RatcliffeBlog - Mitch Thinking Out Loud

Holy smoke: Brobeck shuts down

Holy smoke: Brobeck shuts down

Good God, the 1,100-lawyer, 77-year-old firm of Brobeck, Phleger & Harrison, the scion of Bay Area law firms, has decided to shut down. This is a firm that represented a huge proportion of high tech companies in one way or another. I wonder if there is some hidden liability concern here. After all, times are slow for corporate work, but not that slow.

Said one of the lawyers: "I guess I'll go to Thailand and live on $200 a month" Suffice to say: That's not the last thing I'd want to hear from my lawyer.

No surprises with these IPO...

No surprises with these IPO shares

Frank Quattrone, one of the symbols of the Net bubble, will face civil charges from the National Association of Securities Dealers relating to how he doled out IPO shares to buy influence with companies, bankers and investors. Having taken the same tests Mr. Quattrone did to get a securities license, it is hard to imagine that he was unaware of the preferential treatment he was using to win business -- the NASD beats it into your head before you get your Series 7.

Never underestimate Steve Case

Never underestimate Steve Case

Dave Winer has a great piece on AOL, with the unforgettable double entendre: "AOL was the finger in the dyke of the Internet." That's one confused little Dutch boy (not you, Dave, but "dike" is the modern usage and "dyke" is currently usually used as a slang term for something else entirely).

But, more importantly, Dave's right about AOL not getting the Net. What it did get, and that was much more important to its success, was that it knew and knows it needs to be a media company.

At a party last week I met the former CEO of The Well, Maria Alioto. We talked about her experience. A total parallel to AOL. Good start, probably was necessary for the Web to get going. The core of the West Coast Web. The meeting place for the future staff of Wired and EFF. All good things. But in the mid-90s when she came on, it had no future. As AOL had no future when Time-Warner was snookered into taking their stock.

Moral of the story: Never underestimate Steve Case.

Second moral: He's like Columbo, he makes it easy for you to underestimate him.

Folks, AOL has never been about the Net. It has been about being as easy-as-TV to use and that's it. A huge portion of its users are 40+, too old to "get" the rawness of the Net, but drawn to the ease of communication provided by the Net.

We hate TV, when there's...

We hate TV, when there's other stuff on

The UCLA Center for Communication Policy has released a survey that shows Net users continue to watch less TV, that the decline in television consumption increases the longer one uses the Net, and that only TV suffers. Reading and listening in other forms is virtually unaffected by Net use.

Of those surveyed, 60.5 percent said they considered it an important or extremely important source of information -- ranking ahead of television, radio, newspapers and magazines.

But Americans regard Internet content more skeptically than what they read or hear from traditional media outlets. They've grown more critical of online content, over time. And today, one of three Internet users say they trust only half of what they read online, said Cole.

The Internet is most compelling as a communications tool. The survey found that e-mail and instant messaging remain the most popular activities -- far outstripping time spent browsing, reading news or conducting research for work or school.

Gawd, this is such a great indicator that with new kinds of programming in broadband, upstart producers can grab audiences and create communities. The report is chalk full of data goodness.

It was thus, ever and...

It was thus, ever and ever

Ian Glendinning blogs on my exchange with Dr. Weinberger about philosopher Richard Rorty, point to Richard Barrett's work:

I've blogged several times "It was ever thus" and "Nothing new under the sun" over the years, most recently in connection with US Philosopher William Barrett.

Even more interestingly, Barrett makes the very point - in the concluding chapter "The Place of the Furies" of his "Irrational Man" - that recognising that it was ever thus is as old as philosophy itself, quoting Karl Jaspers, citing an anonymous 4000 year old Egyptian philosopher and Ortega y Gasset citing the Latin Poet Horace. Current issues always look more problematic than the problems of our ancestors, but they were always pretty much the same problems.

I haven't read much Barrett, but Ortega y Gasset has long been a favorite of mine. One can find all sorts of tools for dealing with new problems in history, if only you let go of the conceit that you're inventing everything. I tell my kids this all the time, when they are banging their heads against experience that is easily borrowed and improved upon.

We'd do well to recognize we are all children in the long run. Better than just being dead, because it leaves your whole life in front of you and millennia of history to parent you through it all.

Radio consolidation reconsidered, again

Radio consolidation reconsidered, again

Senator Russ Feingold (D - Wisc.) has reintroduced a bill calling for more oversight of radio mergers and to outlaw payola for airplay. This would go a long way to reducing the vast grey goo that is radio today -- it all sounds the same, wherever you go.

“If you don't have the money to play in this system, you are shut out,” he said during a hearing on radio consolidation held Thursday in Washington. Feingold also took aim at Clear Channel, the biggest radio owner, for its related live concert business. He blames Clear Channel’s consolidation of the concert promotion business with the 61% price increase in concert tickets in the past six years, and said the Justice Department should investigate.

Security insurance: Vendors' responsibility

Security insurance: Vendors' responsibility

Dan Farber says vendors should pay for the damage to customers' systems and business caused by security failures. That would certainly change the beta-first-get-it-right-later approach to software distribution today.

For those of you struggling...

For those of you struggling with metadata concepts

Phil Howard of Bloor Research has one of the most straightforward articles on the difference between data and metadata I've run across lately:

"...relational databases store tables which define entities. That is all they store. They also contain details about relationships that are defined by means of such things as foreign keys. However, these relationships are not explicitly stored in the database, which is why they are called relational, because that information is implicit.

When you are manipulating metadata, however, your needs are rather different and you do actually need to store relationships because you can have relationships between relationships (dependencies for example)."

Starbucks stops Net orders

Starbucks stops Net orders

Starbucks 6,000+ stores won't take phone and Web-based orders for drinks anymore. Simple explanation, if you ask me: We want fresh coffee -- that's the small luxury that keeps people going to Starbucks, even when times are tight. Ordering in advance raises the chance that the coffee you get will be the wrong temperature (how many times have you heard an order for an "extra hot latte"?) or bitter. No, people will stand a moment or two to get fresh, and happily so, because it is a legitimate pause in a busy day. And the pre-paid card speeds the line, which means more hanging around time. It's a simple thing that feels almost like community. For the first month of 2003, revenues were up 25 percent compared to a year earlier.

How does your newspaper site...

How does your newspaper site sleep?

"Staying relevant" is the big challenge, according to one newspaper site executive. This would be the challenge for all media, the problem any Net site has is what to do when the novelty of online delivery, a few Flash animations (which turn out to be a lot more expensive than management would like) and reader polls has worn off. WashingtonPost.com CEO is more down to earth, keeping his mind on managing ad inventory to maximize the value of his inventory.

The big trick is figuring out how to integrate what you do with text into new media -- audio and video, learning titles and so forth. The Post has been very good at taking past coverage to create briefings on current events, for example. But as digital communications replace the one-way analog bandwith we've grown up with, a news organization that doesn't also produce for what we might call "radio" or "TV" today is wasting cycles that could be turned into more inventory.

Tying broadband to voice services

Tying broadband to voice services

Broadband Reports.com writes that Baby Bells are forcing DSL customers to buy their voice services. This is the definition of monopoly behavior, a practice called "tying" that an incumbent carrier, whose wires run into the home, can use to hold customers hostage if they want broadband services. Another example why the telephone business should be allowed to fail fast instead of propped up by the FCC.

Japanese file-sharing site shut down

Japanese file-sharing site shut down

MMO Japan, which hosted a file-sharing directory, called File Rogue, was shut down by the Tokyo District Court on Wednesday. In addition to the Japanese Recording Industry Association, the Japan Society for Rights of Authors, Composers and Publishers filed for an injunction against File Rogue, as well.

Calandra: Disaster ahead

Calandra: Disaster ahead

Tom Calandra: Trading in and the price of small-cap stocks indicate the small investor, still heavily invested compared to earlier eras, are ready to head for the door. This is an interesting time, one when prices will wash out big time and, at some point -- I would never deign fit to say when before it happens (hindsight being 20/20 and all) -- at some point it will be a very good time to buy. But not now.

How small stocks trade says a lot about investors' hopes and fears. During good times, small companies represent all that is hopeful about an expanding economy. During bad times, they do their Jekyll & Hyde act, becoming ravaged as disgusted investors flee the small-company landscape.

The gap between the two is now closing, but it's the way the spread between big and small is closing that most interests Peter Kendall at Elliott Wave International. The shifting gains and losses of the U.S. market's smallest stocks are pointing to a likely rush to the exits by individual investors, Kendall said Thursday.

Don't forget your toothbrush

Don't forget your toothbrush

A survey by Taylor Nelson Sofres found that the toothbrush is the invention most people, adults and teens could not live without. Interent to note that younger people, however, chose PCs and mobile phones far more than adults did. Change takes generations.

IP and democracy don't always...

IP and democracy don't always go together

Dan Farber points me to an upcoming discussion of the myth of democracy spreading across open networks by authors Shanthi Kalathil and Taylor Boas:

Looking at China, Cuba, Singapore, Vietnam, Burma, Saudi Arabia, Egypt, and the United Arab Emirates, they analyze Internet  use by a range of political, economic, and social actors and examine its political impact. Their finding: the Internet is not  necessarily a threat to authoritarian rule, especially in those countries where governments have been in charge of its  development since the beginning.

Kalathil and Boas find that certain types of use do pose political challenges to authoritarian governments, which may  contribute to future political change. Yet other uses actually reinforce authoritarian rule, and the leaders in some  countries actively promote development of an Internet that serves state-defined interests rather than challenges them.

The authors will discuss their findings at an event aired LIVE on the web.  Tune into www.ceip.org/live on Friday, January  31, 2003 at approximately 12:45 to listen. Audio also will be available on the web site after the event, along with excerpts  and table of contents.

This is a really important point to keep in mind. As I've been ranting about the need for Americans to take up their voices, it might have been easy to mistake that as an endorsement of the idea that IP networks by their very nature are more democratic than broadcast media. They are not, unless the people using them are intent on increasing the range of discussion, including as many people and views as possible. People make democracies, not technology. The voting booth is not the reason we live in a free (albeit, less so all the time) country. The people who walk in and pull the lever are the lever of democracy.

British Telecom turning from 3G...

British Telecom turning from 3G to Wi-Fi

According to Europemedia.net, British Telecom is adopting 802.11 (Wi-Fi) hotspots as its primary approach to broadband wireless, foresaking 3G for a network it calls "Openzone" that will be placed in airports, hotels and along the motorways in Britain.

Blogging and nano-publishing on the...

Blogging and nano-publishing on the rise

Dan Gillmor points to this Guardian story about the rise of nano-publishing, which unfortunately begins by reiterating the erroneous rumor that AOL will add blogging capabilities on its site next month. Good coverage of Nick Denton and what his network of blogs is up to.

SEC Chairman-in-waiting will actually divest

SEC Chairman-in-waiting will actually divest

Announcing that William Donaldson, the Chairman-designate of the Securities and Exchange Commission, will sell his entire stock portfolio, the Bush White House radiates ethical standards -- only anyone in their right mind would have expected this in the first place. Loved this passage at the end of the Washington Post story:

Donaldson stepped down as chairman of Aetna in April 2001, a little more than a week before the company warned that its quarterly results would be "significantly lower" than had been expected. Aetna has said the suit has no merit.

Donaldson's office referred all calls yesterday to the White House.

The end of angel investor...

The end of angel investor organizations

For several years, there was so much private money that angel investors could combine efforts to act virtually the same way as early-stage venture capital funds. Now, those networks of angels are evaporating and we're getting back to the roots of individual private investing.

Right on the brink of...

Right on the brink of admitting this is still recession

The fourth quarter produced economic growth of just 0.7 percent. This is, of course, the same number that, for the two quarters of 2001, the Department of Commerce revised downward in the middle of 2002 to acknowledge we'd been in a recession. Consumer spending growth slowed to one percent and that slowdown came in the big-ticket items, which were down 7.3 percent in the fourth quarter.

The Fed, which kept rates level (how much lower can they go at 1.25 percent, anyway?), is paralyzed and hoping against hope that they won't be called on to "stimulate" the economy with easier money. By now, Chairman Greenspan and team had thought they'd be wrestling inflation, but that's no a problem with global deflationary pressures make everything less expensive.

The good news was that companies are increasing spending on computer equipment and software. This figure was 1.5 percent annualized during the fourth quarter. Tech will lead the rest of the economy out of this mess. It won't necessarily pull the rest of the economy along, because IT spending is significantly constrained compared to the mid-1990s, when business and, especially, small and medium-sized business were in the midst of their first build-out of computer systems.

The New TIA

The New TIA

President Bush renamed the much-criticized Total Information Awareness program during the State of the Union address. Now that the TIA was effectively shut down by Senate action, the president said he will create a Terrorist Threat Integration Center (TTIC), which is effectively the same function the TIA was designed for: domestic surveillance. This came in close proximity to Bush's bizarre hint that assassination is part of the war on America's enemies.

Expect the Administration to continue to use the TIA to distract the public debate from the TTIC. TIA hasn't been completely killed and can serve as a convenient whipping boy while TTIC grows.

Since its founding, the United States has struggled to prevent domestic surveillance and, with exceptions like the domestic persecution of dissent during World War I and the Hoover years at the FBI, it has done a pretty good job.

