball was shut down in 2009 after Google had acquired it four years earlier, and while Google continues to operate Jaiku - a social networking service it picked up in 2007 -- the company has effectively abandoned the project. The technologies and expertise from both startups is being incorporated into other Google businesses and projects, however.

I can easily add a lot more to this list. Google Video; Google's acquisition of Jot; Google Wave; Knol; Checkout; Catalogs; Base; Squared; and Google Buzz could be the latest.

Google has tremendous scale so it is puzzling to some why so many of its services should have been such failures. But, it isn't that surprising if you consider its culture because Google believes that good products will find their users based on their own merits.

What Google fails to recognize is that it needs to assign marketing support. Without marketing support it is wasting the cream of its engineering talent.

Have you seen any marketing for Google services beyond an occasional text ad?

I've never been contacted by any PR companies, or Google corporate comms people to talk about a new Google service or product. Yet I receive countless such invitations from smaller companies trying to get media attention.

Google's failure to recognize the need for effective marketing is deep rooted within its engineering culture. Engineers don't believe in marketing. Many software engineers will deride a company's success (e.g Apple) as "it's just marketing." It makes it seems as if "marketing" is something that can be easily acquired and put to good use.

But marketing is not easy, and successful marketing is not a commodity (it's interesting that software engineers are (becoming) a commodity...)

Google's own success grew out of a non-marketing approach; Google search was simply a better product. Google is proud that it didn't use marketing to become a success.

But times are different today. There is a tremendous amount of media already on the Internet and this level will rise to a media tsunami as companies and individuals make full use of their media publishing capabilities. The media tsunami will drown less able companies, products, and services.

Effective marketing is going to become ever more important, and more expensive, simply because the media tsunami is raising the bar for everyone to stand out.

Company culture is very difficult to change and it changes slowly and that's why Google will continue to launch new services, and it will continue to fail because it doesn't understand the need for follow up marketing and PR.

And that means it will continue to remain a one-trick pony.

IBM Study: Millennials And The New Corporate Leaders - Social Responsibility Is Essential

Irving Wladawsky-Berger, a former senior executive at IBM, responsible for strategy, reports on two recent studies: 1500 face-to-face interviews with CEOs: 2010 Global CEO Study; and 3,600 mostly 20 to 25 year old undergraduates and graduates in 40 countries: Inheriting a Complex World: Future Leaders Envision Sharing the Planet.

The students were asked many of the same questions as the CEOs.

This made it easier to look for commonalities and differences between these two generations - one at the top of their careers, the other about to start out on theirs.

The students are from a much different world than the CEOs.

These students have no nostalgia for a simpler era, because they never knew one. They grew up in a complex world. They intuitively understand the tenets of globalization.
. . .
More than 90 percent of the students we surveyed were born after 1980, so for them, games, music, mail and data have almost always been digital. They came of age in a world of interconnections, even hyperconnections.
. . .
They understand implicitly and intuitively that economies, societies, governments and organizations are made up of interconnecting networks. Once viewed as discrete and independent, it is clear now that these spheres - both manmade and natural - connect in a myriad of ways. We may not have even needed to define complexity: they seemed so familiar with the term for an interconnected, multifaceted environment."

There were some similarities between the responses of both groups:

"Overall, creativity was the leadership quality most frequently selected by both groups. Students and CEOs alike viewed creative leadership in terms of disrupting the status quo and taking bold rather than incremental steps.

But there were also strong differences...

... that were entirely consistent with students' values about sharing the earth. Among the nine leadership traits CEOs and students could choose from, students placed a higher emphasis on only two leadership qualities - global thinking and a focus on sustainability. Students were 46 percent more likely than CEOs to view global thinking as a top leadership quality. And they were 35 percent more likely to include sustainability in the top three."
Beliefs about globalization and sustainability were even more defining. We found students were much more concerned with these issues than CEOs, and most importantly, saw them as inherently connected."
...
Based on their comments, it was clear that students view globalization and sustainability as intertwined themes. They believe that a global citizen has responsibilities to others in the world, and that an emphasis on sustainability makes one better appreciate the impact of globalization.

"Students' views were stronger than CEOs on every one of the ten questions relating to these topics, and, as their comments made clear, called for bold and immediate action. They spoke about a new relationship among societies and business, economies and governments, and the need for a new definition of 'value' on what they see as a shared planet."

When asked for the top three factors that will impact organizations, 23 percent of CEOs mentioned globalization and 21 percent environmental issues, ranking them number 6 and 7 among their top issues.
For students, globalization was the highest ranked issue, voted on by 55 percent. Environmental issues were voted on by 42 percent of students and ranked fourth.

The IBM study concluded that universities are behind the times in educating "students in the wider meaning of sustainability, to reflect not just environmental concerns but also the economic, social and cultural implications."

And companies "need to be very sensitive to the increased expectations in corporate social responsibility of this new generation."

More here: Irving Wladawsky-Berger: Growing Up in a Complex World

Tech Firms Choosing San Francisco Over Palo Alto

The San Francisco Chronicle reports that tech firms have become a chief driver for office space in San Francisco.

Tech firms making S.F. new home

Many of the tenants are swelling homegrown businesses like Twitter, while others are relocating from Silicon Valley or outside the Bay Area. As of June 15, 83 technology companies were in the market, seeking 1.5 million square feet of space, up 51 percent since the financial crash in fall 2008, according to brokerage firm Jones Lang LaSalle, which regularly tracks the market.

Zynga, the social gaming company, is one of the largest companies looking for San Francisco office space, as much as 300,000 square feet. Twitter has expanded six times and is looking for about another 100,000 square feet.

The lure is low prices and engineering talent.

South of Market rents that are about half of Palo Alto's right now, the desire to cluster near success stories like Zynga and Twitter and the broader shift to the Web 2.0 world.

...

When David Sacks, chief executive of Yammer, asked his developers whether they should relocate the microblogging service for businesses to Palo Alto or San Francisco, the latter won hands down. This represents a distinct shift from a decade earlier when he was chief operating officer of PayPal in Palo Alto.

