I feel very honored to be ranked #4 by LinkedIn as one of the "top 10 media writers of the year" in the debut of its "Top Voices of the year" list that named 80 writers across eight industry sectors.

I also feel a little uncomfortable about drawing attention to such accolades as do the majority of former newspaper reporters. We don't mind if someone else blows our horn but it feels crass doing it yourself. In today's media world that attitude is a handicap because if you can't handle a certain level of self-promotion no one will see your work.

The early Blogosphere...

When I left the Financial Times more than ten years ago to become a "journalist blogger" I suddenly fell into a very small, very strange community of writers I hardly knew before. It felt great to be part of this tiny and very feisty band of bloggers with Robert Scoble, Om Malik, Renee Blodgett, Dan Farber, Anil Dash, Doc Searls, Craig Newmark, Andy Lark, Dennis Howlett, Nick Denton, David Galbraith, Dan and Steve Gillmor, Jeff Clavier, etc (please see: Original Thinkers list).

I marveled at the variety of forms and media formats that "blogging" allowed -- it seemed as if it were a superset of all other media forms rather than a subset because it could include them all.

And I marveled at the pure meritocracy of the blogging environment. I could write something at midnight and by the time I woke seven hours later the Blogosphere -- as we called social media in those days -- had discovered it without my having to do anything, had picked it up, picked it apart and carried it further afield into other communities, other blog posts.

I marveled that if I wrote something of value the world did indeed beat a path to a better mousetrap! 

That early blogger culture certainly wasn't shy about self-promotion -- there was always a need for some braggadocio -- but it didn't matter because only the good posts rose to the top.

I came to terms with self-promotion realizing that it is OK if I have something of value. The worst self-promoters are the ones that are noisy and empty.

Blogging and bragging...

Today's online media world is far removed from those early days of blogging and the noise level requires certain level of self-promotion. But I see many people -- not just former newspaper reporters -- struggling with the most simple of promotional activities such as tweeting out a link to a recent article, or mentioning it on their Facebook and LinkedIn pages.

Blogging and bragging today go hand in hand and like it or not you have to do both. Here's how you can deal with the discomfort:

- Focus on producing content that is of value to your community. If it doesn't waste people's time but makes their life better, easier, maybe more wonderful? Is it of service to others rather than blatantly self-serving? Then it is perfectly fine to bring attention to it because you are helping others.

- I'm developing a concept called Media as a Service (MaaS) defined as: editorial content that is of service to others in some way; it doesn't waste people's time; it doesn't try to "engage" for engagement sake; it doesn't chase the fashionable content marketing trends of the day... If it passes these "MaaS" criteria then promoting it is fine and no one will complain.

- "Content marketing" fails because it looks and reads like marketing. It is self-serving rather than being of service. Every company is a media company but media companies don't focus on themselves -- they provide a media service. 

MaaS media is the best media

- When you write a blog post or column or share anything online -- make sure it offers something of real value, that it has originality, and it serves others more than it serves you. 

- If you have nothing that fits MaaS criteria wait until you do.If you have nothing original to say don't say anything. Don't waste people's time. Wait. You will come up with something good.

- Trust your instincts rather than trying to second guess what others would like. If you find something interesting and useful it is likely others will too.

- Write in the moment, write because you have to, even at 3am because you feel you'll explode/implode or you'll drive yourself crazy if you don't. 

- Write because it clears room for more ideas. Writing is an innovation engine. 

- Write for your audience and especially write for an audience of one -- yourself. Because then you've made at least one (v. important) reader happy. 

Spiritual rewards...

The more you do it the more you'll discover that the act of writing and publishing is an extraordinarily fulfilling activity. There is a professional reward but there is also a spiritual reward that is rarely spoken about. Try it and you'll see what I mean.

Maas Media is the best media!

I had the pleasure of moderating a conversation with Malcolm Gladwell at a breakfast for top tech executives attending Gainsight's  Pulse 2014 conference in San Francisco.

Gladwell said that over the years he has come to appreciate the importance of Geoffrey Moore's classic marketing book "Crossing the Chasm." 

His latest book retells the story of David and Goliath and I think there is indeed a sea change in the works and that the Goliaths of the world are in trouble. The large incumbents are vulnerable to a new breed of very able competitors that I've labelled "new rules enterprises."

The first rule of a new rules enterprise is that it is new — there's no reason to convince colleagues or bosses of the right strategy — you work with a team where everyone is on the same page. (I have nine additional rules that define a new rules enterprise — drop me a line if you are interested in finding out more.)

Pivots are very rare and only with young companies. Large organizations can't change at all. IBM is an exception but it took CEO Lou Gerstner nearly 10 years to transform it from the world's largest computer company to the world's largest computer services company and it barely survived intact.

These are the new "dotcoms"

A new rules enterprise is a very serious challenger to large corporations. It doesn't yet have the same brand value or distribution networks as a large company but it is extremely agile and extremely focused.

In his most recent book, "David and Goliath" Gladwell tells the familiar biblical story in a new way, pointing out that David managed to kill Goliath because he was not the underdog by any means: he was extremely well armed and he disregarded the accepted rules of combat. Goliath was at a tremendous disadvantage.

A new rules enterprise is very much like "David" — it fights very differently and isn't bound by the accepted ways of doing business. Large companies are stuck in their ways and are very vulnerable.  

I'll make a prediction that we'll see some spectacular business success stories as competition moves into a new realm, and a new format for the David and Goliath story.

- - -

Gainsight, now with its second Pulse conference, is doing a good job educating the marketing world about "Customer Success" technologies. More than 5300 companies employ Customer Success Managers — a new position. It's an education for me, too.

Customer Success technologies can be described as helping businesses track their customers' use of their services and flag the ones that are ripe for upsells, or might be leaving. Gainsight estimates that a lost customer means lost revenues of as much as six times the customer acquisition costs. 

Trying to control how much others know about you is going to become increasingly difficult. Yes, you can adjust your privacy settings, but this process is becoming increasingly complex.

The Price of Facebook Privacy? Start Clicking - NYTimes.com

Users must decide if they want only friends, friends of friends, everyone on Facebook, or a customized list of people to see things like their birthdays or their most recent photos. To keep information as private as possible, users must select “only friends” or “only me” from the pull-down options for all the choices in the privacy settings, and must uncheck boxes that say information will be shared across the Web.

Even if you do all that, Facebook has introduced a backdoor:

...some information will no longer remain private because Facebook has also added a feature, called community pages, which automatically links personal data, like hometown or university, to topic pages for that town or university.

Foremski's Take: Every time Facebook makes a change in its privacy provisions, you have to go through it all again. It's a never ending battle, with Facebook eventually winning because its users will get fed up or forget that another privacy change has happened and that they need to review their privacy settings.

Other sites will be doing the same because they have to, in order to be able to offer their commercial partners access to precise demographic and behavioral data.

So what can you do?

You can poison the well — list a bunch of false data.

You could change your occupation to "whale gynecologist." You can list unicorns as your favorite food. You could claim to be seven foot tall and your home town is Timbuktu. Fingers on a chalkboard is your favorite music. Or even better, change your age to 10 years old — there are strict rules about gathering data on children.

You can poison your data in such a way that your friends know it's a joke but Facebook, and others that don't know you, won't know.

Since most people are expected to go through more than a dozen jobs, and even several career changes, throughout their life, I think the following rules are more than necessary:

- Use your own cell phone/number for business.

Don't use a company provided cell phone because if you lose your job you lose your number, and you lose your business contacts. Your employer can pay your cell phone expenses.

- Use your own email address for business.

Again, you want to be able to be reachable by your business contacts and vice versa, if you lose your job.

- Carry your own health insurance.

It's a lot less expensive than Cobra, and it means you aren't stuck in a job that makes you sick because of the health insurance. Again, some employers will give you a credit towards your health insurance costs or you can negotiate for a benefit when accepting a job. Employers might even choose someone with their own insurance over someone else, since healthcare is such a huge burden for a lot of businesses.

I got some additional tips from fellow bloggers. Mitch Ratcliffe wrote:

- Incorporate and work on contract rather than as an employee.

This allows you to negotiate the same kind of stock compensation while allowing you to keep your business costs, even the ones you can't get compensated for at work, on your own taxes while increasing the flexibility you have as a working person.

- Carry and use your own hardware, building tech expenses into your compensation.

This prevents lock-in to a job through access to technology. Sure, you may have to work with a less impressive laptop, but you're also forced to think more like the people who really buy computers, software, services and so forth.

From Neville Hobson at NevOn:

- Create a blog and establish your personal presence in the new marketplace

In this new age of global inter-connectivity, linking and influence, a blog is a prerequisite if you want to build your own credibility, be found easily and connect with others. Forget the static website. Forget the fancy brochure. Do a blog. It works - I speak from personal experience.

- Join a business network like LinkedIn or OpenBC

However you actively use these or not, they can help establish your individual credibility and provide avenues of contact with others for mutual benefit.

Today I would add:

- Join Facebook

Facebook has become as important as LinkedIn in certain ways. It is a good way to establish your online identity - both professional and personal. It makes it easy to stay in touch with people and contacts even if jobs and addresses change.

- Join Twitter

Twitter is another good way to establish a personal and professional presence. And it rewards those that share good information and insights. Plus, sometimes people post about job openings before they are advertised elsewhere.

Rule number ten is ...

What do you think it should be?

- Factories around the world have scaled back production and are not polluting air and groundwater as much as before.

- We have fewer trucks and ships polluting the atmosphere.

- We have a much smaller carbon footprint worldwide because there is far less use of fossil fuels in manufacture and transportation.

- We are buying fewer replacements for goods we own and making them last longer, lightening the load on landfills.

- We are using less of the earth's limited resources in manufacturing goods and providing various services.

- Fewer of us are traveling to jobs which reduces carbon footprint and pollution.

- Less pollution improves people's health and saves lives.

- More importantly: We are more likely to develop and adopt technologies that are more cost efficient, which means saving resources and energy. And this is where Silicon Valley's companies have a key role, developing disruptive technologies that replace the more wasteful processes that are currently used in many industries. It will lead to the creation of new rules enterprises--businesses that are greener and more profitable.

- - -

Please see: As the economy slumps, so does trash - Los Angeles Times

"Why are you upset?" he asked. I said I wasn't upset but in fact I was upset by his rudeness. I'm not a media slut like many in this business. Everyone else jumps at any publicity. I'd rather be selective and I'd rather that someone ask me first.

In today's age where everyone can publish and Twit anything at anytime I think it is time for some new rules etiquette especially for those people that need to have it spelled out.

I go to a lot of events and I have a lot of conversations and people tell me lots of things that would get them into trouble if I published it. Yet they trust me and trust that I won't burn them but I'm not sure everyone understands this etiquette especially those that are new to publishing.

Sometimes people ask me "Can I blog that?" when I say something. Sometimes that's OK but at least they are asking first.

My line is: "This conversation is just between the people in this group, If I wanted the world to know what I just said then I would have blogged it myself," and usually I say it with a smile. And usually people understand that there are new rules and that if people over step those rules then others will take note and future conversations might be rather stilted.

The new rules are don't publish private conversations--these are not public conversations--and ask first.

- - -

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So many startups have business plans that predict riches can be found in the long tail of commerce. Yet their first target should be the fat, high margin sector of any commercial market. You can always slide down the value chain over time and monetize the long tail.

Which is why you should be wary of companies that are focused on the long tail first rather than later.

Technorati Tags: long tail, startups

What if I write about Apple and Steve Jobs thinks it has been leaked and sacks a friend who works at Apple, because he can see my social network even though that's not my source. What about a two degree separation? A friend of a friend...could that still cause a problem?