Why write about this on a business, technology and investing site? Because the freedom to speak and communicate without fear of persecution is one of the main reasons the U.S. economy has prospered and given rise to so many new ideas.

Ben Bagdikian on media consolidation

Ben Bagdikian on media consolidation

He wrote the definitive book on media consolidation. Ben Bagdikian, former dean of UC Berkeley's Graduate School of Journalism says that if the FCC revokes ownership limits it will harm the public discourse. But look at the first sentence of his comment and think about what is happening with blogging:

"When you get a new technology, you want new, young, smaller groups that are quicker on their feet and able to come up with new ideas. Whereas the few existing giant corporations want to control the change, limit it as much as possible so they minimize their costs of conversion. They control the way it's going to their advantage and not the public's advantage."

Content is prince regent, distribution...

Content is prince regent, distribution king?

The Street's George Mannes says cable companies could choke off the profit from content. I think he misses the point, because he seems to think that video-on-demand is the future. There's no reason to even think of the cable company as a gate-keeper when you can download video over an IP network. The idea that cable network fees could shift to pay-for-performance is ridiculous, since they this will ultimately drive content providers to alternate channels.

China becomes the number one...

China becomes the number one importer to Japan

Japan now imports more from China than it exports. This is one of small moments in history with wide-ranging repercussions. China had already out-exported Japan in shipments to the U.S. to the tune of 2002 China-U.S. trade deficit of $10.45 billion compared to 2002 Japan-U.S. trade deficit of $6.49 billion. This is all about low cost manufacturing and deflation.

The perils of Pepperland

The perils of Pepperland

Snap up a publication staff

Snap up a publication staff

JD reports that CNET's ZD Net Tech Update is up for sale or, rather, was listed on eBay until it was pulled down and reposted with the name changed to "Z---- T--- U

Congrats the Eric, Bryan and...

Congrats the Eric, Bryan and Andre, now let's mess with things

Eric Norlin, Bryan Field-Elliot and Andre Durand announces the PingID Network is up and running, as well as an investment from Nokia.

Ping Identity is the founder and sponsor of the PingID Network (www.pingid.com), a member-owned identity network, the first of its kind, providing businesses with the legal framework and business services necessary for enabling wide-scale identity federation. Both initiatives are unique in their focus and scope - and designed to accelerate the rapidly developing identity marketplace.

Member-owned is corporate-owned, but this is an important step forward. I'd like to suggest that a group get together and incorporate as a consumer's union that will control their identities in the "federated identity" systems Ping ID facilitates. And using those identities, that we start to take control of the legal framework for our relationships with companies.

Augmented reality and moblogging

Augmented reality and moblogging

Ross Mayfield and Adina Levin have a good thread going on the uses of augmented reality, which Greg and I were trading thoughts about yesterday, partly in response to Harold.

The future is a wave of whispers going on within, around and just beyond our experience of conversation and events. I think the addition of virtual reality to reality will be a terrible distraction, but the use of enhanced conversation and the constant recording of history by individuals has tremendous promise as the basis for examining life from a variety of perspectives.

UPDATE: Bryan Field-Elliot, also of Ping-ID, will be talking at the O'Reilly Emerging Technology Conference about "the Coming Ubiquity of Geospatial Annotation." Interesting interesting stuff. "Geoblogging" is a great term.

Open Content Network

Open Content Network

This may be the new Napster. The Open Content Network is a peer-to-peer system for delivering large files (read: media, such as audio and video) using a technology called "Content-Addressable Web" that mimics the edge services provided by Akamai and other content delivery networks. The idea with edge services is to get content as close to end-users as possible and through multiple routes. In a P2P architecture, a single PC could be pulling parts of a file from several different PCs in the Open Content Network.

Interesting. Worth watching. As broadband proliferates, this will improve the delivery of content between individuals -- but since most "broadband" services are only fast on the downstream side, there is still an unnatural monopoly on the carrier's part because they can choke off edge servers they don't own and claim they provide better quality of service. Likewise, I suspect that the RIAA will be watching carefully for signs of "abuse" of copyright.

Refit complete

Refit complete

The write-down of $45.4 billion in value of America Online and the departure of Ted Turner marks the end of the transition at AOL Time Warner. Just as the Time Inc. and Warner Bros. merger ended with a complete housecleaning and reorientation of business efforts, this is the final chapter. Turner's leaving indicates that the resulting company is settling in on a business model, one not bold enough for Turner. Remember, Steve Case is still on the board and heading the strategy committee. It's a nice balance.

Revenue was up seven percent to $41.1 billion and earnings were up before the write-down of AOL's value. The revenue figure is a substantial gain over the $36 billion they generated separately before the merger. AOL accounted for increased revenues. This is the proverbial corner in this story, but the stock will be down tomorrow.

Of course Yahoo! will ditch...

Of course Yahoo! will ditch Overture

Tim Cadogan, formerly of Overture, has joined Yahoo! to lead its search unit and, in the words of this InternetNews.com report, "caused speculation that Yahoo! would end its relationship with Overture when their contract expires in 2005." Duh! When they bought Intomi, that was clear.

Having proved paid placement is profitable, Overture's market is going to be picked apart by its former partners. I'd be surprised if Yahoo! doesn't buy its way out the contract sometime in the third or fourth quarter of this year. Google, because it has worked constantly to extend the range of services its facilitates is in a much better position, because it is worming its way into the infrastructure of the Net. Overture found a novel business model by didn't innovate much after that.

Yahoo! goes to paid radio

Yahoo! goes to paid radio

If you can't get your commercial free music via satellite, why not the most popular portal on the Web? Yahoo! has introduced a 50-channel music service for $3.99 a month. Now, if only they need news and other entertainment, because not everyone wants to listen to music all day.

Sorry, but day-part programming, which fills the clock with programs, is the dinosaur of media and we need to get to a place where content is mixed and matched for us based on our needs -- in the car, where's the traffic report when I want it? What about the news I care about? What about a good joke?

A lazy press. A subservient...

A lazy press. A subservient press

Dana Blankenhorn and Nick Denton are trading criticisms of the U.S. press in a column by Dana and a blog posting by Nick. For a long time, I've been saying that the press should return to its roots, so that when we read a report we knew ahead of time it was coming from a particular perspective and not a purportedly "objective" source. That means that the perspective should be informed and well-argued, not that it simply be ideological.

If you think it's just a few bloggers who are sick of the media's staid professionalism, listen to a media veteran, Janeane Garofolo, who says her anti-war position has led her to be treated like a child by the press. That condescension extends to the audience, as well.

Dana writes: "...instead of thinking of your audience as consisting of people who live near you, how about thinking of it as people who think like you? This is what 19th century journalism was all about....It was only in the 20th century, with the rise of vast chains, that the American reporter became a 'professional,' someone whose job was to play things straight down the line, with inverted pyramids, an unbiased viewpoint…an officer of the people’s court."

I concur, professionalism takes all the fun out of the press, which is what Nick is saying when he writes: "Heaven forbid that any article be interesting enough to offend some readers. Even private correspondence is enough to get a journalist into trouble. Bill Cotterell, a political columnist, was suspended from the Tallahassee Democrat for sending a rude email in response to a reader."

Hell, let's get the rhetorical blood flow in the streets. Let's rumble in the columns of newspapers and blogs. Let's make a difference. Otherwise, hang up the professional hat and retire to a nice farm where they'll feed you through a tube and eventually recycle your body as soylent green--our brains will be long gone. Nick is right when he points to Michael Wolff's comment that “It’s just that being anti-Democrat, anti-Clinton, anti-yuppie, anti-wonk turns out to be great television.” Liberals need to recognize George W. Bush is a veritable Freddy Kreuger that could be lambasted daily for his monumental attacks on individual freedom, his hypocrisy, and the fawning loyalty he demands of the people.

So, let's embrace our differences and make them the foundation of the people's reporting of their world. Participatory journalism should be partisan in the sense that if you were going to attend a good debate (when was the last time an American even thought about listening to an argument as entertainment?), you'd expect the winner to have fully documented their case.

I write from my perspective, which is that of an liberal entrepreneur angry about where this government is taking my country and the marketplace for ideas and information. If the Democrats can't do any better, I'll criticize them for their lack of details, their just-so-careful lack of rhetoric (I did in my blogging of the State of the Union last night, asking for more specifics from Gary Locke.) Let's think about being American in all our media. Let's think about being successful business people in our business media. Let's think and argue about everything under the sun.

I'm with Dana (although my J-school prof told me to leave after one class and get a job, saying I already knew how to be a good reporter and writer -- best advice I ever got, and I later helped him start a Web company that made him rich):

Throw out the NPA. And while you’re at it, let’s forget everything we were taught at Columbia, the Poynter school, even at my alma mater of Northwestern University’s Medill School.

We are not professionals. We are not doctors, we are not lawyers. We’re writers, hacks, entertainers, sweaty ink-stained wretches. Journalism is a trade, like cooking in a restaurant. It’s a harsh, nasty competitive business. Work hard, get drunk, and do it again.

Compete and win is the only way.

I'll be blogging impressions of...

I'll be blogging impressions of the State of the Union

Over at my Social & Political Blog.

Interactive create mode

Interactive create mode

Greg Elin has a very articulate deconstruction of his recent dinner with Fred Ritchin of PixelPress. I love the idea of a second mode of interactivity (in addition to interactive display), the interactive create mode. This relates to Harold's idea, blogged below, and to my discussion of the writing systems that add intelligence.

In the too fantastic to...

In the too fantastic to believe, yet true department....

LawMeme points to this story about a Russian law firm that is suing the animators of the house elf Dobby in the recent Harry Potter movie. Why? Because he looks too much like Vladimir Putin. I hope this doesn't lead to another declaration of war in the State of the Union address tonight -- because, you know, W. and Vlady are close.

Yeah, I can see it. Can't you? Definite grounds for war.

BlogArt

BlogArt

Harold Gilchrist has a great suggestion for a sort of community of practice that would be facilitated by better multimedia support in blog tools, which he calls BlogArt:

I starting thinking this week about "personal multimedia clip art" and how we will use it, re-use it and share it in the next phase of blogging, blogging 2G.

Just like we don't publish everything we write, we also won't publish everything we shoot with a camera or camcorder or say into a digital voice recorder.  As we move to the next phase of blogging that includes integrating multimedia easily into blogs, the art we publish will based on the context of the communication, specifically the subject of the post or the story.  This is not to say that the multimedia art we didn't publish today won't get used tomorrow or by someone else in a totally different context in the future.

I am asking all blog tool publishing vendors to start thinking about features that will give their customers ways to share their BlogArt.  Just as we can share each others posts and links today we will need to able to share our multimedia BlogArt and the ability to subscribe to others multimedia BlogArt galleries.

With this kind of tool, events would become the focal point for image and text stories recorded by the participants. Then, the question becomes how do we make our BlogArt meaningful to others? The great thing about blogging (and blogging as the foundation of new collaboration tools) is that users are always telling designers what they want.

Listen to Jimmy Thudpucker

Listen to Jimmy Thudpucker

Garry Trudeau's aging rock legend explains the future of music in four frames:

New York Times Digital revenues...

New York Times Digital revenues up 18.5 percent

Continuting the trend, The New York Times' digital division saw revenues grow faster than print segments of the company. Advertising was up 6.5 percent in the fourth quarter while digital revenues grew 18.5 percent to $19.7 million, "primarily due to an increase in advertising revenues." Broadcast revenues were up 25 percent. The message: people want information on a screen. 

Operating profit [for NYT Digital] increased to $3.3 million in the fourth quarter from $1.4 million in the 2001 fourth quarter, primarily as a result of higher advertising revenues. NYTD had an operating profit of $8.3 million for the full-year of 2002, an improvement of $15.6 million.

Audio and video in the...

Audio and video in the digital home

In-Stat/MDR reports that moving multimedia around the home will result in the first commercially popular bridges between the data and entertainment devices in the house.

... the introduction of audio and video promises to create a new market for multimedia home networking technology, with the number of multimedia home network households, worldwide, projected to increase by a CAGR of 210.7 % from 2001 to 2006....

In terms of devices, it is unclear at this point whether the PC or consumer electronics cluster will take the leading role in the unfolding market for multimedia home networking.

In 2003, DVD players that access the PC for video content to be played over the television will be the first mass market products that enable video-based home networking. Companies such as Oak Technology and Digital 5 are offering solutions that will be available in name brand DVD players in 2003.

The emergence of digital television, particularly high definition television, is expected to be a multimedia home networking driver, particularly in the later years of In-Stat/MDR’s forecast (2001-2006). Just as data-based home networking was boosted by the need to share an expensive broadband connection, so multimedia home networking will be boosted by the need to share expensive digital and high definition television content.

Selling multimedia home networks will require substantial consumer education and marketing. Solutions will have to be simple enough for average consumers to install, or networking companies will have to work with service providers for installation.

In the near term, because of bandwidth and Quality-of-Service (QoS) constraints, it is expected that only compressed video, such as MPEG 2 and MPEG 4, will be networked.

Paid search listings, are they...

Paid search listings, are they worth it?

I've been running an Google AdWords campaign for a client for about six months and it is of mixed value. The the whole problem is that you must conduct a long series of tests to identify what keywords work, then what offers work in conjunction with those keywords, if you ask me. According to MediaDailyNews:

As marketers grapple with jargon like keyword density and struggle to devise bidding strategies, many may not be aware that some paid search results are being driven by user behavior and perceived relevance as opposed to strict keyword matching.

