Mitch Kapor should look at chaordic organizations
Mitch Kapor of the Open Source Applications Foundation blogs his impressions of the challenge to hierarchical structures represented in his effort to lead the development of Chandler, an open source PIM that, since it was revealed a couple weeks back, has been called everything from Agenda 2.0 to the Outlook killer everyone has been waiting for.
I'm flying to Washington D.C. this weekend for the board of trustees meeting for the Chaordic Commons, an organization dedicated to developing alternative forms of organizational structure and systems of shared ownership based on the ideas of Dee Hock, who founded VISA International. I'll be blogging the conference here and on my social and political blog, if the facilities allow.
Mitch writes in his blog (this is an excerpt -- read the whole posting):
In a conventional corporation, there are a basic set of ground rules about how activity is organized. Corporations are still ultimately hierarchical. Some pyramids of power are steeper, others flatter, but they all point to the top. Anyone who works in the business world absorbs a set of default rules about how workplaces operate, e.g., your boss tells you what to do, but you don't tell your boss what to do.
As an open source project, we are experiment in progress. Like every other project we have to determine how decisions are made and who has what kind of power. Other projects have pioneered various methods of organizing their own activity, i.e., who can submit code for inclusion and who can commit it. There's a lot to learn from them and there is not yet any general consensus....
In a world in which all points can be discussed endlessly, it becomes important to have generally agreed-to processes by which decisions can actually be made and respected. Whether munging reply-to headers is really harmful or not isn't the point. It is that it's a Brave New World out there and we better get used to it. What's new here for me is not the endless discussions of mailing lists, but their impact on a project which is trying to work in an open and participatory fashion. And everything I discussed here is just the tip of the iceberg.
Take a look at the Chaordic Commons' discussion of principles of transition:
In some cases, participants may need or want to develop a special set of principles for the transition from one type of organizational system or structure to another. This is more likely to happen when working with existing institutions that already have well-defined or ill-defined relationships, or within a single organization that will be adopting a new structure or governance system.
During the transition from the pre-existing Bank of America licensing structure to the formation of Visa, for example, Dee Hock and his colleagues were consciously guided by several principles concerning the position of banks then involved in the system:
- Duplicate levels of management should not be created but that for greater efficiency and economy, the new organization should combine all existing structures.
- Every bank heavily and directly involved should be entitled to voting membership.
- Assessments should not exceed the present royalties.
- No bank should be financially damaged or otherwise left in a lesser position, as a result of the reorganization.
- The plan must offer enough advantages to gain voluntary acceptance from a majority of the licensees.
- All existing contractual obligations must be honored for any bank that might decide not to accept the plan.
- The unique position of the Bank of America in the system must be recognized, properly compensated, and its ability to provide sustaining assistance during any transitional period should be utilized.
Getting from point A to the end of a collaborative project, especially one where people hope to profit in some way, is tremendously difficult. Dee Hock's book, The Birth of the Chaordic Age, tells the story of VISA's creation, which involved getting a bunch of banks to share customer information that they had held sacred for decades. What is not in the book is the story Dee's son, an accomplished lawyer, told me: When the various banks met, the lawyers had to sit in the corner and could not talk unless asked a direct question -- it was the only way they ever got anything done.
Palm 6 -- Be cool
Version 6.0 will be as dramatic a change for the platform as OS X was for Apple, or NT was for Microsoft, and represents the culmination of work from the former Be team Palm acquired last year.
The new OS will feature multimedia and graphics frameworks drawn from BeOS, PalmSource's Michael Mace told us. Mace says this is real BeOS code, but Steve Sakoman, the team's former leader at Be Inc, and now PalmSource's "chief products officer" has denied that Be code would be incorporated into the new OS. More likely, we suspect, the new OS will inherit some algorithms and architecture from BeOS.
Version 6.0 will feature granular, application-level security and pluggable I/O interfaces. Which means that licensees can swap out the Graffiti input mechanism for an alternative, such as biometrics. Application developers need not concern themselves with the specifics: apps will simply receive an event.
Let's parse this. First, Be was conceived originally as a media OS. Jean Louis Gassée, Be's founder, demonstrated it as a media hub the very first time he showed it to me in 1994. Since the Be OS and Palm OS are markedly different, the supposition by Register writer Andrew Orlowski is probably correct that only certain functions from the Be OS have been integrated in Palm 6, but based on the addition of audio in Palm 5 (late, but welcome, indeed), the path from a single-market OS for portable devices to an all-purpose platform for use with a variety of consumer devices is pretty clear. This is what the talk of "feature granular, application-level security and pluggable I/O interfaces" is describing.
This is very reminiscent of the Newton OS, which Sakoman and some of the Be team worked on in its early stages. What goes around comes around, eh?
Powell sees the light
FCC Chairman Michael Powell is showing signs of growth in his perspective about spectrum management, writes Kevin Werbach. In a recent recapitulation of his favorite speeches on on wireless policy delivered at the University of Colorado, Boulder, Powell is talking more about open spectrum and the irrationality of spectrum scarcity as the foundation for FCC policy. Werbach has commented extensively and with authority on this issue. If you want to see some important features of the evolving thinking about wireless, it's good reading.
Net is mainstream, broadband will get there
US households making annual salaries of between $100,000 and $150,000 represent the fastest growing income group online, rising by 20% between September 2001 and September 2002. Following close behind, reports Nielsen, is the income group of those making between $150,000 and $999,999, increasing by 14% over the same period of time.
It is important to note, however, that Nielsen finds the income group with the largest unique audience online is actually that with annual household salaries between $50,000 and $74,999, with roughly 37.3 million people as of September 2002.
The reason usage is increasing faster in the high-income housing is that this is where broadband is most widely used. It changes a household's network usage radically--I found this in 1996 when I put a T1 into my home; suddenly my kids thought the computer was better than the TV.
The largest part of the Net, that is the largest addressable audience is a solidly middle-class group that increased its usage more slowly, but in the same pattern that the typical U.S. household followed early adopters onto the Internet a seven and eight years ago. The message: Broadband is inevitable.
Wondering what the top 25 sites last week, according to Neilsen/NetRatings were....
Research better pay
Citigroup snapped up Sanford C. Bernstein CEO Sallie Krawcheck to run its research group,which they will call "Smith Barney." Seems that Citigroup had the old name lying around and finally found a use. This is a real coup -- the head of research at Keefe, Bruyette & Woods agreed with me in The New York Times. He said: "This is a huge coup." I'd say it's real and huge, but I'd be redundant then, wouldn't I?
Making research pay is hard. I spent almost a year trying to figure out how to balance banking and research concerns with a startup bank. The economies of scale a Citigroup brings to the problem, because the bank and brokerage side of the business can drive trading volume fees to the research group.
Starting up, however, is very difficult. Rutberg & Co. is making a game effort to produce research, but it isn't a pure research firm at this point, because it needs to bring capital to deals through syndication in order to participate in profits.
The Citigroup research group, the new Smith Barney, Citigroup explains, will include its private client services group, which includes 12,500 personal financial advisors -- this assures trade volume, at least what there is there days, will be a significant source of revenue. Investment banking and underwriting will live on their own, but it will likely remain possible to link them on individual deals, by assuring IPO volume by allocating shares to Smith Barney clients. It's not clear if that will be encouraged or not, but Citigroup CEO Sandy Weill said: “Over the last several weeks, we have been working closely with our regulators and have been considering a number of ways to address the issues challenging the industry. Our new structure is consistent with the goal of assuring the impartiality of research, which we share with our regulators."
We'll see. Sanford Bernstein has a stellar reputation for impartiality, with Krawcheck an important part of that.
PVR: Setting the stage for change
The way we use media is changing, though not in the way that cable and telco folk predicted back in the mid-1990s, when video on demand was supposed to be the Way. Jenny Levine, The Shifted Librarian, points to a study about the viewing habits of personal video recorders (PVRs). The results speak for themselves: people will download and manage their content, want to control their programming, and real-time downloads aren't particularly important. Check it out.
Would I build a Helix client?
The RealOne client, which is the foundation of the Helix client, currently supports Windows Media and other formats in addition to Real files. Marc raises a good point about the spec of Helix provided by Real here, which implies that Real is the only format it currently supports at a binary level. That means, as I read it, that a developer will need to license Windows Media codecs separately.
Because the Helix client is, for the most part, open now, it is relatively straight forward to integrate codecs for new versions of Windows Media and competitive streaming formats into a client that, if I had any programming talent (which I don't), would be able to handle multiple subscription services accounts, process metadata and perform other functions to add to the experience of media. For instance, I'd like point and click to book mark and save points in a streaming file where I would want to start the stream the next time, instead of having to hand code the entry point in a URL, as David Weinberger does here. Then, I'd have a library of streams that are useful when I want them, like what I have with portable digital audio in the AudibleManager software I use to download and play audiobooks, radio programs and periodicals on my iPod. (Disclosure: I get a check every month from Audible for consulting services, so don't take my word for it -- try it yourself.)
I can also port the Helix player to new platforms under Real's open source license, so just as Macromedia has announced Flash now runs on the Palm OS, I could port a Helix player with features Real doesn't provide to a handheld or other platform. This all assumes I would pursue a streaming-centric approach to media delivery.
The question, however, is what's going to be on the player once I build it? Right now, if I buy a RealOne subscription, I get a limited range of programs for my monthly fee, and I don't necessarily get what I want, besides streaming baseball games. One can take only so many bikini contest programs or Big Brother 24/7 and I don't care about NASCAR. A Helix client with support for secure access to both RealOne and Windows Media premium content would give me a wider choice -- it will also give me more leverage as a consumer to demand the unbundling of programs, so that I can really pick and choose what I want. Imagine this capability on a PVR and the potential becomes really quite interesting -- would you rather have a client on the PVR that tells you just what is on cable that you can record, or would you want a client that also gave you the option of getting programming from Web sources, as well? I think the answers pretty simple: More choice is better.
Now, if only the notion of "basic" and "premium" programming shibboleths would pass like the kidney stone it is in guts of the online programming business and we got to pure a al carte selections combined with some bundled packages that address specific audiences, we might get to a business model that consumers will appreciate. It's a simple straightforward fact that we don't change television sets to watch different channels, so an open source media client that facilitated getting premium content from a number of sources without having to switch players is the right idea.
Where are the savings?
New Networks Institute, a research group, says, "There is a recession at hand and every company is having its problems. However, It is clear the Bells' have decided to give the public, the press, and regulators a distorted picture of their current health so that they can get more financial relief, and higher prices for local phone customers and competitors using the Bell networks." This is a good read.
This is a great piece of research -- while the Bells bemoan their fates, they are burning everyone, from investors to customers, to enrich themselves. Note, however that Qwest, which was a long distance carrier moving into regional Bell land, is not on the list. Qwest is just plain losing money, having sunk billions of dollars into overseas and domestic long distance capacity.
From the report:
The Bells profits are still beyond anything that could be considered fair and reasonable for companies that are monopolies.
Major Cuts in Expenses Should Be Leading To Lower Prices. Phone prices should be declining because the two major costs, construction and staff, are decreasing sharply.
Participatory journalism defined
J.D. Lasica points to a great discussion of participatory journalism at Hypergene MediaBlog. This underscores the need for an ethics debate about blogs, since the assumption is that participatory journalism "relies on either community host [the blogger] or community of participants [informed readers] to define and police ethics, values and credibility."
The definition is....
Participatory Journalism: When a citizen, or group of citizens, plays an active role in the process of collecting, reporting, analyzing and disseminating news and information. The intent of this participation is to provide independent, reliable, accurate, comprehensive and relevant information that a democracy requires.
Except for the medium of distribution and overhead required to collect and analyze data, this could be a description of journalism. Not to say that blogging (if that's what we'll even call it in the end) is journalism, but that the responsibility that comes from addressing an audience is similar. I very much like this comment from John Seely Brown of Xerox PARC in an essay on The Elements of Journalism:
"In an era when anyone can be a reporter or commentator on the Web, 'you move to a two-way journalism' John Seely Brown suggests. The journalist becomes a 'forum leader,' or a mediator rather than simply a teacher or lecturer. The audience becomes not consumers, but 'pro-sumers,' a hybrid of consumer and producer."
When I was a journalist (you can hear the grey hair talking) I always went to great pains to answer every call or letter from a reader -- still do today, so that may be why I don't see the distinction that many folks are hollering about. Talking with and debating my readers helped me understand them better, sharpened my understanding of the topic and, more importantly, kept my wit sharp. Some folks take this as rude, but I don't know of a notable wit that succeeded by keeping their thoughts to themself.
The irony of blogging is that it makes it harder to respond, because it is hard to find every reference to my comments; they used to come to my email inbox, but now they are spread all over. The referrer log doesn't cut it, because it relies on actual linking taking place, and many times comments are not linked.
If we want a dialog, we need an easier way to track the spread of ideas we engender/ignited/tossed out. Backlinking is effective, but requires discipline by bloggers or the trail quickly disappears. (See this excellent posting about backlinking by Denise Howell.) Google still lags behind the actual state of the Web, so it isn't up to the challenge, yet. A kind of Reverse RSS with a Google-driven context engine that ties a blogger's work to other items that might have a relation to it, from their day job to articles they wrote years before on mailing lists, is what I am thinking....
This would give us the tools as readers to better study the sources we rely on, how they think and what kind of conflicts they may either disclose or hide. That would be progress from old journalism (by saying this, I am not saying blogging is journalism), where you would seldom even have contact with the reporter who covered the news.
Mapping insecure wireless access
Howard Rheingold's Smart Mobs blog reports that the Worldwide Wardrive, an effort to create a statistical analysis of how many access points are currently deployed, where and how they are protected (or not) from unwanted access, is underway through November 2nd. The goal is not to break into networks, but to educate network owners about their security shortcomings and, generally, to get an idea about how many hot spots there are around the world. Should be interesting to watch.
The areas covered and who is doing research are listed here.
Interesting chart here, for example, that describes the total number of access points found to date, how many are WEP (encryption) enabled, how many were using their default SSID (network name) and distribution of most common network names chosen as an alternative to the default SSID -- one supposes the top choices were "wireless network" or "wireless."
Your software has an objection
LawMeme comments: "An unfortunate result of software licensing: when you sell your business, you may not have anything to sell."
An object lesson in the perils of software licensing agreements. Kmart is trying to sell the assets of its Bluelight.com unit, which happens to include some Microsoft software. Now, Micrsoft wants to block the resale of that software, claiming that it amounts to a form of piracy.
"The licenses that debtors (Kmart) have of Microsoft's products are licenses of copyrighted materials and, therefore, may not be assumed or assigned with Microsoft's consent," Microsoft said in its objection, filed last week.
Okay, so, let's say I buy a car. It includes, besides the design of the vehicle, a lot of electronics and computational capacity from... oh, let's just use Motorola, as an example. When I decide to sell the car five years later, does Motorola have the right to block that sale because it includes code it created? No. Why then, would Microsoft have a reasonable claim on a legal copy of software at the time it is sold as part of a larger asset sale?
Yahoo! scales vertical wall?
PaidContent.org reports on the launch of Yahoo!'s Industry Center pages, which aggregate a view of the ten leading companies in an industry, calling the service a precursor to "perhaps the holy grail for business sites." I respectfully disagree, in that these are building blocks, but not precursors to a premium service. By that, I mean that a single industry vertical service is inadequate, but you can create real value by organizing a comprehensive view of various markets (not just the top 10 companies), reaching further to create integrated access to deep information from a variety of sources -- many that either don't exist or are so expensive today that only specialists use them.
I wouldn't look for a "Medical Devices Industry" vertical that people subscribe to, but for a "Deep Research" service that you might enter through any number of industry vertical pages and pay for more information as you need it. For example, you may not need a year's subscription to a "Medical Devices Industry" vertical service when doing research on a company in which you are considering an investment, but you'll pay for the data when you need it if the site is organized to lead you to what you need before giving up in frustration.
I'm probably splitting hairs by differentiating between "precursor" and "building block," but the point is that there won't be a lot of little Yahoo! but a deeper broader Yahoo! built on these vertical services.
Bright guy having hot monkey sex on the radio
Making hard games easy makes money
From The End of Free comes this report about CBS Sportsline's fantasy league profits. Sportsline fantasy league revenues grew to $10 million in the first year, after they converted the free service to fee service. If you've ever played fantasy leagues without a computer, you know the the only reasonable way to be totally up to date is to give up your day job. By automating daily standings and building trading around email-like exchange, fantasy sports sites have built real revenues.
Yahoo! fantasy sports leagues are still free in their basic form -- but they get free players to upgrade by offering real-time statistics and improved control of league metrics for various fees. This is Jerry Michalski's Law of Convenience in action. By making a game that was hard to play convenient and fun, you create value.
Helix source open for business
CNET News.com reports RealNetworks reveals code in single Helix. The company releases source code to its streaming media technology in a bid to set a single standard for media players--and to take on Microsoft.
I think this is a good move. The point is not that servers are the center of the business, but that Real Networks can sell servers that deliver content to a wide variety of open-source clients, increasing potential carriage for its premium streaming services. The convenience of a one-stop shop for premium content is attractive consumers. At first, the online media world will seem like you have a dozen cable carriers all vying for your subscription, but eventually there will be consolidation and a few sources will offer a wide variety of mix-and-match choices. It won't be exactly like cable, where you get a basic package and then upgrade for HBO. Instead, ultimately, it will be a choice of individual shows, on your schedule, and you will be able to pay for them commercial free or take them for free or a smaller fee if you accept commercials.
I need a new phone company
Qwest, the up-and-comer telco that ate US Worst, my local carrier, is writing down the value of its fiber network. That means they're admitting they paid too much or, rather, that they should have recognized everyone else's building out meant they would be faced with vast over-capacity in the market.
Of a massive $40.8 billion write down, $10.8 billion represents the premium paid for to get the fiber into the ground. The rest reflects the premium paid by Qwest for US West. The company has about $700 million in cash and long-term debts in the $22 billion range. Looks like a job for Teddy Forstmann (but, according to Forbes, Forstmann doesn't want the job) or Carl Icahn. Can anyone say "blood's in the water!"
The idea that AOL and Time Warner would break-up after all the pain of the combination at the same time the Net bubble was deflating is simply foolish. Of course, some fools think it is a good idea. The combined company produced about $38 billion in revenues when it first merged and now generates about $40.3 billion. That's not a disaster, it's just a long process of adjustment. And, given the environment in which this merger has been concluded and implemented, the company's record isn't so bad.
All-in-one H(P)ome Entertainment Center
* HP's six-in-one media card reader on the front panel, allowing users to transfer digital data from all common flash media formats.
* HP remote control
* DVD+R/+RW or CD-RW drives
* floppy drive
* PVR TV tuner card,
* Media Center keyboard
* infrared receiver
* one front-access and four rear-access USB 2.0 ports
* one front-access and one rear-access IEEE 1394 port
* IR blaster to control a set-top box
* 10/100 Base-T network interface
* optical mouse
* 512 MB DDR memory.
This is cool, if you like complication in your life, I suppose. But it doesn't conform to my idea of the all-in-none devices that will ultimately link separate media experiences on different appliances. Take it from someone with a home sound studio and multiple PCs, these Media Center systems are going to look like a tangle of brambles when you have them all hooked up.
A dark Christmas
And Hannakuh, too. And Kwanzaa -- there will be little gift giving this year. Consumer confidence fell to the lowest level since 1993, far more than expected. The Conference Board's Consumer Confidence Index dropped to 79.4 in October from 93.7 in September and consumer's feelings about their current situation and future expectations both dropped dramatically, as well.
Oy! There goes consumer spending and here comes the double-dip portion of the recession. The Fed is expected to cut rates next week, but how low can they go, given that rates are already so low there is not much leverage left.
Open Source: Path to Profit?
ZD Net reports that the Butler Group, a European IT research firm, says Linux will be the "major server operating system by 2009." All those server admins today who know how to administer Apache will be the lords of computing -- what'dya know, open source does pay off.
If you can't sell planes, sell bandwidth
osOpinion reports that Boeing's In-Flight Broadband is on Track. Aircraft manufacturing giant Boeing moved a step closer to the commercial launch of its in-flight broadband service with the Federal Aviation Administration's approval of the satellite-based system. Boeing now has received the nod for its Connexion service from both key U.S. regulatory agencies -- the FAA and the Federal Communications Commission.
Okay, so you're going to sell half as many planes in 2004 as in 2000? Only part of the solution to your revenue problems.
We knew that was coming
osOpinion reports Satellite Smashes Terabyte Data Barrier. A European satellite launched three months ago recently passed a mind-boggling data transmission milestone while monitoring Earth's environment from its 800-kilometer-high orbit. The European Space Agency's Envisat has exceeded the terabyte mark for data transferred over a satellite channel.
More data means more data-crunching capacity is needed. The report suggests almost all weather will be predictable -- even avalanches and other natural phenomenon -- but only if you are processing terabytes of data against models in real time, as this wildfire prediction system does. Then, you have disseminate the information quickly to the people who will be affected. Not quite a solution to today's unexpected weather.
Harvey, it's not good to appoint cronies
Want to restore investor confidence? Don't appoint cronies of the SEC chairman to oversee the corporate oversight board. The BBC's article is far more frank than the cuddly U.S. coverage. Basically, it points to the continuing insider trend on Wall Street, where Chairman Harvey Pitt, a former lobbyist for investment banks, continues to surround himself with friends and supporters. The markets, as dynamic environments, need a leader comfortable with differences of opinion, not Pitt.
William Webster, the former director of the Central Intelligence Agency, has a pretty good rep for reforming fouled institutions. The Washington Post wrote: "over a troubled institution, brought in a full measure of probity and steadiness and largely restored public and congressional confidence in a sensitive agency where the demands of government and individual liberty easily collide."
Child safety or privacy?
osOpinion on The False Promise of GPS Tracking Gadgets. This is a thoughtful, but perhaps too damning, article about the double-edged blade of privacy and political problems for child tracking devices. In principle, these things work, but in practice there are a lot of reasons to question whether people will adopt this technology and pay to use it. Most of the companies trying this market have relatively expensive technology and a monthly fee in the $10 range.
More cooks or coders?
The New York Times knows Where the Jobs Are. Only two fields dominate the top of the Labor Departments list of fastest-growing occupations. But a look at the areas that will add the greatest numbers of jobs gives a different view.
Keep in mind, these are only projections to the year 2010. On a percentage basis, IT leads, but retail and food preparation dominate in absolute numbers.
Via Ernie-the-attorney, this IEEE Spectrum article by my old comrade in privacy battles, Dave Banisar of Privacy International. Very interesting how, by choosing a jurisdiction with restrictive press laws, entities have increased options to control or limit particular messages.
Powerful organizations and individuals can also use jurisdiction to force their detractors to defend themselves in faraway courts. The threat of a lawsuit can have a chilling effect even if a case is weak. For example, after three criminal libel cases in Mexico were dismissed by the courts there, Banco Nacional de México (Banamex) went to New York courts. It sued two Mexican reporters for articles revealing in a New York weekly newspaper the role of the bank's owner in drug trafficking. The New York court also dismissed the case under U.S. constitutional protections of free speech. But how eager will the next reporters be to risk having to grab a passport, hire a foreign attorney, and defend themselves in a court 4000 km from home?
In other words, along with all the good that comes of increasing person-to-person communications, the Net's reach can have adverse impacts on free expression.
Consumers don't agree
Regarding the conclusion by the Register of Copyrights (see below), consumers -- you know, the people with all the money Hollywood and the music industry want to reap -- don't want crippled digital content. From PCWorld.com (via Slashdot)
According to a survey recently released by GartnerG2, the research service of Gartner/Dataquest, 77 percent of respondents thought they should be able to copy CDs for personal use in another device. Also, 60 percent said they should be able to give copies of CDs to members of their families.
The results fly in the face of efforts by the music industry to gain tighter control over their content as they face the perilous, infinite possibilities for copying in the digital age. But while the ghost of such free file-sharing services as Napster still haunt the halls of Hollywood, Gartner discovered that consumers do not think copy-protected CDs are the answer.
Biotech less-than-cash crash
Corante points to a San Francisco Business Times story about the fact that 27% of public biotechs are valued at less than cash on hand. This reflects the growing concern that the discovery and regulatory process are dauntingly long and that with a new level of insight into human health having erupted only a couple years back, investors are simply not convinced that many of these companies can make it. Part of the problem is that biotechs have specialized so much that you have teams of extremely expensive folks working on one project, because It is analogous to the problem of one-product companies in many other industries, which, if they don't get a hit with their first launch, fail immediately.