Should I keep my network private?

http://blogs.zdnet.com/Foremski/?p=191

Strumpette, the popular blog site for the PR industry, has laid down a gauntlet, inviting the top 50 executives of the world's top PR firms to confront the changing nature of the PR world.

This is an interesting issue, one that seems to be splitting the leading edge elements in the PR industry from the trailing edge traditionalists.

This is the first part of a remaking of PR. It is similar to the changes the media industry is going through.

However, Strumpette's call to arms could be a false dawn because the PR industry has been very slow to change, it needs an economic bust to change its habits. Either way, it is all part of the process that PR needs to go through.

Here is an excerpt from Strumpette:

To the Leadership of the PR Industry:



Where are you?!! Listen: We had a Call to Action last week where we invited a number of you here to a debate about the future of the business. Not one showed up. NOT ONE! Well, that's marked a turning point.



WE'RE OUTRAGED! While there's absolutely a growing cancer in our industry, you (plural) seem bent on lining your pockets exclusively. Regrettably, your peers are involved in behaviors that will surely kill our business. And when it goes to hell and you make off with your millions, we are the ones who will be left holding the bag.

Here is an interesting post from BizReport. It shows that publishers aren't making money from their online operations.

Publishers aren't profiting from online operations - Internet - BizReport

Out of 350 international newspaper and magazine executives gathered in Hannover, Germany, for a media conference, only one was able to claim making a profit from their online operations.

by Helen Leggatt

Furthermore, despite investments totalling millions in marketing dollars, only a handful of the industry players present could claim more than 3 percent of their sales came from online.

The economics of publishing online can't support the people and processes that are needed to produce it.

This is a serious issue because as the "paper" based economic models get trashed, it is clear that online publishing isn't going to save old media publishers anytime soon. Even if their online revenues were to double tomorrow, it still wouldn't be enougth.

It is another example of "you can't get there from here" when it comes to old media transitioning to the new media world.

It's because publishers have to compete against online publishers such as Google whose costs of publishing a page of content and ads is miniscule. The reason GOOG or YHOO or Craig's List can sell advertising cheaper is because they don't have to pay for their content.

Mostly, their content is machine-generated, or harvested by their spiderbots roaming the Internet, or it is user-contributed as in Craig's List.

Online advertising rates reflect this economic reality and thus are held down at low levels. These are levels that won't be able to support old media publishers.

It costs tens of thousands of dollars for newspapers and magazines to produce, market and distribute a "page" of content. 

There is no way that they can compete against competitors whose comparable costs are pennies per page.

Therefore we have to figure out a new economic model for media--it has to be something more than online advertising.

Publishing  a response to a critic is not enougth because it is unlikely to be ranked on the first page of search results. Similarly, if a critic were to change their mind about a company, an individual,  or product--the search engines could still be serving up the original complaint on that crucial first page of results.

This is a serious problem in terms of reputation management for companies, and it will increasingly affect individuals too as they seek new jobs, new partners, etc. 

Companies have large resources and there are ways they can influence the search results. Individuals have far less ability to manage their online reputations.

The Right to Respond

I'm proposing that companies and individuals all should have a level playing field and that a fundamental right of the Internet should be the right to respond to anything that is written, said, or viewed about them.

Readers reading a Right to Respond posting will know that it is likely biased but at least they can make up their own minds.

There should be a tiny Right to Respond widget or link next to any content. The widget is fed by a central Right to Respond.org server. If there is a response filed by a company or individual, it will indicate it, in the same way as my Technorati widget found at the end of each article shows readers if there are other blogs mentioning this post.

- Companies would pay to use this service, individuals would have free access.

- Web site owners/publishers/bloggers, etc would not be forced to provide a Right to Respond link next to their content. But if they did, it would show that they are a respectable and responsible site. Sites that are critical and that won't offer a right to respond will be seen as less credible.

- Offering a Right to Respond link should become the responsible thing to do--especially if a site's reach, such as Google's could potentially and inadvertently cause harm to reputation.

- The New York Times should offer a Right to Respond link next to every story that it publishes. Again, it is the responsible thing to do,  because of its reach and influence and potential to harm reputations.

- Local newspapers should offer a Right to Respond link too, because of their influence in each community.

- Search engines should offer a right to respond link next to each search result they publish--even if a right to respond link isn't found on the original web page of a search result. Some web sites are dead and the content only exists in search engine archives, therefore the search engine becomes the "responsible" publisher.

- There is almost no monetary cost to offering a Right to Respond link, it does not cost a web site owner anything extra in servers or bandwidth.

- Web sites could be paid for offering a Right to Respond service from the fees charged to companies. Each time the page is loaded could earn the publisher a micro-payment, something that could be easily tracked by the Right to Respond widget sitting on the publisher's server.

That payment could be further qualified by the influence of a web site. The New York Times gets more money for running a Right to Respond link than less influential sites-- even if traffic volumes for both are the same.

- Only the content publishers get paid to carry a Right to Respond link and not search engines. It is the originator and not the aggregator that collects the payment.

Would some sites publish nasty things about companies or people simply to collect Right to Respond payments? They could, but constantly publishing critical and negative content would undermine their credibility, their influence, and their traffic.

Offering a Right to Respond should become the right and responsible thing to do,  imho. Let me know what you think.

Responses:

Todd Defren at Shift Communications: PR Squared: The Right to Respond

Several San Francisco activist groups and non-profit internet companies have joined together to protest a proposed deal between the city and a Google/Earthlink partnership to provide free WiFi.

Called the Public Net San Francisco coalition, the group issued a statement Friday insisting that the city government kill a multi-million dollar pending deal with Google and Earthlink. Instead, the coalition says the city's existing high speed fiber optic network has plenty of spare capacity to support a high-speed Internet network open to every resident regardless of income.

The Google/Earthlink deal with San Francisco could potentially establish a model for municipalities across the US and in other countries. It would be the start of a massive new market for giant Internet companies such as Google and Earthlink.

The San Francisco deal could put them in the forefront of a race with competitors to dominate the next big business opportunity: the gold rush to monetise local markets. 

It has long been my opinion that communities will increasingly seek to own their "Internet airspace." Why should the local hardware store pay Google or Yahoo to reach its customers just a mile or two away? Why let Internet giants thousands of miles away become the gatekeepers for local commercial transactions? It sucks money out of a community.

But there is no need for a middleman, there is no need for a GOOG or YHOO tax on people engaged in their daily interactions with their neighbors. As offline and online world's become better integrated through a plethora of Web 2.0 social network applications, it will enable a People's Internet (PI).

Communities will succeed in owning their regional Internets because they can-- the technologies are inexpensive and incredibly powerful. And there is a lot of value in their community.

The most valuable emerging Internet companies are no longer technology companies but communities.

YouTube, the video sharing site was bought for $1.67bn. It certainly wasn't bought for its technology, there are many dozens of Internet sites using the same technologies. YouTube was bought because of its amazingly large and active community.

What kind of value is there in San Francisco's community of about 800 thousand residents? It's not only well-heeled but also influential, which means viral opportunities for the savvy. Whoever owns the regional online space for the San Francisco/Silicon Valley community has a goldmine--they can observe the online habits of those people, they can sell highly targeted ads, and also sell, and exploit emerging behavioral trends that could spread nationally and beyond... And of course, opportunities to influence the community.

The world's largest online advertising companies such as Google, Yahoo, Microsoft, AOL, plus dozens of startup companies, are all geared up for this opportunity. For years they have been developing ever more sophisticated technologies that can target and track a specific Internet user--and deliver custom crafted commercial messages.

Such technologies can easily be used to deliver custom crafted political messages too. And the means to do that involves collecting highly identifiable data on users.

Although most online companies say that they don't collect personal data and that they are only interested in aggregate online behaviors, with no user name attached, the data itself is filled with personal details.

In August of 2006 AOL leaked a database of search queries by thousands of its users over a several month period. Each user account was tagged with meaningless numbers instead of names. But by reading the thread of messages associated with each numbered account, in many cases it was possible to identify the household, and identify the users. Please see: The unguarded thoughts of the digital haves...

The ownership of an online commons by their communities will be seen as essential in guaranteeing free speech, the freedom to associate, and to have unrestricted and uncensored use of the Internet. That's because online worlds will have to  carry the same basic freedoms as in the offline world, it is where we will spend a lot more of our time and it should be seamless--and protected.

Governments around the world are increasingly spying on Internet users, restricting and censoring content, and mining Internet data to arrest dissidents.

Community owned Internets could potentially stymie such activities, especially if their charter were such that could not carry any monitoring technologies--no commercial or government spyware. It could be all be filtered out in the regional PI gateways.

-----

Please also see SVW:

Are Google, Yahoo, EBay and AMZN fast becoming the digital Wal-Marts of the emerging Internet 2.0 era?

Are Google, Yahoo, Ebay , Amazon (and maybe MSFT and Craig's List too) becoming the Wal-Marts of the digital age? It's an important question as they roll out more of their "local" products and fight...

Posted by Tom Foremski on April 18, 2006 4:00 AM

YouTube acquires Google

Google's acquisition of YouTube for $1.65bn stunned many in Silicon Valley. Some thought it was way too much to pay for a startup with hardly anything in revenues and it indicates a bubble...

The future transparency of our lives and poisoning the database

Anybody who runs a blog or a web site usually peeks at the search terms that visitors input. It's fascinating stuff because sometimes you can find clues to breaking stories or emerging issues/trends....

Posted by Tom Foremski on August 16, 2006 12:46 AM

The unguarded thoughts of the digital haves...

The most compelling content on the Internet, by far, is AOL's release of search terms linked to individual users. This is a glimpse into the human condition that goes way beyond anything else...

Posted by Tom Foremski on August 15, 2006 2:25 AM

I get to speak with a lot of companies, IBM, HP, Cisco, Intel, Sun, etc.   And many much smaller companies. The presentations are good when delivered in such formats, when they are off the record they often change quite a bit, large and small.

During those times I get to hear about what a company's competitors are up to and I often learn more about their competitors than about them.

Sometimes I remind people that they are talking about their competitors more than they are about themselves. This rarely stops them, which is interesting.

My advice is simple: wish your competitors well and concentrate on what is on your plate right now.

Focus on what is important in your business right now. The market will take care of you and your competitors, no need to worry about that...

Conference goers got their badges, and their digital schedules on a flash drive - an Apple iPod Nano - very classy.

I got to catch up with Steve Gilmor, my fellow ZDNet blogger, David Tebbutt, and also, Robert Scoble's boss, John Furrier, founder of PodTech was there.

Plus a bunch of pals made it, Chris Heuer, Jeremy Pepper, Brian Solis, Uwe Maurer, and I met many others. This type of event is good because you can get to chat and get to know people.

Office 2.0 is a space that holds much more promise than "Web 2.0" because Office 2.0 is displacing a business model. Much of the Web 2.0 applications out there are not displacing anything, they are seeking new(ish) business models.

Office 2.0 is about offering business productivity as a service rather than as a download. Will corporations allow such activities outside of their firewalls?

They probably don't have any choice about it. I heard one story Tuesday evening about a company that had finished a long SAP installation but their internal departments and other users, refused to switch from Salesforce. So they dumped SAP.

Today's model for growing software sales is: make the software development cheap enough so that departments can pay for it out of their budgets, without having to beg their colleagues in IT. 

Individuals can expense it and it is that kind of viral marketing that works great.

More on  that tomorrow...

The New York Times has an article describing Google's charity: Google.org funded with $1bn. What makes this interesting is that its legal status is the same as that of a corporation--it is a for-profit entity rather than a non-profit.