This focuses primarily on the cost of a click-through, which is important, but only one factor in the whole process of capturing a potential customer's attention and converting them to a regular customer.

The democracy thread, redux

The democracy thread, redux

Britt Blaser has a really great summary of the follow-up to my posting about The Age of Connection last week, including some of the email exchanges that were going on. Great read and he makes very good points about how the move to take back the country is going on already.

My caveat, which I would also add to Dave's comments, is that we only recognize leaders in retrospect. My nine-year-old asked me the other day who Rosa Parks was, mostly to see if dad is as smart as him. The answer is, just as it was with Gandhi or any other leader or pot-stirrer, was that Rosa Parks was a person who just got tired of the way thing were, the injustice she and her people experienced every day. And all she did was refuse to comply with the injustice and viola, she was a leader. Gandhi made salt. Other speak the truth when no one will. Every one of us has that within themselves.

P2P RSS and your information

P2P RSS and your information

Via Dave Winer: Adam Curry writes a great piece about the combination of RSS and encapsulated MP3s and other files to update users' data and alert them to the changes. Everyone has been talking about PointCast lately, the long lost "push" technology that was just not quite right at a time when online time was still metered or slow or both. We're getting very close to personal data services that really make a difference in people's lives.

Writing systems that add intelligence

Writing systems that add intelligence

The discussions of semantic Web applications are always interesting, but mostly a nice dream. Steven Garrity writes that when writing on the Web, that is via a Web application or a blog, the whole mark-up process needs to be transparent to the user. He's talking mostly about formatting, and I've got that with Radio, except for the spell-checker.

But we need to go further if this is going to be additive to human interaction, to a kind of interface that adds information, as well, such as links to the dictionary/glossary sources we rely so that the words we use are clearly understood, relationships between the newly entered content and what one has written before, options for linking to various friends and colleagues, and so forth. There are a variety of ways to use LDAP and other directory infrastructures to make some of this stuff happen, but there is a constant struggle between the goals of participants in the process of building the Web -- commercial, personal, government, cultural, and so on -- that the kind of omniscience we like to talk about is almost impossible. Cory Doctorow covers some of the reasons, but the really important issue he describes is that schemas are not neutral; so, everything becomes political. There's no win-win, to use that fabulous phrase from the 90s.

What we need to recognize is that as a platform for thinking together, simple inputting of text is not the end of the process, but only the start. The more we can automate our memory, the more freely we might think collectively. However, we could also fall back on that automation and stop thinking completely, and that's the biggest danger of all. Everyone will find links that "prove" what they are saying, but those links might be to Mein Kampf or the Protocols of the Elders of Zion and simply by linking to those horrid works people lend them the appearance of veracity.

I'd like to see a semantic Web evolve, but we're going to need to take a long time to get it right.

British market headed south, south,...

British market headed south, south, south

Eleven straight down days and a one-day loss of 3.4 percent has British investors asking the government, the Bank of England and regulators to intervene to stop the economic bleed-out. This is partly war and partly the decline in fortunes of large cap companies -- the FTSE reached a 50 percent decline from its all-time highs of 1999 during the day on Monday.

Did You Know: Israeli interest...

Did You Know: Israeli interest rates are 8.9 percent

Talk about an economy at the other end of the spectrum from the United States, Israel's inflation rate is expected to be 13 percent and its central bank has set short-term rates at 8.9 percent. Israel's economic isolation keeps local prices high while its heavy defense spending drives deficits and, by extension, the price of money.

FCC leaning toward line-sharing on...

FCC leaning toward line-sharing on existing networks

According to an FCC document, the commission is leaning toward continuing to require regional Bell operating companies to share their existing lines with competitors based on wholesale pricing. However, the FCC is going to remove the obligation for new networks, which seems to include local broadband connections that are already in place using copper networks.

The whole system is doomed as long as carriers think of themselves as owning the last mile, because they layer lots of "smart services" on what should be a stupid network that just carries data regardless of where it is going and what it is doing for the user. Listen to the Sage of Isen.com, who left AT&T after realizing that stupid networks are the future.

When they know about broadband,...

When they know about broadband, they want broadband

The Register reports: Broadband awareness soars. Eight out of 10 Britons who are Internet users are now familiar with broadband services and more than 30,000 a week are signing up for the services; Oftel, the British telecommunications regulator reports:

• 67% of all SMEs have Internet access;
  
• 61% SMEs with Internet access use unmetered packages (74% medium and 60% small);
  
• 86% satisfied with overall quality of service;
  
• 26% of SMEs with Internet now using ISDN, 13% use DSL/cable modem; and
  
• 42% of SMEs aware of SDSL;


• Switching from metered narrowband to unmetered is significantly more evident than switching away from unmetered – 33% switched to unmetered compared to 2% switching back to metered.

In the "Making everything digital"...

In the "Making everything digital" department

Marc points to this very cool development in home and studio digitization: Gibson to Embed Guitars with Ethernet [Slashdot] He also points out some troubling elements of the licensing, which suggest that after having encouraged adoption of Wi-Fi and Category 5 connectivity in musical instruments, Gibson may start charging for using these physical layers of the network.

"But what we didn't expect was that by solving all these problems for the music industry, we'd develop a technology that would revolutionize the way video, home automation and a host of other applications.  Audio is just the tip of the iceberg."

This is more than digital pickups and transport of audio signals.  Gibson is pitching this as a general purpose standard for audio, video and data.  They think Home Automation is a target market as well.  They claim they have 'plug-n-play', system config and setup, device control, data transport and have solved many issues of streaming hi-res video over ethernet (which means WiFi as well.)

"Our goal is to establish this standard in the markletplace and to allow smart and creative people - to run with it."

But wait - they say they're giving away a 10-year royalty free license. What happens after 10 years?

It's one thing to say Gibson will make a WiFi Les Paul.  But somebody should tell them they can't have an open standard for everyone to use - but put a 10 year limit on the license!  Here's the ver. 2.8 spec.  It says it's patent pending.  Oh boy.

As sophisticated as Gibson's technological solution is to bring time-locked transport of media to ethernet, it's a little naive to think that the entire world of multimedia is going to lock step to their patented standard.  I can think of at least 2 companys - Apple and Microsoft - which won't necessarily like that.

They didn't pay, but NextWave...

They didn't pay, but NextWave gets to keep its 3G licenses

Justices Rule Government Wrongly Seized Wireless Licenses. The Supreme Court ruled today that the government wrongly seized more than 200 lucrative wireless licenses from a bankrupt telecommunications company.

The problem is that NextWave never actually paid for the licenses and is now trying to build out of bankruptcy or sell the licenses for its own profit, rather than the government. Now, I'm a believer in open spectrum, so this is repugnant in two ways. First, it lets NextWave get away with bilking the public out of the value of the spectrum in the first place -- and government should be able to collect on its bills as easily as a car dealer would (and repossess its property if payment weren't forthcoming). Second, it shuts off spectrum from other uses that could easily have been reallocated to commons usage.

On and on the home...

On and on the home sales go

New York Times: Business reports that December existing-home sales up 5.2 percent. Sales of previously owned homes rose briskly in December, helping to make all of 2002 the best-ever year for sales as home buyers took advantage of the lowest mortgage rates in decades and opted to make a big-ticket financial commitment despite the lackluster economy.

I was talking to a realtor friend of mine over the weekend, who said low interest rates are keeping people buying and that December was one of her busiest months ever. January, which is normally a big month for new listings, has been slower than normal, probably because the number of people wanting to sell is declining. Instead, people are using historically low interest rates to acquire additional properties, and that should keep home prices rising.

The folks at Freddie Mac are feeling the love. The mortgage company's net was up 25 percent.

Knight Ridder Digital in the...

Knight Ridder Digital in the black

While dot-com disasters are history, the newspaper industry is turning a profit on the Internet. Knight Ridder Digital turned its first profit after five years - about how long most media companies take to go into the black. Other digital newspaper groups, like Dow Jones & Co's Wall Street Journal Online, are seeing strong revenue growth compared to other parts of the business.

Colvin doesn't blame Case

Colvin doesn't blame Case

Geoffrey Colvin of Fortune explains the main reason AOL Time Warner's stock is in the tank has little to do with Steve Case. It's because the deal was priced in the stratosphere in the first place due to the high value of AOL shares in 1999. I've said before, Case merely used the currency investors gave him to make AOL the largest media company in the world.

Martha's out $400 million

Martha's out $400 million

Martha Stewart says her company's stock is down enough that she is out $400 million, plus some legal fees. Unlike the people who are not able to recover their lost Imclone value, Martha still has a chance to pull her stock back up. I'd say we're still not even.

SMS and TV: The deepening...

SMS and TV: The deepening connection

Here's a good interview on the integration of short messaging services on mobile phones and television programming in the United Kingdom. An excerpt:

It’s easy to bolt on SMS applications to programmes, but they won’t always be successful. We try and ensure that any SMS activity is integrated directly into the programme itself – and not simply added as an afterthought because the show should be seen to be introducing interactivity.

Voting, as we’ve seen with Big Brother and Pop Stars etc are, of course, popular and successful, as they allow the user to interact with a programme in an easy way – whether at home or not. But apart from voting, few programmes use this technology effectively. We have introduced ‘text the studio’ applications to some of our live programmes such as Big Brother’s Little Brother and Channel 4 News, so that viewers can now text their comments into the show.

From a broadcaster’s perspective, the editorial integrity of the SMS interaction should come first – I’d like to see more programmes using news update services, and play-along interactivity.

The power to fire

The power to fire

One of my working roles is as editorial director of InnovationWorld, a research organization that covers the foreign direct investment plans of companies. One of the issues American companies always bring up is the difficulty of complying with foreign employment laws -- they'll avoid countries with restrictive rules on firing. In Germany, the government is considering allowing companies to fire people, but only as part of a comprehensive reorganization. That's progress, I suppose, but it won't win a lot of business, because American companies want more flexibility.

German Finance Minister Hans Eichel is also making efforts to convince companies that German taxes are not very high.

The figures, published by the Organization for Economic Cooperation and Development, rank Germany's tax ratio of 21.6 percent the lowest in the European Union. The tax ratio measures the percentage of gross domestic product the government collects in taxes.
This makes Germany's tax ratio lower even than that of the United States, which is 22.7 percent. At 17.2 percent, only the Japanese government takes a smaller bite of GDP to help pay for its spending.

Japanese business up in arms...

Japanese business up in arms over deflation

Echoing what I've been writing about the increasingly dire deflationary pressure on global prices, Japanese business is turning on Prime Minister Junichiro Koizumi, who they believe has ignored suggestions by the Japan Business Federation that a consumption tax is needed. The falling price of everything is a real issue, as counter-intuitive as it may sound, because salaries and spending are directly related how much revenue companies can bring for their products.

Japanese CD sales were down...

Japanese CD sales were down 12 percent in 2002

According to Asahi Shimbun, the Recording Industry Assoication of Japan said the domestic CD market was down by 12 percent in sales and 11 percent in units pressed (CDs made).

Sony Music Entertainment's recently released Label Gate Net copy protection technology is also discussed. It is interesting, because you can copy a song to hard disk once for free, but each subsequent copy costs 200 yen (about $1.70).

Digital cameras outship analog cameras

Digital cameras outship analog cameras

2002 shipments of digital cameras reached 24.55 million units, while plain old film cameras accounted for only 23.66 million units shipped, according to the Camera and Imaging Products Association.

Streaming baseball

Streaming baseball

An MBL.com executive recently told me that the league "made a killing" offering game streams overseas last year. Now Major League Baseball and Real Networks are going to offer full-game video during the 2003 season. Think about the range of options the baseball fan will have -- roughly 2,500 games are played during the season. This will be a very important experiment to watch to guage the potential for viewer-programmed networks.

Summing up the SQL Slammer...

Summing up the SQL Slammer event

As fast as it came on, the SQL Slammer worm has receded. It may rear its head again. It will certainly make people more aware of the holes in Microsoft server security (my mail and Web servers, thankfully, run Linux) and generally give the security business another bogey to point at. But, look, this is going to be the pattern for the future. Occasional angry bursts of malicious code will come, be cleansed and come again, usually in a new form. Is it a sign of the inherent weakness of our machine environment? Only to the extent that it was weak before and there is no security that is total, but this doesn't prove the Net is weak. The fact systems recovered within hours is something of a good sign.

Peter Kaminski explains SQL Slammer's elegance wonderfully:

 It's a thing of terrorbeauty, this Slammer/Sapphire/W32.SQLExp.Worm. Weighing in at 376 bytes of assembly language code, it is shorter than some email signature blocks. Shorter than the next paragraph.

It fits entirely within one UDP packet. The packet goes into a Microsoft SQL Server box, and boom, the machine turns into a zombie, spewing the same packet back out at random IP addresses, over and over and over and over, running in a tight 23-instruction loop, cycling fast enough to fill the network it's connected to with the tiny replicates of itself directed anywhere and everywhere on the net.

Here are some more links:

• cstone's annotated disassembly
  
• archived version of the Matrix graph
  
• the slashdot thread
  
• NGSSoftware advisory on the Microsoft SQL Server exploit, 2002-07-25

Pete
This message hereby placed in the public domain.