I'm moderating a panel on this topic in San Francisco on the 19th of November. To date, the panel includes executives from: Amgen, Burrill & Co. Venture Capital/Merchant Bank, Manatt Phelps, Merrill Lynch, The Petkevich Group, Innovation World and Stanford University. It's invitation only, so let me know if you'd like to attend and I'll pass your name along to the folks hosting the event.
This notable comment on emerging competition for today's wireless standards from Gemma Paulo, a senior analyst at In-Stat: "The popularity of Wi-Fi in the home has generated increased interest in extending this wireless home network to entertainment and home automation clusters, opening the door to Wireless Personal Area Network (WPAN) technologies such as Ultra-wideband (UWB) and Zigbee."
The way I read this, Paulo is saying that these alternative standards will hive off parts of the market, when I think they'll merely complement 802.11 networks, which will serve a hot spot. UWB makes a lot of sense for wide-area networking and Zigbee is a relatively low data rate communications protocol for systems automation. In essence, the wireless networking market is branching into niche application environments that call for different throughput and power requirements. Rather than competing, these new standards are filling design and application requirements where Wi-Fi makes little or no sense.
Based on recent research I've been doing, I estimate there are approximately 10.2 million 802.11 b devices installed now, compared to a few hundred thousand in the middle of 2000 -- not bad growth if you ask me.
Think Stamp Act
Doc points to this LA Times piece, She Holds the Cards in the Copyright Fight. The story about Marybeth Peters, the Register of Copyrights at the Library of Congress seems to be unaware of the purpose of that institution, the repository of knowledge for the benefit of the public:
Peters believes that many "fair-use" practices consumers take for granted, such as taping a TV program or copying a magazine article, need to be reevaluated in the digital age because the economic harm to copyright owners is far greater. For instance, she agrees with court rulings that Napster-style song swapping over the Internet is illegal.
Peters has been United States Register of Copyright since August 7, 1994, her biography tells us. She has a law degree and has consulted to the World Intellectual Property Organization on copyright law (you can read Peter's comments to Congress about WIPO treaties and the U.S. effort to conform to WIPO standards). You can watch a nifty video at the Copyright Office web site about how the organization is promoting the goals of the framers of the Constitution, that:
The Congress shall have Power . . . To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries . . .
Article I, Section 8, U.S. Constitution
I'm an author and I do like having my copyright, which I can choose to use however I want, including making my work available free over the Net. But I am also a reader and a viewer who, having paid for copies of works, want to be free to sell them again -- not to photocopy and sell them -- but to sell the copy I purchased when I am done. Or just loan it to a friend.
Since the whole question is so darned ambiguous Peters has, according to the LA Times, "declared that consumers — who are free to sell books and CDs that they have legally acquired — should have no such rights when it comes to e-books or digital music."
I'd urge Ms. Peters to take a walk down into the stacks at the Library of Congress and read up on the American Revolution, starting with the Stamp Act and the public response to it.
You want ease of use with the information overload?
Tools coming for connecting information by Dan Gillmor. We need more sophisticated methods for gathering, massaging and making connections among all the pieces of information that enter our lives each day -- everything from e-mail to Web pages to phone numbers and more. So when I see useful tools, I pay attention. Dan's comments stand on their own -- the convenience we're always promised remain just over an ever-receding horizon. Thanks Tomalak's Realm for the link.
All in none, not one
Joi Ito posts some links about digital media adapters and writes: "I guess the key to the Intel thing will be low cost and open standards. If they can help orchestrate a bunch of devices without trying to make their device do everything, it might work. I still don't like the idea of "fat" home servers. I am hoping that, at least in my house, I can use everything I already have. My PC hard disk, my audio amp and speakers, my plasma display and my digital satellite dish... Having said that, there may be a market for small all-in-one's..."
The evolution of the PC provides a good historical example of where we're going. First, there were separate systems operating in isolation within a computer that were linked by bus architectures. Chip architecture has progressed from a processor that needed a wide range of peripheral systems on the motherboard and cards plugged into the card bus to facilitate additional functionality. Those outboard systems have been rolled into the CPU over the years, to the point where a chip even is aware of other chips through built-in networking capabilities. These days, Intel and National Semiconductor make entire systems on a chip that include cache, imaging and other capabilities, but only some of that comprehensive operating capacity is called on by the various systems and UIs that are wrapped around. It's the designer's choice, basically, what features of a system their device will use.
It's also plenty cheap to buy silicon that can be embedded in almost any device. Today's stereo is a largely digital device with some analog functionality (I should say, many people's are -- my circa-1985 Vector Research amp is an analog device). So, the digital media adapater, which plugs into PCs, TVs and stereos to connect them over digital wired or wireless networks are a transitional device that will be replaced by "smart" devices that, even if they provide only a single form of functionality, such as playing audio, will still be aware of the larger networked environment and be able to monitor it for new content and even functionality in the form of downloadable logic.
So, the device won't become "one," intelligence will become "many" and it will be unnecessary, even unnatural, to look to build a variety of features into a device that needn't have those features. For example, people often talk about screen geometries as the defining feature of the UI, when it should be a simple matter of routing video content or UI control features to the nearest useful screen. That way, a handheld can store, carry and playback video or interactive content without the need for a screen. In other words, there is no need for an "all" device.
Kevin Werbach writes convincingly about the misguided assumptions that the broadband network will work a particular way to deliver a certain range of applications when it is finally realized. He writes (but the whole posting is worth the read):
Real killer apps tend to surprise people. No one in the early 1990s thought that interoperable email would be the driver of the Internet boom. And who would have predicted that the most successful of the countless Internet startups was the one that made it easy for people to swap Pez dispensers? eBay looks obvious only in hindsight.
Broadband isn't an application; it's a platform. No one magic bullet will suddently convince everyone to adopt it. That's also the fallacy of legislation such as the Tauzin-Dingell bill that thinks one regulatory change, whether deregulating the incumbent phone companies or regulating them more, will transform the market overnight. We can do things that will speed up or slow down broadband. The difference matters to investors and to companies seeking to capitalize on the broadband opportunity. It's dangerous, though to set up a straw-man broadband nirvana and fight an all-or-nothing battle about it.
I wrote an essay, The Summer of My Content (n., adj. and v.t.), Part 2, that focuses on the challenge of seeing this Net medium (whether it is narrowband or broadband) as destined for one conclusion vs. many. An excerpt:
Arie de Geus distinguishes between two types of companies in his study of long-lived firms, The Living Company. One set of companies are like drops of water collected in a puddle, a stable body that evaporates rapidly when conditions change; these are economic companies, which include most businesses in the physical economy. The other type of company de Geus equates with a river, a constantly changing collection of drops that keeps its people and values in motion. "A river company is open to the outside world: There is tolerance for a high entry of new individuals and ideas. It is, in fact, expected that new concepts and knowledge will flow though the company's stream of activity on an everyday basis." River companies survive, because they keep flowing.
Does the entrepreneur who founded the Web business you are considering investing live in a puddle or flow like a river? Is her personality content with the puddle or will it pursue new views, new ideas and new opportunities as the content of a daily existence that involves all aspects of human life? I'm not advocating taking a poll of entrepreneurs to see which ones take the time to go home to dine and spend the evening with their kids. That would be missing the point, because the rules provided by anyone - me, a business magazine, another investor - will divert you from a true understanding of the true content of a company.
If you take a look at the basic myth of Western civilization, the millennium story, which has come down from Zoroaster, the Jewish tradition, Christianity, Islam and even our latter-day New Agers, you see that the idea of transformation is at the center of every great civilization. At some point, the world will end and be invented anew.
I believe that this same mythical substructure is at the heart of the entrepreneurial phenomenon. People want to change their world for the better. They start businesses to do it, because economic ties are the most efficacious conduits to the rest of the world, no matter where your little corner of the globe is located. This has been true since the Middle Ages, when fairs were established around Europe and the Far East; these markets became the principle meeting place for cultures that had once been isolated from each another.
Keep an eye
Jeremy Allaire writes that the Macromedia DevCon this week will be blogged in a variety of media, including text, audio, video and synchronous conversation with Jeremy, who is staying home for the birth of a new baby. Should be very interesting to see how this works.
Here is where to watch/listen/read along.
Those aren't the greatest earnings
Huge profit at Verizon, but no growth seen. Seattle Post Intelligencer: Verizon Communications Inc. said yesterday it earned $4.4 billion in the third quarter, largely from selling off assets and investments, and boasted that long-distance and wireless phone services were helping it overcome falling ...
Verizon is profitable, but the "huge" in the headline comes mostly from the sale of assets and the rest, $0.77 per share, are flat from the previous year and projected to be flat or down one percent in coming quarters. Of all the regional telcos, SBC still looks like the best buy at a very reasonable P/E of 13 and a return on equity of 20.52%
While Verizon and SBC's operating profits are almost identical at 18.8 percent and 20.6 percent, respectively, SBC does a much better job extracting profit because it has a much lower debt load. Verizon's profit margin is about 2 percent, while SBC delivers 15 percent of revenues in profit.
As long as don't find out this is Microsoft's doing (anything seems possible these days, eh?), this is a very funny parody:
Thanks, Howard, for the link.
1994 all over, again, but without the stupid money
Scott Loftesness has a comment on two items about "light at the end of the tunnel" from Mark Anderson of Strategic News Service and the dreary levels of VC spending in the last quarter by VentureOne.
Personally, I don't buy any of the arguments Anderson puts forward. He says these areas are showing signs of recovery (with my comments on each in italics:
1.) PC operating system sales
If hardware sales were significantly up, rather than slightly up from the previous and worst year in history, this would be a good sign. OS sales improvements actually lower the likelihood of hardware sales improvements, because a "better" OS milks more life out of older hardware. Everyone I know is talking about the improved performance they get from old Macs and PCs with OS X Jaguar and Windows XP, respectively.
2.) Ad sales
Ad sales are flat to down in most publications and up slightly at a few newspapers, which means consumer companies are addressing consumer markets, but that the narrower markets characterized by trade publications and special-interest publications, where early signs of recovery would appear for the PC and telecom market would first appear. No company, except Microsoft, appears willing to spend more to win market share right now.
3.) Government Spending is way up
What is Anderson smoking? Tax revenues are way, way off at the federal, state and local level. Increased defense spending, yes, but on battlefield technology, not PCs. Basically, the biggest single customer for IT equipment, the U.S. government, is beginning to cut back in the face of rising deficits.
4.) Asia launches the broadband revolution
Yes, things are hot over there. But the demand for portable and handheld devices, which is where the majority of Asian broadband use seems to be focused, is not addressed by the majority of the U.S. IT industry. This is why Dell, among others, is moving into printers and handhelds with wireless capabilities.
5.) U.S. interest rates remain low, and headed lower, while housing starts and car sales remain robust.
Huh? In a deflationary environment, housing is not an indicator of demand for anything except the most conservative investment a household can make in the face of miniscule or negative returns elsewhere. Car sales are down sequentially and both Ford and GM have been lowering guidance based on the fact that 0% financing will eventually create a saturated market for cars -- a lot like the saturated market for PCs and servers after the pre-Y2K upgrade cycle and PC prices started to fall precipitously going into 2000.
Anderson's indicators don't point up at all.
The hestitancy among investors will mean that poorly conceived companies, such as your basic one-component or one-product wonder, will not be funded. Yet there is a lot of activity with entrepreneurs -- I see and hear it every day. People are starting companies and, this time, thinking about the long haul. When the economy recovers, it will be stronger than ever, because all the dumb money looking for a quick exit will not have driven industries to self-destruction.
Slate asks whether the market rallied today because the most liberal senator in the United States, Paul Wellstone, was killed in a plane crash. Expecting the Senate to go Republican, the writer, Daniel Gross (see below for his CEO credentials piece), the market apparently shot up. Gross makes a convincing case:
For proof that it was Wellstone's death and not any other news that moved the market, just pull up an intra-day chart on the Dow. You'll see that it was meandering around lazily for much of the day, down 30 in the morning, up 40 in the afternoon. At 1:30 it was basically flat.
All the news that had the potential to move the market broke in the morning. Some was negative: Cigna had an awful quarter, and orders for durable goods fell more than expected. But some was positive: Consumer sentiment improved slightly, and housing starts were strong. The usual push-me-pull-you. Stocks in Europe had closed down.
Friday afternoons can be volatile, especially if it's a day on which options expire. This wasn't one of them. By 1:30, pretty much all the day's market-moving news had been incorporated into stock prices.
After 1, bulletins started to cross the wires describing a small plane crash, without identifying its occupants. At 1:31 came the first word that Wellstone was likely on board.
Whether you agreed or disagreed with Wellstone's opinions, he was an example of a man who always voted his principles, who stood alone rather than cave into political convenience. His loss is a real tragedy for anyone hoping for a more genuine politics.
Why do CEOs pump their resumes?
Slate's Daniel Gross wonders why so many CEO's lie about their education. "It's mystifying why a mature, successful executive would lie about a degree he may or may not have obtained 20 or 30 years ago. Sure, an MBA from Stanford or Harvard might gain its holder entrée into a prestigious firm. But at the top of the profession, experience and track records tend to matter far more than credentials. No 50-year-old executive gets hired for a top job simply because he has the right degree."
The reason is simple: They started out lying about their qualifications then couldn't stop. I tell my nine-year-old all the time that one bad decision closes off many of the good options he has and opens a plethora of bad choices. I blame the CEOs parents and society, too!
It's the business plan, stupid
Seattle Post-Intelligencer reporter John Cook has a good piece on the proposed take-over and privatization of OnVia. The current CEO is saying he won't sell out to the founder at a premium to current value, because the company will be worth more at break-even. Alas, his company is valued at a lot less than cash and he laments: "I sit here sometimes and say I don't understand how a stock can be valued at $20 million or less with $40 million in the bank . . ."
The story concludes with an unsatisfactory comment from an investment banker who says "the valuation is a little out of whack." In fact, a lot of companies are trading at less than cash -- some are good deals and others, which are clearly only going to burn cash until they fail, are not worth the paper the stock certificates are printed on. OnVia hasn't proved its case or even that it can break even.
Mitch Kapor provides additional details on the architecture of Chandler. Architecture, rather than coding, has always been his passion and strength, so it is interesting to see him sharing that intellectual property even before code comes out.
Chandler will represent chunks of information as items, much as Agenda did. An item may consist of an email, an appointment, a contact. It can also be a document. An item can be thought of us having a body and a set of attributes (or meta-data).
This can very powerful, because metadata becomes a dynamic indexing system allowing the different views he refers to below to be based on multiple criterion. I would like to see a tool that wraps this kind of system with a "preference wizard" that, through a series of questions, sets defaults to one's own basic approach to information (whether it is thinking hierarchically versus relationally or in terms of kinds of documents versus subjects of documents).
Views are formed (logically) by specifying a query and running that query against the repository of all items. As in Agenda, an item can appear in more than one view. This is the underlying mechanism by which we will do the equivalent of "virtual folders".
Views can be of a single item type, e.g., email, or than can be of mixed types, e.g., all items relating to a single subject, regardless of whether they are emails, attachments, contacts, or appointments.
It's cool to be Washingtonian
Alan Reiter writes:
If the U.S House of Representatives backs a $1 million wireless project that already passed the Senate, Washington State Ferries will be getting WiFi. According to an article in Computerworld (thank you Bob Brewin for alerting me), WiFi would be installed for passengers and the crew. Internet access would be provided in real time -- rather than simply accessing the Internet when near shore -- by possibly using land-based microwave towers to interconnect the ship-based WiFi network.
If the money is allocated, WiFi could be available as early as June 2003.
Yes, it is cool to be a Washingtonian, but with the DC sniper as yet another serial murdering Tacoman, I am concerned that the old idea of "going Postal" will be converted to "going Tacoman" (as in, "if you don't back off, I'm going to get Tacoman on your ass"). Then who's going to want to ride our ferries, Wi-Fi or not?
All the right moves
Can Helix Deliver the Real Stuff? Real Networks' move toward open source is a significant step toward a viable business model for its Helix servers, which have seen declining revenues in the past couple quarters. Allowing developers to build their own clients and enhancements to the server will encourage wider adoption of the Real streaming format for delivery of content.
It also creates new challenges to the Real consumer business, and an opportunity. On the one hand, having many clients that can take a stream from a Helix server on a secure basis lowers the barriers for competitors to the RealOne subscription services. On the other, Real, by focusing on aggregating, billing and fulfillment for a wide range of premium content on an a la carte basis can be the hub of a many-spoked media distribution system.
Decentralization starts inside your head
Kevin Werbach has a very good column on the trend toward decentralization in computing. He makes many good points about the permeability of organizations and project teams. The issue, however, resolves at the fleshy person-to-person (the real P2P) level, where the very nature of companies, organization and employment will change for many people due to their ability to work on different projects with different teams and companies throughout their working life.
I've repeatedly seen the resistence to change in people and companies during my career, even though it becomes plainer every year that the typical information worker could perform most of their work without having to slog to an office every day. Granted, it is frightening to think of just walking away from a "secure" job, but I think the people who take those steps now will be in a better position to succeed in the future.
Check out the Chaordic Commons for one way of thinking about new legal and organizational frameworks for collaborative work and sharing resources.
Ad market ready to double dip
Sir Martin Sorrell, CEO of WPP, one of the the largest ad agency holding companies in the world, told the BBC the ad business won't see improved growth until 2004. By improved growth, he means growth beyond the low single-digit range year-over-year.
A company spokesman told the BBC: "Falling share prices in the summer on both sides of the Atlantic and increasing unemployment has had an impact on consumer confidence suggesting a potential 'double-dip' recession."
No clarity about this channel
Hollywood Reporter interviews ClearChannel Radio CEO John Hogan. It's remarkable, for several reasons, how unaware of the impending train wreck in broadcast radio this guy is. The rationale for Clear Channel, which grew from about 60 stations seven years ago to 1,200 today through a series of acquisitions, was to consolidate the industry and gain better control of ad inventories for catering to large national clients.
This is underscored by Hogan's comment: "We also have all of our 4,000-plus sellers asking those advertisers, 'What other media or market can I help you with?' That's a way for us to leverage those relationships to create more opportunities not only for radio but our sister divisions." In addition to radio, Clear Channel owns the largest billboard inventory in the country, too. Note the discussion of Tradewind, an internal inventory capacity management system that Hogan compares to the pricing of airline seats (a business model that is falling apart due to lack of demand).
But this behemoth is constructed on the assumption that audiences are consolidating when, in fact, they are disaggregating into more specialized interest groups. A company with eight senior vice presidents with 40 regional vice presidents has to run huge audiences and will resist the fragmentation of genres and sub-genres of music and information. This will open the way to more targeted sources of audio content, streaming services and news organizations that find new, inexpensive ways to reach audiences through audio.
Classical = Online spending
Arbitron has an interesting report out on a study by Scarborough Research on the tendency of classical music listeners to spend heavily on Net commerce, from airline tickets to computer hardware and books. They are 49 percent more likely to spend more than $1,000 a year online than other people.
Key excerpts of the press release:
The study, based on Scarborough’s USA+ database, revealed that Classical listeners prefer to purchase items online that are consistent with their well-educated, upscale reputation. For instance, they are 59 percent more likely to purchase airline tickets via the Internet, 55 percent more likely to purchase books, and 55 percent more likely to buy computer hardware. Perhaps one reason that Classical fans are so willing to spend money online is that they have adopted super-speedy broadband Internet connections at a faster rate than the general population. The study indicates that Classical listeners are 47 percent more likely to have a DSL broadband connection at home and 26 percent more likely than average to have a cable modem.
Another factor behind Classical fans' penchant for online purchasing is that they have plenty of money to spend. The study confirmed Classical listeners' reputation for affluence, finding that 39 percent have household incomes over $75,000 and 77 percent own their homes. As could be expected, they are also very well educated. Classical fans are 60 percent more likely to hold a four-year college degree and are over three times as likely to hold a postgraduate degree. The Classical format also skews to the older audience, with over 42 percent of listeners age 55+ tuning in.
According to the study, Classical fans display many distinct purchasing preferences. For instance, Classical fans are heavy consumers of financial products and services. They are 57 percent more likely than the norm to have a money market account, 64 percent more likely to use a full-service stockbroker, and 45 percent more likely to engage a financial planner. Classical fans also love to drive foreign cars. They are 56 percent more likely to own/lease a luxury foreign vehicle and 24 percent more likely to own/lease a foreign SUV.
Content that satisfies
Crosbie writes: Why not combine the meanings [of content]? Subject matter that satisfies. People will pay for satisfaction but won't hand over a dime (or centime) for content that doesn't make them content.
Get two free Audible books
In the "I did that" category this morning, a deal I've been working on for a long while finally came to fruition in the light of day as Audible announced its new relationship with MSN. If you upgrade to MSN 8, you get two free audio books -- any two -- from the Audible catalog to download and play on your computer, a portable MP3 or on a burn-it-yourself audio CD.
Enjoying a moment of satisfaction.... There, back to work.
More on GPL and my Congressman
Well, a day after calling his office in Washington, D.C., Rep. Adam Smith (D-Wash.) is catching heat for his ill-conceived criticism of the concept of general public licensing of software; his staff has not called back to clarify or even confirm the letter actually came from Smith. So much for being responsive to your constituency, Adam.
Streaming is only a small piece
OSOpion writes: RealNetworks Predicts Mobile Multimedia Flood. Streaming media specialist RealNetworks has turned its attention to the next-generation wireless market in a big way, announcing agreements with international mobile carriers and membership in the industry's Third Generation Partnership Project.
What happens when you have too many callers on a single cell? Things don't connect. Downloadable content, most of it subscriptions that you choose for regular delivery (because, hey, you're used to getting the paper or tuning into favorite programs) supplemented by digital streams. Some will be multicast, like tagged traffic updates that anyone in your region will be interested in -- and their devices, like yours, will pause what you are listening to to get the latest updates -- and others items might be "priority" news or recommendations addressed directly to you, such as stock buy or sell advice from a trusted source.
The merger made sense
The New York Times reports AOL to Restate Troubled Unit's Revenue Again. AOL Time Warner said that it had turned up several additional improper transactions at its AOL division, broadening the extent of its acknowledged accounting problems.
The company met expectations, because the film, cable and other divisions have performed well -- based on my reading of what is going on over there, the online group is not suffering from declining membership and is rearranging its business to accommodate the radically changed environment. There just aren't any heavily funded startups to throw $100s of millions at simply being on AOL.
That said, I reiterate my earlier comments that AOL did the right thing to use its high-flying stock as currency to buy the largest media company it could, which happened to be the biggest.
More from the Times story:
"Even though the total amount of the restatement represents a small portion of America Online's total revenues during the period," Mr. Parsons said in a statement, "we have taken, and do take, this matter very seriously."
Over all, AOL Time Warner's third-quarter results met analysts' expectations, in part because strong performance from other divisions, especially its cable systems and networks, offset a continuing deterioration in the AOL unit's business.
Telecom equipment, Lucent echoes
San Jose Mercury News reports that Communication system maker Avaya posts $534 million loss. - Avaya Inc. posted a wider net loss of $534 million in its fiscal fourth quarter as sharply lower sales more than offset stringent cost-cutting by the business telephone and data system provider.
Continuing evidence that telecom equipment companies are still far from seeing the end of the excess capacity in networks or the financial wherewithal in major customers to make large capital equipment purchases. As a Lucent spin-off, it seems to have been damned from the outset.
Send a fax, make a call
Bloomberg reports that Bush to Consider More S.E.C. Financing. The Bush administration said that it would consider increasing financing for the S.E.C beyond a 30 percent increase that White House officials last week said was enough for the agency.
Anyone interested in restoring stability to the market should consider sending messages of support for increased funding for corporate oversight. This need not be intrusive to business, rather it could be implemented as a form of public auditing of financial releases.
Lucent goes "thud"
The telecom equipment maker is rolling along like a lead basketball on a steep grade, losing 64 cents a share after revenues fell, again. Year-over-year, Lucent sales have fallen 53 percent and the company said revenues will be "flat to down approximately 10%."