This means that Google.org is not subject to the 501(c)(3) IRS code that restricts what a non-profit can do. A drawback is that it would pay taxes on revenues that would be exempt if it were a non-profit.

Another drawback is the general perception of for-profit versus non-profit organizations. Non-profit status carries a "saintly" aura in our society, while a "for-profit charity" sounds distasteful, it smacks of trying to make money from social causes.

Larry Brilliant, the head of Google.org said this for-profit issue was a problem for him when he was first offered the job.

. . . At first, Dr. Brilliant said, he was thrilled. But then he turned skeptical, largely because of the for-profit structure of the organization.

“I got weak knees,” he said. “It was weird. It was precedent setting.” After several lengthy conversations with executives at Google, Dr. Brilliant changed his mind.

Source: Philanthropy Google’s Way: Not the Usual - New York Times

What Google is trying to do is important because it tackles an important issue I've spoken about: why should a company or organization, whose charter is to develop useful social projects, be tied down by the restrictions of a non-profit?

A for-profit designation does not mean it has to make a profit. A for-profit corporation with a mission statement that is similar to that of a non-profit charity could gain many of the same tax benefits as a non-profit by simply controlling how much profit it makes.

But the public perception of a "for-profit charity" and the associated negative connotations are difficult to overcome.

A far better designation than "non-profit" would be: "not-for-loss." A not-for-loss company could execute on its social causes and be self-funded because its profits are reinvested.

Also, there would be no need to use up time and resources in raising money from donors, as is the case with many non-profit organizations.

A good example of a not-for-loss organization with a strong social charter is the Grameen Bank in Bangladesh. has been very successful in pulling tens of millions of people out of poverty through micro-loans.

The interest rate it charges is higher than from other banks; but this allows it to be self-financing, and to grow its social mission. It doesn't need to go cap-in-hand to the Bill Gates Foundation, or anywhere else, to ask for grants to continue its work.

Another important aspect of the Grameen Bank structure is that its customers are also shareholders.

This is something that Google.org should look into, because its funds and projects could be yanked in the future by Google management or shareholders. If Google.org partners/customers were also shareholders, it would protect it from potential problems.

One of the first projects that Google.org could fund would be to establish the legal structure that others could use to create not-for-loss organizations, in which customers are also shareholders.

The importance of such legal structures should not be underestimated.

We would not have open source software if it weren't for a very powerful legal document, the GPL. This is the license that protects open source software; and it has never been challenged in the courts.

The GPL provides a legal structure that makes it possible for communities of developers to create commonly-owned open source technologies--and be protected from costly intellectual property lawsuits.

Google.org could help create not-for-loss legal structure for organizations with a social mission, the equivalent of a GPL, available in the public domain. That would create a tremendous amount of social value, IMHO.

In thinking about Google handing over identifiable information about users of its Orkut service to Brazilian authorities, and disclosures by Yahoo in China, couldn't such things be avoided fairly easily?

For example, Enron set up huge numbers of off-shore companies to hide its debt and obscure its financial reports. Why couldn't such a method be used by Google, for example, to hide and obscure its data collections? 

Those offshore companies could be made responsible for administration of parts of its services. They could pass back data to GOOG but that data would be only data that was needed for specific tasks.

If there were hundreds of such off-shore companies, maybe independent, handling various aspects of GOOG's services around the world, it would be very difficult for anyone to access, or force access, to personal data on many millions of users.

Contractual agreements between GOOG and the off-shore companies could further prohibit disclosure of personal information to GOOG and others.

Authorities in any country would be hard pressed to chase down or subpoena private data from large numbers of off-shore companies if the data were to be fragmented in this way. It is easy targeting just one big player.

Maybe there is an opportunity for the off-shore financial centers around the world to move into this kind of business?  After all, places such as Bermuda, Switzerland, etc, have strong laws protecting the identity of bank customers. It would be a small shift in the law to protect the identities of Internet users.

The Internet giants could still have their behavioral data on users but it would first be collected and  laundered by the offshore companies to remove identifiable information. There would be nothing to hand over if authorities were to pressure Google, Yahoo,  YouTube or any other web services provider.

Please also see:

DARPA TinyOS developers get $5m from Intel and others

By Tom Foremski for SiliconValleyWatcher Who says Big Brother/Sister isn't coming? It is but under a different guise...

Posted in Silicon Valley Watcher--on March 27, 2006 05:25 AM

Big Brother brings business opportunities

With all the chatter about Big Brother, and government subpoenas for internet usage data, there are business opportunities to be had...

UPDATE: A reader points out that it looks like the Irish Medical Times newspaper was hacked and then picked up by Google. I had posted this hack from Google News with an anti-Israeli message and I asked how GOOG could stop other such incidents and guarantee the integrity of the content.

Google News is one of the world's most popular web sites and a trusted brand. This means it has a responsibility to its community if it is to retain the trusted brand relationship--which Google has managed to maintain despite its super-star status.

http://72.14.203.104/search?q=cache:rX8_ZjbMpf4J:www.imt.ie/displayinterview.asp%3FWID%3D250%26CAT%3D19

Since Google does not employ any human editors, (it is all harvested by machines) the hack hasn't been filtered from Google News.

This calls for a Digg-type credibility system. GOOG can still use machines to harvest content, (more scalable than humans) and the readers can flag potential news hacks. The entire community benefits.

But that's if the community can detect false or doctored stories. A slight doctoring of a company earnings announcement could translate into market advantages for some, and could be difficult to spot in a timely manner by even the most vigilante citizen press corp.

Citizen journalists will be very important unless we figure out viable business models for the profession of journalism; they will be the public's prime media sources, but with the potential for misinformation too.

Private groups will increasingly finance professional journalists and collect and share the information in select groups to gain competitive advantages. Ted Shelton points out that this is the way the Venetian princes won at overseas trade.

Information about ships and prices of goods was valuable to those that had it. It was so valuable, that the Venetians managed to beat out competing trade centers--and also fund the Renaissance.

This transformed the entire known world. The Renaissance was a cultural and scientific revelation, it was the rediscovery of rationalism. This propelled humanity out of a millennium of Dark Ages and into the Age of Enlightenment, and led to our modern world. Not too shabby.

I know that there will be a new generation of Venetian princes from this next phase of the Internet. If it also brings a cultural revolution on a Renaissance scale, that would be interesting. I would certainly welcome a rediscovery of rationalism and the secular society.

Anybody who runs a blog or a web site usually peeks at the search terms that visitors input. It's fascinating stuff because sometimes you can find clues to breaking stories or emerging issues/trends.

And looking at the AOL search term database that was recently released, you can see how people use the search box to make statements, as much as ask questions. The AOL search information is fascinating reading because it represents unguarded thoughts and feelings that could not be collected in any other way.

However, I find it hard to belive that AOL believed it was innocently providing the world with behavioral data and protecting users from being identified. Yes, AOL assigned a numeric code to each user accounts search history, rather than user names. But there is plenty of information in the search terms to identify some of the users.

Now, people will be far more guarded in their use of online services. Surely AOL knew that the data could identify some users. Anybody, even the newest of newbies could look at the search data and see how it could be used to identify people. Yet AOL went ahead and released the information.

Maybe some at AOL wanted to warn others that even if a company says it is not collecting identifiable data on its users, it is not true. People ego surf, they Google their dates, they check up on colleagues and ex-lovers online, they search on phone numbers, etc.

The AOL incident has placed Internet users on notice that their lives are transparent, even in unguarded moments, even when searching for something, anything, even when companies say they are not collecting identifiable data.

One response is to be very careful what you search for. Another response is to poison the database, to create a smokescreen, to use aliases/avatars, to make sure that the data collected online contains only a sliver of the real person.

Yes, it is more work, but you can never know how such information could be used in the future. You can never know if the political climate changes, and some people become persecuted for their past search terms.

And this data never goes away. Google, for example, keeps every search term, keeps a copy of every web site it ever indexed--it never throws away a single byte of data it encounters. And others are doing the same thing, and others have to comply with government regulations in keeping data for many years.

Your every click and keystroke online is being collected by many different organisations, and that means that at some point it will be possible to track it all, and identify most of it. Welcome to the future transparency of your life.

Yahoo Finance has been changed for the better says Yahoo, but many users disagree. Mark Coker tells me the message boards are teeming with complaints.

Here is a sample of what I saw:

There is big risk in a redesign of a popular web site because people are creatures of habit and nobody wants to have to learn a new user interface.

There are already too many user interfaces to learn, too many new "web 2.0" apps to learn, too many new digital gadgets to learn how to use. Every time I change my cell phone I have a different user interface to learn, there seems to be very little continuity.

All remote controls for consumer electronics products seem designed to each have unique user interfaces, even within the same company and the same product families. Even when it comes to positioning the power-on switch--there are many forms of expressing what must be the single most common user interface element.

I've noticed my kids always pick up user interfaces a lot more quickly than older generations. They can figure things out more intuitively. Clearly this is a skill that can be learned: quickly learning new user interfaces. But why should we need that skill?

What puzzles me is why isn't there a best practices user interface for nearly every type of electronic gadget? Surely there must be agreement on placement of keys and controls? Our typewriters have a standard interface, and our cars, why so little else?

It used to be that companies would sue others for copying the "look and feel" of their product, such as a spreadsheet program, or trash can icon. But such lawsuits are rare these days yet we have ever more user interfaces to learn rather than some basic standard formats-- onto which companies could add differentiating buttons and controls.

The lack of standard user interfaces must be the single largest obstacle in growing the markets for digital products of every kind. Nobody wants to have to learn yet another user interface when there are so many better things to do.

I've been thinking about how ideas are created and how they are used. There seems to be a life span to good business ideas in that most ideas eventually become obvious because at some point they will make sense to most people.

Within the startup community there is great fear of ideas being stolen. Many people hang onto their best ideas as if they were unique to them and won't share them easily. Maybe those ideas were unique at some point, they were the first to spot things/trends, the first to connect the dots, but they won't stay that way forever.

Others will find their way to the same ideas sooner or later because they are also working with a similar base of concepts and information. We are all exposed to the same things, although at different times, and that leads to the development of similar ideas.

It is wise to be protective of business ideas for a while so that you can try to monetise them first. But many people hang onto their ideas for far too long, and this can interrupt the process of new idea creation. At some point ideas need to be let loose so that at least you can get a date stamp on the idea, and more importantly, create more good ideas.

I've noticed that more good ideas I talk about, or give away, the more ideas will take their place. Because there is now space within the colloidal supercomputer, our brain, for new ideas to take root and flourish.

Linus Pauling, the two-times Nobel prize winner, said that the way to have great ideas is to have lots of ideas. By having lots of ideas you can pull out the great ideas.

I've noticed that the brain does a tremendous amount of work processing information in the background. Then it will throw its conclusions, ideas into our consciousness and we get that eureka moment coming from seemingly no where. And it's important to write things down otherwise the thoughts will be lost and forgotten.

That's why it is important to turn off the chatter, the many conversations around you. Listen to your own conversation. The reason we get great ideas in the shower is that this is often the only time we are not bombarded by outside chatter from the radio, TV, family, or colleagues. In the shower we have an opportunity to hear ourselves, and that's the source of all our ideas :-)

Google, Yahoo, MSN and the many other search sites and aggregators wandering the Internet with their spiderbots could be in trouble, if their version of net neutrality doesn't survive.

That's because the spiderbots eat up a huge amount of bandwidth, and if bandwidth gets more expensive, the spiderbots are going to suffer. I get 5 per cent of my traffic from more than 18 spiderbots, as they scour the Internet copying everything in their path. They use up about one-third of my bandwidth.