Palladium goes deep

Palladium goes deep

Dan Gillmor reports that Microsoft has changed the name of its Palladium secure-computing initiative to“next-generation secure computing base," a name that makes it even harder to talk about. The next-generation secure computing base, nee Palladium, is related to the protection of content and it needs to be talked about.

Would you like coffee with...

Would you like coffee with that degree?

Howard Schultz of Starbucks, is investing in a Minneapolis-based college, Capella University, that aims to deliver continuing education over the Internet.

Capella has been around for 10 years positioning itself for the acceptance of the Internet. Enrollment and revenues have increased 85 percent each year since 1998. In 2002, the company had $50 million in revenue.

Marc Canter shows the face...

Marc Canter shows the face of free media management

Marc has posted a run-down of the capabilities an open media management architecture, featuring a screen shot of what kind of interface such as system might provide. It's important to point out that what he has presented is just one way of looking into the architecture he's been talking about. You could do many, many different interfaces, bending the data through use of meta-tagging and open APIs to create a huge range of user experiences. The key modules Marc identifies as needing work are:

• Proxy systems that redirect clients to files stored anywhere on the network
  
• Blogging and journaling tool integration with media management systems
  
• Interfaces to a wide range of devices connected in real-time and disconnected devices.

AT&T Wireless and others ask...

AT&T Wireless and others ask FCC for number portability

So begins the migration from hard-wired voice services. AT&T Wireless and several other mobile companies are lobbying the Federal Communications Commission for mandatory number portability, something we should have had years ago. It would allow you to take your phone number with you when you left a particular carrier's network. Since our phone numbers are deeply associated with us, this is a critical moment in the telephone market, an opportunity for a breakout that will benefit both wired and wireless companies who offer alternative connectivity. That the wireless carriers, which experience very high churn rates are ready to accept number portability (which would ease switching carriers) is very significant.

Sony's two sides

Sony's two sides

Via BoingBoing, this Wired article that describes the civil war inside Sony, which has both a hardware/consumer electronics division and owns lots of content. The former wants to provide tools for capturing and messing with media while the latter wants to keep all its content inside a fortress. One is forced by the article's headline to imagine a lot of this as taking place in the setting of Kurosawa's Ran.

You can see the problems in device designs, such as the digital Walkman that forces you to do a check-in/check-out process when moving songs from a PC to a portable. Consumers are going to hate that, but the music licensing people feel it is absolutely necessary.

As a member of the Consumer Electronics Association, Sony joined the chorus of support for Napster against the legal onslaught from Sony and the other music giants seeking to shut it down. As a member of the RIAA, Sony railed against companies like Sony that manufacture CD burners. And it isn't just through trade associations that Sony is acting out its schizophrenia. Sony shipped a Celine Dion CD with a copy-protection mechanism that kept it from being played on Sony PCs. Sony even joined the music industry's suit against Launch Media, an Internet radio service that was part-owned by - you guessed it - Sony. Two other labels have since resolved their differences with Launch, but Sony Music continues the fight, even though Sony Electronics has been one of Launch's biggest advertisers and Launch is now part of Yahoo!, with which Sony has formed a major online partnership. It's as if hardware and entertainment have lashed two legs together and set off on a three-legged race, stumbling headlong into the future.

Based on what we're hearing about Sony CEO Nobuyuki Idei, I think the device side will win the day, but only through a long process of internal education and some very public consumer electronics experiments with digital rights management (DRM) that could fail spectacularly. Those experiments have not dissuaded Sony before.

News aggregators and you

News aggregators and you

J.D. has a great article on the role of news aggregators. Also interesting is his complete record of the interviews for the piece (there are two pages of notes), including my awkward contribution. Good read all round, because it shows how a "journalist" can expand on their source material to give an explorable view of the topic they are covering.

The fix is in

The fix is in

After touting a massive investment in electronic government services, President Bush is letting his cronies kill the funding in Congress. So much for supporting the IT industry, and so much for IT industry support of Bush 2004.

Look, really, Bush comes out in November and makes a big deal about increasing the e-government budget for 2003 to $45 million. The Republicans then gut the budget to just $5 million, without a peep from the White House.

Online Services: The future is...

Online Services: The future is skins

Following AOL's lead, Microsoft's MSN is looking at a content and services-based approach to its future. Let the user get their own bandwidth and offer an interface deeply integrated with Windows and .NET.

Everyone is going to need content. Every "portal" will want a programming line-up that attracts traffic.

File-sharing sites up by 300...

File-sharing sites up by 300 percent?

A firewall company that wants you to buy their software to stop inappropriate use of corporate networks says the number of file-sharing sites grew by 300 percent in 2002. Of course, that's a spurious statistic, because the number of sites is not directly related to the amount of traffic generated. Here are some other statistics of note from this article:

According to the Yankee Group, an estimated 5 billion music files were downloaded from peer-to-peer networks in 2002. That number was closely rivaled by 5 million downloads of video games.

On KaZaa alone, there are an estimated 3 million downloads of television show content each day.

Games as hate speech

Games as hate speech

There is something reprehensible about putting gay characters into a shoot-em-up video game. It is a form of hate speech. Does that mean the game should be banned? No, but most people should and will ignore the game. Parents should be made aware of the offensive nature of the game and jerks who play it and laugh about it will never get laid.

Henk Krol, editor of the Dutch gay paper Gay Krant, has asked for a game that features gay characters the player shoots for points, be banned. And the pig who made the game says: "It's definitely not anti-gay. You know what? It's a game - get over it."

Now, why doesn't the game maker introduce a character based on himself? Then we can all laugh, right? What a piece of shit this guy is.

Storage will grow, just like...

Storage will grow, just like our hard disks

One sector of the IT world I would consider investing in for the long term is storage management. EMC's results today indicate that the worst is over, as revenues were up 18 percent compared to the year-earlier quarter. The vast amount of information being collected and saved these days, as well as the plunging cost of storage itself, will drive demand for storage management systems for a long time to come.

EMC is trading at just 2.8 times sales and is down 94 percent from its highs. It will not get back to $120 any time that I can imagine, but it will certainly continue to perform well for investors who average into shares over the next few years.

Back the Senate's fight against...

Back the Senate's fight against TIA

The Senate voted unanimously to shut down the Total Information Awareness program headed by convicted felon John Poindexter. The program is a frightening domestic surveillance system.

Inserted into a spending bill, the moratorium has to get through the House, as well. Help the Senators backing the bill by sending mail or calling: Sen. Ron Wyden (D - Ore.), Sen. Dianne Feinstein (D - Calif.), Sen. Patrick Leahy (D - Vt.), and Sen. Russ Feingold (D - Wisc.), who has a separate bill that would shut down TIA.

Sen. Chuck Grassley (R - Iowa) has a non-solution to the problem in mind that would allow TIA for use in "domestic intelligence or law enforcement purposes." Even though Grassley is represented as a "frequent critic of government abuses of power" in this CNET article, his is the Bush compromise position. It does nothing to prevent abuses because it still allows the tools to be put in place. We need an absolute repudiation of the TIA, nothing less.

[1]

The studio system for software?

Dave Winer writes: Yesterday, talking with Bill Hambrecht, I asked how they do finance in the movie business, where they routinely raise tens, even hundreds of millions of dollars for highly speculative projects. I remarked that software can't raise that kind of money these days, really never has, yet the western economy is built on software more and more (that's why identity theft is such a pervasive problem). He said that the distribution system is where the money comes from. The movie theaters! Why? Because they need a flow of new products, or their industry dies. So what's the analogy in software? The big software companies. Microsoft. Adobe. Macromedia. Oracle. IBM. Apple. SAP. BEA. Network Associates. Of course. That's the system we all figured we'd be part of in the early 80s. That's the system we started to build. We lost our way somewhere. We've been getting the money from civil employee pension funds and university endowments, which have little stake in the success of our industry, and are highly risk averse. That's why the venture capital industry seems so crazy when technologists look at it. They're backed in a contradictory way. Everything was fine as long as they were delivering obscene returns like clockwork. Hit a glitch, the whole thing falls apart. More to think about. I'll blog it all.

Dave's onto something very important, but I think tying application development to the major platform vendors was a mistake, too. What we have to recognize about software is that the 1.0 release is like any movie. It will be a hit or a miss. If it's a miss, then you don't make the sequel. If we funded one release and it paid off, then you need to raise less to do the next release. Maybe nothing.

The problem with the Hollywood analogy comes when you start "funding growth," and you dilute the owners of the original release because managment and investors are convinced that even though V. 1.0 didn't earn a profit, it laid the foundation for a profit in a future release. But, most investors are not looking for a future share of profit. They want liquidity.

In the old days, before the Net crack pipe went round and round the room and the pension funds, etc. got hooked, investors were prepared to wait for liquidity or a profit. This doesn't depend the platform providers' money, only their support.

I'm looking forward to Dave's future thoughts on the topic.

When blue chips turn down,...

When blue chips turn down, so does the business press

We're in a consumer recession. The ad spending in the blue chip business press proves it. Dow Jones said it expects to see ad revenues down by as much as 12 percent in the first quarter of 2003 compared to the year before. That's bad, but look at the fourth quarter of 2002, results for which were announced today: Revenues fell by 54 percent.

There's a silver lining for the Web side of the business: Wall Street Journal Online subscriptions climbed by 8.5 percent.

Everyone wants Congress out of...

Everyone wants Congress out of copy protection

Me too, but we still need a public dialog on the rights of consumers and today's news doesn't sound like the path to that debate.

A whole slew of technology companies and several "consumer advocacy groups" announced the Alliance for Digital Progress, an organization that will lobby against government-mandated copy-protection regime. I must point out that one of the consumer advocacy groups, digitalconsumer.org, does not reveal much about its funding, so I am not convinced it's really a consumer group even if it does advocate many of the right ideas.

It's very easy to sound right on this issue, but the Alliance for Digital Progress sounds like a very convenient group that has not taken a stand against related copy-idiocy, like the broadcast flag that will shut off copying functions in digital devices.

ADP, which launched a Web site at alliancefordigitalprogress.org Thursday, doesn't have a position on the digital broadcast flag being considered by the U.S. Federal Communications Commission, because the anti-copying code for television signals sprang from private-industry discussions between the television industry and TV makers, McClure said. ADP has no plans to lobby for or against legislation related to the Digital Millennium Copyright Act, McClure said. "We are not about the scope of copyright law," he said.

McClure declined to disclose a budget for ADP, which members have talked about forming since the fall of 2002, but he said the group continues to recruit more members and will be active on Capitol Hill.

Optics companies shrinking before our...

Optics companies shrinking before our eyes

JDS Uniphase and Nortel both decreased their loses through rampant cost-cutting. But both saw yet another quarter of falling revenue. We're still 36 months, at least, from any kind of recovery in the optical equipment market.

Just look at AT&T's shrinking revenues in its Business Group, which were down 4.1 percent. This is a big would-be optical customer and it's just one of the many carriers still searching for ways to increase data revenues. AT&T and Worldcom, to name just a few carriers feeling chagrined by their over-building of optical capacity, are going to see bandwidth costs fall another 90 percent in the next 18 months.

Open Classifieds

Open Classifieds

Via Marc's Voice and Adam Curry: rss classifieds. Rusty Coats: "Most of the RSS community is focused on content. That's great; so was the early Web. But feeding classified ads to aggregators is the next obvious step, and will prove to be hugely profitable for newspapers -- or whoever decides to do it first."

Marc adds: This is a real - rubber hits the road - pragmatic usage of RSS. Certainly a candidate for another 'micro-content' type.

As a former board member at Electric Classifieds, I agree this is a huge market for RSS. The problem with every proprietary implementation of classifieds technology has been the design intent's focus on maintaining a destination for the classified listing. Slowly but surely the market has moved toward nationally or internationally searchable classifieds across multiple sites.

Dan Gillmor has this to add: "RSS is a key part of the developing conversation we're all having. May it spread, farther and wider, faster."

More SEC cop-outs

More SEC cop-outs

The Securities and Exchange Commission passed a watered-down rule that lets attorneys who find client companies have broken the law do nothing. The original proposal, the one the SEC and President Bush talked about, would have required the attorney to alert the SEC, just as a lawyer who found out their client was guilty is supposed to recuse themselves from the case if the defendant continues to lie.

We'll see if the SEC does a meaningful job with the report on credit reporting agencies to Congress on Friday. It would be good to see more competition among the credit reporting agencies -- this information should be totally open and transparent.

The SEC did vote to increase reporting responsibilities by mutual funds, which exercise huge influence through their proxy votes and have not been required to reveal how conflicts of interest affect proxy decisions.

Investors need better than one-out-of-three from the SEC.

The end of Office?

The end of Office?

CNET has an interesting piece about the city of Houston's move from Microsoft Office to a Web-based software suite. The software comes from a local developer, which may be just somebody's idea of doing a friend a favor, but it does cost Microsoft a 13,000-seat customer. But this is emblematic of a trend I see, one I am participating in even as I write this.

Using Web-based content managment and productivity applications seems to be becoming a real alternative to Microsoft Office. I know people who don't use any Office apps, and they just sort of realized that after a while; it wasn't a conscious decision.

ZapThink, a market research firm, says these kinds of services will grow to an $11.6 billion market by 2008.