Forbes weighs in on the continuing disaster that is Lucent. The plan to do a reverse split is going to take valuation nowhere and only create more downside, if you ask me. All you end up with is a bigger peice of paper, so to speak, representing the same share of a company in a death spiral. Say they get the shares to $20, as Forbes suggests they could with a 1-to-29 reverse split in order to save about $400,000 on listing fees, then the stock sinks again?
Investor confidence is Job #1
The Motley Fool comments on the SEC Funding Firestorm, saying "the Commission is only as strong as its funding. Can investors feel secure?"
The message from D.C. is a resounding "No."
While the Bush Administration is a group that has tried to sweep every mistake it ever made from the pages of history, the SEC funding botch is one that Bush, as a "former CEO," ought to take responsibility for and stop the buck passing right now. If the president sets the example of announcing one set of numbers and then delivering a different set when it comes to implementation, what does that say about integrity in the corporate world? Certainly, if Bill Clinton has be blamed for unravelling the moral fiber of a nation because he couldn't keep his pants zipped, Bush's actions correlate far more directly to the problem of fudged accounting and it is up to him to step up and say the Administration made a mistake when it cut new funding to the Securities and Exchange Commission.
Clearing the hype away
Mitch Kapor posts some clarifications in the wake of the river of hype and enthusiasm that resulted from the announcment that the Open Source Applications Foundation. In true straight-from-source style, he blogs his response to how the product announcement was covered. Some highlights (but go read the posting):
CNET's story yesterday opened with this: "Can a fledgling nonprofit organization with half a dozen employees challenge the largest software company in the world?" In the real world, matters are considerably more complicated.
One thing CNET did get right -- we're not aiming Chandler at the large enterprise market. As shipped, I'm certain it will flunk the checklist because we are not doing the work to make it scale to an organization of 1,000 or 10,000 people.
CNET should have egg on its face for including the following: "Kapor said he also has no plans to seek venture capital and has no visions of an initial public offering for his venture." OSAF is a non-profit -- I can't remember the time a non-profit raised VC or did an IPO.
No confidence in the chips
The Globe and Mail reports that Texas Instruments shares tumbled Tuesday on news that the chip maker will not come close to the profit it projected for the current quarter. The price decline in the stock was the biggest one-day fall since October 1987. Yet, the company will still turn a profit of two cents a share.
TI will cut 500 more jobs and be "very tight" with expenses (read that: no capital expenses, so goodbye new orders at semiconductor equipment makers, as if things there weren't bad enough). On Wednesday at mid-day, TI stock seemed to have found some stability and was up 12 cents (0.86 percent). Sporting a P/E of 200, however, this is not a stock to buy "on weakness."
Farber summarizes responses to Gartner predictions
Dan Farber of ZD Net collects responses from readers to the GartnerGroup's 10 IT predictions for the remainder of the decade in a recent commentary. Worth a read, because it tempers what were some pretty aggressive projections from the consulting firm.
Outlawing General Public License software?
A posting on NewsForge suggests that Rep. Adam Smith (D-Wash.), my own representative to Congress, has written a letter to the New Democrat Coalition suggesting that GPL software, which provides free access to technology developed through federal R&D to people and companies interested in developing products or services based on that technology, be "outlawed."
The posting says: "In essence, that non-proprietary interests should not be allowed to use, adopt, improve, or make money from the work. That taxpayers should pay for it twice. And that nobody should be able to stop commercial entities from taking publicly funded code, they will then close off."
If this letter is legitimate, and I have called to check this fact with Smith's office, it is severely misguided, using the example of the TCP/IP protocol of a technology that was harmed by GPL licensing, which, of course, it was not. We might be running some kind of vast NetWare system today, if there was anything even similar to the Internet, had it not been for GPL licensing of TCP/IP.
LawMeme has a good dissection of the letter's arguments. More later....
When you have nothing strategic to talk about....
Simple means consumer
CBS Marketwatch describes how Hewlett-Packard Compaq is changing its R&D strategy: Hewlett-Packard officials say its research and development strategy for the coming year will focus on ways to decrease both the cost and complexity of information technology systems."
What does that mean? That computational devices are not expected to sell into corporations in 2003 and most of 2004. Instead, technology is going down market to the consumer market, represented by products such as the Apple iPod, the Microsoft xBox, and the TiVo and RePlay personal video recorders. Chips are fueling the expectation that consumer devices should do more than one thing -- play music and display your contacts or play games and allow online instant messaging, for example. This is why Intel's "new" strategy is to "put silicon everywhere."
Some of HP's recent all-in-one printers represent bridges to the consumer market. For instance, I recently bought the HP OfficeJet d145, which includes slots for PCMCIA cards, SD cards and Sony Memory Stick cards, so I can print photos and transfer them to my PC.
HP cannot and, unless they are insane, will not focus entirely on the consumer market, but it clearly recognizes that it needs to address how people are using digital technology in their homes and small offices. Question is, why buy Compaq if that is the case?
Unemployment at every level
First Boston laid off its chief market strategist and at least 1749 other people. During the two years I was investment banking (and, I admit, I picked the worst time in history to give that a shot), about all people talked about was layoffs. They were stunned, because most had never lived through a downturn, certainly not like this. Robertson Stephens crashed and burned and almost every major bank let huge numbers of people go. This is a recession that is hitting every level of the economy.
Old dogs reluctant with new tricks?
TechDirt points to this Boston.com story about the format-change weary boomers' resisting the MP3 format. I think the story over emphasizes the skepticism, because the format is not the point as much as what's on. Today, there isn't much in the way of interesting music legally available in MP3 format -- and, despite the counter-culture tendencies of our youth, all of old folks do want to pay for a quality audio product in a format that is useful and comes with support. There was never any customer support at Napster, something many of the boomers are used to and need.
At the same time, there is something to be said for those old vinyl albums I have to explain to my kids.
Original Web programming is back
USA Today on the launch of new Wallace & Gromit films, BMWfilms and an AOL program. It's only going to get more interesting as we go from 15 million broadband households to 50 million, because with broadband there is no need for a schedule that prevents people from viewing all their favorites whenever they like. More importantly, the whole format of shows, from length to the way stories are told will change because, if the show is engaging, it can go as long or short as the creator wants to try.
Wait till you see some of the ideas we're working on at Creative Media Partners.
SMS feedback for TV
More narrative on the campaign to increase text messaging traffic in Europe from the The Guardian. I remember the first time I saw a Coke cap with an SMS address that urged me to send a message back to Coke to see if I'd won a prize. What the Guardian story doesn't really explore is how revenue sharing supports these ad campaigns. By driving SMS traffic, the advertiser or programmer using SMS feedback in their ads or shows creates messaging revenues that the carrier will split, if pressed. So, in a way, the advertising or content starts paying for itself in a new way.
Crisis drives media fragmentation
Searches on "Washington sniper" are threatening to displace other more normal searches, Media Life Magazine reports, showing that the audience that used to just sit and stare at the TV is coming to the Web for more immediate or deeper answers. We see this every time that a galvanizing event, like 9/11 or these horrible serial killings, come along.
The article also has several good lists of top parent companies and online brands.
Everyone is in on it
The Onion reports on the staggering scope of insider trading in this country.
After I work out my plea bargain, I am going to retreat to my mountain hideout I plan to pen Confessions of an Inside Trader: My Year-Long Affair with Martha Stewart. It's got all the sleazy details about how I received a fax from Sam "The coke-freak" Waksal while hunkered down in a remote, but tasteful, bed and breakfast with Martha. I don't actually sleep with Martha, because that's no longer possible because of her plastic surgeries and the sheer horror of it; the relationship consists mostly of catalog browsing and trips to KMart. But, anyway, the fax came through on a delightful pink hand-made paper that clogged the machine.... I handed the note to Martha, who exclaimed, "Shit, I gotta call my broker!" But, I'm saving the details for my meeting with the SEC.
Data: A big giveaway to sustain voice?
Alan Reiter has some interesting reports from the Wireless Airport Association about Sprint PCS's nascent 802.11 b wireless service. Sprint PCS Vision pricing, introduced last week, made data a giveaway. For $100 a month, you can get 2500 minutes of voice service plus unlimited data connectivity. With a PCMCIA card for your laptop or PDA sharing the same account (which currently a free upgrade), you could stay connected to the network all month wirelessly and use about an hour a day of calling.
Alan reports that Sprint PCS's director for wireless LANs describes the company's branding philosophy, which sounds like the old carrier quality of service (QoS) assurance: "In essence, he compared creating a WiFi brand to creating a bank ATM business. Regardless of the type of ATM, the banks and networks involved, a customer of any bank knows how to use an ATM machine."
If it is all about QoS, which makes seamless roaming a priority, then the hotspot owner does not expect to collect revenue based on their own equipment, but on connecting people to the network and a billing system that they can tap for transactions (e.g., want to add a hotel on your current business trip and have it on your phone bill? CLICK HERE). Network organizers, like Boingo become the intermediaries that aggregate hotspots for use by major branded carriers.
Get the financial press release from the source. The growth of RealOne, Real Networks' premium service is not likely to reach the one million customers management said it would earlier this year.
Dow Jones BusinessWire reported: "[Real Chairman Rob Glaser] went on to say, 'Our consumer business continued to grow nicely, driven by the growth of our RealOne subscriber base. On the systems side, our business remained challenging.' RealNetworks had more than 850,000 paying subscribers in the third quarter for its news, sports and entertainment offerings, compared with 400,000 a year earlier and 750,000 in the second quarter.
It's important to note that the service as it currently stands did not exist a year ago and the rejiggering of premium offerings under the RealOne banner was designed to accelerate growth. Since they announced they hit 500,000 paying customers, the GoldPass service has been phased out and growth is about 13 percent quarterly and appears to be slowing.
Last quarter subscriber revenues were up 31 percent (this was the big message in that quarterly report) and grew only 20 percent in this quarter.
Check out RealOne exec Merrill Brown's speech to the Online News Association or watch the video. I'd ignore the streaming to devices stuff, which is going to be hard to work out financially, but do look at what he says about broadband:
“Among my favorite pieces of data is the Arbitron data that concludes that daily Internet, radio and TV usage is equal in broadband households, meaning they’re at parity already with the Web at radio and television levels,” he said.
Happy Weasel Day
It's a weasely way to promote a new book, isn't it? But Dilbert creator Scott Adams had declared October 22 Weasel Day. Send a card.
Terabyte storage in 2004? No.
Roland Piquepaille links to a NewsFactor article on efforts by three companies, Polight Technologies, InPhase Technologies and Optware to deliver holographic storage technology in the next couple years. I agree with Roland that it is very questionable whether these companies will ever deliver an affordable product to market, especially one like the InPhase motto: "Imagine holding 100 movies in the palm of your hand." Well, yes, hold it still but not access the data in a portable device with any semblance of battery life.
Holographic memory has been on the cusp of realization for years. The projection of this technology reaching the market in 2004 is grossly optimistic.
Agere: Down 5.5 percent sequentially
More evidence that the semiconductor and telecommunications industries are not recovering in any substantial way: Agere Systems revenues were down 12 percent year over year and 5.5 percent in just the last quarter. Revenues are half what they were two years ago. The company also is selling its optoelectronics business for only $40 million -- chump change. Another common refrain is the rehearsal of how the company is trying to save money.
The stock is not a good buy now, because the companies debt totals about 42 percent of cash on hand, leaving cash just enough to cover four or five quarters of losses at current levels.
SMS -- It's still about people communicating
This report from Europemedia.net demonstrates that the principle use of handhelds remains communication, even if they are not talking by voice. SMS text message usage in the United Kingdom rose about 40 percent over the year before. My recent conversations with developers about wireless services has underscored that for European telecoms the priority is driving more SMS messages, which average a cent or two per use. The automation of delivery of content to the phone from Web sites and the desktop, such as provided by PocketThis, is a major issue, because that can result in dozens of messages sent automatically each month.
The question is, will simple chatty communication suffice. Enterprise and business applications more generally drive big revenues. SMS is not the foundation of a robust data networking capability.
Martha: Scapegoat for the corporate world
One gets the feeling that the Securities and Exchange Commission's move to prosecute Martha Stewart for fraud relating to her ImClone stock sales is meant to be the denouement of the corporate corruption drama. Martha will be led out and her flesh flayed from her back, then ritually burned, with the announcement that the whole awful episode is over and investors can be confident that they can put their money to work again. This, despite the fact that the corporate oversight budget trumpeted three months ago has been cut by 27 percent, because the SEC is just so efficient it doesn't need the extra money. Ain't going to work.
Adobe: Black Hole Rising
Adobe ties documents to back-end apps. XML allows roundtrip transactional workflows. Instead of taking a distributed approach to data access, Adobe introduced a server architecture for feeding PDF files with dynamic data. The advantage of PDF files has always been that they are not tied to a server architecture, and this is the wrong direction to go at a time when data access should be migrating to the client.
I'd be happy to use a PDF with XML and scripting built into the document, but it is almost useless to me to distribute PDFs that rely on the new Adobe Document Server that may not be available at critical times. This seems to be an invitation for firewall problems making a "smart" document suddenly very stupid.
Soaring market? I don't think so....
There is a severe illogic to the continuing rise in the market. Monday, the Dow was up 215 points and the Nasdaq 21.8 points on news that, well, there was not so much bad news because companies have cut costs ahead of falling revenues. But, in a New York Times story, Warren Buffett had these reassuring words: "If you look at 1974 as a time when you could make money by throwing darts at the wall," and 1999 as the opposite, "we're somewhere in the middle."
Eesh, that's comforting. Even if prices are set for worst-case expectations, as some contend, the current rise presumes that consumer spending is at a low and won't go lower. They will.
Let's step back and think. Remember that the tech industry headed into 2000 with a lot of inventory and, when demand fell off a cliff, spent two years writing down and working off that inventory. Most industrial and consumer goods companies are still tuned to strong consumer spending, which has certainly peaked for the next 12 to 18 months. What happens if, as some analysts are suggesting, we have the worst Holiday selling season in 15 years and the market for cars is soggy with inventory that no one can buy, even at 0% financing?
Web ad revenue falling, so act now
The dreariness on the Web continues, as advertisers pull back on spending out of fear of a failing consumer economy and the ever-falling technology sector's advertising reductions. The New York Times reports ad revenues on the net fell four percent last quarter.
Okay, fine. We expect that. At the same time, people are turning to online entertainment and news in record numbers, if only because they can't afford to go out and buy cars or dinners anymore. During the Depression, a few great brands were born when companies bought up huge tracts of advertising space, on the new radio medium, billboards that were sprouting all over and even the sides of many, many barns. If prices are falling for ads on sites where you want to be seen, close a low-cost ad buy now and reserve the right to renew at the same or lower prices for the next two or three years. See if the ad rep doesn't say yes.
All day, it seems, I've been in discussions that have involved the Microsoft vs. Apple debate in one way or another. A long thread over on Jerry's list elicited the following, which sums up why, while I am really interested in getting another Mac, I will continue to use Windows-based PCs (and, for that matter, Linux on a server):
I run XP Professional and OSX (Jaguar) side-by-side and could run them on the same box if I cared to pay for the privilege with Virtual PC. Both have strengths and both have weaknesses. The point, I think, is that it is good to have a heterogeneous a computing environment (digidiversity, to play on the word biodiversity), both for the individual user and the entire market. That way, we can make choices.
My feeling about OS X is that it has made the Mac a totally viable platform for anything I might want to do and I'm thinking seriously of moving most of my work off a PC to a Mac. A Titanium Powerbook with a large external monitor would give me all the portability and functionality I need to so all the business productivity work I do, plus the audio/video editing and Web work. Besides that, it's really cool, one of the best bits of engineering in portables to come along in a long time. Apple, however, has not achieved nerdvana, the elimination of strife and anger from the user experience, and there are many reasons that I will continue to use a PC, as well, if I do choose to make the jump.
And speaking as the former networking editor of MacWEEK (may it rest in peace), the problem seems to me to have always been about jumping over the artificial boundaries between different platforms more than anything else. If my multi-platform office is a seamless environment (which it is with the new Jaguar Windows networking features), I have the widest range of options available to me when I begin to work on something.
It was the plan all along
CNET writes in Can't buy me love online that Match.com is starting to charge people to reply to potential suitors who send them e-mail, a move some subscribers worry could reduce their chances of finding a mate. (Disclosure: I was on the original board of directors of Match.com, when it was a division of Electric Classifieds Inc. -- I own no stock in the current owner of the service, USA Interactive.)
The fact that it now costs money to reply to an email from a prospective date (before you only paid to send the mail that started the flirting), signals that the service is no longer reliant on having a few women available for a lot of desperate, paying men to send mail to for a fee. Instead, this indicates the mix of men and women is relatively even and that there are enough people finding the service of use to make it possible to try to raise revenue per customer. The problem with this business is, if you are successful, your customers go away (they get into relationships and stop dating). The lifetime revenue per customer was never very high -- about six months of subscription and email fees, then they've usually gone.
Any competitor will have to do the same thing eventually, so Match isn't running too great a risk by adding this fee.
Mitch never does "small"
Pay attention when Mitch Kapor, founder of Lotus Development Corp., ON Technology and the Electronic Frontier Foundation, among other things, decides to do something. He has revealed the purpose of his Open Source Application Foundation. He's designing an open source personal information manager and is now blogging the process.
I hope that the app will support rich messaging, not just the usual PIM stuff, like text and calendaring. We need systems for archiving and library management of media messages and content -- personal information goes WAY beyond what used to fit in a DayTimer.
Just let go, Michael
David Weinberger points to a letter directed to Michael Powell (Colin's son), the chairman of the Federal Communications Commission, urging him to let the telecom wreck evolve to its logical conclusion: The end of big telecom.
We hold that the primary cause of current telecom troubles is that Internet-based end-to-end data networking has subsumed (and will subsume) the value that was formerly embodied in other communications networks. This, in turn, is causing the immediate obsolescence of the vertically integrated, circuit-based telephony industry of 127 years vintage. CLEC, IXC and ILEC bonds used to purchase now-obsolete infrastructure assets have become (or inexorably are becoming) bad debt. Weak last-mile competition prevents the most powerful technological advances from reaching all but a few customers; this is the largest cause of long-haul over-capacity.
The signators include: Scott Bradner of Harvard University (a god of the IT world), Douglass Carmichael, Dave Farber of the U. of Pennsylvania, Bob Frankston, David Isenberg, Jerry Michalski, Paul Saffo, Doc Searls, Kevin Werbach and the aforementioned Dr. Weinberger. These are people definitely worth listening to on this topic.
Microsoft's Smart Phone
Google doesn't suit the SearchKing
LawMeme posts about a suit by a company that specializes in manipulating search results against Google for discounting its influence when calculating its PageRank scores. Dumb suit, but the kind of nuisance litigation that you'll see as companies become even more desperate.
Cory Doctorow writes at BoingBoing that someone has concocted an iSync conduit for the Newton. I still hear from loyal Newton users who have a copy of the book I wrote with Andy Gore about the Newton. Andy had a good obit for the Newton in Macworld. More proof that if you fall in love with a gadget you'll keep it forever, a fact designers need to remember.
Community Digital Assistant
An Indian company has tackled the challenge of how to get a computer into anyone's hands and come up with a $200 device that they say anyone anywhere can use to access information. It is Linux-based, localizable for different languages and designed to be shared by entire villages using a smart card to configure itself to each user and store their information.
Don't mistake it for a poor-man's Palm Pilot, adds Vinay Deshpande, chief executive of Bangalore-based Encore Software, one of the makers of the Simputer. "This is not a lifestyle device," he says. "It's more like a community digital assistant."
Manohar and Deshpande say the Simputer, which uses open-source Linux software as its operating system, has unlimited applications in everything from micro-credit to education to e-governance. Rural Indians can use it to track agricultural commodity prices or look up health information on its Internet browser, with the machine reading the data aloud. Similarly, consumer-goods companies and small banks might use it to track sales and deposits in far-flung outlets.
The Simputer stems from an unusual collaborative experiment: It doesn't have a single inventor, it has several. Its technology is not owned by a company or individual, but by a not-for-profit organization, the Simputer Trust. Its creation involved cooperation between a university and a publicly listed software firm.
We need a really tiny plan
The U.S. House of Representatives has a bill under consideration to create an advisory panel to create an investment strategy for nanotechnology. Sponsored by Rep. Mike Honda (D-Calif.), the bill would require the creation of short-, medium, and long-term plans.
The IEEE Times reports: "The federal government's nanotechnology strategy must have clear goals and metrics to assess our country's progress," said Honda, whose district includes San Jose, Calif.
Honda's press release says: The National Research Council recently assessed the effectiveness of NNI and issued a report titled Small Wonders, Endless Frontiers: An Assessment of the National Nanotechnology Initiative. The report concluded that with the current structure of the NNI there is "no advice from the outside" or straightforward way "to seek opinions from the community at-large," and that there is considerable need for an overarching strategic plan. This legislation would create an advisory board of experts who would help articulate short-term (1-5 years), medium-range (6-10 years), and long-range (10+ years) goals and objectives and establish performance metrics. The board would also submit an annual report to the President and Congress regarding nanotechnology progress, and a review on funding levels for nanotechnology activities for each federal agency.
"It will take many years of sustained federal investment for the nanotechnology industry to achieve maturity, and it is critical that the President has structures in place to ensure that the U.S. leads the world in its development," said Rep. Honda.
It's a good thing that the government is trying to think through the path to establishing a nanotechnology industry, but it also sounds like it could become a rathole down which the industry could go in a race to get funding. Think National Superconducing Supercollider, which ended up choking on the the money it had before the suppy was cut off because it was "behind schedule and over-budget." Sure it was, because nothing like it had been built before -- the whole point is that progress cannot be dictated in situations like the evolution of nanotech.
If the plans are for goals that will be rewarded rather than specific steps that need to be taken, it is a good idea. But we should not expect a committee to succeed at setting out a plan that must be followed, because no one knows how the industry will actually take shape.
Clear up the vagueness now
The New York Times reports: Robotic Dogs and Singing Fish in Cross Hairs. A Princeton professor thinks that the definition of a "digital media device" in the Consumer Broadband and Digital Television Promotion Act is too vague.
Edward Felton, an associate professor of computer science at Princeton suggests that the current language would require device makers to build DRM technology into the simplest products, like that awful singing bass.
The definition of a "digital media device" in Mr. Hollings's Consumer Broadband and Digital Television Promotion Act is so vague, Mr. Felten said, that the legislation would require manufacturers to build copy-protection systems into products that pose very little threat to the entertainment industry.
Rather than wait to litigate what needs to be protected later, the strategy here is to demand far more precision in what the Hollings bill will require to be protected by some form of DRM. Anyone who works with any form of media will need to be concerned about this and a flood of letters from worried business people could have a huge impact on the final definition of what must be protected.
We need corporate oversight, not war, to rebuild the economy
The New York Times reports that President Bush has authorized a 27% reduction in the new funding for corporate oversight he approved with great fanfare and moralizing about 90 days ago. Claiming the the War on Terror and Homeland Security require funding more urgently than the clean up of the vast corporate scandals, his administration was apparently never serious about corporate ethics. It is hanging Securities and Exchange Commission Chairman Harvey Pitt out to dry:
Harvey L. Pitt, the commission's chairman, has acknowledged through a spokesman that the administration's level of financing will not allow it to undertake important initiatives.
The White House has put Mr. Pitt in the awkward position of having to choose between Congressional Democrats who want a larger budget and administration officials who want less.
Many wondered why Pitt was retained earlier this year and it is obvious now that it was because the President intends to blame him for failing to "increase investor confidence" with a smaller than expected budget. Investors aren't going to rush into the market because a war changes the economic fortunes of a few defense and aerospace firms, or even if oil falls to $10 a barrel, because they have been so badly burned by un-policed executives.
Get your spam and get out of town
As a resident of Washington state, I'm pleased our Attorney General is going after spammers.
Attorney General Christine Gregoire's office estimates that Jason Heckel, 28, of Salem, doing business as Natural Instincts, sent as many as 20,000 unsolicited e-mails to Washington residents in 1998, trying to sell a $39.95 booklet called "How to Profit from the Internet."
Heckel was fined $100,000 and court costs. That's at least $5 per spam mail sent into Washington state. I'd be happy to see our A.G. spend the money to set up an online complaint system that was really easy to use, so we could collect a lot more from the people stuffing my email box with junk.