That's a key reason why Google, Yahoo and others, are arguing for everyone to have equal access to bandwidth--at least the last mile pipe to the home--the most important pipe.

If companies are going to have to pay extra to the telcos or cable companies for bandwidth to reach their users, they might not be so pleased to be paying for the bandwidth of the swarms of spiderbots.

I'm fortunate that more than 92 per cent of my readers come directly through bookmarks or RSS, so they know where I live. Many sites depend on 30 per cent to 60 plus per cent of their traffic from the search engines.

And they spend a lot of money to optimize their sites to attract more search engine traffic. But often, this is not quality traffic, it is fly-by-night web surfers.

Web sites should optimize for their readers, not the spiderbots. Let the search engines optimize themselves, that's their job.

If the telcos/cable companies get away with raising fees from the many online companies, to guarantee they have the bandwidth to reach their potential customers, then the spiderbots will be in trouble.

When audience numbers stabilize for a web site, and very few new readers come in from the search sites--yet the spiderbots suck up one third of the bandwidth--then things will change. More and more web sites will be posting a Robot.txt file that tells the spiderbots to go away. They will change because the overall visitor experience is slowed down by the bandwidth hungry packs of spiderbots.

We used to have estimates of how much bandwidth is consumed by email, by SPAM, etc, how about spiderbots? Does anybdy have access to such data?

I would love to know: how much Internet bandwidth is used up by the legions of spiderbots, in their constant search to find and copy new content.

The term "marketing" is broadly used but it carries a lot of baggage such as "spin" and "selling."

Yes, marketing means so much more than the commonly understood term--it is how product development is monetized. But in many uses of the term "marketing" there is an uncomfortable implication that there is some kind of persuasion or manipulation going on, to sell something for which there might very well be no actual need.

"Selling refrigerators to Eskimos," or "taking coals to Newcastle," are examples of sayings that describe this issue. Marketing often seems to be about the use of persuasive marketing/selling techniques rather than the meeting of real needs--not that the two never coincide.

That's why some people are uneasy about doing "marketing" or "selling" because of cultural associations that seem to be more about smoke and mirrors rather than creating value. For example, many times I have had people tell me that the iPod is rubbish because it is "just marketing." As if "just marketing" can be applied by anybody, as if it can be bought off-the-shelf. Clearly, that is not the case, but that sentiment serves as an example of a less than positive attitude towards the term marketing.

Also, the term marketing doesn't seem to fit easily within the culture of the emerging generation of Silicon Valley Web 2.0/Internet 2.0 startups, (and older companies too). Those companies constantly talk about communities: customers, developers, consumers, etc.

But, do you apply "marketing" to those communities...? Within such a context, the term "marketing" feels uncomfortable, awkward, and even inaccurate.

A better term might be "representing." When you represent someone, or a company, or a service there seems to be an associated meaning that there is some personal integrity involved.

For example, it is difficult "representing" something if you don't believe in it. It is much closer to the concept of "keeping it real."

But "marketing" or "selling" doesn't seem to require the same kind of personal involvement or personal integrity.

"Representing" is also a more apt term in describing the way companies or organizations integrate into their communities. Startup teams and their members "represent" themselves, in their day to day activities, and in their interactions with their communities and peer groups, based on their actions as good citizens, and as good members of their communities. That is much more powerful than "marketing" because it is about walk-the-talk rather than spin-and-win.

If I am "representing" something, rather than "selling" something, it feels like I am much more invested personally--with a company, or product, or service. And it is these types of nuances in meaning that are important and have to be recognized when you represent your business, IMHO.

Also, marketing is a different function and set of skills from corporate communications. Corporate communications should not be run by marketing, as it is in most organizations. Corporate comms should have its own seat in the C-level suite. Communications is a strategy-level function and one of the most important departments within a company.

It is no accident that at Cisco Systems, Dan Scheinman, who heads corporate M&A (the core strategy of Cisco's growth), also heads Cisco corporate communications.

Over the past three years she has been working from the company's Manhattan office. She has returned to the East coast where she was raised. She has two young girls, five years and eight years old.

Ms Horn spent 20 years on the West Coast but she says that after the dotcom bubble burst she wanted to "get back to my roots, I needed a new challenge, even though managing a company through the downturn has been very challenging."

I asked her about some of the cultural differences between the East and West coasts. "East coast has more of an attitude of being no nonsense, direct, get the job done. But the Web 2.0 companies out here are very much like their counterparts in Silicon Valley, they have very similar cultures and you wouldn't be able to distinguish the from each other."

One of her goals was to diversify the company away from enterprise software and towards other industries and services. For example, in New York she created a business group that helps companies with web site design, and related services. Now that group brings in about 25 per cent of total revenues and she expects it to bring in 50 per cent within five years.

This is all part of a future for PR/communications that helps companies get their stories out and also publish them. "The Internet is such a visual medium that it makes sense to help companies improve their online presence."

Ms Horn is very much aware of the power of blogging and the new media/social communications technologies that are pouring out of Silicon Valley. Podcasts, vidcasts, new media oriented press releases, and the many different ways companies can communicate are readily apparent from her vantage point. But she admits that it is often difficult to convince clients on best strategy and good practices because they are often stuck in the old way of doing things.

She also recognizes that for PR companies to be more effective at what they do, they have to be recognized as strategic consultants and important partners, rather than subservient to the whims of the current marketing director.

[I've always considered it strange and unhealthy that marketing departments run the communications. Corporate comms should have it's own seat in the C-level suite. That's true in very few companies. There should be a chief Conversations/Cultural Officer or something like that because businesses exist in a society and they need to have the appropriate understanding of the conversations, the culture of that society. That's why SVW reports on the business and culture of Silicon Valley.]

Ms Horn also understands that in today's world PR firms have lost their ability to control the message, and that's a very important realization. Because it means readjusting and accepting the fact that we live in a very different media world today.

[For example, I tell companies that they cannot control their message because the world will tag/label them in anyway it wants, and in all sorts of ways. The new control comes from having the discipline to repeat a message a hundred times and more, making sure that everyone in an organisation understands and articulates a consistent message, time and again. (You'd be surprised at how rare this is!)]

Remaining an independent PR firm is tough in today's world where clients want global reach and representation. But it could be argued that smaller, independent PR companies provide more value, attention and can leverage existing partnerships in other regions to provide comparable services to the mega-agencies.

Ms Horn says that she receives offers to buy her company on a regular basis but she says she is having too much fun to take those offers seriously. "If you are passionate and involved in something, you cannot just walk away from it. I love coming to work everyday," she says.

She shared with me three rules she has learned from running her business:

-The day you think you know it all is the day you need to quit the job.

-There is always far more that you don't know you didn't know.

-Always make sure that the check clears the bank.

Wednesday I managed to catch up with Sean Garrett, one of the co-founders of 463 Communications, an agency that represents tech firms in Washington D.C on tech policy issues. Obviously, net neutrality was a topic we discussed, and Mr Garrett mentioned that the telcos were out spending everyone by enormous amounts on the net neutrality issue.

But this issue is a red herring because there is no way that legislation can force a pipe owner to carry all packets, including its own, on an equal basis. As Mr Garrett pointed out, the real issue is competition, "If we had real competition then the whole net neutrality debate would go away."

That is very true, it's because our access as consumers to the Internet is controlled by the telephone or cable TV companies and we don't have any choice. Efforts by municipalities to provide WiFi for local residents have often been blocked by the telcos yet this is clearly blocking competition.

If we had a broad range of competitors we could choose, and choice is good for consumers, it's also good for the vendors of the infrastructure, Intel, Cisco Systems, Hewlett-Packard, Sun Microsystems etc.

Choice would be great news for the many hundreds/thousands of startups, the so called Web 2.0 companies that are based on the premise of equal access and equal performance on the Internet. Without this capability they will die on the vine--it will wipe out the promise of this next wave of innovation.

The net neutrality debate is bogus because there is no way to mandate/regulate that the communications network owners provide equal access and performance. Because the telcos and cable TV companies want to pump torrents of bits through their pipes in the form of their own services but more importantly, in the form of high definition (HD) TV/video.

HD will squeeze everyone else to the margins and marginalize the entire Web 2.0 generation. That means thousands of small startups, plus the many thousands of VCs and other investors in those companies, will be drastically affected by this net neutrality issue. But Mr Garrett says it is difficult to get the startups interested in political issues that affect their future, that has to change.

So how do we break the local duopoly? And it is a federally regulated duopoly which means the government is part of the barrier to competition.

WiMAX, the Wi-Fi technology on steroids that has a range that can be measured in tens of miles could vault over the walled gardens of local Internet providers. But that technology is not yet ready for commercial use and it might be couple/several more years before it is ready.

In the meantime, HD will kill the Web 2.0 generation by pushing them out of the pipes, IMHO.

- - -

Please also see:

Tom Abate at The San Francisco Chronicle just finished the first in a series on net neutrality, over 200 hours of investigative work: Speed Bumps on the Information Highway

The 463 Blog: Inside Tech Policy which is also a good resource pointing to other good sources on tech policy issues.

Google can sell advertising for much less because it doesn't have to pay for any journalism. Newspapers, TV and radio sell advertising so that they can pay for the journalism.

Craigslist can operate a global classified ads business with just 18 people and do it on a shoestring because Craigslist isn't paying for journalism. It can cherry pick the classified ads business from newspapers and do it insanely cheaply because it doesn't have to pay for the journalism.

So who will pay for the journalism?

Google News cherry picks the best of 4,500 global news sources and it doesn't even want to monetize the business. Therefore there is no way in hell that other media companies can compete against that--because they have much higher costs--and the largest cost is paying for the journalism.

So who will pay for the journalism? You might ask why do we need a professional media class, when we could empower a citizens army of amateur journalists, as some are trying to do.

The reason we need a professional media class is because amateurs do an amateurish job. And that is bad because our society, our economy, depends on high quality information.

In the IT industry, all software engineers know GIGO. This stands for garbage in, garbage out. It refers to the quality of the data that a software program processes. If the data is corrupted in some way, or the source is unreliable, then the end result will also be the same.

We need high quality media in abundant quantities so that we aren't harmed by GIGO.

Professional journalism is a vital pillar of our society, it is sometimes called the Fourth Estate, right up there alongside the Church, Government and the People. Yet professional journalism is fast disappearing because the business models that supported it are disappearing.

I've been asking for more than a year, "what happens if the old media dies before the new media learns to walk?" Media is how society "thinks" it is how we figure out solutions to important problems.

And we have some very big problems ahead that demand the best, high quality information. There is Bird Flu, there are huge political issues to deal with, there are enormous ecological challenges ahead.

Yet we have a sick media sector that is getting worse.

So who will pay for the journalism? Last week Eric Schmidt, Google's CEO seemed irritated in answering the question "when will you monetize Google news?"

But this is an incredibly important question because if Google was determined to monetize Google news, then it would associate some value to the content. Then the content producers could charge Google and any others, and funnel back the money to produce high quality news media.

That would be a virtuous cycle and Google News would be supporting an extremely important and extremely vital resource that is a pillar of a healthy society: high quality professional journalism.

Instead, it cherry picks the best and refuses to try to monetize the news it copies, which compounds the problem because it associates no value to it. Yet our society, our businesses, associate a tremendous amount of value to high quality journalism.

Google is inadvertently blocking the ability of news organisations to monetize their work. That harms our ability as a society, and as an economy, to make the best decisions.

We need to have a vibrant professional media, competing to produce the best, high quality news media. Because then we are likely to make the best decisions, and choose the best future.