Granted, today, I still use Word for writing business documents, but I could take that online easily. A simple spreadsheet application would replace the other major Office functionality that I need every day. This is a trend to watch.

Amazon profits

Amazon profits

Ah, retail. Amazon racked up 28 percent in increased sales last quarter, pulling in $1.43 billion over the holiday season, but made only $3 million in profit. That, folks, is a 0.2 percent profit margin. It still lost $149 million on the year.

Amazon has succeeded. It will live on and it will thrive. Unfortunately, it will likely be thriving in a deflationary market where constant price pressure will keep margins pitiably low. It's stock value isn't going to change for the better for the foreseeable future. Of course, there was a time when Wal-Mart was just breaking even, too. If I were interested in the stock, I'd let my interest continue while watching Amazon and other retailer stocks drift lower in 2003.

A long day of phone...

A long day of phone calls

Usually, I can blog while on calls, but not today. Been watching the links pile up. Having recently started using Vonage, I've got this new phone that when you use it hands-free makes typing virtually impossible, because it picks up every noise and adds a tinny quality to the tapping. It's the phone and not Vonage that does this, but I haven't figured out how to cancel the noise on this new phone. As a result, talking to me while I am blogging is like calling a silversmith's shoppe: tink tink tink....

I just felt the need to share that.

The Age of Connection

The Age of Connection

David Weinberger has an important essay at Greater Democracy on the meaning of connections, the What that flows over the things people keep focusing on.

Until now, our connectedness has depended on centralized control points that have been the gatekeepers of our economic and political networks. To speak to everyone, you had to be one of the few with access to a broadcast networks. To sell to everyone, you had to be one of the few with access to a global distribution channel. To achieve office, you had to be one of the few with access to corporate coffers and national media....

We are not in the Information Age. We are not in the Age of the Internet. We are in the Age of Connection. To achieve the ideals this country was built on — equality, freedom of speech and thought, the basic fairness that let’s people determine their own destinies — we need everyone connected to everyone else.

I've been thinking a lot about this lately, too. Reread Democracy in America over the last week and it seems to me that, with the Bush Administration taking so many clumsily totalitarian steps toward the destruction of its political party, and with the Democrats in almost total disarray and cowering despite Bush's immense gaffes on the international and domestic fronts, it is time for just one thing: people must elect themselves to make a change.

It is a horrible prospect that the U.S., an immensely connected country, might become submerged by the limits on connections being imposed by the government (granting greater media consolidation a clear field for the final push toward One Big Voice; a spectrum as private property approach to wireless; Total Information Awareness; closing our borders and driving out students from overseas, etc., etc.).

Individuals need to rise up and sieze the power they have always had and been urged to forget. Beyond voting, we need to organize and actively debate everything, from the sidewalks in our home towns to the bills before Congress and the ad hoc rulings from the executive branch. We need a parallel government that forces the attention of politicians back to the people and away from the monied interests.

Why would this work? Because politicians go where the power is and money is merely a proxy for power and time (because you can buy people's time or their attention through broadcast media). An active populace, a Jacksonian revival, with a thousand Lincolns spinning homely leadership, and a thousand Dr. Kings igniting our indignation toward arbitrary exercises of power by something called "the majority" would erase the proxy power of lobbyists and career representatives of big contributors and drive the return of an American dialog.

We should use the connections to establish parallel governments at every level, until the governments adopt the dialog by default, which they will do, because American government is still by people and for people at its roots. There are good people in government, and a lot of snails and weasels, too. Give the dedicated civil servant and the earnest legislator a constituency and they can change things in weeks, even days. Decisions can and will be made based on the will of the people through informed and open debate.

In one of those coincidences, David Weinberger and I were exchanging email yesterday about the future of network communications. In it, David expressed real fear and lamented that we haven't seen our Dr. King, that we need one desperately.

In fact, we need 10,000 Martin Luther Kings, 10,000 Andrew Jacksons, 10,000 Abraham Lincolns, 10,000 Teddy Roosevelts, 10,000 H.L. Menckens, 10,000 Ida Tarbells, 10,000 Bobby Kennedys, 10,000 Thomas Jeffersons, 10,000 Ben Franklins, 10,000 Walt Whitmans, 10,000 Edward R. Murrows. And they should all be arguing with one another and with the "mainstream" thought leaders vociferously. We need what Tocqueville called "birthpangs in progress" to keep the nation astir in order to create as many new movements and collaborations and opportunities as possible.

With connections, we have the power to be the great country we are, but only if we break out of the bonds of waiting for information, waiting for an opportunity to talk, waiting for an opportunity to start a business, waiting for the next election to deal with our frustrations about what the government is doing and, then, only in the abstract. The United States was born in action and we need to return to that heritage NOW.

Because, the fact is, folks, we--Americans--have produced all of the preceding leaders before, despite the strictures on communications. We can do it today. If anything, the rise in self-employment and entrepreneurialism over the past decade has proven that this is practical in economic matters and can, with commitment, spread to the political dimensions of our life, as well.

We are Dr. King. We are George Washington. We can be anything we want as a nation and as a part of the world. If only we would take the reins, and they are hanging there now, untouched, because the Adminstration and political parties have decided to rely on Big media, markets and messages that treat us all as faceless and useless non-participants if we aren't waving hundred dollar bills when the rulers pass by.

Goodbye, Hilary

Goodbye, Hilary

Blaming a desire to spend time with her family, the RIAA's Hillary Rosen stepped down. There are rumors she felt the organization was too unbending, but her actions were consistently unyielding and aggressive. Good riddance. Bet she ends up lobbying for cigarette companies or something equally noble.

FCC media ownership changes have...

FCC media ownership changes have attracted 2,000 comments

One of the commissioners attending the Columbia University forum on the proposed elimination of media ownership limits by the FCC said "that although media concentration has increased, diversity also has increased, pointing to the rise of cable penetration and the number of channels and choices now available to the average viewer."

A CBS executive reportedly said some regulation was necessary because "free TV" might go away -- not the most compelling argument I've heard.

Newspapers head toward online registration

Newspapers head toward online registration

Gathering information about readers is a profitable way to run a newspaper site. It can lower traffic, but it generated revenue for the sites described by Editor and Publisher. In a second piece, they describe the move by 21 newspaper sites to paid-only access.

Another good editorial on why...

Another good editorial on why media ownership limits are necessary

USA Today writes that media consolidation eliminates local perspective in reporting. The result may be cheaper media delivery, but no damn good for the community.

The Way things Are Going

The Way things Are Going

Gallup reports growing dissatisfaction with the economy, healthcare costs (which compounds the economic anxiety) and immigration.

There's a lot more interesting stuff in this report, which the Gallup Organization does each January before the State of the Union address.

MeshBox: Another Linux media hub

MeshBox: Another Linux media hub

Sony's Cocoon Linux-based media hub has been getting attention. Here's another intereesting approach, the MeshBox, a black box with wireless, Ethernet, USB and media interfaces built on a 32MB system image that fits on a cheap CompactFlash card. The spec includes:

• Opera 6.03 -- free to use (ad sponsored browser) (may replace with mozilla etc)
  
• Xmms -- advanced mp3 player / shoutcast streamer
  
• Everybuddy -- instant messenger applications (AIM/MSN/Yahoo/ICQ/IRC)
  
• DonkeyML -- p2p file sharing - edonkey and soulseek p2p networks
  
• Vncviewer -- remote desktop control application
  
• Rdesktop -- windows terminal server client
  
• MpegTV -- free to try mpeg video viewer (may replace with xanim etc)
  
• Netstrength -- graphical wireless monitor
  
• Bubblemon -- comical system load meter
  
• Squid -- advanced web caching system
  
• Boa -- Tiny high speed webserver
  
• OpenSSH -- Encrypted secure shell login server
  
• Dhcpd -- ISC dynamic host control protocol server
  
• Aewm++ -- Window manager
  
• Vtund -- Virtual Private Network server
  
• OpenSSL -- complete cryptography package
  
• Linux -- Linux kernel vers. 2.4.18+
  
• Xwindows -- Graphical networked windowing environment
  
• PCMCIA -- Card services support, PCMCIA + Compact Flash
  
• Truetype -- Truetype vector fonts for large scale text
  
• Wifi -- Support for many devices, prism2, orinoco, PCI, PLX, PCMCIA, USB etc.
  
• CaptivePortal -- wireless users are authenticated before they can gain access.
  
• RemoteManagement -- Complete setup/upgrade/package manager via remote website

That last item is interesting and important, as the motive for many carriers to drive real broadband into the home is the potential for in-home network management revenues.

Because RatcliffeBlog is cooler than...

Because RatcliffeBlog is cooler than the Super Bowl

Ozzy Osbourne's Pepsi commercial, which is hilarious. Now waiting for Super Bowl Sunday.

Inherent conflict

Inherent conflict

Irwin Jacobs, CEO of Qualcomm, called for a change in U.S. licensing of spectrum. He says: “We need to carefully examine whether we are unreasonably restricting the use of different frequency bands.”

The thing is, Qualcomm would like to have spectrum allocated for the exclusive use. Seems like paying for the exclusive use of the spectrum is a fair gateway to entry, since no one else would get to use it. If Jacobs et al. would like the U.S. to drop licensing fees, let them call for Open Spectrum.

By the way, Qualcomm's net profit jumped 73 percent in the last quarter on a 57 percent increase in revenue.

Progress and patience in Digital...

Progress and patience in Digital ID

Andre Durand has a new article on the three phases of progress in digital identity. He argues that there are "at least two intermediate phases which MUST take place before the world is prepared in all respects to absorb and indeed 'enable' the true utility of a T1 [sovereign] identity." I'm skeptical of these kinds of statements that certain events must happen in a particular order for history to turn out all right, but Andre is right that we are in the midst of an evolutionary process.

Andre's map:

His first phase involves the linking of disperate enterprise systems through Lightweight Directory Access Protocol (LDAP) and other database/directory infrastructure.  Doc makes an important point, that we have to be careful to separate the identity management systems from the systems that describe our relationships. The whole question of identifying oneself within an enterprise is being settled now and systems are selling.

Andre writes: The reason Phase I is so important is not that it allows corporations to maintain some semblance of security while dealing with the inevitability of their disappearing firewall, but rather that in the process of federating their identity systems, companies will define the common language (protocol) of identity interchange. This language MUST be developed, installed and understood by all enterprise applications PRIOR to the T1 identity having any real world utility.

I've written before that I think the definition of the individual's identity without that definition becoming the property of a corporation. In fact, it's critical that we break that cycle of ownership of personal information by larger entities if we're going to change anything, anything at all. Andre underscores this, saying "customer databases have been, and will continue to be, viewed as both sacred and highly protected information assets." But those are no individual assets.

Unfortunately, Andre assumes Phase II starts only when we recognize companies have this information about us and we start demanding more legal rights. As a veteran of the Computers, Freedom and Privacy Conference (I was on the steering committee of two of these events in the early 1990s), I think we're already well past that point. Consumers have been demanding more rights for years. So we're already at a point where the true sovereign identity can and will emerge given a sufficiently compelling value proposition that can catalyze the infrastructure for personally-owned and controlled identity.

I think that if we don't recognize that this evolution in identity is far beyond the engineering questions relating to the effiiciency of identity management systems, we'll find that the dialog Andre expects will happen -- which is already happening -- is closed before the design demands are acknowledged.

The evidence that this is a pressing issue can be found in the article by Phil Becker that suggests business has a right to "fair use" of individual identity: "If a company honestly wishes to provide superior customer service, and provide the products its customers really want, it must learn about those customers as to their wants and needs."

Now, think about this. "Fair use" is on the outs with regard to individuals' right to use corporate-created content, but business has a right to fair use of our identity? It feels like getting screwed by the same bunch all over again. Let's not make the mistake of thinking we're only at the beginning -- we're at least 400 years into the evolution of identity, what it means to be a free person in a capitalist society.

The rise of public web...

The rise of public web services

Jeremy Allaire comments on the predominantly individually generated content in the RSS world, the evolution of programmatic services being "syndicated" on the Web.

This continues the evolving thread about the openness and interdependencies of the media management environment. I've been spec'ing an audio product and it is always a challenge to balance the grassroots qualities of what we call "blogging" with the "enterprise" (in quotes because I'm trying to emphasize not big media, rather the need for support and integration capabilities) in an application/business model that can serve niche and broad market content creators.

Brand USA?

Brand USA?

I wish the branding religionists would recognize that a nation is not a brand. A brand is an ephemeral thing, while a country is a real entity, albeit that has some qualities that people experience in ways similar to a brand, but is going through something much deeper than can be remedied by a "repositioning." America itself is in a crisis about its own identity, what it will be within the world, yet here are the lights of the fashion and public relation discussing Brand USA. Idiocy.

Get real, people. Recognize that what is happening to the United States today will be resolved only by the massive engagement of the people in deciding their future.

Here's a tribute to U2's Bono for spurring this idiocy.

Or, it could just piss...

Or, it could just piss off your audience and make them leave, never to return

MediaPost writes: Usage of full page, video enhanced ads could improve pop-up performance. It might even help wean advertisers away from using pop-ups and pop-unders -- two formats that have gone the way of the banner when it comes to consumer resentment.