Killing your market softly
The New York Times reports: Fees Forcing College Radio Stations to Scale Back Webcasts. "About 70 college radio stations have been forced to pull the plug on Internet broadcasting in the last several months because of new copyright fees and reporting regulations."
Okay, recording executives, you are paranoid about piracy and understandably so. Those college dorms are stuffed to the gills with would-be pirates, right? But they are also your core market and the audience you want to sell to for years to come, because they'll earn more than the average worker.
If the radio stations stream your songs, they can't be grabbed and ripped conveniently, and your core audience will discover new music. When I was in college back in the early 80s, I worked at KUGR in Pullman, Wash., and we used to get calls all night long about what was on the air -- people went to buy what we introduced them to. If you stop the streams to these people while they are spending hours on their computers each night, you are, with all due respect, oh members of the RIAA, idiots.
If you're still scared about piracy, try some new pricing regimes that makes it easier and more satisfying music. Turning off an influential channel for introducing new bands and new music is a form of suicide.
Rigidity is stupid
The New York Times report An Italian Official's Blunt Words Set Off Euro-Mayhem. "With one word "stupid" the European Union's top official has blasted a hole into the already damaged budget and lending structure crucial for a unified European economy."
The European Monetary Union, represented in the pockets of citizens across the continent by the Euro notes in their pockets, is unsteady because it is built like a building with no elasticity in an earthquake zone. It requires that Euro countries limit deficits to three percent of GDP, and that looked doable in a more prosperous time. Now that tax revenues have fallen, many countries are trying to figure out how to preserve programs and lend assistance to the growing numbers of unemployed (whether it is food programs or educational credits). The stabilization requirements have hogtied governments, leaving them no room to apply Keynesian stimulus, and that is a potential disaster -- it needs to be reformed, or the European Monetary Union will come unglued and that will be a disaster of global economic proportions if it happens in an uncontrolled way during a deep recession.
The President of the EU was right to point this out, even if it is an unpopular opinion.
It may be an awful market, but at least it's our awful market
I think this is overstating the case, because a lot of companies are trading very close to cash and Apple has at traded below cash more than a few times in the last decade. This reflects a vicious conservatism vis-a-vis tech companies. Sun, which has traded at dozens of times it cash position is now trading for just 3.2 times cash, for example. Investors aren't saying Apple will never be profitable as much as expressing their general disinclination toward techs -- a few months back, when Apple was a 25, compared to Friday's close of 14.34, the downside risk was a lot more pronounced. Compared to Sun, Apple has fallen far less dramatically since the beginning of the year.
Flat rate 3G -- the inevitable has arrived
Sprint announced flat-rate access to its 3G network, called "Vision," according to this Infoworld article. In it, one analyst calls it a suicide course, because it sacrifices data revenue to win voice customers (you can get 1,250 voice minutes, plus data services, for $85 a month, in the basic plan). I see this is as logical end-point of telecommunications networks that refuse to let go of the voice-centric network, not a suicide course. Data services are going to be wrapped into larger bundles, which include application services that use data, but are billed for functionality.
At the same time, other companies, such as Orange in the United Kingdom and Europe, are emphasizing free application functionality to drive data usage and increase billing, particularly by driving SMS usage.
I tend to agree with Sprint that the business user wants a flat fee. If the phones are not packed with applications that rely on data services in the first place, you can begin to add them for additional flat fees.
The PCS Vision phone, a Handspring Treo, comes with email and calendar now, but you can easily imagine custom applications that can be delivered to the enterprise (such as commerce functionality, so I can use my phone to submit expense reports in real time, perhaps even billed through Sprint). You begin adding layers of flat fees, not trying to drive data usage to raise bills -- this makes people aware of the data usage and they begin to limit it. In Japan, NTT DoCoMo's iMode phones treat data as a give away and bill for subscriptions to games and information services -- the service has about 30 million users.
Sprint's may be the right model, since they are primarily in the voice business.
Check out this portable a/v device
Sharp's AV-1 is a hybrid audio/video device that doubles as a MP3 player and a video-playback device. Available only in Japan write now, this device just needs wireless connectivity to begin to be what I described here. It lists for $450, but one site that specializes in delivering Japanese tech to U.S. customers has it for $350. If anyone springs for one, let me know how it really performs.
And in the "No shit, Sherlock" category
WorldCom CEO defines challenges, new world of business. Sidgmore says telecom recession will spur consolidation, according to InfoWorld. This from the guy who has already resigned as CEO of WorldCom, because it is doomed. He's still there, as no one is dumb enough to take the job.
John Sidgmore addresses a Women in Technology meeting when he made the startling revelation: "The forces that are driving telecom crazy are the same things that are driving WorldCom crazy. If you borrow huge amounts of money and your revenue drops, you can reduce costs. But if you have fixed interest payments [on debt repayment], you can't jump over that." It also doesn't help if your founder and ex-CEO and some of his cronies misrepresented revenues and capex for years.
I've always found Sidgmore a thoughtful and honest guy -- he was clearly speaking his mind and trying to be as frank as possible. The problem is the story is one of those, "well, we needed something after sending the reporter to the meeting" stories, all non-news.
Not the best of signs
CNET reports Two senior execs exit Yahoo. The portal giant says its senior vice president of marketing and the head of its business services division have both resigned. The marketing guy was a Semel pick, I believe, and is already on his way out. With HotJobs accounting for most of its revenue increase in the last quarter, with the rest from search placement, the new marketing direction doesn't seem to have panned out. Likewise, the business services unit -- what used to be Broadcast.com -- has been floundering as it searches for a real business model. My guess is that the infrastruture there will be turned to the cable MSO strategy real fast, where Yahoo! carries content and pays out share of revenue to the content providers. It's the trend all across the industry.
PopTech is one of those events that I always want to go to, but never have, because it is about as far from where I am as you can get by plane in the United States (it takes less time to fly to London from Seattle than to Camden, Maine). Fortunately, you can follow the event through a variety of blogs and a purported live video feed (it doesn't seem to actually be streaming anything). Check these blogs for the running reports:
David Weinberger (JOHO)
eBay as indicator
The Internet auction site eBay reported that its revenues have grown by 73 percent over the year-ago quarter. I submit that, except for eBay shareholders, this is bad news. It demonstrates that vast amounts of product have been dumped by failed or failing companies, that consumers are shoring up their budgets by selling collectibles (I've noticed the price of baseball cards, which I collect, have fallen steadily over the past year) and that retailers, who can now list excess inventory on eBay, are dumping overstock on the site. All of that points to slack demand for new equipment, lower retail sales and fewer jobs in the coming year.
I was just on the phone with Bill Martin at FindProfit.com, who said he tries not to be so pessimistic as I am, but admitted I have a point about the precipice we are perched on just now.
Cox-Wyden Digital Material Bill
This is progress, as it is yet another bill in the vein of California Democrat Zoe Lofgren's bill to allow fair use and digital copying and the bill introduced by Rep. Rick Boucher (D(-Va.) and Rep. John Doolittle (R-Calif.) that would allow circumventing copy protection to make "fair use" copies. There is realy momentum growing for a rational digital copyright regime.
Washington, DC (Oct. 18, 2002) - U.S. Senator Ron Wyden (D-Ore.) and Rep. Chris Cox (R-Calif.) have introduced a bipartisan, bicameral resolution to assert the rights of consumers who wish to use and enjoy digital media such as CDs, DVDs, e-books and even TV shows broadcast in digital high-definition. The Technology Consumer Bill of Rights seeks to make sure that as copyright law is written for digital media, and as protection methods become more high-tech, consumers can still use digital media as freely as non-digital or analog media for non-commercial purposes.
"Digital media simply shouldn't be more restricted than other copyrighted items," said Wyden. "Digital technology is a great step forward, and it would be a shame to take a big step backward on consumers' rights when it comes to using this material."
"Law-abiding consumers and creative content producers alike deserve a clear-cut statement of what is fair use and what is not," said Cox. "Agreeing on first principles will mark an important step in the difficult technical decisions that lie ahead. Ultimately, consumer-rights and copyrights aren't at odds -- they're complementary. The Technology Consumer Bill of Rights will ensure that this is so."
Under current copyright law, the doctrine of "fair use" allows consumers to copy legally acquired media - videos, TV shows, music and other items - for personal, non-commercial purposes. The Cox-Wyden resolution states that consumers should be able to exercise the same personal control over their digital information and entertainment content. It affirms consumers' rights to copy legally acquired digital media to use later, such as taping an HDTV show to watch at home, or to use in a different place, device or format, such as copying songs from a purchased CD to use in the car or in a portable MP3 player. The resolution also recognizes consumers' rights to use technology to engage in such lawful "fair use" activity.
In introducing this resolution, Wyden and Cox both expressed their support for strong anti-piracy and copyright protections in conjunction with appropriate consumer rights. They anticipate that the Senate and House will take up the digital copyright issue in the 108th Congress, which begins next January. The Cox-Wyden resolution is based on the consumer rights articulated by DigitalConsumer.org.
"DigitalConsumer.org has done a tremendous job publicizing new threats to fair use rights of video, music and other media consumers," said Cox. "I'm grateful for DC's efforts, and wish to help in its campaign to affirm the rights of digital age consumers."
CONTACTS: Lisa Wade Raasch (Wyden), 202/224-5244
Paul Wilkinson (Cox), 202/225-6168
Real Earnings Rising
The Bureau of Labor Statistics reports those people who are working are working more, making just a bit more and prices have risen slightly:
Real average weekly earnings increased by 0.7 percent from August to September after seasonal adjustment, according to preliminary data released today by the Bureau of Labor Statistics of the U.S. Department of Labor. A 0.6 percent increase in average weekly hours and a 0.3 percent gain in average hourly earnings were partially offset by a 0.2 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
Wireless multiplexing -- very cool
The Register reports about Lucent's Bell Labs demo of 19.2Mbps 3G chips. It's a reasonable question to ask if Lucent will be around to actually deliver the chips, but what they do is very, very cool. Basically, the Lucent chip applies the same principles that multiplexing signals on a wire or fiber optic line do, breaking messages down into multiple signals, sending them over the network simultaneously and reassembling them at the other end. Using multiple transmitters allows the chips to send and recieve far more data than one transmitter working in islation.
There is still a significant question about how many multi-radio devices could use the spectrum at the same time, but this solves some very critical problems revolving around the way to increase throughput to a mobile device (as compared to one in a relatively static position within an 802.11 b/a hotspot).
Doc is a yummy sandwich
Doc reports that, based on his reading of the German version of an interview I did with Ben Schwan for Netzeitung, a German online publication, I may have called him a sandwich. Even though I spend a few weeks in Germany almost every year, I couldn't order a sandwich to save my life, but I do imagine Doc as a sandwich sometimes. It's one of those dark secrets that only comes out in translation.
Here is the German version of the interview, which focused on blogging ethics. And here is the English version, which is longer, since the email interview was redacted for translation and publication:
Q: As a former journalist and now blogger / consultant, why do you think ethical / journalistic standards have to apply to the blog world?
I don't think that they have to apply and never said they did. What I believe bloggers need to do is ask themselves ethical questions, just as other people who have the opportunity to influence others through their writing do. The fact is, some blogging is growing into a kind of business, just what that will look like remains to be seen, but we needn't wait for a definition in order to begin asking questions about ethics.
We don't have to walk blindly into the future. All I suggested was that these questions need to be asked. I did not dictate the answers.
In fact, what I did was just good blogging. I noticed a comment about this paid junket, which many people might never have seen, and blogged it, adding my comments. I just have a talent for igniting controversy -- it's what makes my blog worth reading, I believe.
Moreover, I intend to make some money doing this, someday. In order to do so, I need to establish a level of trust with my readers, so I talked about my ethical standards. It is a mistake to project my standards onto others, but that seems to be what a lot of folks see when they read that posting.
Q: Do you wonder why Microsoft invited bloggers to an event like Mobius?
Not at all. It's Microsoft's job to try to influence the market in favor of its products to every degree possible. These bloggers, who run sites dedicated to technology and that often feature advertising and commerce links for purchasing handhelds and mobile phones, are acting in the same role as a start-up technology trade publication in the 1980s. So, it is the company's best interest to establish relationships with them early. What better way that to invite them, starry eyed at the notion that they have so much influence Microsoft wants to spend time with them, to fly and stay in Redmond with all expenses paid?
Q: So Microsoft thinks bloggers already have that much influence? Do they themselves believe that?
Well, Microsoft accomplished two things by bringing these folks into Redmond. First, they got a lot of feedback from people are fanatical about their products or their competitors' products. Second, they got a lot of ink in the blogs about their technology, some raves, some simple reporting, and some pans. That's okay, because any press is good press when you are trying to win market share.
As for the quantifiable amount of influence bloggers have, it is about reaching the right people, not the most people. Does Microsoft see the bloggers as influential as Walt Mossberg, the technology columnist for the Wall Street Journal? Not yet. But Walt is invited for annual or semi-annual sit-downs with Bill Gates, and the Journal pays his way.
I'm not sure which "they" you refer to believing there is influence there -- if you mean the bloggers, I think they were surprised, but they are also proud of their readership. If you mean Microsoft, they aren't stupid and will not ignore an emerging medium.
Q: How was the reaction in the blog world to your posting?
Well, a lot of people discussed the idea. Doc Searls posted a mea culpa article that I found very thoughtful and thought-provoking from one of the pioneers of the blogging form. I got a lot of defensive mail from the bloggers who went on the junket and a couple very reasonable replies from them.
The notion of ethics was misinterpreted by a lot of people as a edict being issued from on high. I, however, am not sitting particularly high in the world. I just asked a question -- people's refusal to answer, defensiveness about answering and their willingness to answer those questions tell a lot about each of them. I'll be paying close attention to the bloggers who said, "Yes, I should think about this and be sure I am not being influenced by keeping my conflicts in the open." I'll be paying closer attention to the ones who said they won't disclose or said they would and haven't, so I can criticize their work publicly. That's just good blogging.
A number of correspondents suggested that disclosure was a silly notion, because they pay to publish their weblogs. They used extreme and absurd examples, like saying they would not reveal how much money they made to their neighbors or their readers. Most of that was a red herring to avoid the more pressing question of whether or not they ever expect to earn a living doing this -- many bloggers don't expect to and probably shouldn't. But those that do are going to find that they have to pay dues not unlike journalists have. Proclamations that blogging is different than journalism only go so far; once you start acting as a reporter or, more likely, a columnist, you need to ask yourself if you are not purposefully misleading your readers by failing to disclose conflicts. My assumption is that if we are going to grow a new medium it ought to be better than the earlier ones if it wants to survive, and higher standards are just one part of that evolution.
Q: How much do the readers of the big weblogs already see this source as credible - comparable to big news outlets?
I think many readers mistake the opinions they share as credibility in the writer. So, instead of reading critically, they take comments from a conservative warblogger or a peaceblogger or a libertarian business blogger as "the truth, at last," when they should be reading more critically than ever.
That said, blogging, which is only one aspect of the Web and only a tiny fraction of the media world, does allow and encourage the reader to explore ideas more thoroughly and from many different angles than ever before. As I wrote in a posting recently, the only real change in media introduced by blogging (since the form of last-posting-first, or reverse chronological order from the top of the page is just a different layout) is that commercial publishers no longer have a monopoly on access to sources. Bloggers call sources and check what journalists write (introducing a strange opportunity for the source to change their story and blame it on the journalist, which will eventually be exploited by PR people). Sometimes, the blogger is the source for the journalist and will comment on how they were covered, such as the case with this interview. So, sourcing has changed dramatically, but our motivations for writing are about the same -- while a few bloggers are like journalists, some bloggers are like people who consistently write letters to the editor and others are simply keeping a journal, which might wide-ranging or narrowly focused, that they share with the world.
Q: Do you see a trend there?
I see the continuing evolution of the way humans communicate. Blogging isn't the last new thing, though it may take an interesting place in the communications environment, one that is close to the "every person has a press" predictions of the early Web era.
Q: Can a blogger really be held up to journalistic standards? In the end, he only is an amateur, right?
Amateur bloggers, the people are simply writing from a passion or sense of commitment but who do not profit from it needn't live by journalistic standards.
If you start placing ads, taking sponsorships and earning money or value (like free goodies at a Microsoft junket) from your blog, you're not an amateur anymore. But, what I said was that we need to talk about the ethics of this kind of blogger, not that they should be held to the standards of a journalistic organization.
But, look, why not hold yourself to a higher standard than the big old corporations we complain about, who limit our access to the truth. That's the rap against Big-J journalists on the Web in general, not just among bloggers -- the media is supposedly all hype. So, why not set standards for yourself, as an individual publisher, that are higher? Progress starts at home, after all. You can't wait for the neighbors to out-ethics you.
Q: Weblog memes have made it to the news already. Will they become a more important source for news outlets?
Yes, the blog format is finding adoption with some big media outlets. I hope to build mine into an important, useful and profitable venture. Remember, though, it's just a format, a kind of genre, and it will not replace journalism. It can add to, modify and blend with existing media, just as the Web has with print and TV, as TV did with radio, as radio did with print, as print did with scribal reproduction, as scribal reproduction did with individual copying, as individual copying did from story-telling as story-telling did from the first time someone decided to scare their friends around a fire, talking about the shadows in the night.
Q: Thanks for your time, Mitch.
InfoWorld reports Nortel Q3 revenue falls across all segments. With a loss of $1.08 billion, about four times as high as analysts expected, Nortel is clearly in trouble. It says it expects to have $3 billion in cash at the end of the year -- less than its outstanding debts. The telecom sector is not just bad, it's getting worse:
Compared to the third quarter of 2001, revenue from its wireless networks segment decreased 30 percent, revenue from its enterprise networks unit fell 10 percent, revenue from its wireline networks segment declined 49 percent, and revenue from its optical networks segment declined 47 percent, "representing substantial decreases across all major regions," the company said.
I'm probably going to piss off everyone now
In my continuing campaign to keep people from distorting my ethics posting, I have engaged Gretchen's Head, who writes that I "lumped [people] into very generalized and often misappropriate categories AND because this has just been done to my husband" when I raised the issue of bloggers accepting expense-paid trips to Microsoft's Mobius 2002 product briefing.
Gretchen's arguments are all fine by me -- people shouldn't generalize and journalist and bloggers are often different -- but she attributes all sorts of things to me that I simply didn't say.
Predictably, many of the comments on her site from readers called me all sorts of things, from envious of the attendees at Mobuis to a builder of an ugly site (which is just a Radio template with minor changes); and there were the usual plays on my last name, which I've endured stoically, since I love my last name and its history, since Kindergarten. It's all so familiar to me from the Y2K days, when every Y2K alarmist in the world threatened or insulted me at one time or another, that it just reinforces my belief that no matter how much things change they stay the same.
My reply to her posting:
I am astonished that the inocuous phrase "a group of bloggers" is what you single out as the source of your anger about my posting. I simply intended to distinguish some people from the rest of the people on the planet. It was based on a posting from Gizmodo that said Microsoft had invited bloggers to attend all expenses paid. You're reading something into it that absolutely wasn't there when you suggest I meant to demean bloggers in general or even the people who attended Mobius.
Nor did I say anything about bloggers being journalists or anything specifically about your husband, who I did not know was attending and with whose work I am familiar. Do I think it is ethical to take a free trip while running a newsletter and a conference? No. I never did when I ran a newsletter and a conference, even when I ran it on my own dime. But, it's up to Chris to make those decisions, not me -- as a reader, I have to say that I am surprised that he does take paid trips. As a reader, it changes the way I'll read him in the future. Is that something you should be angry about? You don't have a right to be, because I am free to make value judgments in my reading, just as any other reader is.
I only asked a rather obvious question and asked that both readers and bloggers consider it. In essence, I blogged my thoughts. I've also posted a number of follow-ups to the original posting which reiterate the fact that not once did I say bloggers are journalists or that they are obligated to disclose things as a group.
You also lump me into a category with "journalists," emphasizing this by saying I used the term in the context of "blogs being discussed in the media." You might have noticed that I discussed this issue on a blog, for which I do not get paid and which has no affiliation with any major media organization. You seem to be grinding an axe on my back that I did not help to dull, as I was just blogging, too.
Gretchen, it is nice you love your husband. I love my wife. The world is changing and if you don't want people to ask hard questions, I suggest you turn off the computer and ignore comments about what Chris does. Writing requires putting your thoughts and reputation on the line, it always involves harsh criticism and requires a thick skin. I only ask that you try to be accurate about what I said before you attack me.
Mitch (not Mr. Ratcliffe, because you aren't writing for the New York Times)
Now, is it rude to object to being mischaracterized by someone defending their spouse? No. If, as I am sure many of the people who will comment on this posting will, you believe it is rude to do so and that as a result you'll never ever read my stupid ugly blog again, fine. Goodbye.
See, that's the thing. My repeated attempt to ensure that my writing is not mischaracterized is an attempt to keep the debate focused on one simple question: What's ethical, whether you are a blogger or a journalist. That's all. Simple question. You don't have to answer it my way, or even to my satisfaction unless I ask you as a reader (in which case, I can stop reading your blog or your column or your newspaper). It's a democracy, one full of questions that need asking.
My email address is firstname.lastname@example.org. Flame away, but I reserve the right to edit what goes on my site, so flame in mail.
Now, back to our regular programming on the Ugly Stupid Network (USN -- Where you're bound to be offended sometimes).
Amplifying the roaming progress
The 80211b.weblogger points to Agere and Infineon's agreement to collaborate on a mult-802.11 wireless chipset. Atheros is ahead in this race, but this partnering activity is, in the words of the soon-to-be-not-Living-so-happily Martha Steward, "a good thing." The result will not be in retail devices for a year or so, and, ideally, your phone will use voice over IP (VoIP) to eliminate the increasingly archaic distinction between voice and data in mobile handsets.
Seamless roaming one step closer
Lucent is demonstrating a device a the CTIA show in Las Vegas that is capable of hand-offs between an 802.11b and and a "3G" CDMA 1xEV-DO network (a broadband wireless telephone network). This is cool and significant, since it represents a big jump toward a time when a device will be able to keep in touch with data services through a variety of networks, using the fastest or cheapest available connection available. There is no reason a handheld computer or laptop need to be reconfigured by the user each time they want to switch networks -- frequency- and protocol-agile devices will eventually handle that reconfiguration on the fly.
Thanks to Howard for the link.
Is the bear headed back to the cave?
The Economist reviews investor optimism after the Dow Jones Industrial Average rose by 13% in four days (it is up 2.42 percent on the day, at this writing). Citing arguments that the S&P 500 has fallen approximately 50 percent from its highs, just as it did in the '73-'74 recession, and that many stocks have reached a fair value, the article also issues a strongly cautionary note:
There is a clear risk that the market still has new lows to test. And even if one believes that share prices are no longer overvalued, the long-run prospects for equities are not dazzling. Over the long haul, share prices depend on profits, which cannot forever grow faster than nominal GDP—as they did through the 1990s. Real equity returns might average only 5% a year over the next decade, compared with annual returns of 25% over the four years to 1996.
I still hear a persistent growling.
Dell: Stronger and stronger
Dell takes No. 1 PC maker spot from HP, report says demonstrates how a great company can take advantage of a slowdown to build market share. From a stockholder's perspective, this is good news; if you are thinking of buying Dell, you are still looking at a 58 P/E, so beware of the potential for downside in the short term. In a recovery, though, Dell is in the PC industry's catbird seat.
I don't like the new ads. The story of the new-hire conversion to the Dell way is tedious.
Assuming you want a handheld
osOpinion on What's So Good About Pocket PC?. In this story by Kimberly Hill of WirelessNewsFactor.com, Deloitte Consulting's Mark Peacock says Microsoft's PocketPC strategy depends largely on the enterprise user who wants to connect wirelessly and that the Compaq iPaq and PocketPC need one more generation to improve before they take the market from Palm. He says "leading-edge people will drop the laptop and move to PocketPC devices."
While it always true the business use drives early adoption of a technology, I think this is a mistake, if you are considering PocketPC as a platform. We'll certainly carry a device that substitutes for the organizer in paper or the PIM on your PC, but the form factor of the handheld is largely geared for reference and access to information, with minimal input.