I'm hoping Google will recognize that "Don't be evil" means nothing and that "Do some good" is what Google founders and employees would rather be doing (that's probably what the Founders meant so say).

Google has a chance to do some good on a massive scale. And Googlers love big challenges; the Gordian Knot of this next phase of the Internet is how to pay for the journalism we need. Google could become the saviour of the Fourth Estate rather than one of its pall bearers.

- - -

[Published in an experimental format across different sites, the first part is here, the second part is here.]

As more and more business products and services become digital, they become vulnerable to what I call "cherry pickers." Competitors can target highly profitable businesses because those businesses provide a high price umbrella.

IBM for example, spawned a massive "IBM mainframe compatible" industry three decades ago, because of its high price umbrella on mainframes.

Those companies with highly profitable business groups are sometimes using those profits to help support less profitable, sometimes rarely profitable, business groups.

Hewlett-Packard, for example, has over the years managed to use its highly lucrative printer business to help it support its PC business, and its information technology business. It could be said that H-P's sales of printer ink, at various times over the past decade, have subsidized its other business groups for many years.

And that's why H-P's most valuable intellectual property is the design of its printer ink cartridges--which prevents copycats providing printer ink at sharply lower prices.

H-P has managed to stop cherry pickers from running off with its printer ink business and allowed it operate large, rarely profitable business groups. Those business groups have provided a lot of value, to customers, to employees, and to their surrounding communities around the world.

But other companies, other industries, haven't managed to stop the cherry pickers. That's especially true for the media.

Google News is a good example of a media cherry picker. When launched in 2001 Google News quickly became a fabulous success. It was the first aggregation of news stories copied from thousands of news organisations, and published in a very accessible user interface. Google News scans thousands of mainstream media news sites, copies and publishes the headline and the first paragraph and a photograph. It is a very good service.

It's an extremely low cost for Google, the news stories are harvested by machines, and they are presented by machine. At the bottom of the Google News home page you will find this text proudly displayed:

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

Google News was one of the first services it launched, one of many dozens today, yet it does not monetize this service. At last week's GOOG press day, its executives were asked if they would monetize news, the answer was that it was on the list, but that there were some more important projects that would be monetized first.

One of the journalists asked, where on that list is Google News? Eric Schmidt showed a little exasperation when he answered, saying, that it is obviously below the cut off point...

(Please continue reading...)

It was not ethical for Microsoft to drive out companies in its adjacent businesses. Yet time and time again, Microsoft moved into markets which had established companies in them and they took over those markets leveraging its dominant position in PC operating systems.

Apart from the conviction on illegal anti-trust charges, there seems little to distinguish MSFT and GOOG business strategies. And that is something that Google should be careful about.

In the 1980s, the US semiconductor industry managed to persuade the US government to make it illegal for foreign companies to sell memory chips below their cost of manufacture. It was called "dumping" and it was a practice that harmed the chip industry, led to lost jobs and threatened the future of many semiconductor companies.

Google is "dumping" lots of online products onto global markets. What is to stop say, China or France, from blocking Google's online services because they are being "dumped" onto their markets? I'm sure it wouldn't take much to prove that Google's actions are harming some small Chinese or French competitors.

And it is dead easy to block data packets. I can't see any nation allowing large foreign online companies to dominate the online worlds of their domestic commercial sectors. Old-fashioned nationalism comes in handy sometimes. And I predict that Google's limitless business plan will run into limits far sooner than it expects.

. . .

More on this subject on Tuesday.

[This is an experimental publishing format, a distributed column across different web sites. The first part is here. The second part is here. The first part leads you through all three sections.]

Is it OK for Google to launch numerous businesses and not seek to monetize those businesses? Is it OK for Google to take advantage of its huge scale, its global operations to muscle into new markets and create businesses and not monetize those business groups?

Is GOOG acting in a similar way to Microsoft, when it used its huge scale, its global operations to muscle into new markets and businesses and not monetize them?

When I was at the Googleplex HQ last week for the annual Press Day, Google announced four products. It already has a multitude of products, ranging from web based email, to desktop applications, and even drawing and photo management software. Also, sophisticated web analytics, web site creation software, maps, instant messaging, news, and lots more.

Only a tiny fraction of those products are monetized, the rest are free, and free of advertising. Larry Page, co-founder called them "experiments" and said that they are "beta" products.

He can call them what he wants but each one of those products competes with many much smaller companies, and the fact is that the smaller competitors cannot compete. Because Google has the scale, it can integrate those products into a global operation and global platform because of its size.

And it can continue doing this again and again. Its organizational structure is that its engineers spend one-fifth of their time creating new online products and services. Its development teams are self-forming, and don't require any extra investment, Google already pays their salaries for their regular jobs, it gets the innovation for free.

This means it will continue to produce ever more products and services, again and again. At the Press Day event Eric Schmidt, the CEO announced a "limitless" business model for Google, he said the company saw no limit to its expansion and predicted that it would become a $100bn revenue company.

(Please continue reading part two....)

[Here is Part 1]

There is a strange phenomenon that I've encountered and it seems other people have had a similar experience [I was talking with veteran UK journalist David Tebbutt (Thinkerlog blog) last night about this].

I will sit down to write an article on a topic and I know what I'm going to write....yet I end up with something completely different. It's as if I'm "thinking" through my fingers. Until I sit down and start writing, I never know what is going to be the end product because the act of writing can change the article.

So, with the "Bad Competitor" post on Monday, I've been engaged in some online debate on this topic and I've realized a few things. I've realized that Silicon Valley is full to the brim with bad competitors.

By bad competitors I mean other companies trying to commoditize your business while defending their core business, thus everyone is vulnerable to a bad competitor, someone that can provide a product or service at a fraction of your costs.

So for the newspapers, an excellent service such as Craigslist, which monetizes less than one percent of its business, is a "bad competitor." There is no way newspapers can compete.

And there are thousands of startups in Silicon Valley that would absolutely love to be the "bad competitor" in their target market. In fact, that has to be the base line for any startup--that it can provide the product or service that is ten times as good for one-tenth of the price. Okay, this is just my rule of thumb, but you get the picture, the startup's solution has to be massively compelling to overcome adoption/switching costs.

Bad competitor startups will succeed because what they have is so much better than what is available, it is a no-brainer. And that is the way capitalism works--money finds the path of least expense--if it is allowed to.



And so the future leads to a form of capital entropy. Anything that has a cost structure high enough, that can be attacked, will be attacked. Any business that has high profit margins is extremely vulnerable to attack by a "bad competitor."

But bad competitors are only bad to the victim companies--the market loves them because the customers benefit. However, after many millions, billions of these challenges to accepted business models, at some point, we will reach a interesting point in the evolution of our global society. We will have come to a point of maximum efficiency--what happens then?

Let me put it another way. About 12 years ago or so, I remember the thrill of interviewing Dr. Eric Drexler, one of the pioneers of nanotechnology. And the interesting thing was that Dr. Drexler was not much interested in the mechanics or the science of nanotechnology.

He said that the way our industries are progressing: manufacturing, chip industry, chemical sciences, biological sciences etc, we would get our nanotechnology society sooner or later. At the time, he estimated about 15 years. Clearly, it might be another 15 years from now, but whatever--it is not a long period of time.

What struck me was this: he said, what happens when we can make anything ten times better for one hundredth the cost? How will that affect our society?

And that is exactly the path we are headed--what happens when we can make any product or offer any service for one hundredth of the cost and at least ten times the quality? What kind of society will we have?

Clearly, it will be a society that will be completely and utterly alien to ours. It will be a society where not everyone will have to work, in fact work will have to be redefined completely.

Will it be a golden age or a frightful age? I don't know, but that's where we are all headed and we will probably see it in our lifetime...

I've been thinking about "bad competitors" after coming across this excellent speech on the future of newspapers by Phil Meyer, Knight Chair in Journalism, University of North Carolina at Chapel Hill at a conference in August 2005. [Craig Newmark is founder of Craigslist, the classified advertising company.]

...they [newspapers] don’t have a monopoly. As sure as Craig Newmark is sitting in this room, they don’t have a monopoly on classified advertising, and there’s lots of other stuff they no longer have a monopoly on. They have a monopoly on being newspapers. But that’s not the point. The point is that the services they provide are being provided cheaper and more efficiently...by somebody else. I first met Craig at this meeting and I shook his hand and I said, “Craig, you are what the Harvard Business School calls a bad competitor.” A bad competitor is somebody who will provide a better service at a lower profit margin. Since Craig isn’t interested in any profit margin at all, he’s about as bad a competitor as you can get. And this is going to continue.

Check out the The Sunday Times (of London) recent feature on Craigslist quoting Craig Newmark and Craigslist CEO Jim Buckmaster:

From Sunday Times May 7 magazine: Falling for super-geek

. . .Newmark drives a Prius, a petrol-saving hybrid car. Buckmaster has never owned a car. They both take the bus to work in the morning. “I don’t really want a Rolls-Royce or a huge, fancy house,” says Buckmaster. “Money is important until you have enough of it to be comfortable with. Beyond that, I think it’s a very mixed bag.”

. . . For Newmark and Buckmaster, the internet has a higher calling than money-making. It’s a view many shared at the start of the dotcom revolution. But one by one, Craigslist’s contemporaries at firms like eBay and Google have joined the rat race and made billions. The Craigslist duo could easily join the dotcom rich list if they chose to sell the company. The idea is anathema to them.

. . .Classified Intelligence Report, an industry newsletter, found that in San Francisco the main newspapers lost over $50m in classified revenues in 2004 because of the Craigslist effect.

[Please note: I am friends with the Craigslist team, and have eaten many a meal at the generous table of Jim Buckmaster and Susan Best, and Craig is often there too...]

There are bad competitors in the enterprise IT arena, especially if you look at the way enterprise software competitors are trying to turn their competitor's core markets into commodities.

Nicholas Carr over at Rough Type says it well (in reference to one of my posts about SAPs strategy.)

From Stack War:

SAP's trying to commoditize the database, by promoting, for instance, the open-source MySQL; Oracle's trying to commoditize middleware, also by promoting open-source options; and IBM's happy to commoditize the applications (while maintaining an escape hatch to "business process automation" up above the stack).

It's an interesting dynamic that, in total, would seem to simply accelerate the commoditization of everything.

-And you can see it in the music industry too. Take a look at Yahoo Music, one of my favorite web services. For just $5 per month I get access to an amazing catalog of music, any time, any place, even from a friend's computer-- you'll never use iTunes again. You'll certainly never buy another $20 CD.

-Take a look at the dozens of me-too companies in each category funded by Silicon Valley venture capitalists. There are more than a 120 news aggregators for example, and more coming. How many "wiki" companies are there? Every new idea in what they call "Web 2.0" is copied and commoditized within weeks.

-The outsourcing business is driven by bad competitors. Overseas IT services companies that do it for far less than local companies. They could get more money for their services but choose not to so that they can win more business.

-Somehow, in the 1980s, the US chip industry managed to persuade the US government to punish its bad competitors. In those days it was the Japanese memory chip makers and Intel (INTC) was leading the push for tariffs against Japanese competitors for "dumping" on the US market. Dumping meant producing chips for less than the cost of their production, to win market share. That became illegal.

-Robert Scoble, Microsoft's top blogger creates millions of dollars in good PR for his employer for the cost of an engineer's salary, about $100k. Microsoft's PR agency Waggoner Edstrom cannot compete with the ROI on Mr Scoble. It's something PR companies everywhere will have to face.

And there are many other examples of competitors either behaving stupidly and ruining the market for everyone. Or, competitors that don't monetize the markets to their fullest opportunity and thus are not creating wealth for themselves, their investors, or their employees.