I'd say that full-page ads will earn consumer resentment, regardless of the technology. The article cites GartnerG2 reports that suggest Clipstream/CommFlash ads (full-screen TV-like ads) are less likely to offend users viewers than pop-ups, pop-unders and banners. Well, haven't these people heard of the Hawthorne Effect? Changing the nature of a message creates a sense of novelty, but that novelty wears off fast if the ad always gets in the way of the information/entertainment people are looking for.

If the advertising industry's approach is to simply find the next technology with which to piss us off, they'll destroy the medium. The ads and the notion of marketing through interactive media themselves have to change, not just the technology.

Open Spectrum ISPs on the...

Open Spectrum ISPs on the fast track

In-Stat looks at the wireless ISP market, which has flourished in unlicensed spectrum. It estimates that there are currently between 1,500 and 1,800 WISPs worldwide with revenues of $265.2 million for 2002. Interesting projection: After a couple years growth, revenues fall off because users become their own ISP.

Federal Reserve on the distribution...

Federal Reserve on the distribution of wealth

Under the less excitable phrase "consumer finances" the Federal Reserve released a study today describing the changing patterns of wealth in the United States. It's in this PDF.

A few things of note:

First, I've been saying that the digital cottage, where one is self-employed and able to offer knowledge services is the future of the American econony. Consider that the Fed found college-educated heads of households and self-employed workers have the highest median and mean incomes of all work-status groups. A well-educated population connected by robust networks is virtually the only way to drive the economy. As knowledge services become globalized, we have the chance to stay at the top of the value pyramid, but it requires investment in open connectivity and education.

The wealthy, who are supposedly needing more incentives to invest, got a lot richer compared to the rest of us:

Net worth increased for all income groups, but particularly so for the top decile of the income distri-bution, in which the median rose 69.3 percent and the mean rose 34.1 percent. Over the 1992–2001 period, median and mean wealth rose the most for the top quintile; the increase in the mean in the top decile was especially large—90.1 percent.

One in seven Europeans downloading...

One in seven Europeans downloading music

Forrester Research says the record industry could be right:

According to the report, one in seven Europeans downloads music. Around one-third of the internet population, or 13 per cent of all Europeans, uses the internet to download music, and 38 per cent of these users download more than seven tracks per month. These frequent downloaders are much younger than the rest of the online population -- about half are less than 24 years old.

Frequent downloaders burn CDs. What do downloaders do with the music? Most of them listen to it while working at their PC; only seven per cent upload files to an MP3 player. Of frequent downloaders, 63 per cent burn CDs – and, downloading an average of 12.6 tracks monthly, they can fill one per month.

Salon's new model

Salon's new model

This has been going around as a rumor in the Web content community: Salon will require users to buy a subscription or provide extensive private information and view several screens of advertising before they can read articles. Great site, but that'll be an ugly front door. Folks, pony up for subs ASAP.

Media ownership hearing in Los...

Media ownership hearing in Los Angeles, Feb. 18

The University of Southern California will be one of the venues of a public meeting about the Federal Communications Commission's proposed abolition on media ownership limits. Show up in force, Southern California.

These events are free and open to the public. To RSVP, please e-mail ascevent@usc.edu with 'RSVP:FCC_Forum' in the subject line, or call (213) 740-5658. Secure parking is available on campus for $6. For parking information and directions visit http://www.usc.edu/info/maps/

[1]

Public satisfaction at six-year low

Public satisfaction at six-year low

Americans are feeling worse about their world than any time since 1996, the Gallup Organization reports.

With all that cash, why...

With all that cash, why not buy Placeware?

Mary Jo Foley sums up why Microsoft bought Placeware today. They needed something to put under a newly minted senior manager.

Placeware lays the foundation for a service fee for connectivity built into Office. Maybe that makes sense. I'd bet on VoIP combined with tools for open source tools for collaboration.

Dubai a hotbed of online...

Dubai a hotbed of online gaming

You have to scroll down to find it, but the Khaleej Times reports that 64 teams will compete in an intense 13-day Counter-Strike tournament. And this is some sort of spectator sport. Gawd, there must not be much to do in Dubai at this time of year.

"The absence of a real online gaming event has affected the development of the gaming industry here. With the Samsung Cyber Challenge Dubai 2003, we will set a new benchmark for the gaming industry, paving the way for future competitions, as well as expanding the online gaming community in the region."

Venture investment down in Israel,...

Venture investment down in Israel, too

Not that this is surprising, but venture investing in Israel was down 39 percent in 2002. Total: $982 million.

Broadband Taxis?

Broadband Taxis?

Says here that taxis in New York are adding wireless services. Check out Interactive Taxi, a group of guys with a dream....

Housing -- I don't get...

Housing -- I don't get the growth

Homes in my area aren't selling really well, and it isn't a shabby neighborhood. But with housing starts and applications climbing, the magic seems to go on. CBS Marketwatch says we should banish the "bubble" word from future reporting on housing.

Data in the car

Data in the car

From WiFi News: PC World says Linksys and Zandiant Technologies want to put 802.11 wireless into the dashboard of your car. I've been predicting this for a long while now. Good to see it coming -- tie into the Kenwood Music Keg, for starters. I like the idea of a "digital briefcase" in terms of its utility, but it seems somewhat redundant to the PDA, the laptop, the other digital stuff you'll have with you. The real point is wireless connects everything everywhere.

Already watered down: SEC backing...

Already watered down: SEC backing off tough rules

The hedging begins. Investors are not safe with the Securities & Exchange Commission current leadership, who have already begun to remove the teeth from new regulations that were much-needed to restore confidence in the numbers companies deliver each quarter. Both the lawyer and accountant conflict-of-interest regulations are being gutted:

The accounting rules, which will be decided on Wednesday, would permit companies to allow auditors to provide advice on issues like tax shelters, even though the same accounting firm could find itself auditing the shelters it helped create. It would leave it up to audit committees of the companies to decide what nonaudit services their accountants could perform.

So, I'm guilty, too, I...

So, I'm guilty, too, I guess. We all are.

File-sharing is society's fault. For gawd sake, we have to shut down all file-sharing applications, not just Kazaa, but also Windows filesharing, Rendezvous, FTP, all of it. We've been too open with our hard drives, so bawdy about our bits, that it's time the RIAA and the U.S. Court of Appeals for Washington, D.C., should teach us a nasty lesson. We've been so bad, so very bad.

Just how are they going to convict someone of sharing files when that has been the goal of networking technology since the first day? How will they argue that using a specific application is illegal if that application has nothing specific to do with copying files from their source (Kazaa doesn't rip MP3s, other apps do that -- so, will we outlaw those, too?)? Where do we stop? How about we just turn our computers and routers in to the government for a refund?

W3C working on a synchronized...

W3C working on a synchronized streaming standard

SMIL notwithstanding, the World Wide Web Consortium has launched a Timed Text Working Group that will develop a standard for synchronizing text and media streamed over the Net. We can certainly use a standard, since synchronizing content with audio and video can address a variety of markets, including presentations, enhanced news and entertainment programming (providing links for futher exploration of a topic in other media) and for both the blind/visually impaired and dyslexic communities, where synchronized audio-to-text is a key to learning to read. It's one of those efforts that sounds trivial but can have large impacts on markets and individual lives.

Fire Nancy Victory

Fire Nancy Victory

Assistant Commerce Secretary Nancy Victory had wireless lobbyists "pay for a private reception at her home and 10 days later urged a policy change that benefited their industry" the New York Times reports.

We've had enough cronyism from the Bush Administration to fill a decade. Fire this woman, who has the nerve to say it is "'ridiculous' to draw a connection between the party and her letter 10 days later to the Federal Communications Commission urging an immediate end to a decade-old restriction on how much of a region's wireless spectrum a company could control."

Managed home networks

Managed home networks

Thinking that the shortfall in last-mile revenues can be made up inside the home, ISPs are looking to provide home network management services, according to In-STAT:

With service providers waking up to the importance of the home network, the number of service provider managed home networks will grow from just over one hundred thousand in 2002 to over 6 million by the end of 2006, according to In-Stat/MDR. The high-tech market research firm reports that, while this will only account for less than 10% of total home networks, the ability to extend the reach of the service provider beyond the traditional demarcation point into, and around the home, will mean more potential for revenue generating service opportunities, as the number of devices connected to each other and to the broadband network multiplies through the home network.

This may explain the flashes...

This may explain the flashes of light

I live near Fort Lewis in Washington State, right across the freeway and a half mile further from the main gate. For the past couple months, the night sky has been illuminated suddenly and brilliantly by flashes of light, usually between the hours of 2 AM and 4 AM. These are flashes so bright that you can see them inside the house with the lights on. I've been speculating that the army is experimenting with EMP weapons, which don't discharge light, and using the brilliant flashes to alert soldiers nearby. We're probably 12 to 20 miles from where the war games go on -- you can hear the guns and artillery all the time.

Time magazine reports that the US Army has a "high-power microwave bomb" that is is preparing to use to disable electronics in Iraq. 10-to-1, that's what we're seeing out the window at night. I hoped they're turning down the power around here, rather than cooking us slowly. History doesn't give me much hope: When my wife was in high school, a science class took a field trip to the Hanford Reservation in Eastern Washington, where the military was making plutonium. Every kid on the trip died in the years following from bizarre illnesses.

Read it an weap, Hillary

Read it an weap, Hillary

Doc points to this passage about a dinner after the recent CES keynote by Sony's Kunitake Ando, reported by Steven Levy:

After the keynote, Ando unwound at a dinner for a few journalists, where talk turned to the knotty problem of digital rights. He startled everyone by speculating that in the long term, given the nature of Internet copying, record labels may not have a future. “When you have a problem like this,” he says, sighing, “I really wish we were a simple hardware company.”

Sony, of course, owns a record label and a movie studio. By embedding media management in devices, they can retain distribution control of their content to a limited degree, but even their top executives are facing the future with eyes wide open, which makes me even more confident about my recent speculation, as well as Marc's, that Sony, and not Microsoft, may be the new digital behemoth.

Did you know the Chinese...

Did you know the Chinese banking system is insolvent?

Now you do [via Asia Business Intelligence]. The Chinese government is preparing a $40 billion cash injection to bail out the three biggest banks in the country -- this after a similar deal in 1999 to wipe approximately $800 billion in bad loans of banks' books. Yet, by the end of 2001, the same banks again piled had more than $1 trillion in bad loans.

It's interesting to see how both outsiders and the Chinese themselves are completely convinced that this economy is bound to grow, when in fact it is simply burning massive amounts of capital. Chinese cheap labor, which is a profound deflationary pressure on every other economy around the world, will not prop up this monstrosity forever.

Freeview: More evidence of flat-rate...

Freeview: More evidence of flat-rate video devices

Freeview, a set-top box that allows buyers to get 30 channels of digital television for a one-time payment of £99 (about $180) has swept to success with more than 300,000 units sold in two-and-a-half months. The company has received two million requests for information and 700,000 phone calls from consumers.

TiVo, Replay, and anyone else looking at monthly fee-based business models need to take note of this. Hardware is something people see as a bounded purchase, unless it is deeply discounted to attract customers to on-going services (the cell phone model). Software services providers, too, should consider one-time pricing for their products or, at least, one- or two-year upgrade and service/support agreements rather than adding another monthly charge to the customer's credit card.

In the land of double...

In the land of double jeopardy

Norwegians have a word for "innocent": "stillguilty." "DVD-Jon" Lech Johansen will stand trial a second time for breaking the encryption on a DVD after being acquited the first time.

Corbis and Motorola launch MMS...

Corbis and Motorola launch MMS stock media

Call this one a loser, I think. In email this AM (it's not up on either company's site), I find a Motorola press release that says:

Corbis (www.corbis.com), one of the world's leading providers of
digital images worldwide, and Motorola Inc. (NYSE:MOT), a leading
provider of end-to-end multimedia messaging solutions, today
announced the creation of a new multimedia messaging service (MMS)
that gives wireless network operators the ability to extend their
existing offering to include media products ranging from still
digital imagery to motion video content.

This partnership is also significant because it further expands
the wireless channel as an important market for digital images
worldwide.

This one-stop service combines compelling photographic and fine
art images from the diverse Corbis collection with Motorola's MMS
VAS (Value Added Services) Media Solution to offer enhanced
picture messaging for mobile and Internet environments. This
combination gives operators a complete MMS package enabling them
to easily deploy a wide range of media across new MMS-enabled
handsets, legacy handsets or PCs. Operators can immediately equip
their existing MMS systems with the Motorola Media Solution
featuring Corbis content via an ASP, MSP or Server Software
license agreement via Motorola's Mobile Services Cafe -- a suite
of solutions designed to help operators quickly commercialize and
brand a variety of wireless data services.

"Multimedia Messaging Services are key to driving mobile data
uptake, and downloadable content is an important element that will
provide network operators with a unique way to differentiate their
services while creating additional revenue streams," said Mike
Bordelon, corporate vice president and general manager, Motorola
Personal Communications Sector. "Teaming with Corbis lets us offer
our customers vibrant content that adds value for the consumer
while increasing average revenue per user."

End users benefit from being able to create highly personalized
multi-media messages by accessing, downloading, and customizing
high quality photos, graphics, fine art, and illustrations either
via their phone or the web using robust enhancement and media
management tools. The resulting personalized content can then be
saved as screen savers and wallpapers, or shared instantly with
friends, family members and colleagues around the world via any
graphics-capable Internet-ready device.