I think the business traveler will use the PocketPC during the day to connect to and use information -- everything from text to audio and video, once wireless service is readily accessible and memory sufficiently small to support the data demands -- but that they'll still be synching and using that device in conjunction with a laptop or the Xbox/Media Center PC at home.
Same with the Palm platform, which is adding support for sound and other rich media applications. The article argues that Palm is not ready for the enterprise, but it would be a powerful weapon if Apple were to acquire it and build deep integration of the open-source OS X into those devices. Who runs PalmSource, the Palm software division responsible for extending the Palm OS into the enterprise? Dave Nagel, formerly of Apple.
Where's the relief?
The Associated Press reports that I.B.M. Results Fuel a Rally on Wall Street. Propelled by better-than-expected earnings from I.B.M., stocks surged in early trading today for the fifth time in six sessions.
IBM made its numbers through cost-cutting. Cost-cutting means lower sales. Cost-cutting means people without work. People without work mean consumer confidence will continue to suffer (Note that the actual consumer confidence in the report I linked to has been falling, while the Expectations Index has risen -- this reflects hopes that are being dashed by new layoffs). A couple years back, the market would rally on poor employment news, because it meant that inflation would be held at bay and the Fed would keep interest rates low. Today, layoffs and cost-cutting mean we're heading into a deflactionary cycle. The market is not rational, it is insane.
But will it sing and dance?
I'd also like to be able to send a PDF file to Kinko's over the Net and have the resulting document appear with bleeds to the edge of the paper rather than with that ugly white border the PDF + Xerox systems at Kinko's produce today.
We're going back to Boston?
The Macintosh News Network reports Apple snubs IDG, declines to go to Boston. The Macworld show, which IDG proposes to move from New York back to its roots in Boston, will have no Apple presence. How much you want to bet that IDG stays in New York? This opens a huge opportunity for IDG's competitors to snatch the anchor tenant at the Macworld shows away with more focused events.
It was always so muggy in Boston at Macworld time -- even if the Big Dig is getting finished, it's hard to imagine returning to the expo center out there on the landfill, which was crowded and uncomfortable.
My local economy
Washington state has one of the highest unemployment rates in the nation, 7.4 percent, after years as the destination of choice for everyone from computer scientists and aerospace engineers to grunge rockers and baristas. Now, we're literally screwed. I only report this because the wave of poor earnings and layoffs locally is indicative that, while the tech sector may have bottomed (year-over-year revenues just about flat, slight gains sequentially) the industrial economy is just starting its major dip due to 9/11 and a variety of other factors.
This is going to take the wind, what's left of it, at least, out of the consumer spending sales, because when big manufacturers lay people off it shakes layers of the economy that were almost gleeful at the plight of the high-flying dot-commers job losses; no, it wouldn't happen to them, because they had stayed in the old economy. Well, economies evolve, and while the New Economy (with caps) was a mirage concocted by eager tech visionaries, the old economy has been shedding its skin, too.
Cost-cutting, which has been the watchword of technology firms for almost 28 months, is hitting the big old companies. Boeing today announced revenues are down 43 percent and future orders are falling rather than rising compared to the previous year and the previous quarter (a war could help this company, but it would cost lives down the road at Fort Lewis and McChord Airforce Base). Boeing chairman Phil Condit, who moved the company's headquarters to Chicago last year, said the company doesn't expect a recovery into at least 2004, because foreign airlines and some domestics are picking Airbus planes over Boeing's. The company will lay off several thousand employees in the next few days, after a previous 30,000 workers who preceded them out the door. According to the 11 PM newscasts here, the numbers will be in the low thousands.
Weyerhaueser, the timber company, is laying off 750 at its corporate headquarters, 26 percent of the staff there. I can see the Weyerhaueser's family headquarters out my home office window right now and some of it is for sale. The lights are out over there, but it is one o'clock in the morning.
Adobe is laying off 250 workers, which may severely impact its office with 450 people in Seattle, where Aldus PageMaker was created and is still managed. Capital One, the credit card company, is closing its call center in the area, with 117 losing their jobs.
This is all to say that the downturn is far from over and that once your neighbors are out of work the only thing on your mind is preservation. Say goodbye to any notion of a big holiday spending/travel season to help retailers, airlines or the economy in general.
The one bright note: Microsoft is expected to exceed its projections.
(Disclosure: I am negotiating several deals with Microsoft. Why? Because they are going to be around for a long time.)
History repeats and repeats
I published the following essay on January 2, 1995, in Digital Media, the newsletter that I used to run. I'd just returned from the "roll-out" of the now-defunct $1.1 billion (yes, billion) Time Warner Cable interactive television network in Orlando, Florida. The service was all about consuming. So, thinking about what a real interactive world would be like, I sketched a day in the life of a guy working from his home as an online personality, or OP (pronounced "Opie," like Ron Howard's character on The Andy Griffith Show). I submit that this is the future of the digital cottage and that blogging--all forms of self-publishing, as well as changing modes of commercial publishing--are steps toward a world where we can apply our creativity from virtually anywhere to earning a living.
Must we take the Turing test?
People talking to machines. That's the economic model of the information age breaking out everywhere. People ask machines for a news story, a movie or the sports scores and the machines charge them for it. People go away happy. Mostly, they just go away. For example, I read in the European Wall Street Journal recently that airlines see more than just added revenues from in-flight interactive entertainment: "Passengers busy playing computer games or watching movies will be less likely to harass flight attendants with endless requests." I can't wait to be lulled into that cooperative, complacent state. Peace, at last. But come to think of it, that's the condition we retreat to after voting every two years; and we always emerge in the next election more angry than before.
While the development of technology that can spit a video stream down a cable to a home, or an airplane seat, is really quite remarkable in this Paleolithic information epoch--we're really nowhere near the time when the whole world will be living together among easily accessible digital connections--video on demand is not the face of Helen that will launch a new economy.
Of course, that's not the way Time Warner sees it. Listening in Orlando last month to Time Warner CEO Gerald Levin gleefully anticipating his grab for a part of the $105 billion telephone market, it was clear that he doesn't want people to earn money in the information age; he just wants them to spend it.
I think we can do better by the people. You're probably thinking what my father would say: "Put up or shut up, Ratcliffe. What's this new economy supposed to look like?" Well. . . .
It's nine o'clock in the morning, sometime in 2017. Davis Allen, a 39-year-old man living in Nantucket, pulls himself up to the keyboard in his den. He's at work. He's an online star. As his computers boot up, the screens around him flicker to life; some contain text messages, others are video feeds from the places he'll be performing today. The screen directly in front of him, labeled "LIVE," is blank. This will let him see who he's talking to when he actually taps into the lives of his audience. There are approximately 75,000 online personalities (OPs) in the United States. Folks come into contact with five to ten OPs a day. Each OP has a micro audience of 3,500 or so people who would identify with that personality. The superstars, like Davis, are very influential, because they "personally" advise half a million or more people.
The new broadband lines are standard fare in Davis's community. Everyone has vast amounts of capacity available dynamically. There's no more making appointments for T1 bandwidth: it's there instantly. Davis gobbles bandwidth keeping connected to his audience. About 420,000 people in the region--and a few who have moved across country or to Europe and Asia--count on Davis's endorsement of products when shopping, as well as his wit and eye for the ironic to provide entertainment.
The broadband lines in the house are from one of the local phone companies. They are the second set laid in. The first, installed by the now-defunct cable system, were paid for by Davis's old employer, Paracom, the entertainment conglomerate. In those days, he was doing banter in the interface of the local interactive television system, hawking new programs, connecting gamers in huge virtual Zork tournaments, and giving folks the sense that they weren't alone in the digiscape.
Paracom Online spent heavily on developing online personalities in the late 1990s. These next-generation disc jockeys followed the lead of the MTV VJ and talk-radio hosts like Rush Limbaugh, who were the first to turn participation (no matter how inconsequential) into a mass medium. Davis Allen was one of the first, joining the Paracom network as a 19-year-old to cruise the youth-oriented newsgroups on the Internet, making friends, getting those friends to bring others into the conversation; soon he was a literal Pied Piper at the vanguard of the march into interactivity.
His own experience taught him to pick out the most interesting people he met in cyberspace. As more people took up the video camera and desktop video editing systems, or turned their keyboards into expressive outlets for their ideas, Davis became a valued source of contacts--a kind of virtual editor who connected his audience with others' creative work.
Late in the first decade of the new century, Davis left Paracom's employ and set up his own company. For almost a decade, he's been contracting with media companies, advertisers and service organizations, including Paracom, to provide the online personality for content, products and services throughout the Northeast. The average OP, working for a production company that taps many networks to distribute its content, has hundreds of these endorsement contracts.
Davis's latest venture is the virtual shelf-talker. Whether shopping at home or in a store, consumers plug a pcmcia card into their PDA that tracks their proximity to Davis-endorsed products. When they pass one on the store shelf, for instance, a Davis video pops up and explains the comparative benefits of the product. The video is manipulated by the computers on Davis' desktop to insert the customer's name in the rap. But if they have more questions, a light flashes on Davis' monitor and he can go live to assist them. Since he covers only a part of the country, and since his video talkers are recorded to answer most consumer concerns in the first minute, he doesn't spend much time in live conversations. When he's not at work, an assistant takes care of people.
The rest of the day, Davis spends time in forums, producing introductions to new films and shows on the interactive networks, and out in the field shooting tape for segments.
Davis found out early that the biggest challenge for the online personality was the shut-in. These people want to go live and just talk for hours, killing the time they fear, but also Davis's own production time. Two strategies paid off. First, he introduced the shut-ins to one another; but he also found out what kinds of activities were going on in their communities and got them to go out and try to join in society.
Davis, because he works at home, has considerably more time than his own father for involvement in the community and his family's life. He's on the school board and regularly meets a group of concerned parents for discussion at a local coffeeshop. He eats breakfast, lunch and dinner with his family (finally, intelligent agents and pdas are providing flexible access to the networks that facilitate working less, but working better), and knows his children's friends by name. Involvement keeps families growing stronger, no kids in the region have been murdered by other children for almost five years. . . .
That's a brief portrait of the world we could make. No one expects that an economy can be born in a single moment of transformation, but I think the op is an example of a recognizable job description undergoing a transformation in the information economy. These people will require a complex assortment of support staff and technology. Literally hundreds of new job descriptions might erupt in a world where the home is a permeable membrane that collects the power of human intelligence to serve the family living in it. Imagine, for example, that the power systems in a house--heat, air conditioning, lighting--are controllable from a remote location; there's a new industry in maintenance and consulting services that help consumers get the most out of their electrical consumption.
I'm afraid, though, seeing how little incentive people have for acting as creative beings in the so-called information age of video on demand, that we're building a dystopian society in which people will be treated as mere consumers. Like Robert Louis Stevenson's perfect child, there will be the expectation that people will speak only when spoken to--and then in a voice that says "Yes, I'll take two" through the mechanics of a handheld interactive TV control. We'll pay a terrible price for such mechanistic social perfection.
If you want your company to win a place in a robust economy, in a society where you will enjoy living, think beyond the media to the people using it. And think beyond their use of media, to their lives. What are we complaining about as a nation? I see many phenomena that orbit the issue of a growing sense that there is no humanity in the world. Keep in mind what Fred Rogers wrote in the Freedom Forum's Media Studies Journal recently: "Television may be the only electrical appliance that's more useful after it's turned off."
Give the people a voice
Earthlink to offer blogging tools makes it perfectly clear that the forces that shaped the early Internet are still alive and well. People talking to people is what this is about. Whether you are a passionate wine enthusiast or a company CEO who is talking with the market, the Net has always been about dialog. Earthlink is using Dan Bricklin's Trellix for its weblog software.
The Macintosh News Network reports: Apple posts net loss of $45M after charges. The picture is pretty much what Intel's numbers earlier this week suggested, that the recovery is still a long way off. Having written down some $52 million in poorly performing investments (they used to be called losses due to bad investment), the company lost $45 million, or $0.13 a share.
Year-over-year revenues were flat and the actual number of units sold was down by 14 percent, which means that Apple improved its margins -- a ray of sunshine, not unlike today's IBM results, which were bouyed by cost-cutting, as well.
Jaguar, the OS X upgrade, is supposedly headed to five million users by year end, which is a very strong performance. But with the year ahead looking gloomy, I'd not be expecting any significant gains in this stock in the short term. At 14.56 a share today, however, I'd consider dollar-cost averaging into Apple over the long term, since it is clearly making advances with user satisfaction and cool products.
The Lemur speaks
Recived communication from the Head Lemur, who is experiencing some discomfort.
My feelings go out to the Head Lemur and his scrotum:
I hope you think I got people thinking, but it seems you're also concerned about my moral outrage, too, since you disclosed the issue of your privates to me specifically. This was unnecessary, as the generic question of your preference in underwear -- for medical or other reasons -- is wholly irrelevant to the opinion I'll form about your ideas.
Now, if you constantly posted about how Hanes briefs relieved the discomfiture you experience due to your persistent spermatocele, and you were receiving those boxers for free, without hijacking the local Hanes delivery truck, but through the generous donation of briefs by the Hanes Corporation, then I would be concerned about your Hanes credibility, but not about your apparent lack of relief from spermatocele discomfiture -- perhaps you are blogging too much and need to spend some time with Mrs. Lemur or, if there is no Mrs. Lemur, one of the frisky lemurs that populate your region of Madagascar, the native land of lemurs.
As for my comfort level, I am perfectly content to endure soundbytes and dumptrucks of buffalo shit to find a good idea on the Web. It's like that with books, magazines and handbills, too. I just want the people writing all the shit to know what they are doing is influenced by money, which can pay for a lot of Hanes briefs, Lemur, so I can better determine the smell of a flower from amongst all the shit.
The problem is, Lemur, the flowers and the shit are all made of the same things: Words. Words are thought viruses, though I am decidedly tired of the notion of a "meme," since it is as overused as a shared piece of toilet paper in a national park outhouse.
I would assume that you agree, were it not for your brief disclosure, that people who claim bloggers are somehow immune to the influences that make words into shit and not flowers, amongst which number money, public relations "specialists," influence, power, sex and insecurity, are somehow above those baser animal parts of life are a little too full of their own shit.
You seem like a guy who, like me, is cranky and tired of digging through shit for flowers. I harbor no hope of finding flowers in the shit, for I embrace the philosophy of Camus on the issue of hope, but I do continue digging and I imagine I am happy doing so, for it may someday lead me to some idea, some long work of pure unadulterated genius, a fulfilling debate, anything to distract me from the painful rectal itching that afflicts me night and day, since I took up working at a keyboard.
Yours in shared suffering....
Slashdot has a very good run-down of the IBM PowerPC 970 Architecture. The chip, which will be used in Macintosh and, perhaps, in some form in the Sony Playstation 3, is a rendering monster. That means incredibly rich media capacity will be sitting at the edge of the network. Intel and AMD will have really fast chips, too, I'm not making any comparison here.
The important idea is that with all the compute power that will be sitting on the desktop, in portables and, even, TVs (with Intel's "missing box" TV-system-on-a-chip), there will be an unprecedented opportunity for new messaging interfaces. That means cool applications coming over the net.
The interesting stuff should be happening at the edge, where people will be able to create more exciting stuff, from home video (not just porn, but for Grandma, too), and rich forms of messaging.
It shoud, with these devices, be possible to render and compress video in high resolution in near real-time. What latency remains in the device will be far outweighed by the lack of upstream capacity most people will have at home and on busy corporate networks. But, and here is the silver lining, this should drive increased usage of bandwidth starting in late 2003 and going forward, which might finally consume all the excess capacity in the network today.
Trusting, not branding
The whole hoohaa over ethics fired up by my recent posting about the Mobius 2002 event has led to some great postings across the Net. What it all comes down to is that we need to establish trust, not brands, as so many were encouraged to do in the 1990s. A brand is a lot of things, some good for purposes of selling, but mostly it is about management by control. Thus, you get trademark symbols in the middle of sentences, phantom switchers who vanish more quickly than they appear, and so forth.
The following are well worth the read:
AKMA has a fine piece on why Doc is trusted.
JOHO has pledges, manifesto links and parody.
A sword that cuts both ways
CNET reports that Yahoo's Overture economy is saving its bacon. A deal with Overture, which syndicates sponsored search results, drove as much as $30 million in revenues to Yahoo! in the last quarter. Overture and Google are going head to head to see which can grab the largest portion of the market for search results. So, the concern expressed in the article by analysts in the story that Yahoo! could could become too dependent on Overture is misplaced. What will happen is that Overture and Google, which run extremely lucrative search keyword placement services, will duel over which can drive the highest cost-per-click (both use a modified auction pricing system) and give Yahoo! and their other partner portals the greatest share of revenue.
The caveat is that, in order to drive search traffic, Yahoo! needs to increase traffic flow consistently to drive more searches. The company may come to a point where it needs to back away for its pay-for-carriage model with content providers simply in order to have a wide enough range of content people want to visit regularly. That could hurt the bottom line as much or more than the Overture revenues have helped it. The answer is premium services and based on consumers consistent willingness to pay for better access to content (cable and satellite TV being the prime examples), that's what you can expect to see.
InfoWorld reports "Expanded tax incentive would spur IT, group says." Well, if it were just that easy. I have been doing research on corporate investment in new markets and, based on what I see there, the economic incentives a region offers are almost irrelevant to the decision to locate there -- if there is no revenue to earn, no external factor, like a lower tax rate, will get business to move.
Suggesting that small business would buy more PCs and printers and gadgets if they got to deduct more (and, hey, I'd love to deduct more of the technology costs I get immediately) will spur business to spend on tech assumes that those expenses can immediately be translated into more revenue or significant savings. There just isn't that much business growth right now. Older systems are fine if all you do is type letters, run Excel or QuickBooks and do an occasional presentation.
If government wants to spur technology spending, it should remember that government is the single largest customer for technology. Spend tax dollars on new systems for police, fire and education and see if that doesn't lift revenues at technology companies. It's a more direct route to the goal this tax cut sets out.
This is an interesting move from Network Associates. Putting support and technical people into close proximity to corporate customers increases average revenue per user ("ARPU," an acronym that is pronounced like the name of an Eskimo village) and increases its ability to capture large customers, but suggests the company is skeptical about growth in the wider market for its technology.
One reason AOL will survive. The Washington Post reports that AOL's new client software will block pop-up ads from users screens, indicating that it is turning away from the ad model (foregoing about $30 million in current revenues). This means the premium services model is taking precedence at AOL as well as other major ISPs/portals. Keeping viewers happy means keeping annoying ads out of the way while they enjoy/consume/use (you pick the verb) the content for which they pay extra.
CNET News.com reports that Intel falls shy of views, revenue flat. The chipmaker meets expectations for revenue yet falls just short of profit goals for the quarter. Guidance for the fourth-quarter is conservative.
Well, so much for a Christmas PC sales and most of Q1 -- the tech doldrums continue with nary a shiver of wind in the sails. Flat year-over-year revenue shows that this holiday season will be as tepid as last and a mild three percent sequential gain is only a sign that manufacturers expect a very slow Q1, too. Normally, OEMs would be stocking up on components for the holiday season and placing orders to keep inventories ready for early spending for companies with fiscal years that start in January (new budgets used to mean new purchase orders from the IT department). As it is at many tech companies, they could probably put two PCs on every other desk just using the old systems lying around after layoffs.
I'm such a gloomy Gus, but 2003 isn't going to be pretty, either.
UPDATED: So, I've been talking to my market. One of the bloggers who attended Mobius 2002 this weekend has been mailing throughout the day, but doesn't want to be identified. But the thread is informative about a perspective and also kind of fun. Maybe you'll see that I am joking, but if you don't, hey, maybe this site's not for you:
Incoming email from "Mystery Blogger:"
Interesting perspective on things - thanks for not flaming us TOO much as a group, but FYI I haven't even had a chance to post my Mobius story yet, so you may want to wait a few days before tying the noose around our collective necks for not disclosing everything. :-) You also don't seem to consider the fact that for some of us at least, our Web site is our job, so paying our way to Mobius isn't a viable option.
Can I quote from your comments to me in a posting?
"Mystery Blogger" responds:
No. I would prefer not to be used in such a manner.
Back I went:
That's too bad. I won't quote you.
Alright, so "Mystery Blogger" comes a-calling again:
Perhaps this might give you food for thought:
1) Blogger gets trip + goodies paid for, goes home, writes for free. Best case scenario Blogger sells goodies on eBay, though even that is somewhat unethical to sell "NFR" gear that way.
2) Journalist's company pays for trip, goes home, then gets paid to write a story.
Who's losing out more here? At least the journalist gets money to pay his bills.
And I retorted:
Welcome to reality, Mystery Blogger.
If you want to be taken seriously by your readers, you have to tell them everything. Otherwise, you're worse than the journalists' publisher, who cuts travel expenses and demands complete coverage of events people can't go to.
Look, I started out as a freelancer, earning 3 cents a word. Do you know how long it takes to write a living for 3 cents a word and no expenses? Usually, I lost money, and that was the cost of earning the audience's trust. But, by doing it I eventually earned more, even got a job, even quit the job and started my own publications, stopped that and turned to blogging, which I *will* figure out how to earn money doing in an ethical way.
When climbing the ladder there are no losses, just dues paid. You have to see it that way or you're just making excuses -- methinks you protest a bit too much about the fairness of compensation here. Are you feeling guilty?
Back, again, "Mystery Blogger" replied:
I'm not feeling guilty, but I don't remember voting for your appointment to "Lord of the Blogging World". ;-) You're taking this all very seriously, which is pretty amusing - I believe it's possible to worry about your own ethics without condemning others and I'd urge you to do so.
I mailed back to Mystery Blogger:
Anyone who reads what I wrote sees that I am not condemning anyone. If anything, I'm going out of my way to be nice.
I like Lord of the Blogging World. Nice ring. But, when it comes time to file for election, I'll pass. Got a business to build.
As for my ethics, hey, let's battle. What the fuck is the fun if you can't argue with people all day? I've been doing this for years and experience counts.
I mean, look, Mystery Blogger, you sent a note that attempted to lecture me about your situation, that you write for free. I do too. Haven't been paid to write in a year and a half. Now I just write for fun, the only reward I get is having arguments in email, which is fun. I *enjoy* debating. I enjoy fucking with people even more, which is why I went into this line of work. Do I seem high-handed? It's only because I write so damned well and fast after publishing millions of words. I'm old. I'm cranky. I'm a fucking asshole, but I know what I'm talking about.
Having been subjected to Microsoft, Apple, Oracle, HP, AT&T and myriad other PR machines, I know whereof I speak about this ethics stuff.
Moreover, I know PDAs inside out and backwards and forwards, having written books about Newton, the EO and an aborted book about WinPad, the predecessor to PocketPC that never shipped. We might have fun talking about something else besides ethics.
Mystery Blogger, in a snit, gives me the "bottom-line":
Let me bottom-line if for you Mitch: if a Blog's readership trusts the author so little that they think he or she could be bought off for a few trinkets, why the hell would they be reading him in the first place? Most Blogs have a readership based on trust, and I can say that my readers trust me to tell them the truth. You're not a regular reader, so you don't know me or my style of sharing with my readership. I think it's all well and good to talk about the ethics of this issue, but my initial point still stands: I hadn't even posted about Mobius yet, and you were lumping me into the "did not disclose" category.
To wit, I reply:
My categorization was based on the existence of postings about Microsoft on the day before and day of Mobius at the sites listed, so when the posting was made you were traveling to or at the event on Microsoft's dime. I explicitly said it was an assumption, not a fact, that you had received airfare and hotel. I wrote that "apparently" you did not disclose and continued to say: "Blog-reading is a kind of guided tour of someone's perceptions, so we need to understand the reasons to ask these questions and the answers. Readers do need to think about this issue. Bloggers need to discuss it. What are the standards of conduct? What do readers need to know in order to judge the sources they are reading or relying on for guidance in reading?"
The point was to make the reader think critically, not condemn you.
However, since you're being picky, I would point out that in your posting referring to your return from Seattle -- the first time you had the opportunity to disclose, you did not. Yet, in the same posting you raved about a device that was hawked at the event, saying it "kicks the crap out of" another product.