So where does this trend lead?

Should it be illegal to make a loss in order to gain market share?

Should it be illegal for companies to make bad decisions that ruin the market for everyone?

Does a company have a moral or ethical obligation to increase the monetization of a market so that it can employ more people and provide additional services for its communities?

Are companies that use very profitable business groups to prop up less profitable businesses groups acting as bad competitors? For example, Hewlett-Packard's printer group has subsidized the IT group in the past.

Are the telcos and cable TV companies "good competitors" because they seek to block any Internet threat that would commoditize their services and thus force massive layoffs??

This bad competitor trend will only intensify because it can't be stopped.

What happens next?

I recently wrote a post arguing that Google, Yahoo and all the other online giants have put up a half-hearted defense of Internet neutrality because they have a lot to gain from the absence of neutrality.

The tech giants that have the most to gain from net neutrality are not the web services companies but the infrastructure providers such as Cisco Systems, Intel, Sun Microsystems, IBM, EMC, Dell and Hewlett-Packard. And it is puzzling why they are so quiet on this issue.

If the Telcos and cable TV companies are allowed control the choke point--the last mile connection into the digital home then that cuts out competition. Without competition you have far fewer infrastructure builders.

This means that to get to the next stage of high speed broadband is going to take a lot longer because the Telcos and cable TV companies operate a duopoly in most markets. They'll get around to upgrading their networks when they get around to it.

There is no competitive pushing and shoving to get them moving faster. And there is no competitive infrastructure building which is bad for the big IT vendors.

Plus, it is a bad situation for thousands of Silicon Valley startups (and their VCs) that are banking on ubiquitous high speed broadband connections at low prices. We've been here before: During Internet 1.0 a lot of startups were way too early in their expectation that millions would soon have (low speed) broadband connections and they went out of business.

Now, we have millions with low-speed broadband but it is the rate of adoption of higher speed broadband that will determine the fortunes of the next generations of Silicon Valley startups.

Yet the startups are too tied up with their ventures and blinkered from seeing what is going on in the political realm, where the Telcos have huge sway thanks to institutional connections that span generations. They are very good at lobbying against any legislation that mandates net neutrality.

The leading Silicon Valley companies such as CSCO, INTC, and HPQ, all have much better political connections than the newbies such as GOOG and YHOO. However, the executives at the big IT vendors are extremely shy in speaking out on this issue when in private, some of them will agree with me that the actions of the telcos are harming their markets.

They won't speak up on network neutrality because they don't want to upset their "valued customers." But those valued customers are costing them the loss of a much bigger market.

In my humble opinion they should be taking care of their valued shareholders. They could sell far more infrastructure equipment if the Internet is open, neutral and there is unfettered access to the digital consumer.

- - -

Please see:

Check out this Washington Post interview with Scott McNealy and how this former fearless iconoclast sidesteps the net neutrality issue.

Here is a summary of news coverage on net neutrality from News.com.

Here is Wikipedia on Net Neutrality as law.

I had some invites and it was a gorgeous evening in San Francisco and so I just wandered in and out of various places, content to observe and amble around.

And this is the point of this post: I can walk into any room and talk with anybody and I will walk away with a story. I like to joke with people that there are so many stories here, that I can kick over an empty soda can in the street and find a story. And it's true, and I do it time and time again.

So this evening I met the very excellent Chris Heuer, and his delightful entourage. And the wonderful thing about all of this is that there are so few people that speak this freakish pig-latin that people in the bloggerhood speak.

I certainly didn't speak it until I became a journalist blogger about a year or so ago. And at the time, I would estimate there were maybe 150 people that understood this special language...

Now, there is at least a 200 percent jump in that number. There might even be as many as 500 people that speak this language, worldwide (most are here).

And that number will not hockey stick, it will jump onto a logarithmic scale very, very soon. But in the meantime it's great to find like minded souls.

And it is so wonderful to be here, in Silicon Valley, the birth place (again!) of the next big thing. I've spent more than 20 years here, covering Silicon Valley as a reporter, looking over other people's shoulders with my notebook in hand, saying "Wow, that looks really interesting, tell me what you are doing."

Now, my colleagues in the mainstream media call me up and say "Wow, that looks really interesting, tell me what you are doing." It doesn't get any sweeter than that.

There is a new trend emerging, but it is not where you might expect it. Silicon Valley is buzzing, there is a new energy in the air, but it is not where most people think it is.

The next big thing is ... [I'll tell you if you ask me :-)

- - -

BTW, Chris Heuer and his buddies are heading over to New Orleans next week to bring the new social/media technologies to the neighborhoods and the small businesses that anchor the city's communities. It's a real test of our collaborative media technologies; if we say these technologies are powerful change-agents then let's put them to use in the most needed areas of our society!

My focus is schools, but there are many other places that we can put these powerful and very inexpensive technologies to great use. I support what Chris and his group are doing and you can too. You can contact Chris here on his web page if you'd like to help.

Yes!!! Put-this-in-your-pipe all you "Die! Press Release Die! Die! Die!" reactionaries...

This just in from Todd Defren over at Shift Communications' PR Squared blog.

I received a note from the "rising star" staffer who's in the graduate PR program at Boston University, in response to the latest series of posts.

She wanted me to know that our "Press Release of the Future" (and Tom Foremski's inspirational rant) had been passed around and discussed in class, and that the professor recently informed his students that their Final Exam would include questions on this "PR 2.0" topic.

From: Already making a difference.

I've been thinking a lot about the many ways companies can engage in new types of competitive battles for the pole position on that first page of Google's search engine results--which is defined by your PageRank.

Over on ZDNet, I've been writing about the potential for PageRank assassination and other nefarious acts of information warfare:

I'm not an advocate of search engine optimization techniques--beyond the basics. Because I believe you should optimize your site for your customers and not the spiderbots. Let the search engines optimize themselves to find the right content--it's their job.

However, the techniques of search engine optimization have potential application in the reverse: they can be used for PageRank assassination. [PageRank is the relative importance Google assigns to a web site] You can apply SEO techniques to potentially cripple an online competitor by making it seem as if it is engaging in forbidden SEO practices.

Google has strict policies on what you can and cannot do to make yourself visible to its spiderbots. And other search engines also try to root out web sites that are using SEO techniques to try and trick them into a higher PageRank.

Google will dumb-down the PageRank of a web site if it believes it is engaging in non-prescribed SEO practices. And it has even banned the web site of a large corporation, BMW in Germany, to show that small and large companies can be banned from its index.

The potential for competitors taking potshots at each others' online reputation is just too tempting. And such activities can be easily disguised.

And there are many other strategies of online competitive warfare that could tempt companies, such as renting a zombie network for an afternoon or two to mount a DNS attack on a competitor.

But it doesn't have to be sneaky. Public companies are vulnerable to scrutiny by the media and investors. A competitor could encourage the scrutiny of certain weak business groups, as an example. Bringing attention to problem business groups within a competitor can be easily done in many ways . . .

[Please continue reading . . .]

Newspapers need to get away from thinking that their distribution mechanism (newsprint) defines them. The distinction between print and online has to go away.

News organizations should see themselves as content creators. Print and electronic media are the distribution channels for their news content.

And there is no sense in locking up the content by asking readers to pay for it because we live in a world that is one big scramble for attention. We've realized that in a world with 500 cable channels, a gazillion Internet channels (web sites) and our families, friends, boss, colleagues, (and our internal) clamor for our attention is huge.

That is why if I can get two minutes of your daily attention on Silicon Valley Watcher that is great. But there is a responsibility here. Attention is a scarce resource that is why I feel a responsibility to provide something of value because I am taking time away from your family, friends, boss, etc--all these very important people in your life.

I don't want a "sticky site" I want readers to come in and out as quickly as possible. I want them to always leave feeling they got more than their time investment.

Old rules still apply

I don't want to add to the noise, I want to provide original, you-can-only-get-it-here scoops, interviews, insight and sometimes, fun stuff. And I want it available to everyone and anyone with an interest in such things.

These have been the traditional goals of newspapers for hundreds of years. The new media operates on the same principles, it is just that the distribution channels have multiplied; newsprint or online--it should not matter.

Yet in most newspapers or news magazines--the online journalists and editors have been a separate group and very much second-class citizens. That is changing rapidly but the ingrained discrimination means that many print journalists dislike becoming "online" journalists. And the blogging revolution now means that these journalists have to interact with their communities--which is even more work on top of already low salaries.That is why this transition to the new media world is tearing apart the professional media sector.

It will regroup, and it will reform, and it will become a better professional media sector because we will realize media is all about the battle for attention and professional media people are good at grabbing attention. This is a valuable talent for any business and that is why news groups will be valuable businesses--once we've gone through this transition.

Some of the new rules

In order to grab attention you need unfettered distribution and easy access. Newspapers should be available for free in public places such as restaurants and coffee shops. In fact, they already are--a lot of diners and coffee shops have a central basket of newspapers that were left behind by patrons.

But the format of newspapers and news magazines will have to change. They have to become showcases of their overall content available through any and many electronic means of distribution.

The business model can still include subscriptions, and news stands can still sell newspapers and magazines but that will be just one avenue for revenues. The business model will include many different revenue streams, of which some we know and others will be invented.

News organisations will sell attention instead of papers. And the electronic forms of distribution will enable them to sell far more different types of products and services than just printed adverts...(that's the secret of the new media :-)

- - -

[PS: I'm away most of this week at Tibco's user conference in Florida--full report when I get back.]

SVW reader Todd Defren has proposed a micropayments system for content, but I don't think such a thing would work because people don't like being nickel-and-dimed for content.

[Please see SVW: We need a Google AdSense on Steroids to pay for content.]

Also, payment for content implies that if you don't pay you don't get to read the content. I wouldn't want to lock up my content behind a subscription firewall I'd like it to be free to roam the internet.

However, what about a type of commercial trackback? What if linking to a blog post you agreed to run a small text link advert at the bottom of the post as part of the blog link policy?

For example, if someone were to write a blog post and link to this post. The blog software would ping this post and then send back a text advert link. So at the bottom of the post linking to this one would be something like this:

[Links in this post are from: Silicon Valley Watcher, Scripting.com, WikiPedia.

These links are sponsored by: Dreamhost--for all your web hosting needs.; "The Power to Predict : How Real Time Businesses Anticipate Customer Needs. ]

The blog software would assemble this bottom panel automatically. It would be a type of Google AdSense advertising network that is "stuck" to the content and follows the content wherever it is reffered to or quoted from. And, it could be done in such a way that everybody could share in the revenues.

For example, if one of my readers writes a blog post and refrences my post which might be sponsored by Amazon and thus an Amazon text link appears on any reffering blog post. If that link on the other blog post generates a sale for Amazon, I get a piece of the sale but so does the other blog site, and so on down and up the line.

In this way, a popular blog post would be able to have broad distribution of its content and its associated text advertising link. Those blogs reffering to the original post would bring attention to the original post and thus are creating value. They get to share in the monetisation of that value through any clicks/sales on the text ad link.

The virtuous trackback

Could you scam/spam something like this? I don't know. There would be nothing gained from just blogging other posts hoping to get affiliate clicks/sales unless those original posts carried some intrinsic value. And bloggers agreeing to such a setup would know that they are helping support the creation of the original content, thus creating a virtuous cycle in which good/great content is rewarded and monetised and reinvested in producing yet more content. It's the virtuous trackback :-)

Another aspect is that because of permalink, one popular blog post would essentially create an advertising network across many pages on the internet and it would be permanently there. Thus, the original sponsor of the original blog post could be changed, and that would be reflected in all the other, connected blog posts.