I've actually purchased a number of Corbis prints over the years, and I like their archives as much as anyone. But the idea that I'm going to spruce up my mobile phone messages with Corbis art? Would I like the prints I have of Mark Twain, Will Rogers and Ghandi on my phone as wallpaper? Their beauty is in the detail, the photrographic antitquity of the images, and I can suppose some folks might want to decorate their phone LCD screens, but it feels like a loser to me.

Now, if it was personally important images that I could add to my phone, as I have with the desktop of my laptop where my kids smile out at me, that's personalization most people will want.

Why times will be good...

Why times will be good in research again

Forrester bought Giga Information Group today for $51.3 million in cash. Not stock. Cash. Why do that when Forrester, which said it "hadn't done an exhaustive analysis" but believes half of Giga's clients are also Forrester clients, spent about a quarter of its cash on hand to drive consolidation? Well, first there is the savings from cutting overhead while serving the same client base, but then there is the simple issue that the core research business of neither company is growing and if you want to incresase revenues the only thing to do is buy your main competitor.

Now, why does that mean times will be good again in research? First, the more monolithic the big firms are, the less likely they are to develop real insight in new sectors. Second, and more importantly, clients know that they need more than one view (this is why there is so much overlap in client base between Forrester and Giga alreay), so there is a widening void for providers of a second or third opinion.

...and in the Worst Headline...

...and in the Worst Headline Category

Lucent Rallies in Nuremburg.  Now popped Net-blister Lucent meets Nazi reference. Need I say more?

Government's role in digital ID

Government's role in digital ID

Phil Windley, former CIO for the state of Utah, says government has an important role to play in the creation and management of identity. I agree that government has abdicated its role in the digital world and believe it can play an meaningful part in making digital ID widespread.

But...a governmental digital ID system should not take over the individual's identity, because the states have proved untrustworthy with our data. For example, they sell it to companies when they need revenue. It would be great if government set up a corporation, like Fannie Mae, for digital identity management. That corporation should be controlled and governed by its customers, the ID holders. It should protect identity-related data (reputation and history) for the benefit of the identity holder. It could pay for itself simply by facilitating a statewide or national identity that was linked to public functions, such as the driver's license, real estate ownership, taxes and so forth -- it could provide these functions within government for a modest fee that would wipe out massive non-digital costs associated with managing multiple versions of a single citizen's identity.

The state should not, however, be granted control of our identities. Just as the Constitution limits the powers of government to those explicitly granted in the document, identity ownership should reside always with the individual and never with the state. If one would like to withdraw their identity from all non-public systems so that it could not be used for any purpose other than verifying that one has a driver's license, that right should remain entirely in the domain of the individual.

It's a great article. Read. Think.

Red Herring fried, offers Always...

Red Herring fried, offers Always On

What the article doesn't say is that Red Herring is shutting down. Always On, a new blog-like site will be membership based and supposedly will feature articles (postings) by famous IT execs. Note that the site is owned by an eponymous LLC and not the Herring.

Everything that is wrong with...

Everything that is wrong with radio

This Washington Post story tells, again, why radio is broken and suggests why XM Satellite is a viable alternative.

I'd only say that the all-filtered programming of XM, which is national in orientation, is just as narrow as any radio station. Sure, there are a 100 channels, but as the writer points out at the end of the story, you'll be flipping around to get what you really want. In fact, what we need is personalized audio in the car (or wherever), that blends information and entertainment based on what you are doing (such as commuting or exercising) or the time of day.

Safire on the hidden threat...

Safire on the hidden threat of media consolidation

William Safire has an excellent piece on media giantism and the cost to the public dialog. Seeing one of Nixon's speechwriters say this shows how far we've come.

Meta-riffs on managerial capitalism

Meta-riffs on managerial capitalism

Frank Patrick takes Britt Blaser's recent excellent rant on managerial capitalism to thoughtful new levels (I've been on deadline, so have not had a chance to address Britt's piece):

And, as I've written about recently, the path to getting out of these conflicts and on to coordinated effort is through a strategy of alignment around dealing with constraints through a holistic, "whole-system" view of "the conversation."

Rorty riff at JOHO

Rorty riff at JOHO

David Weinberger cites one of my favorite philiosophers, Richard Rorty, who nicely deconstructs the argument that everything is new at the forefront of history. In fact, everything is old and only newly considered.

This is an important point of humility that "visionaries" and "revolutionaries" conveniently forget, leaving the rest of us to pick up the pieces. Pragmatic thinking about the whole of history, instead of just the recent changes, places society, individual life, business, investments, all of it, on a much firmer foundation.

Goodbye CNET Radio

Goodbye CNET Radio

The end of January is the end of CNET Radio as the company shifts to a paid service, CNET Radio Direct, a twice-a-day program.

Dave Winer's identity idea

Dave Winer's identity idea

Dave Winer suggests the "You Know Me" button added to pages with discussion-group features, is essentially an opt-in cookie that allows the user to manage the threads they want to follow. Like Ryze does, it should also open a set of communications options, such as "Mail me" new messages and links to instant messaging (which would then be integrated into the page -- here is Marc's emerging structure, as well).

Dreamix: More signs the current...

Dreamix: More signs the current TiVo model is in peril

Dreamix is an open source personal video recorder that may or may not succeed in putting PVR functionality on Micrsoft's Xbox. Next, it will port to the PC, then Linux and Mac (even though the XBox implementation is  purportedly built on Debian Xbox-Linux). You can sign up to participate in the beta here.

These things are inevitable. The important thing to recognize is that the current monthly programming guide subscription business model that TiVo has relied on for recurring revenue will be wiped out by open source TV guide services. With data assembled by individuals willing to scan local cable listings (remember, directories are not protectable, at least, not now), the future of PVR programming is free, not paid.

Dave Hughes, a man for...

Dave Hughes, a man for the times

If you don't know the story of Dave Hughes, you should.

Imagine there are no borders,...

Imagine there are no borders, that the music companies are in control

The crack-smoking weasels from the RIAA are now talking about a fee to be charged to ISPs for facilitating music piracy. The costs would be passed along to consumers, regardless of whether they are copying music or not. The RIAA's Hillary Rosen says demand for broadband is largely due to file-sharing traffic--because we wouldn't think to use our Net connections for anything besides stealing music:

"Let's face it. They know there's a lot of demand for broadband simply because of the availability (of file-sharing)," said Rosen. "It's clear to me these companies are profiting to the tune of millions and millions of dollars. They must be held accountable."

15 million camera phones in...

15 million camera phones in Japan

Twenty percent of the Japanese mobile phone market has already purchased a camera phone, according to the three leading carriers, DoCoMo, KDDI and J-Phone.

Put that in a little context: Six million digital cameras were sold last year. The Japanese seem to be more interested in low-res cam phones than high-res digital cameras.

Japanese legislation for more Wi-Fi

Japanese legislation for more Wi-Fi

Japan's Ministry of Public Management, Home Affairs, Posts and Telecommunications will introduce a Telecommunications Business Law on Monday in order to drive wider installation of 802.11 hotspots. Problem is, Wi-Fi is not currently treated as a "telecom circuit" and so the government cannot intervene to resolve disputes between carriers and the owners of property in public places, such as city centers, who don't want to allow the installation.

People's reporting

People's reporting

The press has new competition from the participants in events. Lisa Rein posts video that challenges the media claim that only 50,000 people participated in anti-war protests in San Francisco. She suggests the true number is 350,000 and provides video of a vast crowd as her proof.

Perspectives will never be the same now that the people are reporting their own experiences.

Open Spectrum, public connectivity

Open Spectrum, public connectivity

David Weinberger, David Reed, Dwayne Hendricks and Jock Gill have assembled an FAQ on Open Spectrum, a wireless connectivity commons proposal that could have a profound effect on communications and entrepreneurial opportunity in the United States. It wipes out the assigned portions of the radio spectrum to make vast amounts of bandwidth available to anyone who wants to use it based on a minimal set of rules.

The evolution of radio, which now involves a great deal of signal processing, eliminates the need for the strict boundaries between portions of the radio spectrum. With software-defined radio (which changes the frequency and protocols used depending on what's available) and Ultra Wideband (in which every signal looks like "noise" to the majority of transceivers with which a signal might interfere), there is no need for the Federal Communications Commission to enforce ownership of parts of the spectrum.

With all that spectrum, it's conceivable that everyone could have bandwidth for their creative/business/communications purposes.

No surprise there

No surprise there

The New York Times reports that the reading public is no longer flocking to buy memoirs of CEO-authors. What was surprising was that people ever did rush to read executive biographies, most of which were little more than entertainment for people who wanted to experience wealth and power vicariously.

U.S. indicator? Japan's economy goes...

U.S. indicator? Japan's economy goes down, down, down

The Japanese economy slumped for the third straight month because industrial output (and demand) have slackened. And at the same time, attacking deflationary pressure in Japan is becoming a major political issue. I think this is a global trend and we'll be seeing calls for the same kind of anti-deflationary actions in the U.S. within the year, even though this is stark contrast to the Federal Reserve's policies of the past 20 years. The National Bureau of Economic Research says we are still in the 2001 recession or maybe just hitting the second recession in two years -- either way, the pressure to drive inflationary demand-side economic forces is on the rise, as it is one way to address rising unemployment.

Philips and Italian wireless carrier...

Philips and Italian wireless carrier launching video MMS

The prospect for video messaging is cited as a basis for rapidly expanded wireless carrier revenues. The assumption has been that multimedia messaging (MMS) would have to wait for the introduction of "3G" networks. Philips and Italian carrier Wind have announced a MPEG-4 video messaging service for 2.5G networks, like the GPRS systems available in the United States.

What to do with it? Right now the focus is on user-created content, like video messages and dating services. But, remember that Philips and Sony have purchased InterTrust. It will also be interesting to see how Philips applies this kind of MMS services through its 802.11 efforts.

You read, Cowgirl

You read, Cowgirl

For fans of the [drop into Goldmember Dutch accent] insanely sexual, tight like a tiger Susannah Breslin of RCB, drop by to hear the woman herself reading this Sunday in Los Angeles. This is our first blog-to-TV cross-over sensation and, with apologies to Oliver, who reached the small screen this week, a lot better looking.

What do you think?

What do you think?

Howard points me to onbusinessnetwork.com, a slate of programming refreshed weekly that Cisco, FeedRoom and others are offering as a 10-week pilot. Take a look. It's built on Flash. The code is buggy. The interface is busy, mostly just to get you to click something. The programming is professionally produced but largely fluff/promotional stuff and comes from Tech TV, MSNBC and Sawyer Media.

My critique: An interface like this is a destination and what we know is that distribution--getting content to the edge of the network (for instance, that's where the TVs and radios are)--is the key to success. Then, you have the problem of a slim line-up when people look for new information every day.

Scuttlebutt also says Cisco has FeedRoom producing a game show for some reason.

I'd like to hear what you think. Why? Well, suffice to say we'll be talking about it soon.

Consumer PC sales will save...

Consumer PC sales will save 2003?

Dataquest, a market research firm, suggests that consumer PC sales will climb substantially in 2003. The firm expects global shipments to rise by 7.6 percent compared to 2002, when global business and consumer PC sales were up just 2.7 percent.

But in order to drive overall sales up by 7.6 percent, consumer PC sales would have to climb by well over 20 percent, and there's no evidence in recent PC unit shipments to suggest this will actually happen.

Yahoo! broadband going international, not...

Yahoo! broadband going international, not just national

Although the company hasn't said the word "broadband," Yahoo's announcement it is going to launch ISP offerings a la SBC DSL in Europe is certainly pointed toward fast connections. The company's results announced this week boasted hefty revenues from its broadband partnership with SBC, which it is planning on extending to other access providers.

Institutional insanity

Institutional insanity

One of the reasons the power to control digital ID needs to reside in the hands of the individual is the tendency of people working inside institutions, which make all sorts of promises about the integrity of data, to abuse personal information. At Allstate Insurance, employees were constantly accessing private records for nefarious purposes, so the California state Department of Motor Vehicles revoked its access to public records:

A DMV audit at seven of the company's California claims offices uncovered that Allstate employees "had engaged in numerous violations of the confidentiality requirement of the contract. This included using bogus or nonexistent investigative file numbers to request information from DMV files."

The audits were triggered by a complaint that an Allstate customer's confidential address had been released, which resulted in a written threat to that person. These audits also uncovered numerous instances where Allstate employees improperly accessed records of friends, relatives, and others in addition to their own records.

High on the list of violations was the company's refusal to allow DMV auditors access to Allstate premises as guaranteed by the company's contract with DMV, and numerous password and security lapses. There were many other types of contract violations, including failure to keep records of address inquiries, application changes, and disclosure violations. The audit also uncovered significant unauthorized use, disclosure, and distribution of the information obtained.

Not bad enough? How about the Cincinnati Police Department, which has had 137 lawsuits filed against it in the last decade, many involving illegal use of information by police officers to harass black citizens.

Lean times ahead

Lean times ahead

Consumer sentiment is down, again. Production is down. It's going to be a tough year for major consumer goods companies. Paradoxically, the technology markets will not see declines because its recession began long before the rest of the economy. So, just to reiterate my stock predictions of the New Year. The Dow will fall to a 30 percent loss at least twice this year (two bottoms) and close off for the year by as much as 10 percent while the Nasdaq will be up slightly.