"There's a lot more engineering talent living in San Francisco now," he said. "The balance of power may have shifted."

Brazil Diary Conclusion - From Sao Paulo To Rio...

View from Cesar Park hotel, Ipanema, Rio de Janiero.

(I'm back from Brazil and finishing up with some observations and conversations from my recent trip visiting with Brazilian IT companies.)

Brazil, like many developing countries, has a First World country attached to a poor country. Brazilian IT is very sophisticated and world class. We attended a very large trade show focused on banking technology services. It looked the same as any trade show in the US.

After Sao Paulo, we took the evening flight to Rio de Janeiro. The Brazilians in our group were perking up visibly as we took the coach from the airport to our hotel. The Brazilians love Rio, one of them explained that it's the equivalent of Miami, a place where people work hard so that they can play hard.

We couldn't see much of Rio because it was night but you could hear thump and the swoosh of the surf from the beach (Ipanema) across the street from our hotel.

I had a great conversation at diner with from John Dohm, VP with True Religion. It turns out he was an early collaborator with Ray Kurzweil on his first book about the Singularity (please see: Is "The Singularity" The Elite Geeks' Version Of "The Rapture"?) But isn't much of a supporter anymore.

The next day we met with government officials and heard about the many financial and tax incentives given to companies that invest in the state of Rio de Janeiro. We also heard about Brazil's thriving economy, the eighth largest and growing 4 to 5% a year; it's on track to become the fifth largest economy in the world by 2014 when it hosts the World Cup, (pushing out Italy).

- That evening we celebrated the end of the trip with a short cruise around the bay. When the samba band started playing, the Brazilians in our group become very excited and started dancing. "This music is our proudest export," one of them said.

- Alfredo Neves, Director for Global Clients and Finance at CPM Braxis, said that Brazil's work culture has changed a lot and that there are even small startups funded by angels. It used to be that finding a job working for the government was the top goal for many Brazilians and if you passed a key exam, you would be employed for life. But that's changing and people want to work for private companies.

- I spoke with Heloisa Pereira, one of the organizers from SP4 Communications, and also studying for a PH.d in Sao Paulo. Her thesis is on cyber culture. She's looking into the phenomenon of Brazilians adopting the online persona of famous people, for example, Demi Moore. She says that there are huge numbers of people on social networks in Brazil with fake personas. Some are more popular than the "real" people.

But she concedes that by the time she finishes with her PH.d in four years time, things might have changed completely. Cyber culture can have a very short lifespan.

She says that Brazilians without PCs will spend an hour or more a day at Internet cafes to keep up with their social networks. Google's Orkut is far more popular than Facebook in Brazil.

- I was impressed with Brazil and its people. It was surprisingly European and very urban. Brazilians tend to live in large cities, Sao Paulo has about 23 million people, making it the third largest city in the world.

- The food is surprisingly European too, with strong Italian and German influences. I couldn't find a single spicy dish.

- Sao Paulo is where business in Brazil happens, it's New York. And the "Paulistas" are proud that it's where business gets done.

- Sao Paulo isn't one bit as glamorous as Rio, which is the media and cultural capital of Brazil, but it does have a lot of cultural activities, with theater, films, art galleries, etc. "You can find lots of things to do every night."

It was great to meet UK journalists Mark Hillary, and Angelica Mari I wanted to thank the hard work of the organizers of the trip, Thais Trapp, and the many others; and I look forward to further contact with Brazil and its tech sector.

- - -

Please see:

There's a Lot of IT in Brazil: Brasscom And The South American IT Industry - SVW

Interview: Berthier Ribeiro-Neto Head of Engineering at Google Brazil

A Pearltrees Report On Brazil's Tech Sector Growth

Brazil Diary Day 1: It's A Long Way To Brazil...

Brazil Diary Day 2: The World Is Flatly The Same...Is Sao Paulo A City From The Future?

Global IT Outsourcing: Here Is How Brazil Can Differentiate Itself

Killer Marketing: Spirited Vigil Outside Apple Store SF

I went to the vigil for dead Foxconn workers outside the Apple store in San Francisco Thursday evening, organized by the Chinese Progressive Association.

Chris Knight from Cohn & Wolfe came with me and snapped some pictures (above and the next one.)

There were about 50 people, a lot of high school kids, taking part in the demonstration and handing out leaflets that urged people to email sjobs@apple.com (using an iPad in the store!).

The leaflet asked that Apple work with Foxconn to adopt more humane production schedules; to facilitate the formation of a trade union; and improve overall working conditions.

The message was to tell Apple "you expect better." Or, as I like to put it, Apple should "Think Different - Think Fair."

Please see:

"Think Fair" A Potential Apple Follow Up to "Think Different"

Analysis: Here's How Apple Could Become The First Fair Trade Tech Company

Foxconn Suicides: Is It Time For "Fair Trade" Electronics? Would You Buy A "Fair Trade" iPhone?

Loren Feldman - East Coast Critic Of Tech Media Worth Following

I’m a big fan of Loren Feldman and his 1938Media site because he calls the Emperor's new clothes more often than anyone I know.

He is not everyone’s cup of tea but there are many people that support his views but can’t come out publicly because of their position in PR, or within tech companies, where support for Loren could be used against them, and has been used against them. Merely retweeting someone else retweeting a Loren post has gotten at least one person I know into trouble.

He also has a hilarious sock puppet show series that spoofs many well known personalities.

Puppets

Dave Winer

Julia Allison

Larry and Sergey

Loic

Mark Zuckerberg

Mike Arrington

Pete Cashmore

Salaam E. Baloney

Scoble

Shel

Steve Ballmer

Waltr Kronkyte

Loren is part entertainer, part astute commentator, especially on the West Coast tech scene, and the publications that cover them. He has been critical of Michael Arrington, the publisher of Techcrunch many times, and also of “Business Insider” the New York city based publication edited by Henry Blodget, the infamous Merril Lynch analyst; a superstar analyst of the dotcom boom years but now barred from the securities industry.