What do you think? Maybe we can get Dave Winer to comment on this since he is the inventor of RSS and trackbacks. What do you say Dave? Can you give us a commercial virtuous trackback so that we can pay for content without going to micropayments?

These links are sponsored by: Dreamhost--for all your web hosting needs.; "The Power to Predict : How Real Time Businesses Anticipate Customer Needs.

I've been really enjoying my job lately. I've been writing a lot about the open source movement and the changes it is having on the enterprise software market. Ingres is an excellent example of how the most innovative business model thinkers are taking advantage of the market opportunities.

I feel that I am often in a unique and fortunate position to move quickly on stories. And that is great for a journalist blogger--which is how I define myself.

What is also very interesting is that I don't have a business model to defend, or a boss looking over my shoulder. That means I am free to call things as I see them.

For example, I've been taking on the least progressive elements of the PR industry in my attack on the press release in its current format. I've offered a design for "new media" press release which has inspired many people to create totally new types of news releases.

The role of journalism - professional and citizen

It's not that I'm the only one that sees things "as I see them" because many others understand my positions. But I often am able to give voice to those that cannot speak directly. And that is one of the major failings of "citizen journalism."

There are members of our society that need to have independent journalists tell their stories. And that is what professional journalists do every day--they help our communities tell their stories.

That is our mandate as journalists and nothing has changed in this new media world--except that the delivery mechanism doesn't rely on a newspaper delivery. It's all about the content not the delivery mechanism: paper or plastic (or digital)? It sounds ridiculous to make such distinctions when you think about it.

Dan Gillmor, the great champion of citizen journalism is right when he says his audience knows more about a news subject than he does. But they cannot tell the story. They would get in so much trouble if they wrote about what goes on at work under their own names. That is why journalists cultivate contacts over many years, so that those contacts feel safe in telling their stories.

Yes, there is no transparency in such cases, I will not reveal sources to whom I have pledged anonymity. But it is an important way that journalists can communicate news and information that could not come out into the open in any other way. And the more information is open and shared, the better it is for all.

Media is how society solves big problems

Media is how society thinks, it is how it debates and discusses important issues. That is why it is important to have a professional media class--supported by a citizens media army in the form of blogging and fact checking. That is a scenario for a high quality mediasphere.

And we need a high quality mediasphere because we have some towering problems ahead to solve. Avian flu is the most immediate, but there is a long line of equally disturbing challenges ahead for us that require high quality information widely distributed.

We have one Mediasphere

A couple of Sundays ago, Al Saracevic, deputy business editor at the San Francisco Chronicle was at the CyberSalon in Berkeley. He asked the assembly, [which featured many of the blog/media demi-gods of our times,] can you figure out a way to pay for him and his editorial teams? Al is now a blogger, and he understands that both blogging and newspaper journalism share one mediasphere--and they share the lack of a viable business model.

Blogging is not disrupting journalism--that is a false comparison. Blogging enhances journalism, it contributes to journalism, and it helps disseminate important information in a way that no other way has managed before. This combines to produce a higher quality mediasphere -- at least for now. The problem is the decimation of the professional media by the marketing money flooding toward search engine marketing.

Our current media business models cannot carry the information load because they are being decimated faster than the ice caps are melting. What happens if the old media dies before the new media learns to walk is something that I have been warning about (thanks to Sam Whitmore) for almost nine months. And it is getting worse.

I know we can solve the challenges that face us, because humanity has incredible capabilities. But we must solve the most important Internet problem: how do we recover (pay for) the value of high quality media content? Right now, all the money is in aggregation of news/content, such as Google News, and pennies for the creators of content.

This is the Gordian knot of the Internet, figure out the value-recovery-mechanism that rewards high quality content and pays for more high-quality-content. Are there any Alexanders out there?

This is a virtuous cycle--one that Google AdSense took a baby step towards solving and then stopped.

We need a Super-duper-supercalafragalistic-AdSense that can reward quality content with real $$$ that can lead to investment in yet more quality content.

We don't have that value-recovery-mechanism and without that we are in serious trouble. Because we have no sponsor for journalism.

Selling products by advertising around journalism used to be a cost of sales. Now, it is far, far cheaper to sell products/services around the search box.

How will we pay for the professional journalism that we need? Solve this problem and you will inherit a chapter in Wikipedia. And I'll commision a statue in your (best) likeness.

- - -

Update:

- What about a virtuous trackback? - Could this be one way to pay for content?[Read]


- - -

More than a year ago, on February 3 I wrote the this post and it caused a stir in the nascent BlogoSphere. I stated a hypothetical scenario and something which could be one of several flaws in the pay-per-click advertising model--the dominant form of online marketing.

There were quite a few people that didn't understand it, but that was fine because I didn't want to seem as if I were yelling "fire" in a crowded place. The people that did understand it understood the significance of the scenario.

Today there are larger numbers of people that will understand the riddle. And although I use Google as an example, it is not specific to Google, it is something that would affect many other advertising networks.

Here is the original post and I'd be interested in an original solution (I think I have one :-)

Here is the scenario:

A billionaire has arranged to give $100m to the first person that clicks on a special link that looks like a Google text ad.

Giovanni Rodriguez from Eastwick Communications, seems to think that Strumpette, the latest out-of-left-field blogging sensation written as a stylishly erotic PR blog, by Amanda Chapel--is a fake.

Maybe, but...does it matter? It is wonderfully entertaining and I sent a personal email of encouragement with some of my top blogging tips and said I'm happy to help out with any advice needed. I also said that I would respectfully keep confidential any private correspondence between us--unless agreed otherwise by both parties. [This has to become a basic rule of social etiquette in this day and age when anyone can publish.]

And, I would also keep quiet if Amanda were to be a single or group project. Either way my blogging advice remains the same.

Here is Giovanni's comment and my reply. Let me know what you think about my idea for creating a persona that several writers could share on a weekly basis...I might enjoy it, I'd give it a try, anybody else?

by: Giovanni Rodriguez on March 27, 2006 06:20 PM

Strumpette is a H-O-A-X. Sez me.

Do we have any evidence that "she" exists? Yes, there's a blog. Yes, there's email. What else?

Reply by: Tom Foremski - Silicon Valley Watcher

That's what you said last time G. You said SandhillSlave was a man and I said no way and I betcha I'm right.

Strumpette's Amanda might very well turn out to be a group hybrid personality--it would be fun either way. It is certainly entertaining so far. Maybe we could all take turns to be SandhillSlave or Amanda and play out a persona. Perhaps the real person could be hidden among a flurry of writers and able to protect their insider identity...?

What if we were to adopt a real or imaginary persona, one with a distinct blog voice/online personality, and several people agreed to write one blog post per day within the character of the blog persona? That could be interesting, and maybe even compelling content...

So for example, if Amanda is a composite of several persons then we could have several writers randomly writing as Amanda... They could be semi-fictional semi-factual stories for entertainment purposes only...and they might even protect the anonymity of insiders?

What do you think G? Could you pretend to be Amanda, or an Angela or an Angus, for one day? I bet you could do it with your theatrical background... you could probably manage all three :-)

It includes a link to a video clip of myself (blush), I was on a panel with Joe Trippi, Howard Dean's political consultant and probably the most high profile political consultant in the US right now because of his experience with blogging and other media technologies, used to great effect during Mr Dean's presidential bid.

[Andy is a consumate professional and has been one of my earliest and staunchest supporters especially when I left the FT and ventured forth to test out the new media waters nearly two years ago...He and his family are also wonderful hosts whenever I'm in New York, which is not often enough.]

Hope all is well. After sitting out the blog world for a while, I've
jumped in with a video blog, which I have titled Beet.TV - it's on the
very cool VideoEgg/TypePad platform.

It's a work in progress. I wanted to present thinkers in the

media/PR/tech space - it's a great way for my firm to keep in a

leadership position and to create a new platform for our ideas and

clients.

Here's a clip of your excellent appearance at last year's Impact.

http://www.beet.tv/2006/03/tom_foremski_on.html

All the best, Andy

Andy Plesser

Plesser Holland Associates New York + Washington

Microsoft A-list blogger Robert Scoble says he wants to be off the A-list blog roll--things are getting way too mean. Yep, that's true. I try not to be, it's too easy.

http://scobleizer.wordpress.com/2006/03/16/the-new-a-list/

. . .

I went to the "6 Poets at 6 Gallery" event Friday in North Beach because of my interest in the Beat Generation and its historic lineage to blogging, and thanks to Allison and Erica who got there early, we had the best standing room in the house, right next to the poets. It was a fun event and I met a lot of interesting people.

The rest of the evening, however, is less easily recalled. I remember something about expressing my own personal "Howl" at the world towards the end of the night...

I could claim to have been aroused by the passionate poetic visions so wonderfully recreated. But I think forgetting to eat during the extended social part of the evening had something to do with an interesting, but highly unrecommended odyssey back home.

Let it roll: A celebration of beat and blog literature; shoot-from-the-hip-one-take-journalism

The Beats: celebrating the obscenity of literature

. . .

Strumpette: A naked journal of the PR business is the new chick on the blogging block, smart and se.x.y, and that's just her writing. Her physical description of herself promises pert parts and other fine qualities of a pertinent nature.

And she has the top male PR bloggers eating out of her hand and she just launched(!) Amanda, don't you just feel some days that it is all just too easy :-) Or, are you really A-Man-Da!

Personally, I try to go for the more challenging muckraking--I figure I can do the easy stuff later...

[BTW, Steve Rubel couldn't, wouldn't, and doesn't need to take on Richard Edelman. He'll be there a long time...that's where I'd put my 25 bucks. I'll even put 25 on you making it to Edelman within the year, if you can build your pagerank :-)]

I'm sick of all this criticism of the content on MySpace.com. All the fuddy duddies are warning of hell in a hand basket again.

I peeked in on MySpace more than a year ago and I was very impressed with the writing, the tone that teenagers could set with very few words. I found some great writing and I found some writing that could only be described as Joyceian in its form and ambition. I was super impressed. Yes, I didn't understand a lot of it--but I'm not the target audience.

Let the kids express themselves in the manner and way they want to. We are lucky that they feel able to express themselves in such a public way that we can occasionally look at it. They could lock it up and share it only among themselves.

I wonder what they would say if they read our ramblings about Web 2.0, and online business models, and Google this, that and the other?

Here is Scott Karp: Ticking time bomb.

Here is Nick Carr.

Update: Here is Dana Boyd on MySpace.

Here is some wisdom from a Lebanese writer K. Gibran:



Your children are not your children.

For life goes not backward nor tarries with yesterday.

There is a very interesting trend emerging in how companies are dealing with the key issue of business strategy. The savvy ones are beginning to realize the benefits of combining the roles of business strategy with corporate communications.

And if you think about it--it makes perfect sense because strategy and communications are naturally linked. Yet in most organizations the corporate communications is run by the marketing group. In my opinion, corporate communications and business strategy should be one and the same. And I'm beginning to see some examples of companies implementing such positions.

Here are some examples of strategic and corporate communications roles being combined:

-Dan Scheinman is head of Cisco's mergers and acquisitions, this is the key strategic role within the network giant because it relies on acquisitions to become the drivers of future revenues. It must choose acquisitions that are on the cusp of large markets but it has to figure out what those markets will be, two years and more into the future.

Mr Scheinman also heads corporate communications at Cisco, and in this role he can direct the company message, make sure that internal communications and external communications are synchronized. And also communicate to customers and investors Cisco's strategic roadmap repeatedly and consistently--and now, potentially collect feedback with blogging tools.