You ask if a blog readership would think so little of the writer that they can be bought off. Of course they will, if a few bloggers screw up. How do you think politicians, journalists, lawyers, priests and Muslims got such a bad name. Do you really think you walk on water, that you can't be tempted? You're naïve if you think so; the rigors of an ethical standard, which does not exist today for bloggers -- you seem to think I am dictating one -- are put in place so you have a True North to stick to amidst the temptations of free PocketPCs, nifty software and other junk (that you actually sell on eBay?)
So, bottom line, Mystery Blogger, you're being awfully defensive about a question that, if you took it seriously, might even have helped you improve your relationship with the audience. But, you have no sense of humor, I see, and a thin skin (which is going to make it hard to be a writer, since readers bite back; I promise to start to, just to make you squirm). I promise to be a regular reader from now on, it'll be fun to mess with your head.
Mystery Blogger comes back, both barrels loaded for bear:
You seem to be one of those people who's only joy in life is conflict with others - that's a pretty sad life Mitch. You're welcome to read my site, but as for "messing with my head", I can only respond with an equally childish "whatever". I like your site (you have some good things to say), but if the only way you can get your rocks off is to publicly question the integrity of Web site owners, you need to get out more.
Could it be possible that I know my audience better than you? I wouldn't presume to judge the intellect of your readerships any more than you should mine. It's an arrogant presumption you presume to make Mitchell. I have a good rapport with my readership and I know what they expect of me. Disclosing in a stand alone post, without being part of a Mobius summary story, makes it seem like I care so much that I MUST feel guilty
- surely even you can see that. I'll disclose in my own time and manner, and I guess you'll just have to trust me on that.
I wanted to comment on this statement:
"You ask if a blog readership would think so little of the writer that they can be bought off. Of course they will, if a few bloggers screw up. How do you think politicians, journalists, lawyers, priests and Muslims got such a bad name. Do you really think you walk on water, that you can't be tempted?"
The above statement really drives home why you and I differ on this issue - you view Bloggers are a category/job/vocation and place them in the same place as politicians, journalists, etc.
I don't - Bloggers are people talking, nothing more and nothing less. That has it's inherent drawbacks and flaws, but it's the reality of Blogging. There is no way to create an "ethical yardstick" for Bloggers because there isn't one for humanity - how can we possibly agree on whether or not it's ethical to let a company pay for our airfare when we disagree on the nature of the world, the existence of God, and everything else under the sun? It's just not possible.
You're trying to turn the "art" of Blogging into the "science" of journalism - that's not possible. A Blog is a blog until that blog evolves into a true media outlet - at which point the Blogger is no longer a Blogger: they're a journalist. When they make that decision, they'll follow the codes of journalism. Until that happens, don't presume that all Bloggers have even the slightest interest in being journalists and following their code of ethics.
All of this is getting silly, and I know I'm only falling into your trap because you like to argue, but you're being unfair to myself and the people I met at Mobius and I didn't want to let it go unchallenged - you can't openly challenge the integrity of someone you don't know and expect them to be silent. Even though you were fairly light-handed about your criticism, the manner in which Gizmodo.com disclosed wasn't "good enough" for you, which is partially what triggered me to email you in the first place - you're trying to stamp your code of ethics on everyone else, which is downright ridiculous (especially since you didn't even have a damn clue what Mobius really was!).
I could have disclosed on my site 10 times now in the time I've wasted in this exchange with you. ;-)
My reply, clearly finding more to riff about than in hope of making any points this guy will acknowledge:
No, you totally misunderstand. I am not into conflict, I am into debate to clarify the unclear and find a little truth. Childish? No, but I am baiting you, because you've set yourself on a pedestal, like the worst journalists I know; you have no sense of humor about what you do -- you take it too seriously, to take a quote from an earlier charge you leveled at me.
Journalism was great before it became a "profession" and blogging is not an "art," it's writing, which I have done all my life, whether I got paid for it or not. Anyone who tries to set themselves apart from the audience as a professional or an artist is kidding themselves -- and saying that bloggers are not like politicians is foolish, when so many blogs are blatantly political. Your elevated view is making you dizzy or near-sighted, probably both.
LIFE IS THE ART, THE REST IS A RECORD.
The truth is we are all people talking to one another using a different format than before, but the dialog is still the same. You are a trade blogger, not a trade journalist, but your obligation to the audience is the same--to give them the information they need to make judgments for themselves. You write about an industry that is dominated by hype and you've bought into it like someone who went looking for a deal on the Brooklyn Bridge.
Can you seriously believe what you wrote: "There is no way to create an "ethical yardstick" [you should use single quotes inside a quoted sentence] for Bloggers [bloggers is not capitalized, it isn't the name of a sports team -- if you are going to claim artistry, master the language] because there isn't one for humanity - how can we possibly agree on whether or not it's ethical to let a company pay for our airfare when we disagree on the nature of the world, the existence of God, and everything else under the sun?" If that's the case, how do you make decisions about anything? You're human, don't fight it. People do live together based on shared values and compromise. That fact is kind of hard to ignore. For instance, you said I was unfair to you and your colleagues. How did you judge that? Does your moral compass only extend to self-defensiveness? I don't think so, but you're so high up on that pedestal it must all look scary.
As for knowing your readers, after 15 years in technology writing, and a lot of it about PDAs, I think I can tell you a lot more than you think. It might scare you how much I know about your readers, what they dig on and how they react. And not knowing what Mobius is? Do you have any idea how many "special, intimate" product briefings I've been to? Gawd, get a clue. Microsoft is the same company that made up a fake "Switcher" just yesterday. Nothing has changed. Do you know that they had a fair, with a Ferris wheel for the Win95 launch? It's all a show, to make you think that they don't think you are a meat puppet with an audience they want to reach.
But, more importantly, I became a reader and you don't like the question I posed. You called it unfair, because I put it in print. How is that different than your clean, honest, upright, artistic, high-minded opinion that explains that "the V35 kicks the crap out of the Toshiba e310 and every other low-cost Pocket PC on the market"? When I read that, don't I have every right to know that you concluded that on Microsoft's dime?
I critiqued Gizmodo's disclosure language not because it wasn't good enough, but because it was the only disclosure language to talk about.
As for trusting you to disclose, you're the one that said you would disclose when you wrote a Mobius story, and there is no denying that a piece mentioning your return from Seattle and a product pitched at Mobius is precisely what you defined.
If talking about ethics is a waste of time, then why did you keep it up when I opened the alternative thing we have in common, a deep interest in PDAs? No, Mystery Blogger, you're sick about ethics. You want to talk it over, like a college kid on his third day of speed-induced cramming for a philosophy final. It's eating at you so much that you blame me for wasting your time and preventing you from disclosing. Oh, Mystery Blogger, I feel for you. You'll be eaten alive if you ever leave your room.
Disclosure redux! Regarding my posting in response to Nick Denton, of Gizmodo, I realized after posting that message that yesterday morning I queried a company, Moreover.com, about carrying a feed of RatcliffeBlog: Business Technology & Investing, and Nick is the chairman and founder of that company.
Do I take one word of my response back? No, absolutely not. And if Nick were to go down to the editorial guys and say to them (which I am sure he wouldn't do), "Don't do anything with that Ratcliffe guy," hey, it's his loss.
Chris Pirillo replies to Doc's Blogo Culpa posting, clearing the air about several things. It's defensive and needn't be -- he said Bill Gates wasn't there, but my original posting used a Bill appearance as an example, not a requirement for a conflict to exist -- okay, he's not a journalist and people don't pay his freight, but he still says what's on his mind. People at the were critical of Microsoft -- it's easy to be critical of Microsoft. That's not the point. We can all take a legalistic approach to this question, but the fact is there is a money influence in media that, if it is not disclosed excessively in blogging will pervert this medium faster than a priest at porno theater.
Alan Graham's posting on the matter is sort of reductive and legalistic, because it suggests anyone who has ever been to a corporate sponsored event could be indicted for non-disclosure, but concludes brilliantly:
I think you better question the motivation of any writer (including me) regardless of whether they were paid to attend an event (you can generally assume some type of compensation somewhere). In fact, you should question anyone who publishes anything for public dissemination. Writer's are ego driven. I know some may deny this, but the fact that we believe someone else would care what we think proves we think a lot about our opinions. I try to provide a service...and I have my own internal compass for what my ethical line is. And I believe my readers are intelligent enough to sort out the bullshit from the truth...and THAT...is what keeps me honest to myself and them.
In general I fucking loath Microsoft...the real question is...in the future, when Microsoft pays for me to attend an event, will I still say that?
While I am an early and active advocate of the idea that markets are conversations (I moderated the first public panel on the topic at some conference in LA, can't remember which), my reading of the Cluetrain Manifesto is that those conversations should be based on open and honest exchange. From the 95 Theses:
12. There are no secrets. The networked market knows more than companies do about their own products. And whether the news is good or bad, they tell everyone.
29. Elvis said it best: "We can't go on together with suspicious minds."
CNET News.com reports that TiVo takes short films to small screens. These programs are basically marketing and promotional pieces, but this is a clear sign that Tivo, RePlay and TVs with storage capability (which for major announcements in 2003) will become a channel for films large and small, as well as television series sold directly to the public.
Here is a situation where variable pricing can be very effective. With feature films, it is easy to imagine a $39 price tag for first-week access to the film, with declining prices until it is released on DVD, when presumably, it will be priced roughly the same as a used DVD (because the studio and distributor carry no inventory risk, they can pass the savings for access to the film online).
Imagine a television series, say the Sopranos, sold as a premium. You might make the show available on "broadcast" networks for a year, then take it to a split market, where you can download the show packaged without advertising (or, perhaps, with ads for a lower price). If 2 million people decide that a season of the Sopranos is worth about twice the cost of the collected DVD set (say, $140) -- the timeliness of access means a higher price -- then the revenues would be $280 million. Better than the current revenues, I'll bet. Then, delay the second season broadcasts for three months, so buyers of the subscription get to see everything first. You still have broadcast revenues and DVD sales, because people will want the convenience of storing the content on a shelf with pretty packaging and "bonus" features.
AOL Sinking? Slashdot, in an posting titled "The Sinking Ship that is AOL," suggests a Salon article provides an entertaining look at the failure of AOL. Anyone who remembers the last time AOL was on the ropes, back when the Net was rising like tsunami, will see that the company is, once again, being underestimated.
Disclosure: I contributed to the design of AOL's Digital Cities community interface as a consultant and am currently in discussions with the company about several projects that would rely on AOL as a distribution channel. I also haven't had an AOL account since 1992, favoring my raw TCP/IP connection through a series of ISPs.
I don't agree with the Slashdot spin on the article, because the writer at Salon grudgingly acknowledges that the company's customers may well "want their Internet to come with training wheels."
Basically, "AOL Sucks" is as common a comment as "Microsoft sucks." It has been for years. Yet, these are both among the most successful companies in technology because they go slow and introduce features and services really late, after others have paved the way and lost most of the money it takes to gain user adoption.
AOL was smart to stay out of broadband until now. Why? Not because, as the Salon article suggests, the company makes most of its money from ISP customers--they can continue to do that with a modest fee for AOL services to customers with their own broadband ISP and direct broadband services to customers--but because the back-end of a broadband service was really expensive in 1999-2002. Now, as the prices fall, AOL can support much richer services without paying early adopter prices to deliver audio and video. Those services will drive more revenue.
The dog-stupid interface lambasted by so many technologists is exactly the kind of comfortable environment most TV viewers will find attractive. It is not as cloying as, say, Microsoft BOB, an awful and short-lived user interface from Microsoft. It is useful for marketing, which is where the money comes in.
It is a mistake to count AOL out. Steve Case may have "burned" Time Warner shareholders, but he did his core constituency of the 1990s, AOL shareholders, a huge service by concluding the merger. Now, there is a diversified company there, with a variety of networks and a lot of content. The combined entity still has higher revenues than before the merger, it just hasn't grown as fast as executives led investors to believe.
I would only point out one nit in this notion. That is, blogging is a form of mediation between "reality" and the audience. Blogging is a medium, writers are intermediaries--their perceptions alter what they report about.
Rebecca has six principles, all discussed with intelligence, that bloggers should be thinking about.
Ethics and blogging. Well, it hasn't quite been the Dresden firestorm I thought it might be, but my posting about Microsoft's paying bloggers' way to Mobius 2002 has generated no small amount of reaction. Maybe it's my life-long prediliction for stirring hornets' nests, but I'd like to share a few reflections:
First, as I went to pains to point out at the outset of a rather long posting, my point was to raise a question about ethics and not to attack anyone. I do think it is important that we think about what we do when we use words, since they are the most powerful weapons in the human arsenal. It was not a Big-J journalism attack on the rabble in the streets, because I am pretty much just one of the rabble -- no one pays my way anywhere, either.
Nick Denton, who provides financial backing for Gizmodo, the site that did disclose that it received airfare and hotel expenses to travel to Mobius 2002, writes in this posting that he agrees with me about the need for establishing a code of behavior.
He goes on to reveal that Financial Times reporters were allowed to take annual Cisco-paid junkets to California from London and a number of other horror stories. As I said in my posting, the ideal is imperfectly realized in the real world.
Nick concludes: I'm glad this topic has come up, and relieved that Gizmodo disclosed Microsoft's invitation ahead of time. But the notion that weblogs are any less upright than established media: that's a joke, and betrays a lack of knowledge of the corruption endemic in mainstream busines and consumer media. When print journalists disclose which PR has fed them the story, and why, then I'll start agonizing about weblog ethics.
Now, here I disagree vehemently. First, I didn't say weblogs were less upright than any other media -- most are labors of love, which give them a nobility that journalism lost when I.F. Stone died (because of publishers, not because reporters are less dedicated). Stone was a one-man crusade who scraped by publishing his own newsletter while doing the best reporting in Washington, D.C.
Why, if we're in the process of building a new medium or mode of organizing information should we wait for previous media to live by the word of their journalistic creed? Try to do better or go home and leave things as bad as they are.
Don't hold up the old fish, tell me it stinks and then offer me a fish that stinks just as much. I want fresh, good fish.
Nick's right about the give-and-take between journalists and their sources, a mistake I've tried to avoid with probably mixed success. But it is easy to find examples of failure in any organized activity, whether baseball (Bill Buckner, Fred Merkle, etc.), literature (most mystery writers who try to be Raymond Chandler, but aren't), and journalism. And blogging.
There are good, honest and diligent reporters and editors out there; it's the publishers who will oftentimes burn in hell. I've been a publisher, so I probably am going to Hell; good thing I don't believe in it. Nick, another publisher, contends that not asking about Tom Cruise's sexual orientation because the question will get you busted to the back pages of Vanity Fair just doesn't strike me as fudging one of the pressing issues of the day. Did anyone doubt that is a publication about image and not about substance?
I applaud Gizmodo for being the only discloser, and thought that it was implicit in the posting that theirs was a good act -- I dissected the language of their disclosure because it was the only one doing so. It wasn't an attack on the site or the writer. It is a very healthy debate to have.
In an email, Nick writes: An attack? Some might feel that way. My own view: we've sparked a healthy debate on this subject. Truth is that a lot of product coverage -- both online and offline -- is warped by PR goodies. And one of the ways we can stand out at Gizmodo is by exposing the process to the public spotlight.
Bravo -- keep up the good work! May I respectfully suggest that you create standards that minimize the influence of those PR goodies ("don't take hardware," for example).
Other sites mentioned in the story sent me notes, which they did not want quoted with attribution (that's too bad, because this needs to be a public debate). They said that they felt I'd attacked them, as well. Some said they were holding off on their Mobius stories for a few days and wished I'd let them disclose or not, before tarring them or, in the words of one, "putting the noose around our neck."
There is no tarring involved in raising an ethical question. There is certainly nothing wrong with asking in advance if these sites would or would not disclose whether they received airfare and hotel accommodations; I'd ask my local Congressman the same thing about his relationship with Weyerhaeuser, the largest company in the district, if he suddenly started talking about timber rights all the time.
Finally, Dave says of Doc Searls' Blogo Culpa: "Doc acted for the benefit of the jungle, paid a small price (not really) and gained a deeper respect from his readers." I wholeheartedly agree with this sentiment.
I think you may be overly pessimistic in your assessment of e-billing
Here in Europe almost everyone I know now settle their bills online via their bank. Even my father who is over 80 does it via online banking. I think that this BusinessWeek article about Nordea from April 2001 will give you a decent picture of what is going on in Europe.
Sure the European Banking system has a lot to do with the popularity of online banking. When I came over to live in the US in 1998 I was positively shocked that I still needed checks. Here in Europe they have been relegated to the dust bin since a long time. And all bills are settled via direct transfers so the leap online is very small.
There are probably other issues like regulations and standards that have favoured this development in Europe while delaying it in the US.
While in Europe Banks have only needed deal with usability. In the US a big job is needed on Trust and Culture.
But one thing is for sure it is nonsensical to print out a check put it in an envelope and mail it so somebody so they can take it to a bank where it will be re-digitized and the actual transfer will be done. e-billing actually makes more sense than e-mail.
I agree that we're a bunch of retrograde troglodytes about banking in the U.S. I am shocked every time I go outside how poorly banks have addressed the digital opportunity here; and having spent a lot of time in Europe, I know what you mean about the ease of using digital services to pay on the Continent.
It is partly due, I think, to the challenges of having so many currencies in close proximity before the Euro and the process of introducing the Euro that Europe is so far ahead -- precisely the kind of re-education I said is necessary (implicitly in the United States, though I should have been clear) has taken place in Europe over the last decade.
I would not go that far ;-) BofA used to have a deal with Yahoo that allowed me to check my balance and a few other things in my.yahoo.com I thought this was a great service that both increased the value of both my Yahoo and BofA experience.
[The introduction of the Euro] forced the European Banks to do major upgrades of their banking software. That probably made some things easier. But the single most important element must be the national inter banking transfer systems that have been around since much longer, as long as I can remember actually. Europe still has some work to make transfers between EU countries as easy.
Doc Agonistes. Doc Searls, one of the genuinely Good Humans, posted a mea culpa in the wake of my posting about blogging and ethics. I had not intended to impugn him with that posting, but I also think the posting here (I'll post a permanent link tomorrow) is a great step in terms of how bloggers will establish their ethical standards. Doc is one of the founders and here is are his principles laid bare: All bloggers pay heed.
The response from bloggers is interesting. I'm giving this some time for thought and more mail before posting a follow-up.
Nationwide 802.11? The New York Times reports on discussions between Intel, AT&T Wireless, Verizon, IBM and Cingular. The problem of billing, hand-off and compensation are all being worked out, supposedly, over eight months of talks. But there is a long way to go.
Alan Reiter covers the whole topic very thoroughly here.
Olivier Travers emails:
Olivier Travers emails:You wrote "No one is going to be comfortable paying $4.95 for a movie one day, because they ordered in advance, and $9.95 because they decided to watch on the spur of the moment."
Isn't that what's happening in movie theaters with matinee and evening prices? Aren't consumers, who routinely buy airline tickets or hotel rooms, already used to yield management? Why wouldn't "peak hour" higher prices make sense for Internet video delivery?
Not exactly. You may check to see if the matinee price is available and decide whether to go to the movie based on that, but it involves a different set of criteria than the perceived functionality of an IP network with a TV on the end -- remember, we're talking about ordinary non-technical people who are used to paying the same cost for a local phone call regardless of the time of day -- and all services appear local through the TV.
On the hotels and air travel side, there is a clear move to flat rate pricing going on, because people are frustrated, if not enraged, by the changes in rates even over the course of an hour.
Olivier responded: Maybe it's monopolistic public service practice, but here in France we have tiered pricing on phone and electricity, based on peak and off-peak hours and days. But I agree that overdone yield management can infuriate customers (a 1 to 5 ratio for the "same" train or plane ticket based on the day of the week, gimme a break.)
And, I replied (with all due respect to the French people):
France, in my experience, is a special case with regard public utilities. We have peak and off-peak long distance pricing on calls here (though almost all plans are moving to one flat per-minute rate), but even the airlines are now advertising one price all the time - the post 9/11 fall-off has a lot to do with that and we'll see if it sticks.
Product placement as blog sponsorship. Halley Suitt wants Coke to sponsor her blog and I want sponsorship, too. So, what we need to do is work product placements into our postings. Yeah, that's it. That's the key to unlocking the wealth box in blogging. Lemme see....
We can take a leisurely and relaxing puffs on our Marlboro cigarettes as we blog, adjust the Armani suits we wear to blog, raise a Coke to our lips and enjoy its effervescent goodness in anticipation of the effervescent goodness of blogging, and turn on Friends to watch Jennifer Aniston and her cohorts, laughing uproariously at the commercial goodness of it all, then blog it.
So, from now on, all my postings will begin with a variation on: "I just looked away from NBC's Friends (8 PM, Thursdays), which is so hard because those kooky kids (who can believe that all of them are approaching 60 in real life) are just so much fun, when I noticed a new product feature in Microsoft Word...."
This is a lousy "Switch" campaign. (UPDATE: Microsoft pulled the page after a lot of criticism, this link now points to a cached version of the page on Google) Microsoft's version of the Switch ads that Apple use are pathetic. It all looks made up for these reasons: 1.) No name or signature or any kind of personality at all in the story, which supposedly comes from a "freelance writer." If this were a freelance writer working for me, they'd be looking for a new job. 2.) It reads like a manual, right down to scintillating text like:
Now that I've given you the reasons why I converted, here's the skinny on the how.
Step 1: Internet and E-Mail
The first time I turned on my PC, Windows XP prompted me to set up User Accounts. I set up one for me and one for my husband. I love that we can define completely different user experiences without messing with each other's settings. It's like a Lexus we rented once; when you pushed a button, the driver's seat and mirrors all moved to accommodate my 5 foot 3 inches instead of his 6 feet.
The New Connection Wizard then guided me through the setup of my Internet connection for browsing the Web. If you use a dial-up connection with an Internet service provider (ISP), you'll need to know your ISP's name (e.g., MSN®), your user name (the part of your e-mail address before the @ symbol), your password, and the phone number for your ISP connection.
To make a new connection:
Apparently, this is a freelance technical writer, which is why she "demands the best in mobile computing."
Also, the comparison of the way XP handles user accounts is inaccurate. I have XP and OS X Jaguar running side by side and they both deal with different users, configuring individual workspaces, in virtually the same way. So, she's an inaccurate technical writer.
3.) The pitch finishes by underscoring how hard XP is to use with the memorable line: The key to getting hardware to work with your computer is to have the correct drivers, the software that enables your PC to communicate with your hardware. Windows XP or your computer manufacturer will pre-install most of them. If not, go to the Web site of the company that makes the peripheral you want to attach to find the most current drivers.
My XP installation is still not dealing with drivers correctly and part of each boot sequence are error messages related to misinstalled or incompatible drivers for my one-year-old PC.
There is also the glaringly obvious technical error in the statement that "drivers... enable your PC to communicate with your hardware." Unless I am mistaken or someone's been feeing me acid all the time, the PC is the hardware and it is operating system that uses drivers to communicate with hardware.
ADVICE TO MICROSOFT: Scrap this campaign before it makes a laughingstock of product comparisons in general. Go back to the drawing board, think of a new idea, don't copy Apple in your advertising. It won't work.
CNET reports that former FBI Director Louis Freeh is urging lawmakers to limit encryption products that don't include backdoors for government surveillance in Former FBI chief takes on encryption.
Freeh is an idiot about encryption though he seems to be a very smart man about other things. Here's the simple truth, the only truth you need to know about encryption: One backdoor for government is a backdoor for tens of thousands of potential break-ins. Encryption must be total or it is worthless. If U.S.-made crypto products have a back door, no one will buy them -- they'll go to non-U.S. companies and the U.S. software industry will loose a lot of business.
Amazingly, even proto-fascist John Ashcroft agreed with me. At least he did before he became Attorney General.
He also responds to many of my most recent comments, saying "think after...." My problem, as a pragmatist is that, while I can think after problems work themselves out, I also see the mountains that need to be climbed to get there. Having almost died on a couple mountains, this pragmatism you develop when nearly freezing to death or dangling from a rope is hard to shake....
Infoworld: Media projecting further, about rich content and digital media companies take on network congestion. The irony of the post-bubble world is that there is a vast amount of dark fiber out there and not a whole lot of extra capacity on corporate networks and their links to the Net. Corporate IT managers need to figure out how to deliver rich media to desktops without bringing a fresh copy over the wire each time someone wants to view it.