Here is Loren Feldman’s latest post critical of Business Insider and Henry Blodget. I recommend you follow him on Twitter: http://twitter.com/1938media

You Have To Be Joking... Steve Case Ridicules AOL's $850m Bebo Buy

I couldn’t believe this:

Steve Case, the former head of AOL Tweeted:

“AOL buying Bebo for $850 million and then selling 2 years later for $10 million doesn’t seem like a winning strategy.”

Is this a (Steve) case of a pot calling the kettle black?

The merger of AOL and Time Warner is one of the greatest failures in M&A history.

New York Times May 2009:

When the merger was announced in 2000, the two companies had a combined market value of more than $300 billion.

By the time the deal was consummated in 2001, with Internet stocks plunging and recession taking hold, that had fallen more than $100 billion. Today, the combined market capitalization of Time Warner and the new Time Warner Cable is less than $40 billion.

Steve Case has a nerve criticizing the Bebo buy…

AOL/Time Warner went from $300bn to $40bn. Today Time Warner is worth $19.7bn and AOL is $2.4bn. Combined worth is $22.1bn. Wow. That’s a far, far, bigger loss than Bebo.

Steve Case initiated the Time Warner deal. And it was a great deal for AOL and for him. He walked away with a lot of money.

You would think with such a disaster on his resume, Mr. Case would refrain from commenting on the AOL/Bebo deal. Clearly, Mr Case’s hubris distances him from AOL’s subsequent adventures. Company culture is set by its leaders, imho.

Is "The Singularity" The Elite Geeks' Version Of "The Rapture"?

The Singularity is a belief that our technology will inevitably collide with our biology, and that this will give us mastery over our mortality.

We will be able to cure diseases, stop our aging, and also control our senses with augmented created experiences. The resolution of those augmented experiences would be indistinguishable from the natural world.

We will be able to create a reality that is indistinguishable from our "natural" reality. We will be able to choose the "matrix" as Hollywood knows it (Singularitans hate that term).

. . .

Ashlee Vance in the The New York Times wrote an interesting report today on The Singularity Movement:

In the Singularity Movement, Humans Are So Yesterday - NYTimes.com

The article points to how much support there is from Google founders and others, such as top investor Peter Thiel.

"Some of Silicon Valley's smartest and wealthiest people have embraced the Singularity. They believe that technology may be the only way to solve the world's ills, while also allowing people to seize control of the evolutionary process. For those who haven't noticed, the Valley's most-celebrated company -- Google -- works daily on building a giant brain that harnesses the thinking power of humans in order to surpass the thinking power of humans. "

"Larry Page, Google's other co-founder, helped set up Singularity University in 2008, and the company has supported it with more than $250,000 in donations. Some of Google's earliest employees are, thanks to personal donations of $100,000 each, among the university's "founding circle." (Mr. Page did not respond to interview requests.) "

. . ."We will transcend all of the limitations of our biology," says Raymond Kurzweil, the inventor and businessman who is the Singularity's most ubiquitous spokesman and boasts that he intends to live for hundreds of years and resurrect the dead, including his own father."

. . ." Peter A. Thiel, a co-founder of PayPal and a major investor in Facebook, is a Singularity devotee who offers a "Singularity or bust" scenario."

As in the Christian Rapture, only a few will get there:

..."Andrew Orlowski, a British journalist who has written extensively on techno-utopianism. "It is rich people building a lifeboat and getting off the ship."

It's a vision of a select few living forever in an utopian paradise free of mortal concerns. Is "The Singularity" the uber-geeks' version of "The Rapture"? It certainly shares key themes and beliefs.

- - -

Ray Kurzweil is the chief spokesperson for The Singularity movement. I went to see him speak at the Herbst Theater in San Francisco a few years ago.

Mr. Kurzweil had to take a break from ingesting more than 350 micro-nutrients a-day. He takes these to help him stay alive until we reach the early stages of the Singularity - that's one micro-nutrient every 3 minutes.

He spoke for about an hour, or rather, he showed graphs for about an hour. Most of his graphs were logarithmic scale and all his graphs went up. They showed the inevitable progress of technology and science. And all of them converged in about 15 to 20 years, the point of The Singularity.

He said that if we can avoid encountering our mortal nature over the coming ten years or so, we will probably make it to The Singularity.

- - -

As far as my personal choice of "raptures" I'll go with RK's secular "The Singularity" I think we will get there faster than the Christians with their tech-free approach to salvation. Jewish people are still waiting and they are next in line.

- - -

BTW: There is an unique web service for Christians:

Rapture Letters

"The rapture: When all the believers in Jesus Christ, who have been born again, are taken up to heaven.

After the rapture, there will be a lot of speculation as to why millions of people have just disappeared.

... We have written a computer program to do just that. It will send an Electronic Message (e-mail) to whomever you want after the rapture has taken place, and you and I have been taken to heaven."

The Singularity geeks will send out their own emails. And there will also be a Google alert.

Global IT Outsourcing: Here Is How Brazil Can Differentiate Itself

I'm enjoying meeting Brazilian IT services companies and various IT associations as part of my trip this week to Sao Paulo and Rio de Janeiro.

The Brazilian IT sector is very sophisticated and it wants its share of the global outsourcing pie -- the same pie that India and China enjoy.

This morning we heard presentations from several very senior government officials from the state of Rio de Janeiro. The overall message was that Rio de Janeiro has 8 out of ten of the country's top science and technology schools; it produces 14,000 PH.d graduates a year; it has expertise in BPO and call centers; there are science and technology business parks; there is government financing, R&D credits, etc.

It's very much the same message that every other place around the world is using in their efforts to attract IT services business.

But when there are so many regions around the world now offering pretty much the same things, how do you distinguish yourself? That was one of the questions put to the Brazilian officials and they didn't have a good answer.

Antonio Gill, president of Brasscom, the Brazilian IT industry association, finished up the meeting by saying that there is a lot more work that needs to be done in getting the message out to the world that Brazil has a sophisticated IT services sector that is the equal of India or China.

"We are not very good at marketing," he lamented.