Cisco is thus able to keep tight control over its message and repeat it, time and again, and make sure it fits in with its business strategy. And that is the way it should be. Corporate communications should not be run by Cisco's marketing group or an outside PR agency. However, PR agencies can provide useful support services in executing media/business strategies.

-Charles Philips is one of Oracle's presidents, he is not head of corporate communications, however, he does have a personal media brand that he uses to support Oracle's business strategy. As a former star Wall Street analyst, Mr Philips built a large following among the analyst communities, and in the press as a savvy and insightful analyst.

He still has a lot of respect within those communities and we've clearly seen how Oracle waged a media campaign that helped it beat considerable obstacles to its acquisition strategy.

-Ingres, is a revitalized open source database company which is building a very interesting high-powered executive team. Ingres has doubled up on the concept of combining business strategy and communications. Among the star executives at Ingres is CFO Tom Berquist, a former star Wall Street analyst, and Comms Chief Jim Finn, former head of corporate comms at Oracle for many years, and more recently, head of comms at IBM Americas.

Together, Mr Berquist and Mr Finn will have no trouble in raising Ingres out from the white noise in the enterprise software space. Mr Berquist knows how to speak to the financial analyst community and Mr Finn has strong relations with top media from his time at Oracle and IBM. It's a potentially very effective strategy and communications team.

[BTW, I am meeting with part of the Ingres team on Tuesday evening and will have more to report about this company later in the week.]

-SAP has Jeff Nolan, head of its Apollo Strategy Group. I met with Mr Nolan recently (Please see: Exclusive: Jeff Nolan). He is in charge of developing business strategy for the German enterprise software apps leader--and developing a new internal and external communications infrastructure for news dissemination and for gathering competitive intelligence.

Part of his mandate is to "Attack Oracle" by making sure SAP has its message heard loud and clear in its customer communities and can challenge anything Oracle says. And because Mr Nolan has built a media brand as a top VC blogger, he understands how corporate communications could be used in extremely strategic and creative ways.

Mr Nolan's position as an A-list blogger is far more useful to SAP than his experience as a VC. But his understanding of revenue models, market trends in enterprise software, and his media savviness make for a potentially very powerful role within SAP. I'm very interested in seeing how Mr Nolan uses that position--which is very new.

It has been my experience that mainstream media does not understand the new media technologies and how the mediasphere operates, but the A-list bloggers do. They know how to build media brands because that's how they got to be on the A-list.

That type of experience is hugely valuable to any enterprise--however there are not that many A-list bloggers, so it could be said that SAP was fortunate to be ahead of the game.

--Edelman, the world's largest PR agency has a twist on the strategy and communications role. Its strategy has been to acquire the top communicators in the blogosphere.

It is not a surprising strategy if you consider that its chief executive, Richard Edelman is an A-list blogger himself. The personal networks that top bloggers build provide a knowledge about the propagation of ideas and influence that cannot be gained by reading about it. It only comes from involvement in blogging and that is why Edelman has been scooping up top A-list bloggers such as Steve Rubel,and Phil Gomes.

It is a very smart strategy because it is harder than ever to break-into the ranks of the A-list bloggers--so therefore see if you can acquire them, or make sure you have good access to these top media brands.

Microsoft has two parallel media brands: Bill Gates and Robert Scoble. Mr Scoble is a two-way technology-enabled media brand that and costs just $100k per year in salary. Mr Gates is broadcast only--let's see if MSFT understands the difference--I bet it doesn't quite get it yet.

_ _ _

- Here is another take on this subject from my ZDNet blog...

[Please see: - Exclusive interview with Dan Scheinman...]

- Ingres'  CFO is Tom Berquist, a former star Wall Street star analyst, and its Comms Chief is arguably the top practitioner in the US, Jim Finn,

I met with Mr Nolan recently....

- Meet Richard Edelman, --an A-list blogger.

Edelman is scooping up A-list bloggers Steve Rubel, and Phil Gomes for the price of a salary?

There is a current mania among corporations and PR companies to figure out which tools to use to find the influencers in the blogosphere. They are combing through the PageRank and Alexa rankings of online news sites and blog sites, figuring out who has the audience, who do they try to engage in a conversation about their clients. It's PR 101.

I am often asked "which blogs are the important ones, which ones should we be paying attention to, which ones should we be reading?" I can give you a decent list, but you should be able to figure that out yourselves.

In fact, you will come to know the important bloggers because they will be the ones that your peers share with you. As blogging moves out of the Geek communities and into many more sectors, that sharing principle is how influential blogs become created and distributed and that is how you will recognize the leaders.

Finding the right metrics to measure a blog's value as an influencer will never be as simple as measuring numbers of links, comments, trackbacks, Alexa rank, Technorati rank, etc. Because you have to understand the context of each blog and how it fits into its online communities. And you can only do that by being involved in those communities, online and offline.

Let me say it again: the best way to figure out who the important bloggers are in your sector is to go into the online communities as a participant. It'll become apparent very quickly.

I'm lucky to be be publishing a popular and influential news blog. Yes, I'm happy that the numbers are very good, but I don't look at them that often. The metrics that please me the most is when I hear back from readers, from emails, from comments.

What I love the best is when I meet people, from the trenches to the boardroom, and they tell me "I read you and I share you with my team." That's the kind of feedback that energizes me and makes me feel that I have one the best jobs in the valley.

SVW reader Penguin points to VC Rick Segal's recent post about the quandary venture capital is in.

To summarize: Web 2.0 companies don't need much capital and GOOG, YHOO and MSFT can step in and buy them just for the heck of it for a few million and the VCs don't get a look in. Plus there is not much distinction between the Web 2.0 startups.

Welcome to the world of the new rules startups; no VCs required, although an Angel or two helps... It's a knowledge capital world these days and GOOG and pals offer the largest platform for rolling out Web 2.0 services/products. How can VCs compete against that?

But also, there is widespread animosity towards VCs today. I've been covering Silicon Valley since 1984 and I haven't come across as much hostility towards VCs from startups, as I have over the past 18 months.

Why? Because of the many outrageous VC practices during the dotcom boom and afterwards. VCs always get their pound of flesh and then some.

But what goes around comes around. We live in a serial entrepreneur community here in Silicon Valley, and memories are still very fresh.

The strategy for startups these days is to bootstrap--go for Angels if you need money. And if you do need to pitch the Sandhill row, first raise your valuation as much as possible through your own efforts and financing.

I have a lot of respect for many VCs. Those are usually the ones I come into contact with, because they are out and about and pitching their investments.

There are hundreds of VCs that I never come across and seem to be baffled about what to invest in; they follow each other with a herd mentality and thus mess up the markets for all; and with almost no IPO market exit strategies rely on selling out to one of a small number of large companies--which keeps valuations in check.

When I recently met with VC M.R. Rangaswami of Sandhill.com, he said there were still too many VCs, and that the industry must come to terms with the fact that future returns on investments will be far lower than at traditional levels.

That means VCs have to tell investors in their funds to expect smaller gains. That's a tough sell, especially since the risk has not decreased. I could argue that the risk of failure for VC-backed startups has increased. . .(more on that in future posts).

While some VCs are twiddling their thumbs thinking about what to fund, they would do well to hire a PR agency to spruce up their image. Something along the lines of a benevolent "uncle" looking out for the best interests of their young charges might be an appropriate image to shoot for :-)

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Please also see SVW: That giant sucking sound...will massive tech companies vacuum up all the cool/hot tech companies?

I love this American saying, "You can't get there from here," I'm told it comes from Maine. It seems to make no sense but when you need to use it--it makes perfect sense.

I find myself thinking of the phrase more and more these days. It's because I see companies and people defending dying business models because they are still profitable. And because the new business models are not yet formed.



That means an organization can't jump to the new business models because it doesn't recognize that there is a big change happening in its industry; or it can see it happening but cannot jump to the new business models because the new cannot support the old cost structures.

For example, that's what I see happening in the PR industry, which sees itself carrying on business as usual and defending its traditional methods of PR, with no threat to its business from new communications methods such as blogging.

While in the media sector, media companies can see the writing on the wall but they cannot jump over to become new media companies. Because the new media business models are too flimsy to support the old cost structures.

In both cases, "You can't get there from here." You have to be a new company you have to be a new rules company.

Is internet a disruptive technology?

"You can't get there from here," also helps to define a "disruptive technology." I define a disruptive technology as something which companies do not see coming, when they see it they pooh pooh it, then they grudgingly accept it, then they can't do anything about it.

A disruptive technology is like seeing the car crash in slow motion, it is seeing the train wreck happening right in front of you--and you can't get out of the way.

PC was disruptive

That's what the PC did to the minicomputer and mainframe companies of the East Coast. They laughed at the PC, then when the train wreck started they couldn't get out of the way, yet they could see it coming.



It took down all those minicomputer companies etc, and it nearly took down IBM forcing it to reinvent itself as a services company.

Now that's a disruptive technology! Don't you think that the internet is a disruptive technology? It's a very powerful technology, more powerful than the PC. But where is the disruption?



All the tech companies that made it through the PC revolution are pretty much still there. The disruption is in the media sector--the internet is a publishing technology.



Now, with blogging, we've connected up the other end of the internet. Now, you can publish to any device with a web browser. Now, any device with a web browser can publish back.

This is why this really is a new internet and this is why there will be lots of disruption of media companies.



Oh, and by the way: every company today is a media company to some degree. Because every company publishes and tells stories, to itself, to its customers, to its community, to its new hires. An organization is not much more than its stories--that's the content. (And you can think of business processes as stories too.)



And those stories had better be good, truthful stories, and they had better be compelling stories. That's the new media--that's the new communications.



If you've understood this post, and I've helped you see the internet in a new way, then you are now six to nine months months ahead of the game--and you owe me at least a dinner :-)

That's because in an online world where you have tens of thousands of business transactions and interactions happening in a day, or even in a minute, you need the tools to manage and interpret the behavior of large numbers of events.

Then three days later BusinessWeek comes out with its cover story: Why Math Will Rock Your World. I should remember to wear my tin foil lined hat more often--BusinessWeek is known for monitoring my brain waves :-)

At least Matt and I are thinking along the right lines. And while "Quants" as the top math stats geeks are known, are usually found in the financial sector where they are paid rock-star salaries, there is growing demand for Quants in helping to manage ever larger IT data centers.

I recently met with Daniel Berg Distinguished Engineer VP & CTO of Sun Services group, and he was telling me how Sun Services is using Quants to proactively prepare against IT failure.

As IT data centers grow ever larger, with tens of thousands and eventually hundreds of thousands of servers, plus storage systems, plus network gear, plus a myriad of applications interacting with middleware and operating systems, things get complex very quickly.

And it's important to be able to analyze and monitor the huge masses of telemetry data generated by such interactions, so that patterns can be found that will signal future problems. Mr Berg says such patterns can signal IT downtime several days in advance, by which time proactive measures could be taken--but some customers don't...

Here is more of my interview with Mr Berg on ZDNet:Sun Services CTO says utility computing acceptance is slow going.

There's no doubt about it, Google's patina of goodwill is dissolving. I'm hearing a fair amount of anti-GOOG chatter all over the place.

Personally, I still like Google. I still feel that I get a whole lot more out of Google than Google gets out of me as an internet user.

In many ways, Google exemplifies what I call one of the new rules of the new economy.

Old Rule: Success is the ten-bagger company--returning to its VCs/investors more than ten times their investment.

New Rule: Success is the reverse ten-bagger--the company that monetizes ten per cent or less of the business opportunities it has.

Otherwise it is not providing enough value to its customers and it will be considered as trying to fleece its users.