This also has a lot to do with Digital Rights Management (DRM) systems, which are probably the greatest barrier to ease of use. Kontiki and CenterSpan, mentioned in the story will give away their tech to get market share at this point, if they think you have the right programming to drive consumer adoption. Other carriers, like Akamai, SpeedEra and Digital Island (now Exodus, now Cable & Wireless( give every impression that they learned the free doesn't pay the bills -- but how they'll actually manage allocation of bandwidth is not yet clear enough to judge.
In a long and fascinating email exchange this weekend, Marc Canter said he believes that all bandwidth will be auctioned off based on when you want access to data. For the most part, these costs will be borne by the content provider or application services provider, and I think that makes sense in the corporate environment. Based on the flurry of late-night mails we exchanged, I think Marc's company, Broadband Mechanics is going to do a little world-shaking. But I disagree with Marc's contention that video will never be delivered over the free Internet (by that, he means that someone will always pay the frieght, almost always the content provider/portal you are accessing, not the consumer). Here's my reply to that idea:
I do think there is an intelligent prioritization system that can happen for traffic, but this will only happen as a matter of course in corporate application/communications situations. In those environments, your auction scenario is totally viable. And, to some degree, the results of that auctioning process will influence pricing, but only to a limited degree from the consumer's perspective. No one is going to be comfortable paying $4.95 for a movie one day, because they ordered in advance, and $9.95 because they decided to watch on the spur of the moment. Most purchases are impulse purchases -- grocery shoppers, even those really organized ones with lists, still buy 70% of the items they walk of the store with on impulse. So, the content provider might price all movies somewhere between those two prices and hope they can manage their bandwidth auctions effectively.
Then, however, their prices have to be more convenient than going to the video store -- where you get the DVD for a week for $3.50 now. And, until movie studios and music companies decide it is okay for people to keep copies of what they pay to view, there is no way the online provider will beat the local video store if it has to price for the typical ad hoc viewer. That's a major choke point in the development of this industry.
So, bandwidth will be a variable cost and someone will make a killing arbitraging the variance. That creates a California power "crisis" opportunity that could kill any goose laying golden eggs. If tools for managing bandwidth create publicly-accessible accountability and audit trails, that'll relieve the potential for gaming the system, but based on my experience with venture capitalists and investment banking, there is always someone dedicated to finding an angle.
This comes back to video and the free Internet. My big bone to pick with the infrastructure is that it is still thought of as a delivery mechanism and not a two-way street. We would never have built a system of roads that only let us receive goods but did not let us go to work. Until up- and down-stream capacity are synchronous, most homes will not adopt broadband (that is, the fabled ubiquitous penetration will not happen), because people need to be able to profit from the bandwidth as well as just get stuff over it. This will happen -- the attitude that one deserves a synchronous connection -- because people like us will talk about how great it is to work wherever we want whenever we want. It'll get political and newspapers will write indignant editorials about the inequities of the infrastructure.
But there is a good thing in this, and that is that once I (the generic "I") get additional flexibility in my work because I can stay home one day, two days or more a week (reducing my employer's real estate and support costs), I'll be happy to pay the extra freight for broadband; not only that, I'll be able to expense some or all of it, because it'll be a perc from my employer, who is saving money elsewhere on the P&L because I chose to work at home sometimes.
This increased willingness to pay for broadband will increase total revenues, reducing the scarcity of bandwidth that would drive arbitrage. Auctioning produces less variable costs in this environment and, as a result, everyone is happy because companies and content providers have the freedom you point out, but without the increased potential for gaming of the system. Auctioning will increase efficiency without attracting the piranha.
Infoworld reports: Reuters, Microsoft launch IM for financial services.
Instant messaging is a good and useful primitive step in speeding communications inside an organization. I find it really useful for back-channel conversation during a conference call to strategize while my colleagues and I are working with a client.
In financial services, however, every word of communication with and about a client has to be recorded for NASD review (and some poor son of a bitch, the "compliance officer," has to read it all). The major story here is not the security, which is what is emphasized in the lead, but the auditing capability -- think Martha Stewart, here.
This means that if you are part of one of these IM networks, every word is now recorded and available for review. My bet is that this knowledge will squelch IM adoption, not increase it.
CNET is reporting about a Jupiter report. Study: Consumers warm up to e-billing projects a roughly five-fold increase in online bill viewing and payment between now and 2006. I am always skeptical of these reports and the CNET reporter makes no mention of what the historic growth rate has been or if it needs to change in order to reach the projection in the Jupiter report.
The report makes the rather unremarkable claim that online bill viewing and paying will be one of the fastest-growing segments in coming years. It does not, apparently, discuss the immense re-education and support problem entailed in bringing consumers to the service. The simple fact is that most people who use Quicken still write their own checks, because it gives them a paper back-up to the computer records, which they consider volatile -- they need to be shown that by paying bills online they get back-ups and confirmations of payment, that their financial records are not just disappearing into a void.
The CNET reporter describes a "silver lining" for banks, in that the report suggest consumers will consolidate their bills in one online place. That's not a silver lining, it is an opportunity for the banks to survive, and also for competitors to come into the market and displace them. An Edward Jones & Co. rep could replace your local bank if the company allied with the right combination of financial services organizations to deliver a complete banking interface.
Years ago, I wrote an essay in Digital Media, Banking By Walking Around, about the banker of the future, who lives and works in the community, getting to know and support individuals and businesses directly using a variety of banking back-ends to build highly customized solutions to the customers' banking needs. Banks cannot expect to win this market if they keep their people firmly seated behind a desk in the local branch. They should shut down the branches, put feet on the street with wireless portable PCs and get to consulting on financial services if they want to win this game.
Dave Winer's Scripting News links to John Patrick, who is blogging Agenda 2003 in Scottsdale, Arizona. This is always an interesting event, both to see who is and isn't there, the general direction technology is taking, and to take the measure of how tech execs are feeling about the coming year. Seeing it through the eyes of John Patrick of IBM should be fascinating.
China: Revolutionizing the cost of things. Chairman Mao might not be spinning in his grave, now that a 21-inch television costs only $80 in his China. The Far Eastern Economic Review has a very good piece about the impact of Chinese manufacturing on the price of virtually everything. The country will remain a deflationary force globally for years to come, it seems.
What is missing from the article, and what I believe is truly revolutionary, is the fact that foreign companies wanting to business in China in order to access all that cheap labor, must set up joint ventures with the Chinese, usually the government. This means that a "communist" (if you can still believe the Chinese are communist) government will soon co-own a vast amount of world trade with their former capitalist enemies. How's that for a mixed economy?
XO deal re-reorganized. Carl Icahn, the "corporate raider" of the 1980s has pulled off a minor coup in displacing Teddy Forstmann, the corporate raider of the 1990s, in a deal to take over XO Communications through its debt reorganization. Original shareholders, like the public and even Craig McCaw, have seen their shares' value fall to zero. But the company, which released Forstmann Little & Co. and Mexican telecom Telefonos de Mexico from agreements to inject $800 million in exchange for token payments totalling $25 million.
I was having a discussion about this kind of deal in email last night, in which my partner in the dialog suggested that bandwidth prices will have to stay higher because it was the only way to dig the banks who hold all the debt out of the hole their in.
However, I've spent enough time in investment banking to know that the notion of a "hole" is an illusion. A financial pit does exist, and it sucks money in until it is "reorganized," usually giving debt-holders enough equity that they can sell some now to recoup a few dimes on the dollar and retain enough that, if the company recovers, will make them whole and more. The "hole" is an illusion that fills up with suckers' money, and the suckers is us, the retail investor whose shares are devalued through the reorganization.
The net effect, however, is that the cost of bandwidth is no longer predicated on the original capital expenditures the loans were made to cover, but on the new re-priced cost. This lowers the cost and, potentially, makes the company viable because it can now compete more effectively on price, which is about the only thing that really counts in telecommunications these days. With networks pretty much "dumb" -- all they do is move bits -- and most major telecom customer using multiple networks to create redundancy, customer can now manage their own quality of service (QoS), which used to be one of the big differentiators among carriers.
Saul Hansel writes in The New York Times that ESPN will introduce free video services to users of high-bandwidth ISPs. The program will require a download of a companion app that handles the video integration into the ESPN home page, which may doom the test. But this is just more evidence of what I've been preaching: Broadband is affordable and useful now, because the cost of bandwidth has been repriced through vast bankruptcies. You will see a lot more audio and video integration in coming months. Just watch.
Clash of Internet Privacy Policies. The New York Times suggests that privacy features of the latest version of Microsoft's Internet Explorer Web browser are creating unintended consequences.
In fact, the problem may be that the quest for a standard, such as P3P, has locked some sites and some browsers into different and conflicting states. Rather than define the technology, it is probably best to define the goal and let a thousand privacy flowers bloom. The role of an industry or privacy group, then, would be to actually critique the different privacy approaches and let users decide for themselves how to approach different sites.
A good and potentially profitable service would be a buddy app that browsed with you and, before allowing changes in privacy states, let the user make the decision to proceed or not. It could be populated by a central database of privacy reviews and operate like Brewster Kahle's Alexa, before Amazon bought it and eliminated the useful parts, which showed both background information about a site and the popularity of a site. This app would show the user in a glance whether other people were trusting a site -- it could incorporate easy-to-use user rating systems so that users could have a voice in the information displayed. A self-organizing solution to privacy would arise. It's an example of what Howard Rheingold calls "smart mobs."
Is Slashdot a success? The New York Times writes one of those "we can't quite figure this out" articles about Slashdot, the geek news site/blog/thing. On the one hand, the article reports that the founders don't care about making money and on the other, the site is owned by VA Software, a publicly-traded company that clearly benefits from being associated with Slashdot. In effect, Slashdot is a sponsored site, and that's simple to understand.
It's blogging. Blogging can be sponsored and it can be ad-based. In the case of Slashdot, the site also drives traffic to a store, so it is generating merchandizing revenue. There's really no mystery to it all, yet the comparison is made to the recently defunct Forbes ASAP and Upside magazines, which were really expensive to publish. If you have one, two, three or a few posters with wit creating most of your content and there are no real delivery costs, it's easy to stay in business. Those magazines had dozens of people doing the work of writing and producing each issue. Blogs don't have that kind of overhead.
These blog-pubs could also work inside publishing companies, but the companies need to change the way they launch a business. A blog can profit as an appendage to a network ad sell or as an exclusively sponsored site that emphasizes its exclusivity. Sure, anyone can see it, but only a few will get it, and they are the ones you, Ms. Sponsor, want to reach.
When I was in the trade show business, it was easy to sell a company a banner to be displayed on the wall of a room where only six hundred people were going to meet -- the right 600 people; that's a CPM way beyond anything you'd see in the Web, in print or on broadcast media. The disconnect is that on the Web the right 600 are in the room with many other folks -- the sponsor just has to forget the audience it doesn't want to reach.
Want to launch a blogging business in a big media company? Launch a lot of blogs and profit a little from each blog. It's just like you had 50 journalists working on fifty different publications, but without all the support and production overhead.
Want to sponsor this blog? Just call me. See the link in the Navigation section for "My Consultancy," where you'll find the number.
The Device I Want. There is a lot of talk about what the next generation of media device/communications tool should look like. Here is what I want, and I want it from Apple, and it sounds like it might be coming. But, the specs I've heard are really vague, so this is what it should be/do:
It should be a pretty revolutionary device that seems like Newton (actually, the Motoroal Marco) and the never-shipped Sweet Pea multimedia gadget's love child on crack, in that it does simple data functions like the iPod (calendar, email and some sort of wireless communications, along with media) -- iPod should look like a Neanderthal compared to this. It should run an OSX kernel, have massive storage, a good chunk of memory and be adaptable to home/office and mobile use -- hard to say whether it should have a video-quality screen or plug into one. The intent should be that, in addition to music and some form of connectivity, you will be able to take a movie along to a friend's house, on a trip, or a presentation and full-motion video with nav abilities in a small form factor -- maybe the size of a paperback.
UPDATE: Forget to note, as it was late at night on a Saturday, that the thing that got me thinking about this a posting by Marc Canter about the Archos Jukebox Mulitmedia -- what's missing from this is the OS and a processor capable of running applications and encoding video. It's definitely a step in the right direction with the a/v-out and much else.
Hear me, but don't see me. I was on the WebTalkGuys radio show today and you can listen in Real or WinMedia format. Rob and Dana always do a great job of keeping me just slightly in control when I am on the show -- some good questions today about blogging, audioblogging, streaming economics and other stuff.
Here are the show coordinates:
Microsoft paid for a group of bloggers to attend its Mobius 2002 product briefings this weekend. This raises a serious ethical question. I am not implying it is necessarily unethical for a blogger to accept a trip to Microsoft, just that it requires some thinking about the way companies might manipulate the blogger to get favorable coverage. Before this gets confrontational, I am not saying that bloggers are rank amateurs and that you should pay attention only to professional journalists, who, as a general rule, would not accept a trip at the expense of a company they were covering.
Mobius 2002 is a kind of product promotional event that Microsoft has held for years. These things usually fill up with a mix of hardened tech editors, industry analysts and a few fans of technology. Bill Gates or Steve Ballmer appear, say a few words, stay around for a few questions in the hall and then welcome key editors into their offices for "intimate" discussion. The rest of the crowd hears hours of product briefings, which are a combination of real technical demos and information, some smoke and mirrors, and a whole lot of spin. Microsoft is by no means the only company that does this kind of event and is not evil because it does so -- building buzz about products is one of the main tasks a company faces in the tech industry.
Journalists are trained to be outsiders, even when they are getting inside. At the point that they start to interact as partners in the process of marketing (for good or ill, in that the express opinions rather than simply report the technical facts), they are not journalists anymore. They've either graduated to PR, to writing columns in which they express explicit opinions, they are activists, and they might start a newsletter. But, they don't take the company's money, its largesse in the form of hotel or airline expenses or otherwise while working as a journalist. The idea, albeit imperfectly realized in practice, is that there is as little conflict of interest as possible. Good columnists don't take expenses for these trips, either. I have never taken a paid trip, except to give a speech once, for the U.S. State Department to address the Malaysian Securities Commission, at a time I was writing two columns about investing. I've turned down speaking fees from companies many times, but do speak at companies occasionally.
Are bloggers ready for and aware of the potential influence of the gift of a trip, the thrill of hanging with the inventors of the technology they care about, the recurring calls they'll receive after the trip to reinforce the marketing messaging they were exposed to in Redmond? I don't know, but both bloggers and their readers should think about this.
The publishing companies that employ journalists spend a lot of money to cover their journalists' expenses to cover stories without monetary influence by the subject of the stories. In the tech trade press they also take a lot of money from the companies that are covered, but I have never in more than 15 years writing for the trades been asked to modify a story to avoid offending an advertiser.
Would you be comfortable if you knew that your favorite warblogger were receiving invitations to sleep in the Lincoln Bedroom at the White House? Would you be comfortable if your favorite peaceblogger were receiving free computers and free passes to the Iraqi presidential harem of sexual athletes from Saddam Hussein? Bet you would take their perspective differently -- not better or worse, objective or not, but differently. And it is that change I am asking you to consider here. There are people at every company paid to create favorable coverage of the company -- bloggers are an emerging and ripe target for these people.
Money is a powerful influence. So, I looked at each the blogger sites Doc Searls said was represented at Mobius to see if they disclosed their expense-paid trip and what kind of superlatives they used to describe the products they saw.
The posting that got me started with this was at Gizmodo, a "weblog dedicated to everything related to gadgets, gizmos, and cutting-edge consumer electronics." They wrote: Full Disclosure: Bizarre as it sounds, Microsoft actually thinks enough of weblogs in general, and this weblog in particular, to have sprung for my airfare and hotel. Don't worry, I'll still tell you whether or not their new gadgets are any good.
The phrase "don't worry" worries me, because it is not bizarre that Microsoft should try to influence a key influencer in the gadget market. The three postings at Gizmodo about the event this weekend include a tepid comment about one product, the Smart Display, and a description of a "rollercoaster ride of new gadgets" that will be covered in text later. That's quite a superlative, one I would have edited out if presented the story by a reporter, because it sounds like an endorsement of the event. Rollercoasters are fun, so the products are fun.
Here's what I found at other sites Doc mentioned that discuss Microsoft in the past couple days. Granted, these site may not have been given airline tickets and hotel accommodations, but based on the statement from Gizmodo, as a critical reader we have to assume they were:
PDAntic.com said it was attending the event, raved about the products it was excited about seeing and made no disclosure that Microsoft was paying the freight.
InfoSync, a news site, does not mention the Mobius conference in any postings in the last few days, but does report on two Microsoft-related items in its blog.
Writing On Your Palm, a blog, is positively ecstatic about its experience at Mobius: "Tablet PC freakin' rocks. To quote Will Smith in 'ID4', 'I have GOT to get me one of these!'" There is no disclosure about expenses being covered.
PocketPC Thoughts, a blog and product information site, is very positive in a posting that talks about the information being discussed at Mobius without mentioning the event or any disclosures about expenses. "I'm most excited about the Windows Media Player 8.5 release - previously code-named 'Salsa,'" Jason Dunn writes, "the support for 9 Series Windows Media comes in advance of the 9 Series tools being finalized."
So, four out of these five sites that apparently received airfare and hotel expenses did not discloses this conflict or, in order to distinguish themselves from those who did take the free trip, state that they did not receive any value from Microsoft.
Blog-reading is a kind of guided tour of someone's perceptions, so we need to understand the reasons to ask these questions and the answers. Readers do need to think about this issue. Bloggers need to discuss it. What are the standards of conduct? What do readers need to know in order to judge the sources they are reading or relying on for guidance in reading?
I'm thinking about it, too, because I am looking at how to bring sponsors or other revenue into this blog. For years now I have joked about being "Conflict Boy," not because I took trips at the expense of the companies I wrote about, but because in some cases since I became a consultant I have worked for or been on the board of directors of the companies or their competitors about which I am writing.
I joke about being Conflict Boy, because I am so used to disclosing my conflicts of interest and even changing the hat I am wearing in a meeting, going from columnist/analyst to business guy and saying, "Look, I know this is strange, but let's talk about a business deal after we're done talking about your strategy."
I am often critical of companies with which I do business or with which I am currently negotiating on behalf of a client. Moreover, I often compliment my clients' competitors for the things they do right. Sometimes I criticize idiotic statements about my clients, as I did here, when a reporter suggested another company had introduced totally unique service that my client, Audible, had delivered for years.
I know everyone's secrets and don't tell them; I am Conflict Boy I always disclose. I've made it a practice, deeper than a religion it is part of my very soul to be honest about those conflicts. But, let me tell you, it does take a lot of conviction to stay the course and I have been sorely tempted to fudge. So far, though, I have not. I think if I did, I'd write about it.
Oddly, if memory serves, I said something at Jerry Michalski's Retreat! Conference in 1996 about being Conflict Boy and Chris Locke, who was sitting right in front of me, said, "Oh yeah, well, I'm RageBoy." Anyway, that was the conference where he got the name and I probably remember my own role with an inflated perspective. Feel free to correct me if you were there.
You can see, though, how a blogger in the thrall of the Redmond PR horde (or any other corporate PR machine -- AT&T used to do this really well, for example) would be tempted to see the fact that a product manager for PocketPC took them aside and explained something or, amazingly to the dumbfounded blogger, leaked product information -- a scoop! Will they think critically about what is being said to them or fall into the trap of enthusiasm? Will they write their honest opinion, that the product manager's new release is junk if it will cost them the free trip to Mobius next year?
Bloggers rejoice about the new paradigm in information dissemination that they represent. Well, here's a hard question for them to address seriously before dismissing the practitioners of journalism.
Dave Winer is making Tag Soup, and I like it. Reminds me of the old story "Stone Soup," about the soldiers who come into a town that is hoarding food. Instead of taking the food by force, they say "Let's make stone soup," and dump a few stones into boiling water. The villagers, intrigued, are drawn into contributing meat, vegetables and everything for a banquet. At the end, everyone concludes that they are astonished that you can make soup from stones.
It's that way with the heterogeneous tagging schema on the Web. Rather than reduce things to a single language, we need the richness of constantly developing tags (tags for formatting, tags for filtering, tags for everything) to ensure that the medium continues to develop new expressive capacities. This is what Dave puts so well when he says: "Sometimes you invent something thinking you know how it's going to be used, and the world surprises you and uses it for something else."
Secure Xbox broken in less than a week. SlashDot links to a posting by the Xbox Linux Team that they have broken the security on the supposedly secure Xbox so that it will run Linux instead of the Microsoft OS. Note that they describe this as "normalizing" the device -- in other words, no security is the normal state for a computational device. In one sense, this is true, because any security in a static device, like the Xbox, where the ROM and the OS are easy targets. They're just sitting there waiting to be broken. Same with a "universal" solution to protecting intellectual property. It is much harder with a moving target, such as encrypted email, to break every message.
In another sense, the natural state of a system is to function. The Xbox will eventually come with an online service built in -- break that by replacing the OS and the Microsoft security and the online service will stop working. Tying a device to an ongoing service, besides creating a recurring revenue stream, creates disincentives for destroying the security in the system for most folks. Some will always crack systems, but the system that delivers value is the system that will be preserved.
Windows delivers value, because it runs lots of applications. Same with the Mac. Same with Linux. For most people, that's all the value they want. For the teams that break systems, it's the challenge of doing so that delivers value. We tend, when looking at these stories, to see pirates and pillagers of legitimate systems. If people want to buy your hardware, break the security on it and use it as they please, fine. If they make tools that let them run your games, fine. If they can't get to the follow-on services you offer because they broke the system, but they paid for the system, it's fair.
Your application or hardware is a machine, not a work of art totally unique and irreproducible. As a machine, it should be tinkered with, because that's how machines get better. If the Xbox is broken, hire the Xbox Linux Team to build support for Xbox games and online services that users will pay for. Price the games fairly. Hire them to build support for online services, price those services as an attractive enhancement to the device.
What's clear is the market is telling us people don't want security regimes, they want freedom to use the devices they buy as they please. They will pay and break the security. Likewise, if you price software and games or music fairly, if you let them use those titles as they like, copying small bits, like you quote from a book in a school report, and selling the whole title when they are done with it, like an old CD or book, people will pay a fair price.
If you focus on the broken security and not the message it sends, like certain massive entertainment conglomerates have so clumsily done, you're going to lose. Keep your eye on the message, that fairly priced useful devices and "software" will sell because people appreciate their value, and you'll win.
David Leonhardt and Daniel Altman write in the New York Times that Weak Growth Means Few Jobs, and Pain Is Felt Far and Wide. Almost a year after the economy began growing again, a broad jobs slump has spread the pain more evenly than almost any downturn on record.
We're at a very critical point in the economic cycle, when consumer confidence is teetering even as business reaches the bottom and begins to recover. At this point, business' ability to retain employees may be the deciding factor as to whether the economy dips deeper or stays at this low point and establish the beginning of a solid recovery. This article goes on to point out that in the coming decade where will still be a tighter labor market because the Boomers retiring will not be followed by so many young workers -- but that is still a decade away. This feels very 1931, in the middle of the three and a half year downward slide in the markets, when there was no business, let alone show business, that was hiring.
The despair in Silicon Valley is evidence that consumers, who have carried the economy on their backs while business has been pummeled by its own over-spending is evidence that consumer confidence is all but exhausted.
The reporters go on: "Still, barring an unexpected shock, the job market does seem likely to improve, particularly over the longer term. Indeed, if the economy follows roughly the same recovery schedule as it did a decade ago, companies will begin adding more than 100,000 jobs a month by early next year."
An unexpected shock? Every new announcement of 10,000 layoffs, like Lucent this week, is a minor quake. It adds up. If business does not want to see consumer demand fall off, delaying the recovery by years, it needs to bite the bullet and retain people whenever possible.
All right, I was wrong about where the market ended the week. The VIX has fallen from 50 to 43.44 -- pretty fast, indicating anxiety will rise, again. The market finally had an up week after six straight down weeks. The markets will likely snap down early next week, especially since the war rhetoric is sure to escalate on this Sunday's morning news shows.
Dan Farber of ZD Net reports and comments on 10 predictions to shake your world, based on a recent GartnerGroup report. You can read a whole slew of articles about these issues in a special report on the Gartner Symposium/ITxpo 2002.