As he finished, the curtains in the conference room were rolled back and sunlight poured in through the large windows. And the vista was breathtaking.

We were right across from the iconic beaches of Ipanema, golden sands stretching for miles, the surf tumbling in, thudding and whooshing, people relaxing, playing volleyball, blue skies and blue water. Wow.

It was my first real view of Rio de Janeiro because we had arrived late the previous evening. I'd seen plenty of pictures of Rio but none captured how stunning this city really is.

Endless golden beaches ring the bay, similar to San Francisco bay, but this bay is studded with spectacular islands that tower hundreds of feet above the water. Behind, there is a ring of steep, lush green, cathedral-like mountains, on which one stands the massive statue of Christ the Redeemer.

And that's what struck me as the best way Brazil can distinguish its IT industries from any other place in the world:

"We have Rio de Janeiro."

After all, when all things are equal, why would you want to work with outsourcing teams in India, or China, when you could have Rio?!

Consider this:

- India and China take a full day and night of travel to reach and you arrive horribly exhausted and unproductive.

- You have to deal with massive jet lag.

- You are stuck in places where you can barely see the sun through the pollution.

- It takes another 24 hours of travel to get home, you arrive horribly exhausted and with massive jet lag and are unproductive for days.

- You have to stay up late at night to communicate with your teams in India or China.

- You have to deal with significant cultural differences both in business management and popular culture, which affects communications.

Brazil has the same things that India and China have: established IT services firms; a highly educated workforce; lots of engineering graduates; tax and financial incentives.

But also:

- Rio de Janeiro and Sao Paulo are within one to four hours of the same time zone as US companies.

- There's no need for US managers to stay up late at night to talk with their teams.

- Travel time is a lot shorter than India or China.

- Hardly any jet lag coming or returning which means you are productive instantly on arrival.

- Brazilians have a very good understanding of US culture and especially business culture, which makes for far better collboration.

- And the most important selling point - Brazil has Rio de Janeiro.

Here is my contribution to the marketing of Brazilian IT services in the US, just use this slogan: "It's Brazil" along with images of Rio.

You can even play around with the "IT" in Information Technology: "IT's Brazil" ... along with some appropriate images of the great lifestyle in Rio.

In a similar way as in the movie "Spinal Tap," when the lead guitarist shows of his custom amps that have dials that go to "11," and is asked questions about what makes them special compared with other amps, he keeps saying in a puzzled tone, "Yes, but these go to 11..."

If companies looking for IT outsourcing services ask questions, comparisons with Bangalore, etc, just repeat in a slightly puzzled tone, "Yes, but this is Brazil..." Because Rio takes Brazil to 11.

In the global IT outsourcing marketplace, when all things are equal -- as they trend towards that point anyway -- great lifestyle will be the next best selling point. And on this Rio de Janeiro can't be beat.

As soon as Brazilian IT services companies figure this out, that the answer to their marketing problem is staring them in the face, they will do very well indeed. They just need to roll back the curtains.

Brazil Diary Day 2: The World Is Flatly The Same...Is Sao Paulo A City From The Future?

"So how do you like Brazil," I was asked by one of the hard working organizers of the Brasscom IT Forum conference.

"I hope to see some of it before I go back to San Francisco," I replied.

The world is flat, flatly the same when viewed as a business traveller. All hotel rooms, airports, restaurants, and conference centers look the same. And the people look the same too, same dress, same culture...same.

I went for a walk but there wasn't much in the area around the Sheraton World Trade Center in Sao Paulo, where I was staying, just highways, and light industry, it could have been Newark, New Jersey, it looked like Newark. Surely Brazil should feel differently.

Next to the hotel I found a large design center with dozens of showrooms focused on high-end designer goods: furniture, electronics, interior decor, bathrooms, and more. Beautiful designs, very chic, and ultra-modern. I could have been in Milan, Italy rather than Brazil, where the average income is about $5,000.

. . . Brazil's fast growing consumer class

Sao Paulo is a massive city with about 23 million population, the third largest in the world. And it has a massive economic divide between its residents. It doesn't have the 750 favelas (shanty towns) that Rio de Janeiro has, but it has the same contrast between wealth and poverty, side by side.

But change is happening. Just half-a-block from a Lamborghini dealership with its hugely expensive, shiny cars, I saw a KIA dealership - the middle class is growing quickly thanks to Brazil's excellent economic growth. And that's drawing a lot of firms to Brazil's increasingly propserous consumers.

I spoke with Julia Santos, Head of Worldwide Strategic Outsourcing at Johnson & Johnson. She said that J&J has been in Brazil since 1933, which helps now that the markets for J&J products are growing because the company understands the culture.

"What sells here wouldn't sell in say, India or China," she says. "There's different scents, and other preferences. We also use Brazilian names for our brands."

She also works with Brazilian companies producing products for J&J and she says the cultural aspects of working with Brazilians are very good. "There is a can-do attitude here. The people work well together and they will do whatever needs to be done to get the job done."

. . . A city from the future?

Maybe Sao Paulo is a city from the future, because the way the economic divide is widening in the US, it won't be long before we get our own favelas and underclass.

In the same way that developing countries can vault ahead of the developed world with its legacy infrastructures, maybe Sao Paulo is ahead of us as a city blueprint -- we have yet to build our favelas and disenfranchise our lower economic classes but we're working on it.

The economic divide provides Sao Paulo's businesses with a lot of economic advantages: the city has a young, very well educated class that is as dynamic and ambitious as any in the world; and it also has a large and cheap workforce it can tap from its underclass.

Living costs are low, that means this workforce can compete with the best. And health and safety issues aren't much of an issue -- a further competitive advantage.

. . . Steak again

In the evening we visit one of the most famous restaurants in Sao Paulo, Figueira Rubayat. It is built around a huge fig tree that looks more like a banyan tree with multiple trunks.

The steaks here are world famous and I can taste why. Perfectly grilled, slight char with a very rare, melt-in-your-mouth center.

At dinner some of the attendees of the Gartner portion of the conference are keen to tell me how they very strongly disagree with the presentation of the Gartner analysts on outsourcing. And these are CIOs at large companies.

Interview: Berthier Ribeiro-Neto Head of Engineering at Google Brazil

(I'm in Brazil all week reporting on the IT industries of South America.)

Berthier Ribeiro-Neto received a Ph.D degree in Computer Science from UCLA in 1995. He is the co-author of "Modern Information Retrieval." In 1999 he co-founded Akwan Information Technologies, a search engine focused on Brazil. Google acquired the company in 2005.

Here are some notes from our conversation:

- We built a search engine funded by the salaries of professors, probably not a good idea but we quickly got a lot of traffic. Google acquired us in 2005 for the people and not our technology. Google closed our search engine.

-Google's acquisition validated the quality of the skilled engineers in Brazil and growth has been rapid here and we now have more than 300 people.

- My group is responsible for global projects. It only makes sense for Google to work on technologies that can be scaled globally. My group works on Orkut, the social network, which is very popular here; targeted advertising; and maps.

- The Internet market is growing very rapidly in Brazil, we have more than 70 million Brazilian Internet users today (36% of population.) And large advertisers are rapidly moving to the Internet.

- Brazil does not have a VC community and investors do not understand the Internet market. This is Brazil's biggest weakness. If you have to grow from your own revenues then you will grow slowly.

- We strongly believe in open APIs and not what Facebook is doing. Closing APIS will work against companies. The most successful example of an open API is email - built on open standards. It would be ridiculous if you could not send an email to someone unless you were both on the same network.

- Google has been focused on Internet consumers but we do see good opportunities in business services. There are issues of compatibility. We are working hard in that area and you will soon see some announcements.

- Most of the innovation on the Internet won't come from Google, it will come from elsewhere, it cannot be predicted. Brazil will play its part.

There's a Lot of IT in Brazil: Brasscom And The South American IT Industry

I'm spending this week in Brazil at a conference organized by the world's largest IT analyst firm Gartner, and sponsored by Brasscom, (Brazilian Association of Information Technology and Communication Companies)

South American IT companies have started cropping up on my radar screen over the past year so I'm keen to find out more about this sector.

This week I will be reporting on what is happening in Brazil, and also in Argentina, and Chile.

I spoke with Richard Matlus, senior VP of Outsourcing at Gartner. He said Brazil and other Latin American countries are becoming important in key sectors such as providing infrastructure outsourcing support services.

He speaks to lot of users of these services. He says that US companies like working with Latin American companies because:

- The quality is very good. He doesn't recommend India for prime time zone outsourced infrastructure support services.

- It helps a lot that the time zones in South America are so close to the US, this means that the prime times are covered in the same time zones. If most of your customers are in a certain time zone, you can have your best quality people working in the same shift, which is very important for customer satisfaction.

Mr Matlus says that this is one of the largest cited advantages among clients. His clients tend to use teams in India for the other two less important daily shifts.

- South Americans speak good English but, more importantly, they also have a better at understanding the culture of the US -- that makes a very big difference in terms of management and the quality of support.

I also spoke with Ricardo Asse, a senior advisor for Brasscom, (Brazilian Association of Information Technology and Communication Companies).

Here are some notes from our discussion:

- Brasscom has been around for 6 years but it is now hitting its stride in the last couple of years, with lots of members and it is better focused on helping to promote Brazil's IT industry.

- Sao Paulo (where the Brasscom/Gartner conference is located) is the South American HQ for nearly every major US corporation, IBM has been here more than 60 years. There is a long tradition of working with US companies.

- Brazil, Argentina, and Chile are discussing cooperating in an umbrella organization to co-promote each other's IT sectors.

Mr Asse says that each country has strengths in technology and IT. There is much to be gained from aligning those IT resources into a united organization that can work with multinational companies across a broad spectrum of services.

I'll have more South American based posts all this week...

Does Mark Zuckerberg Need Adult Supervision Like Sergey and Larry?

Mark Zuckerberg, CEO of Facebook, is just 26 and has done very well but his young age does often show itself in various ways. He's put his foot in his mouth several times over privacy and has had mixed reviews on his performance in high profile interviews.

Here is Chris Pirillo:

Things didn't go well for Mark Zuckerberg when he appeared on the D8 stage two days ago. From all angles, he appeared to be fumbling his way through the answers he was giving. He broke out into a cold sweat and had to remove his trademark hoodie. Bloggers around the globe took stabs at Zuck and his team based on his performance.

Today, I have seen several posts where people are beginning to wonder whether or not Zuckerberg should continue in his current role with the company he founded as a college student. Likely the most prolific comes from Shel Israel.

Does Mr Zuckerberg need "adult supervision?"

Google's founders, Sergey Brin and Larry Page were at about that same age when Google's investors, John Doerr and Michael Moritz decided that they needed adult supervision. Eric Schmidt was brought in as co-CEO in 2001.

Every day brings Facebook closer to its eventual IPO. Its top investors might be wondering if Mr Zuckerberg needs someone to be his Eric Schmidt. Mr Schmidt did a great job in preparing Google for a stellar IPO.

And adult supervision isn't such a bad thing, Messrs Brin and Page still have theirs and they are now 36 years old.

Who would make a good Eric Schmidt to Mark Zuckerberg?

How about Scott McNealy the former head of Sun Microsystems?

I saw him recently at Verisign's celebration of 25 years of making loads of money from its dotcom registry services, in San Francisco's city hall. He's out of work following the Oracle acquisition so he has the time. He seemed a bit bored and listless but a new challenge might perk him up.

Mr McNealy isn't the most tactful person and he never outgrew his fratboy sensibilities -- he'd probably get along really well with Mr Zuckerberg.

He could become the lightning rod for Facebook in a similar way that Mr Schmidt is for Google. And he knows how to run a very large publicly traded company. They would be a great match, imho.

(Mr Schmidt is also from Sun.)