Without deconstruction the article too much, here are my comments on Dan's comments about Gartner's predictions:
1.) Bandwidth will become more cost effective than computing. Dan says it'll take a decade before you see companies "pry the big hard disks out of people's computers." I think we will never see the end of local storage, that it will become so massive that we will hardly think about the problem of storage. Local storage, which will likely be in your wall somewhere, behind a panel like today's circuit breakers, will consist of Terabytes of disk storage and Gigabytes of random access memory, along with multiple processors, linked to devices throughout the home or office via wireless to conduct real-time grid-computing like functions. This will allow "dumber" (even though they'll be a lot smarter than today) clients to perform more complex functions.
2.) Most major applications will be interprise. I'm with Dan that it will take at least half a decade to see much progress in this area. Gartner analyst Carl Claunch also points out that there are a lot of political reasons the tools we use will never work together. I'd add one more reason: Intra- and interdepartmental politics and inter-enterprise demands for secrecy and an "edge" over even your closest customers will always be a barrier to successful implementation of comprehensive interenterprise applications.
3.) Macroeconomic boost from interenterprise systems. Dan's a skeptic, but ultimately believes Gartner's prediction that this productivity gain will come in the next ten years. I think that even if the systems problem is worked out, the human political problem cited above will dampen productivity gains. It takes a very long time for people to change. That's not to say there will not be continued productivity gains, but really huge gains are unlikely.
4.) Successful firms in strong economy lay off millions. Dan remains a skeptic. Gartner believes companies will be letting millions of workers go due to automation. There are two reasons not to expect this in the next decade: First, capital expenses for new automation have to be justified by economic conditions -- we're in a slowdown now and continuing layoffs will only lengthen that slowdown, reducing the amount consumers spend, which drives capex. Second, automation often creates additional opportunities for human work that did not exist before. Once you take the filing out of the hands of people, you begin to need people to analyze what the automated filing is telling you. Where the white collar laborer (that is, the non-executive) is replaced by computational capabilities you often need a business analyst to replace them. This means that automation will require massive retraining to succeed and this is not the environment or the government to make that happen.
5.) Continued consolidation of vendors in many segments. Dan says "duh," and so do I. But where there is consolidation, there is also new opportunity as portions of the value chain are disaggregated and outsourced.
6.) Moore's Law continues to hold through this decade. Dan agrees. The industry keeps waiting for Moore's Law to break down and that will happen about the same time that we experience a loss of gravity. While transistors may ultimately be only one atom wide and can be shrunk no further (who knows? they might go smaller), the geometries of chips can easily be increased for years to come to accommodate more compute capacity.
7.) Banks become the primary provider of presence services by 2007. Dan doubts standards can be worked out by 2007. I wonder whether there will not be a whole new layer of economic activity aimed at managing our privacy, preferences and, in some cases, anonymity. Banks are one natural provider of these services, but I don't see preferences management as a core competency in those organizations. Something else will happen, though it is certain banks will be involved somehow, since they deal with money.
8.) Business activity monitoring is mainstream by 2007. Dan doesn't really say he agrees or disagrees with this prediction, just points out that it is closely related to prediction #2, which he says will not come to fruition in this decade. I think that the idea of a few people running most companies through largely automated systems is silly. We'll track many more activities, but we'll be employing people, and people slow decisions down. That's a good thing. An economy running on automatic would be a disaster waiting to happen, especially given the willingness of terrorists or even just competitors wanting to bring things to a screeching halt. Business activity monitoring is a buzzword that will go away.
9.) Business units, not IT, will make most application decisions. Again, Dan reports this prediction without really judging it. I think it's a given that IT decisions will devolve onto the people that will use the technology, but that does not mean that the IT organization will vanish as much as it will melt into working teams. This closer linkage between IT professionals and the people they support will improve specifications and usability.
10.) Pendulum swings back from centralized to decentralized. This follows from #9, but will be restricted by the evolution of bandwidth to and from the home. It's my contention that the Digital Cottage, a home with adequate compute power and sufficient bandwidth to participate in enterprise applications (both up and downstream) will transform the economy from one where people go to places where they work together for a fixed number of hours a day to one in which people work together throughout the day or night, on their own schedules (and against clearly defined goals), while taking greater parts in the life of their family and community than was possible in the Bubble Years.
CNET reports that Windows Media 9 will power interactive TV services in Korea. Korea Telecom inks a deal with Microsoft to license its Windows Media technology to deliver on-demand movies and TV shows to 4.4 million broadband Net subscribers in South Korea.
This presents a very interesting opportunity for U.S. makers of content other than movies. Whether they like us politically or not, Asia digs on U.S. culture. And in detail. So, don't think just movies or TV shows -- think bigger, think different.
Creative Media Partners has just that kind of programming under development, for those of you interested in such matters, you can mail me.
Jason Chervokas as a very good analysis of the current plight of satellite radio companies at decodings.com. He demonstrates why XM and Sirius are, essentially, doomed in their current corporate configurations. But their assets, those birds in space (and in Sirius' case, terrestrial rebroadcast facilities, too), are going to be picked off by someone who will consolidate the industry. After all $3.5 billion in infrastructure for, say, $100 million, isn't a bad deal. Instead of having to reach about 5 million subscribers each for these companies to survive independently, a restructured and consolidated offering would need about 1.8 million subscribers to break even, assuming about $100 million a year in operating costs.
(Thanks to Howard for the link)
Brad King at Wired News writes Was Satellite Radio a Big Waste?. An FCC decision to let analog radio stations make the switch to digital signals was music to their ears. Good news, perhaps, for commuters trapped in cars with only a local DJ for company, but it spells likely doom for satellite radio.
This is a simple-minded story. Look at the infrastructure for digital radio and you'll see that ubiquitous coverage requires a hybrid network -- terrestrial and satellite -- and so the satellite systems are not doomed. The companies may be, but they will be consolidated. As I pointed out yesterday, this is inevitable. But no one will be listening to broadcast programming on the broadcasters' schedules within five years, and so you could argue that digital radio based on existing broadcast models is a dead-end.
CNET News.com reports that Intel server sales are showing signs of life. The market for standard servers, which include systems running Linux or Microsoft Windows with an Intel processor, break through the economy's malaise, according to market research. Dell is up. IBM is up, HP is up.
This was inevitable. The last round of major IT investment on the server side was in preparation for the Y2K run-up. Yes, there were a lot of companies in the Web business, now out of business, that bought servers in 1999 and 2000. But the big corporate IT buyers spent to prepare for Y2K and now those servers are exhausted -- new software needs far more cycles than those 1998-era servers. The cast-off servers from the Web bubble kept the market for new hardware down during 2001 and the first half of 2002. Now, we'll see better server sales. Sun will benefit too, but their recent moves toward the low-end will result in lower margins that Sun investor are used to.
osOpinion writes: Is Linux Really More Secure Than Windows?. With the recent spate of worms targeting Linux servers, Linux enthusiasts who once believed they were less vulnerable to attack than Microsoft users may have begun to wonder whether they were overly optimistic. But it is a mistake to think that one operating environment is inherently more risky than another.
This is dead-on. Here is why Linux has appeared more secure: Hackers (in the good sense) were working on building Linux, not pounding its security features the way crackers and virus writers have Windows. Now that the Linux OS is going into wider usage, it becomes an increasingly attractive target of opportunity.
Kevin Werbach writes about Tivo: Anil Dash speculates that Tivo users could hack a connection to the (free) TV listings that Microsoft's Media Center OS downloads. This raises a broader question about Tivo's business model.
It's a good article to check out, because he suggests that Tivo should explore other options for recurrent revenue streams than its programming guide. This is certainly possible -- with a hard disk behind every TV (basically, that's Tivo), they should be able to sell legal copies of programming and become, essentially, a publisher/distributor. Tivo needs to go to copyright holders with a strategy for delivering their movies without all that messy physical packaging. It's Audible's business in audio (Disclosure: I consult on Audible business development.) It's also the business every cable MSO is in, and they are moving toward Tivo-like settops as quickly as possible -- though they would very much like consumers to buy the boxes themselves. Can anyone say PC-based home entertainment hub? HP is claiming it is there, as of yesterday. Apple is clearly aiming at this market, too.
Reuters reports: Lucent to Cut 10,000 Jobs. Lucent Technologies said on today that it would report a wider-than-expected fourth quarter loss and cut an additional 10,000 jobs.
Here is a formerly great company that is all but defunct. The firm also canceled a line of credit and is preparing to sell real estate to maintain its cash reserves. While it would be a great time to pick up buildings around northern New Jersey on the cheap, this bodes very ill for the telecom market because a leading innovator is going to be severely diminished. Most creative engineers are gone already, those remaining will probably take a buy-out and go out on their own. There might be a number of new startups coming out of the region in the next couple years, but all signs indicate that the telecom equipment market is possibly many years from its next major growth cycle.
In the meantime, all the new products and services that will sell will maximize existing bandwidth and make connections more intelligent (better security, better application support across networks -- wired and wireless).
The Motley Fool makes a well-worn but valid point in Veni, Vidi, Vivendi. Even as Vivendi falls flatter than a crepe, entertainment stocks are looking attractive, because people tend to turn to entertainment rather than products during an economic downturn.
That said, there are a lot of entertainment companies which are relying on the consumer to pony up more money for alternative forms of access to content that is already available down the street at Blockbuster (BBI) or Hollywood Video (HLYW). They want consumers to dive into movies via broadband and "premium services." Well, yes, that's fine, but I'll wait for the DVD.
The real question is, which of these companies, AOL Time Warner (AOL), Disney (DIS), Viacom (VIA), etc. is going to have a hit during the downturn -- a film or album that spurs huge sales and tie-ins? My bet is still on AOL, which has the second Harry Potter movie, the second installment of the Lord of the Rings trilogy and a continuing asset in cable services. For all its problems, being the most diversified media company gives AOL considerable leeway in its market.
Broadband lessons to be learned. The BBC reports on a recent visit to South Korea, where 60% of the population has broadband, and the story sounds a lot like the process of rural electrification here in the U.S.
Unlike the U.S., which has attempted to deliver a broadband infrastructure to the home largely through private investment (the backbones, however, were and are largely subsidized by government usage), Korea has ensured corporate loans, even made loans, to get fast Net service into the home. There are a lot of reasons why this has worked so well, including the highly concentrated population, but there is every reason to believe that the mixed economy model is the best for launching an infrastructure. Such was the case with electrification in the U.S., which depending largely on federal monies and a conveniently unemployed mass of men during the Depression to do the work on federal paychecks.
Instead, here in the U.S. investors handed over the money and now the stock they got is virtually worthless. It's just a different form of sharing the cost, only Korea doesn't have so many executives who cashed out at the heights while the small investor paid the frieght.
Steve Ballmer knows your pain, though he just recognized it.... Dan Gillmor comments on Microsoft CEO Ballmer's comment that "when you clean things up, sometimes it ends up costing customer more money." This is in stark contract to Mr. Gates' statements that it is a natural result of innovation that more features will be rolled into the OS at the same or a lower price. Microsoft needs to revisit pricing strategies immediately or, once there is an aggressive Department of Justice in office, they're going to be headed back into court.
Mobile phone growth to stagnate in Europe. It's slowed to a crawl, because most people who want mobiles apparently have them. It also suggests that the new generation of phones, with cameras, wider ranges of time-killing features like games, and ever greater data throughput are not capturing consumer attention. What's the killer app for the handset-centric design? Just talking.
It's time for a break with the handset-centric network, so that network services become a unified connection for a variety of devices. The announcement by Compaq that it will ship 802.11 and Bluetooth in its next high-end iPaq is only a small step in the right direction. Intriguing to not, though, that future versions will also have GPRS capabilities. Now, if only T-Mobile would bill me a fair price for all those different network usages in one account.
I respectfully submit that DRM can be done right if it is priced fairly, allows reuse and pass-along (just like books, magazines and audio CDs, among other artifacts we know), and does not come loaded with the anxiety of whole industries, legions of paranoid artists and the poor implementation skills of engineers who don't understand ease of use. In other words, most DRM schemes will never work.
Too many copyright owners and DRM developers treat every piece of intellectual property they want to protect as though it was a whole cow, when they want to sell steak. They see a pirated copy and screech, "You killed my cow, my sacred cow." Instead, they need to recognize that it's a steak, one packaged piece (copy) of their intellectual property. By contrast, a pirated copy, without all the support, or liner notes or artwork or other nifty things that make a book or album collectible, a treasure, is a smelly piece of steak. Recognize that and you recognize you can sell good steak at a fair price and still beat the pirates.
DRM in and of itself is not a bad idea. But wrap your intellectual property in security that is as onerous as opening a bank vault to get to the steak instead of as easy as opening the fridge and snapping off the cellophane wrapper, and you will fail. It's a steak, not a sacred cow. Don't worry if there is a little blood and some scraps left over after the butchering of the cow -- that mess is analogous to piracy, the imperfect protection of your content -- there will always be piracy.
You can sell a better product in a better package (including the DRM, the design, the tchotchkes, the liner notes, the collectible poster and the customer support) than the pirates can. So, quit squirming and get busy instead of trying to wipe up the blood in the butcher shop of history, where old ideas have already been slaughtered.
Even the summary of this story over-hypes today's digital radio announcement, that the FCC has given its blessing to iBiquity, a provider of a sort of sideband digital radio system for terrestrial broadcasters. While the new service will let you hear existing radio stations in digital sound (same feed, same commercials, same annoyingly similar disc jockeys in every town), it is nowhere near delivering on-demand programming. The current implementation of the digital data service will offer enhanced information about what is on, such as the name of the band and song -- like what Europeans have had for about a decade.
The Motley Fool suggests that the system is a new competitor in digital radio, which has been "dominated," if you can call it that, by XM Satellite and Sirius Satellite. These companies have sold some hundreds of thousands of devices and earn a roughly $10 a month subscription fee, but they also don't include advertising. The iBiquity system, as noted, is just a clearer version of the same old radio. It will be adopted slowly and largely through new cars with the receivers built in.
There just isn't enough physical spectrum to deliver on-demand radio to every car on the road (think about what happens to a cable modem's performance when your neighbors sign on the network). It cannot happen in any reasonably foreseeable future, no matter what the Motley Fool says. A much more reasonable version of the story, but still somewhat hyped, comes from The Washington Post.
Ultimately, the extra capacity on digital networks may be used to broadcast digital versions of programming that can be captured and stored on hard discs in a car, such as the ones in the Kenwood Music Keg, but the programs would have to be sent en masse and filtered by the receiving client for what the user is interested in -- and that capability doesn't exist in these devices today. Audible handles this more gracefully, managing subscriptions and delivering them to portable devices, and could use iBiquity as a delivery channel. (Disclosure: I am a consultant to Audible, folks.)
iBiquity will be a very viable competitor with XM and Sirius, however, because it will be "free" after the radio upgrade. This is a market that will consolidate and at least one or both the satellite companies will likely go broke along the way -- then the combination of terrestrial and satellite coverage offered by a consolidated service will make digital radio a reality, but still according to the broadcasters' schedule and not ours.
My contention is that the future of consumer audio is consumer choice. People will (and want to) listen to a show when and where they want, not when the broadcaster chooses to transmit it.
T-Mobile: More Hotspots, More Wireless [Source: PDABuzz.com] It's great that the number of 802.11 b hotspots is growing, but the notion of a separate account is going to deter a lot of consumer adoption. Instead, T-Mobile is going to find that they need to combine hotspot access with regular wireless services and that they will not be able to charge a large additional charge. However, if they have an audience addressable through the hotspots T-Mobile will find they can charge content providers for carriage (which may be ad sponsored).
Forbes.com is taking a vote about whether its readers believe Secretary of the Treasury Paul O'Neill is right about the economy growing three percent to 3.5 percent in the fourth quarter of 2002. So far, the "The economy will contract votes are ahead." I'll bet it grows by about one percent.
Reuters reports that the VIX, a volatility indicator that reflects investor anxiety, is at a its highest level since July 24 -- indicating it may be time to buy. I've used this as a successful indicator in the past. It should also be noted that some friends in investment banking found this notion crazy, but I kind of like these contrary indicators.
Reuters reports: "Historically, the current VIX levels of 50 or higher are associated with market bottoms as investors are willing to pay more for puts which carry the right to sell the underlying stock," said Tim Ord, editor of the Ord Oracle, a daily technical stock market publication. "This often occurs when the market is poised for turnaround."
But this time around, heading into what I believe will be a dismal holiday shopping season, because so many consumers are feeling wary about their jobs and the prospects for 2003, I think the VIX will only go higher. In other words, while it is time to continue to dollar cost average into your reliable positions, it is not time to load up on speculation of a turnaround.
My bet is the market finishes down from the current level, closing the week tomorrow with the DJIA around 7335 and the Nasdaq Composite at about 1090. Why? Because consumer sales are slowing. See this Wall Street Journal story (sorry, you need a subscription) about Wal-Mart's slow growth (they always grow, because they are claiming share) and Penny's, Federated and Target's declining sales. Today's is a mild relief rally based on some favorable tech reports yesterday, including Yahoo, Rambus, Redback and Sonus upside surprises. But fact of the matter is that analysts have finally become so conservative about tech projections that they are creating those upside surprises, so they don't really reflect major improvements.
Everything starts small. As I recall, my first modem was 2400 bits per second. Waiting for the information revolution to save your business model? It always takes a while.
David Weinberger on Microsoft's Palladium digital right managmeent system: "Ultimately, I think you have to ask what world will be better, one with enforceable usage rights that drive out the leeway and hard-codify fair use, or one in which there's reasonable (and even unreasonable) leeway where some genuine piracy happens, a lot of genuine cash-for-use happens, and a whole bunch in between goes on at every level of society." [Source: Werblog]
I'll take the sloppier model and here's why: When you visit an Asian country, whether it is China, Malaysia or Taiwan, you can buy a ton of software for a few bucks. When I gave a speech a few years back to the Malaysian Securities Commission I proved my point by bringing in more than $12,000 worth of U.S. software that I'd purchased on the street the night before for about $11. "You'll care more about this piracy when you have your own Bill Gates," I said. "If you want to have a Bill Gates sooner rather than later, you'll take care of it now."
In the meantime, I pointed out, people all over Malaysia are starting to use PCs. They are joining the information age without stopping first in the industrial era. And, since that time (it was March, 2001), the Malaysian government has begun to crack down on piracy. Even the Chinese, who are realizing that if they don't their own products will become fair game in the world market.
But, in an age when a lot of products are infinitely reproducible, piracy will happen and it must be viewed both as a plague and, like a plague, an attack that strengthens industries by expanding their potential customer base. The annual pronouncements about lost revenue due to piracy in Asia are as much off-the-books marketing expenses for future upgrades and support services (and it is here that most money will be made, so find your Asian support partners now).
The future of the AOL will be in carriage, like a cable network, and the company's challenge now is to upgrade its audience to broadband without destroying the economics of its business in the process. This means they have to rely on low-cost backbone and local access providers -- and it makes a lot of sense, really, to have waited so long to push into broadband, because now the infrastructure has been repriced into a reasonable territory through bankruptcy. At the same time, it means that the the programming offered on AOL has to be carried not at a fee to both producer and consumer, but that AOL needs to court programmers as cable and networks have, making decisions based on shared risk and profit if the shows they deliver turn out to be a hit.
If anyone is looking for a great programming concept, contact me. We've got some killer shows under development at Creative Media Partners (web site coming soon).
Marc Canter wraps up several postings about rich media and messaging with some basic rules for success: "To make distributed systems work - we need to establish more than just common data structures. Moving forward not only do disparate HTML systems need to connect and talk to one another - but (heaven forbid) other, more rich media oriented fat clients as well."
I had a really interesting conversation with Jeremy Allaire the other day about this issue. At Creative Media Partners, the new production company Peter Shaplen and I have started, we're trying to take all the low-cost production lessons learned at ON24. But the tools for audio and video production still have a long way to go, because they are still many different pieces for most business users to conveniently produce a meaningful message, something that doesn't come off as worse than an awkward voice mail.
The Macromedia Flash Communication Server is a great start as a foundation for immediate communication -- it can work as a kind of switchboard for multimedia messaging (see the announcement about Date.com, a service that links would-be daters via video so they can see and hear if there might be chemistry). When I was on the board at Match.com, we used to talk about being able to do this someday. Now, someday is here. I even spent six months as interim CEO of a CUSeeMe-based video community/police force that monitored conversations for unwanted nudity.
But when all is said and done, the current generation of rich media messaging is an gawky appendage to the telephone. The Web converencing style, where you might share a screen to work on a document, is only a step, since it works in real-time and is boring as hell when you play it back.
What the exec needs, or the sales trainer, or a support engineer, is a quick, easy-to-use tool for assembling a collection of media assets -- they might be slides, Web pages, links to Web pages, Flash training animations, anything -- that can be at the ready as you talk. Imagine being able to look at the camera, click a presentation and have it open right in the frame over your face. Then, you split the screen so the viewer can see you talk about the slides; a Web page you think of can be brought you so you can take your team on a tour of the competition's site. All this is lined up, ready, not buried in a file system from Redmond or Cupertino, on a stage like Flash provides, but without the preparation Flash requires, that can digest file formats without regard to proprietary nonesense (that's Marc's point at the end of his posting when he points out: "We need to all build pieces and make sure they fit together in the end.")
It takes a fat client to handle translation and interaction, but that client has to function like the desktop -- PC or wood -- where we can arrange our thoughts in a few moments, then make a call with documents close at hand to refer to or share. Fat clients often become confusing clients. If the software industry can make a tool like that, production and creative people will be lining up to create the documents and programming that executives will eventually be using to change the nature of a message.
Yahoo boosts Q3 with smaller advertisers, pay services. Earnings come in slight above expectations, based mostly on cost-cutting (even though revenues rose 50%, the comparable quarters in 2001 were so dreary that it is hard not to improve when you add in the HotJobs revenue they acquired since the year-before quarter).
Everyone who still invests in Net companies looks to Yahoo! as a bellwether for the entire online services sector. It did okay this quarter, coming in with a profit of five cents a share. YHOO shares were up 4.96 percent on the day and will rise again tomorrow. But, as a sector leader, YHOO's trailing 12-month price-to-sales ratio is a steep 7.38. Compare that to other sector leaders: General Electric (GE), 1.83; General Motors (GM), 0.10; ClearChannel (CCU), 2.44. Yahoo's P/S is at a software company level (Microsoft's is 8.53) and needs to come down into line with other leaders and, especially, media firms. Even AOL Time Warner (AOL) trades at just 1.19 times trailing sales -- and that is supposed to be a disaster.
Until we see a real increase in ad and marketing spending, which can drive Yahoo's results higher, Yahoo does not carry much upside. It may have turned the corner, but it has a lot of work to do on building revenues from new, non-acquired lines of business.
This is a clear sign that, in the midst of the downturn, the Mac is making market share gains. It used to be the case that the Mac applications group was the most profitable part of Microsoft -- I always liked to think it was because the Mac developers were 10 times as efficient because they weren't dealing with Windows APIs. Anyway, Microsoft would not be investing in Mac promotions if these stylish machines weren't taking more desktops in the home and office.
It's a good sign for Apple stock, which closed at 13.60 Wednesday. Relatively speaking, the P/E is still high, but increased promotional spending for Mac software will translate into better Mac sales. In a recovery, Apple could claim an additional two percent to four percent of corporate market share based on the new OS X (Jaguar), a truly awesome industrial strength operating system, powerful desktops, stylish portables and the XServe, which is attracting a lot of design and Web server business, based on what people in the industry tell me.
This is just really bad news. I'll miss reading Jim. He and I took opposite sides during the Y2K run-up, but he consistently did so with good nature and humor, instead of the attacks most of the Y2K-preparers launched at me. God bless, Jim.
Okay, folks, the initial design is done. After wrestling with the site design all day as I was on the phone and working various other things, I can say the new site is ready to go. Now, instead of getting a mix of the social and political comment that I am certain many of my business-oriented readers are not looking for, you'll get just the business commentary at this site.
I'll be posting news comment, investing comment and discussions about technology developments. Sometimes there will be crossover, because technology topics often cross the boundary between business and socio-political issues. But, if you are looking for a good George W. Bush jab, a comment about stupidity in the press or just around the neighborhood, look at RatcliffeBlog -- Social and Political. If you want the straight business stuff (albeit with no less attitude), check here (this site).