EC=MC: Edelman Hires FT Journalist, Preaches Media Publishing To Clients

Thanks to everyone for pointing me to this article at The Independent, the UK newspaper:

PR stunt or the new journalism?: The titans of public relations are going direct to viewers and readers - Press, Media - The Independent

...Sambrook is convinced that Edelman's clients must take their message directly to the consumer. "The mantra is that every company has to be a media company in their own right, telling their own stories not just through websites but through branded entertainment, video, iPad and mobile applications," he says.

Here are some more extracts:

At the forefront of this change is Edelman, an American-owned PR firm with 51 offices around the world. When in February Edelman hired Richard Sambrook, the former head of BBC News, the audacious appointment caused surprise in all disciplines of the media.

It wasn't just that Sambrook was a corporation stalwart of 30 years standing, but that Edelman had given him an intriguing new title: Chief Content Officer. Last week the company went further by hiring as its new head of strategy the influential business journalist Stefan Stern, a marquee name on the Financial Times.

All good stuff.

However, knowing how I know PR people to be, they love to control every message. Journalists are trained to be fair in their reporting and question the claims of companies and executives. That's not something you'll find within Edelman or any of the large PR agencies.

PR agencies need to change too. Simply hiring journalists without changing their internal culture won't change a thing.

Please see: Every Company is a Media Company - EC=MC - the transformative equation for business.

"Think Fair" A Potential Apple Follow Up to "Think Different"

Who will be the first Fair Trade tech company? I think Apple could do it: Analysis: Here's How Apple Could Become The First Fair Trade Tech Company.

And here is the perfect follow up to Apple's "Think Different" marketing campaign: "Think Fair."

The "Think Different" advertising slogan was introduced in 1997 and it became insanely successful, it was credited with rejuvenating the Apple brand and used for about five years. "Think Fair" could easily run five years.

If Apple products were Fair Trade electronics, they would marry great design with great ethics -- that's a killer combination. Right now, the Apple iPad is associated with suicides. Earlier today I retweeted this:"@drachgenabe: One suicide death per 200,000 sold iPad." That's the wrong kind of killer marketing.

"Think Fair" Apple products would do wonders for the user experience; there's nothing wrong with warm and fuzzy.

The only problem: Apple fanboys would become even more annoying than they are now. They would exude a torrent of moral superiority from every pore of their bodies. It could be over powering -- especially in confined spaces.

Analysis: Here's How Apple Could Become The First Fair Trade Tech Company

(Image by Damien Van Achter)
In the wake of the Foxconn suicides I've asked Who will be the first "Fair Trade" tech company? Moving beyond "green"...

Becoming the first Fair Trade tech company would not be easy but there is one company that would find it easier than others and that's Apple.

Apple has already taken some steps towards this by topping up Foxconn worker salaries. TechEye reports:

Apple has decided to give the workers a small cut of its profit margin, which it hopes will give workers a better standard of living and slow down the number of suicides that have taken place in the factory, which makes iPads, iPods and iPhones in Taiwan's Hon Hai Precision Industry.

The rumoured 20 percent raise from Apple will raise the cost of labour for the iPad from 2.3 percent of the cost to 3.0 percent of the cost.

A 20% higher salary for its workers is excellent and it comes at a very small overall manufacturing cost increase.

That's a feather in Apple's cap and a potentially great marketing move too.

Fair Trade electronics would mean that every part of a product has been manufactured in a Fair Trade environment. The supply chain for electronics can be massive, it will probably be impossible to make a 100% Fair Trade laptop, for example, for a while yet. But smaller products would be possible, especially if a huge manufacturer such as Foxconn converts part of its factory into Fair Trade production zones.

A 100% Fair Trade electronics product might be tough but it would be possible to calculate how much of a product is "Fair Trade" and issue a percentage number. As more manufacturing facilities within a supply chain are "Fair Trade Certified" that would raise the Fair Trade total for a product, and that can be advertised on the packaging.

When I was in Japan a couple of years agoI met a startup called Rinen. It had developed OpenTrace, a way of tracking the carbon footprint of any product. That same approach could be used to track the Fair Trade content of any product.

Increased costs...

Apple has very healthy profit margins on its products, much better than say, Dell, or Hewlett-Packard. Apple's overall profitability is 21%, Dell is at 3%, HP is at 7%.

Apple's profit margins on key products such as the iPhone and iPad are even greater.

Apple can easily absorb higher manufacturing costs, Dell and HP cannot.

What Apple pays in extra manufacturing it could recoup with killer marketing to sell more products.

For example, how would a Dell laptop compete against an Apple Fair Trade laptop?

"Buy Dell! We're cheaper and less fair!"

There's profits in being fair...

The first Fair Trade tech company would reap a bonanza in terms of the marketing opportunities plus all the free publicity surrounding that announcement.

Steve Jobs has taken bold steps in removing porn from the iPad, he's clearly an ethical thinker and leader. Why wouldn't he want Apple to become a Fair Trade company? I'm certain he will. I'm certain that eventually, every company will seek to be Fair Trade.

If it is truly inevitable, why not try to be the first and reap the benefits before everyone else?

- - -
Here is a Pearltree on Fair Trade Electronics. If you know of additional sources send me a pearl and I'll add it.

MediaWatch Monday: Twitter Censorship Of #Flotilla Tag? And Circuit Breakers On Viral Media...

The Israeli interception of a flotilla of boats carrying aid to Gaza sparked a furor on Twitter with people spreading the news of deaths, injuries, and protesting the action, using the Twitter hashtag #flotilla to group all the messages.

However, that hashtag stopped working for an undetermined period earlier today. Was Twitter censoring the #flotilla hashtag because most of the Tweets were critical of Israel? That was the view of many Twitter users.

Charles Arthur at Guardian.co.uk: Did Twitter censor the #flotilla hashtag following the Israel attack? | Technology | guardian.co.uk

...at around 11am, as #flotilla began "trending" - rising to the topmost-used hashtags on the service - it seemed to vanish.

Was this censorship by Twitter? Quite a few asked the question.

Matthew Ingram, a reporter for GigaOM, tweeted: "Twitter spokesman says problem with #flotilla hashtag was a "short-term technical issue" that is being investigated."

It seems that the problem was likely due to anti-spam filters being triggered (The mystery of the disappearing #flotilla on Twitter [Updated]).

However, I'm wondering if future news distribution services might be required to carry filters of another kind, ones that would seek to dampen down news dissemination if it could result in great distress.

Israel, and its activities in the Middle East, is an emotional subject that drives many people to action, both pro, and those anti-Israeli policies. For example, here in San Francisco, large crowds are already gathering to protest the flotilla attacks. Similarly, there will be pro-Israel demonstrators there too.

What will happen in the future, when news dissemination is far faster, far more viral, and the subject might be something which could trigger in riots, violence, or other possible distress, to a society or region?

Misinformation within such a future scenario could be extremely damaging, and misinformation is highly likely because there are organizations that would benefit from such tactics. By the time any information is checked and verified and put into context, etc, the damage could already be done.

The stock market has "circuit breakers" that halt trading if the market falls too far and too fast. The goal is to avoid problems from automated trading systems that react to bad news and all try to sell stock at once, lowering the price and setting off even more sales, in a massive avalanche of sell orders.

I can foresee the possibility that any news dissemination service, such as Twitter, might in the future be required to have "circuit breakers" that would stop the sudden dissemination of news so that it can be checked, verified, and put into context by news organizations, by journalists putting the story together, trying to be truthful and objective.

Journalists have done that job for a very long time, taking time to evaluate, check sources, and then publish. Too bad we are losing that tradition. We might be faced with a much more volatile world in the near future.

It's Cool To Be Fair...

A great photo from Damien Van Achter from ""Fair Trade Electronics", by @tomforemski - Damien Van Achter"

Who Will Be The First "Fair Trade" Tech Company? It's The New "Green"...

There's a tremendous opportunity waiting to be grabbed. There's a Wikipedia page waiting to be written.

"The first Fair Trade tech company was ..."

I'm certain that the Fair Trade concept will be applied to electronics, and it's just a matter of when that will happen. I'm convinced it will happen not because it's a good idea but that it's a potentially profitable idea.

Let me explain my thinking. Our digital gadgets and gizmos are becoming very cheap, almost disposable - yet the working conditions for millions of workers in the global electronics industries are deplorable. Even though they often work in bunny suits, in super clean, well lighted work places, those jobs are highly stressful and often unhealthy.

Lets not forgot that those bright, sanitized work places, those clean work clothes, and filtered air conditioning, is not for the workers, it's to protect the electronics from the humans. The wages are poor and the work is grueling.

Fair Trade electronics could help tens of millions of people around the world without making much difference to our wallets. We could easily alleviate a lot of suffering without much suffering on our part, we could afford to pay a bit extra.

Noble goals are important but what will drive the growth of Fair Trade electronics is that it will be an excellent way to make money. It's a great way for companies to differentiate themselves in the market place.

Consider this: All technology products trend towards becoming commoditized - that's just how things work. How do companies fight commoditization? It's done through differentiation.

- Companies such as Apple do it through design. Take a commodity product, say an MP3 music player, and apply a great design. Design drives sales and it is a high profit value add.

- A lot of computer companies these days proclaim how green they are, how eco aware they are, and how their products use less energy, carbon, etc. "Green" drives sales and it's a high profit value-add.

- Fair Trade electronics is another way companies will be able to differentiate themselves from competitors. Fair Trade will drive sales and it is a high profit value add.

Yes, companies will be able to make money out of Fair Trade electronics and make a difference in the world- it's one of the wonders of capitalism.

Fair Trade applied to the electronics industry will also be incredibly transformative because the supply chains are huge.

Think of a laptop and how many companies were involved in the sourcing of the components of a hard drive, the motherboard, making the chips, the glass for the screen, the plastic for the keyboard, the springs in the keys, the capacitors, the resistors, and on and on...

To make a Fair Trade laptop would require hundreds if not thousands of companies in the supply chain to have Fair Trade certified work places. So, if a company such as Dell or HP were able to build just one electronics product, a Fair Trade laptop, it would revolutionize a massive sector of the world's electronics industry.

And once a supplier has a Fair Trade manufacturing facility it can then also supply Fair Trade components for a vast array of other Fair Trade electronics products.

The first Fair Trade tech company will revolutionize the entire industry. Who will it be?

Foxconn Suicides: Is It Time For "Fair Trade" Electronics? Would You Buy A "Fair Trade" iPhone?

The suicides at Foxconn have highlighted the issue of highly stressful working conditions in the global electronics industry. Foxconn has responded with psychologists, punch bags, swimming pools, and asking employees to promise not to kill themselves.

But these moves do nothing to change the actual working conditions. Suicide numbers are a big red herring because even if they go down, huge numbers of workers will still suffer from low wages, long hours, and many other tough and unhealthy working conditions.

A recent BBC documentary series, "Blood, Sweat and Luxuries" took six young British consumers and placed them exotic locations working in the same jobs as locals, and having to survive on the same wages.

It's an eye opening series because it showed the horrible work conditions that billions of people face daily, every week, for years, and decades. These were strong, healthy, young British adults, yet they would pass out from the back breaking work, suffer panic attacks, and many other maladies, after just a few hours on the job.

They carried huge amounts of dirt in Ghana's gold fields; they processed leather in stinking abattoirs in Ethiopia; they dug deep holes in coffee plantations; and they had to work in an electronics factory in the Philippines where workers prepared tiny components for disk drives, processing one component every 3 seconds.

If they even took a moment to glance up from their tasks, or be distracted, they would fall behind in their quota and have their wages docked. It was incredible how much work had to be done for so little money by so many people. And the reason they were paid so little is that the electronics factory had to accept tiny profit margins in order to win its contracts.

All the large tech companies such as Apple, Nokia, Dell, etc have agreements with their suppliers that they do not employ children, and that they will abide by certain standards to protect workers. But it's not clear how these are monitored, enforced, or how much in common they share across the electronics industry.

What is common across the electronics industry is a relentless focus on reducing manufacturing costs, and the largest manufacturing cost is labor; which is why employees are pushed to work faster, while maintaining high quality work, and at the lowest wages acceptable.

We reap the benefits in the form of cheap digital gadgets, gizmos, and computers. We have absolutely no idea about all the blood, sweat, and human suffering that went into creating our digital devices.

For the six young Brits that took part in that five week program, the experience was life changing. On their return they made big changes in their life styles, some changed their diets, and they all changed their buying habits. Some raised money and collected clothes and books for the families they met during their stay. And they found a new respect for Fair Trade goods.

One of them said that she used to dismiss Fair Trade coffee as some kind of marketing ploy, a trendy fashion. Now she doesn't, and is happy to pay extra because she knows it does make a difference in the lives of many people.

Would you buy a Fair Trade iPhone or Android smartphone? Would you buy a Fair Trade Dell or HP PC if there were such choices? And how much extra would you be willing to pay?

And more importantly, what would it take for you to be assured that the Fair Trade premium was making a difference in the lives of electronics workers?

It wasn't that long ago when PCs typically cost $5,000 and lots of people paid it willingly. These days you can pick up powerful notebooks for under $1000, and netbooks for under $400. And a $100 smartphone is more powerful than PCs from just a few years ago.

Surely, we should be able to afford to pay a Fair Trade premium on electronics without too much suffering on our part.

And hopefully, the global media attention on the Foxconn suicides will result in improved working conditions for millions of electronics workers, and Fair Trade electronics goods will become commonplace.

Dirty Little IT Secrets: Our Privacy Is Protected By Massive, Inefficient Corporate IT Systems

There has been lots of chatter about data privacy but fortunately, the ineptitude of IT systems is a protective factor. Take a look at this amusing tale from my ZDNet colleague Dennis Howlett.

Dennis is an Englishman living in Spain. He tells of trying to make changes to his account at Vodafone Spain. Vodafone Spain saps my will to live

Each time you call, it seems necessary to go through a grinding series of questions that include the number you are calling from (they don't have caller ID?), providing your passport or residency number, your password and bank name. Then you have to slowly and carefully explain the problem. At least twice.

... Vodafone claimed they have no record of my landline number or that I have requested that service. Duh? I have SMS messages telling me they activated the service on my mobile. I"m staring at them. 'We have no record.'

...Knowing what it is like dealing with anything that smacks of government or utilities, I pack every piece of paper I can think that will successfully identify me as the person I say I am. At the Vodafone shop I get the same answer. No record.

Thinking laterally, I ask if there is anything registered to the new DSL service and oh by the way, can you search against THAT phone number? Bingo! Up pops the details Vodafone said it didn't have.

It turns out that when I acquired my Vodafone mobile, I gave my passport number. When I applied for DSL etc, I gave my NIE (resident's) number because that is what it asked for. Vodafone doesn't match these and cannot alter what it now sees as the master identifying record locator. So now it seems I have two accounts.

It's a frustrating story but in a way, it is uplifting in the context of data privacy. Vodafone is a large IT user with massive data centers, yet its databases can't handle a simple match between just two pieces of data.

The dirty little secret of enterprise IT systems is that while they do store a lot of data, they are terrible at using that data. Relational database systems are extremely difficult to query, it can take weeks to design and run set of queries against the data. All major corporations have these relational database systems.

We thus have a large measure of protection from egregious uses of our personal data because of the inefficiency of corporate IT systems.

And this situation won't change anytime soon, even though far more efficient database technologies are available (such as Mark Logic). No company wants to mess with its core database systems -- a lucrative secret that Oracle discovered a long time ago.

Companies will rip out and replace servers but they will do everything they can to keep their databases intact -- it's core to their business.

Facebook, Google, and many others, are using specialist databases, some that they've developed themselves to overcome the limitations of relational database systems. But, because those databases are customized for their unique uses, it is very difficult to map their data against data in other types of databases. Using people's personal data to sell products and services is very difficult.

So, while we do need to be concerned about the commercialization of our personal data, and campaign for tougher controls, the likelihood that corporations will be able to use all that personal data in a meaningful way is very low. Data goes in, but getting it out in a useful way is shockingly difficult.

There is even more good news: inefficient database systems will continue to dominate the Fortune 1000 for many years. Database architectures have to remain the same because they have to maintain backward compatibility.

It could be said that the biggest defender of our data privacy is Oracle and its massive installed base of relational database systems.

Are Foxconn Suicides Misrepresented By Media? Employees Are Far Less Likely To Committ Suicide

Patrick Mattimore, a fellow at the Institute for Analytic Journalism, recently published the following article on China’s People’s Daily Online, headlined: Media badly misplaying Foxconn suicides.

Taiwanese-owned Foxconn has had seven suicides this year. That sounds like a lot, but the firm has an estimated 800,000 workers, more than 300,000 of them at a single plant in Shenzhen.

Although exact figures are hard to come by, even the most conservative estimate for China’s suicide rate is 14 per 100,000 per year (World Health Organization). In other words, Foxconn’s suicide epidemic is actually lower than China’s national average of suicides.

I checked his figures. World Health Organization suicide figures for China (1999) are 13 males and 14.8 females per 100,000 people.

Elderly (65+ years) suicide rates can be as much as 50% higher than youth (18 to 24 years), which means Foxconn’s suicide rate, with its younger workforce, should be significantly below the national average.

Let’s estimate an average of 10 suicides per 100,000 at Foxconn. Just the Shenzhen Foxconn plant alone, with its 330,000 employees, would be expected to have about 33 suicides this year, or 14 so far.

Foxconn has had just 10 suicides this year, and that’s across its entire workforce.

Working at Foxconn dramatically reduces people’s risk of suicide!

Mr Mattimore is right, the media is misrepresenting the facts. He writes:

The larger problem stems from the fact that most journalists have not been taught to critically examine statistics. They follow the herd which often means that they report numbers without providing readers a context for making sense of those numbers.

Hopefully, the public will wake up to the fact that there is nothing wrong at Foxconn and demand that newspapers act more responsibly and begin supplying some context when they decide to instigate their next corporate suicide watch.

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