PR guidance for dealing with...

PR guidance for dealing with bloggers

Dan Gillmor points to this interview by Phil Gomes on how public relations people should deal with bloggers:

The problem is usually that PR folks who try to pitch a blog do so while masquerading as a member of the community. Big no-no.

Yes, blogging is about authenticity.

5 GB in a credit...

5 GB in a credit card form factor

From Pocket PC Thoughts: This is cool. StorCard can hold between 100 MB and 5 GB of data in a credit card-sized, magnetic strip reader-capable form factor. Come to think of it, this is perfect for a national ID card.... On second thought, maybe it's not just cool. It's also a little scary.

Britons battle national ID card

Britons battle national ID card

From BoingBoing this encouraging news that the British people are standing up against the introduction of a mandatory national ID card. For those of you wondering if the U.S. has such plans, I broke the story of a Department of Defense/Postal Service effort along those same lines back in 1994. It is foolish to think that they aren't working feverishly towards this goal today.

What goes around comes around

What goes around comes around

Dave Winer reminds us that he was a fan of Pointcast. We're rebuilding it in RSS, as he says, and now that bandwidth and storage are so cheap, plenty of folks would turn over 10 GB of disk space for a rich media service.

PC sales were up only...

PC sales were up only 2.7 percent in 2002

Well, at least they were up. In the see-saw battle for #1 ranking, Hewlett-Packard regained the lead by sucking the life from Compaq:

"What was more telling is sequential growth in Q4 from Q3; we outgrew Dell and we outgrew the market," said Jim McDonnell, vice president of marketing for HP's Personal Systems division.

McDonnell explained that HP and Compaq Computer Corp. did see some contraction in sales as its two customer bases overlapped after the completion of their merger last spring. But that overlap has shaken out and by focusing on keeping prices competitive and bringing better products to market, he expects HP to remain a top seller of PCs in 2003.

Magazine brands heading for television

Magazine brands heading for television

It's all about cross-media these days, but what's missing is the Web-based interaction with the media, including cutting-and-pasting your favorite Car & Driver clip into a mail that shows off your new car. Thinking just TV is missing 9/10ths of the action. Thinking television production practices is writing off 3/4ths of your profit.

How to make a hit,...

How to make a hit, using email

Media Post has this article on the making the Dave Matthews Band's latest hit album using an email campaign aimed at fans using their broadband connections at work. We're not talking about the album production, but the pre-selling that guaranteed radio play.

Pre-order incentives included a bonus DVD, access to exclusive DMB material and a live audio webcast, as well as entry to win front row tickets to an upcoming DMB show. Showcasing the communal qualities of music and the viral aspect of email, the message tempted recipients to share the message with at least three friends with entry to win an autographed, framed poster.

And it worked.

Is the future full of...

Is the future full of Glenn Reynolds?

The New York Times describes the life of a blogger, specifically Glenn Reynolds. It sounds a lot like this piece of futurism I wrote in 1994.

Gregor is not pleased

Gregor is not pleased

A beautiful little piece of scenario spinning from Dan Farber that explains in a story why we need to be diligent about our digital identities today. If we get to the point Dan describes and the masses haven't rebelled or the machines gone Matrix on us, we will be a sad bunch indeed.

Macromedia acquires Presedia

Macromedia acquires Presedia

I'm sitting here watching an animated presentation by Rob Burgess and Norm Meyrowitz of Macromedia using the new tool they acquired from Presedia to convert a Powerpoint presentation and audio into a Flash presentation. Marc and Jeremy both do a better job of explaining why this is important than I can.

I'd only add that there are a number of ways this can be put to use in a variety of broadcast-like settings to create niche programming.

Is AOL Time Warner compounding...

Is AOL Time Warner compounding a problem?

In stark contrast to the recent suggestions by the Conference Board that companies should separate the role of CEO and Chairman in order to improve accountability, AOL Time Warner named its CEO, Robert Parsons, chairman of the board today.

Parsons is a smart guy, but he's also one of the people who agreed to the merger so widely condemned today (though not by me). The company should either have promoted Parsons to chairman, replacing him in day-to-day operations (bad idea -- AOL Time Warner needs him running things) or installed a chairman from outside, who would add perspective and experience. 

What a tool of mindless...

What a tool of mindless greed

Arnold Kling holds forth at Tech Central Station about the naivete that he says is the Creative Commons. In a wholly duplicitous argument, which tries to correlate the function of a publisher to a waste treatment plant and then to a Bayesian content filtering system -- neither of which have anything to do, metaphorically or literally, with what the Creative Commons stands for -- Kling says the Commons is just a kind of hippie do-goodism that will never survive in the marketplace.

Creative Commons is based on a naive ideology that believes that raw content is gold, which then gets stolen by the evil media companies. In reality, the economics of content are that most of the value-added comes from the filtering process, not the creation process. If you want to overthrow incumbent publishers with Internet-based alternatives, you are better off starting from the assumption that Content is Crap.

As an editor and publisher and news producer, I agree that the filtering function of big media adds value. Movie producers and record labels can add value, too, but if Kling's argument were correct, the only value from the moment a pen started working on paper (or fingers on a keyboard) would be the packaging that wrapped a book or movie. This is patently not the case. The creative works themselves would be worthless in Kling's analysis. Joyce's Ulysses would not have become a work of art until it was purposefully smuggled into the United States and, through a court action, made available by Random House in convenient hardbound and paperback editions. I think Bennett Cerf would mock Arnold Kling, were he alive to hear this argument for publishers' overwhelming contribution to the creative process.

In reality, the Creative Commons is a progressive technical solution to a simple problem that content creators have had in the face of a publishing/distribution industry unable to expand as rapidly as the creative media available to individuals: it lets the content creator express the preferences relating to how content may be used in machine-readable formats so that those preferences can be enforced later. In an age when it is impractical to send a copy of everything to the Copyright Office in order to gain protection of one's creative work, the Creative Commons is a simple solution to stating what rights we creators claim in our work. And it leads to a content marketplace in which people can sample intelligently and purchase exactly what they want.

The argument that a Bayesian filter is a better way to create value in content than the Creative Commons is self-serving of Kling, and it does not reflect the true situation, one in which the Net and digital technologies are the foundation of a growing global medium for creativity. The supposedly neutral action of a well-designed Bayesian filter is intended to be analogous to Adam Smith's invisible hand. It just dresses up the "let the market decide" rhetoric Kling spouts in technological terms, but does nothing to reinforce his condemnation of the Creative Commons. If anything, a machine-readable rights regime improves the function of an automated content filter, because it would, at minimum, identify content that was available on terms the reader/viewer will accept.

The Creative Commons' licenses allow a wide range of rights preferences and do not, as Kling claims, treat every idea as "pure gold." Only a fool or an ideologue would insist otherwise; Kling appears to be a bit of both in his rant.

What Kling wilfully fails to acknowledge is that the old copyright approach, which was tragically extended by the Supreme Court yesterday, treats aging content as inviolable, as more valuable than gold, in an age when every idea is a starting point for new creativity. Whether it's performing a poem in public, sampling music to create a new mix or riffing on the fate of Peter Pan, creativity flows out of reasonable access to ideas, which is precisely what the Creative Commons aims to facilitate.

Microsoft goes blue chip

Microsoft goes blue chip

It's about time. With more than $40 billion in cash, Microsoft has been past the point where it could reasonably reinvest cash at a higher return than the investor could expect from leaving the money in the bank since the collapse of the Internet bubble. The Redmond, Wash., behemoth announced its first dividend, a 16-cent payout for the full year.

I heard a company spokesman on the local radio say the proposed tax-free dividend policy of the Bush Administration was one factor in the decision to start paying dividends. Let's take a look at what that means in terms of tax-free income to three big investors in Microsoft from this single dividend payment:

Bill Gates: $97.915 million
Steve Ballmer: $37.677 million
Paul Allen: $22.150 million

The company also saw revenues trend higher, by 10 percent, though only the Office and Windows groups actually made money. MSN's $459 million in revenues on the quarter put it close to profitability and the $1.33 billion in home and entertainment sales, which includes xBox and PC games, was up 38 percent year-over-year.

VC woes will continue in...

VC woes will continue in '03

Venture capital returns continue to slump as the potential for IPOs or mergers/acquisitions that produce the fabled "liquidity event" for investors remains at a historial low. Since 1999, VC funds have returned just 67 cents on each dollar invested -- they are money-losing propositions right now.

Meanwhile, Sequoia Capital, one of the venerable VC firms in Silicon Valley, is raising a new fund and, in the words of Mark Heesen of the National Venture Capital Association, "This is like Lewis and Clark going out on their expedition,'' said Mark Heesen, president of the National Venture Capital Association. ``If the Indians shoot them, everyone will know it's too dangerous to go out."

What we all have to recognize, investors, entrepreneurs and commentators, is that the old era of running profitably for numerous quarters before an IPO is back. It was business unusual, to take a line from CNN's Lou Dobbs, for a few years, but now it's business as usual with regard to the timeframe for investor liquidity.

Euro Teen Texting Habits

Euro Teen Texting Habits

Interesting read on the future in the comments of kids in Europe who are texting one another instead of using voice services.

"I prefer text, generally," said Kayleigh Roberts, 15. "Cause I'll probably end up laughing and saying something really stupid on the phone," she said....

When his mother texts him, she uses sentences and proper punctuation - a practice that is the opposite of cool. "We don't do that," he said. "It takes too long."

Yahoo! takes broadband nationwide

Yahoo! takes broadband nationwide

Makes sense that Yahoo! would offer its broadband services with other carriers, now that it has proved the concept with SBC. I've seen the Yahoo! Broadband interface under development and it is all about selling services -- weirdly, nothing in the broadband MyYahoo moves, except the ads.

Yahoo! has hundreds of millions of visitors who can be sold on speeding up their services and SBC broadband revenue splits helped propel Yahoo! to a hefty profit on the quarter.

Here's the rub: A broadband focus will pay off for only so long, as we've seen with the tailing off of dial-up adoption. So, as long as Yahoo! and investors recognize that unbundled broadband services will become more price competitive in the future, it's a good short-term business boost.

PlayStation 2: 50 million and...

PlayStation 2: 50 million and counting

The announcement that Sony has shipped its 50 millionth PlayStation 2 unit since the product rolled out in March 2000 is a major benchmark. This network-enabled game system and its successor, due in 2005, demonstrate that highly sophisticated technology can be delivered at a lower cost than PCs and give Sony a viable competitive platform for entering the home market with a wide range of services.

The battle is moving from the desktop to the living room. Advantage Sony, to date.

Jumpstart Broadband Act

Jumpstart Broadband Act

Sen. George Allen (R - Va.) and Sen. Barbara Boxer (D - Calif.) introduced a bill, the Jumpstart Broadband Act, that would allocate at least 255 megahertz of spectrum in the 5 gigahertz range for unlicensed use. The bill treats 802.11 wireless as the new, viable solution to the last-mile problem.

This is a great step, though many remain, such as how individuals can buy and share wired broadband capacity with their neighbors. We need additional legislation that says if we pay for capacity we should be able to use it as we wish, including becoming the access provider to an entire city block.

A little more on the...

A little more on the cellular/Wi-Fi dual mode demo

Following up the announcement that Motorola, Avaya and Proxim are teaming up on a dual-mode phone that switches between carrier networks and Wi-Fi, I've been exchanging some email that got me thinking that there is a sort of bait and switch going on to keep the wireless carrier in the value chain even when users are on a Wi-Fi network.

SEC adds limits on reporting,...

SEC adds limits on reporting, executive trading

It's about time. The Securities & Exchange Commission issued new rules governing how financial reports are presented to investors (no more "pro-forma earnings" that emphasize profits before amortization, depreciation, etc.) and prevent executives from trading on their own accounts or through any indirect holdings while employee pension plans are in black-out periods. Here's the SEC rundown. It's a small step, mostly the kind of common sense that has become painfully clear to everyone in the past couple years.

I'd go further and suggest that like investment bankers, corporate executives of publicly traded companies be tested and licensed. When you get a securities license, the rules for reporting of information to clients, to the NASD and SEC and so forth, are drilled into your head and every two years one is required to take continuing education courses. It's a pain, but it does provide proof that, in order to get that license to act as a securities representative you did demonstrate a knowledge of the law.

Apple: Still slow, like most...

Apple: Still slow, like most PC makers

Apple posted its second consecutive quarterly loss today on basically flat year-over-year sales. The company sold the same number of units as the year before, as well. All's flat the stays flat, in keeping with the generally tepid report of Intel yesterday. Only Dell is making gains in this market.

Yahoo! on the mend

Yahoo! on the mend

Yahoo! reported 51 percent revenue growth over a year ago and turned in a profit of $46.2 million. Where'd all the new revenue come from? Mostly it's HotJobs career service, personals service, paid search listings (in payments from Overture) and a share of the DSL ISP revenues from SBC.

Dan Gillmor sums up the...

Dan Gillmor sums up the Eldred gloom

In the wake of the Supreme Court decision to allow the extension of copyrights for absurdly long terms, Dan Gillmor pretty much says it like it is:

The theft is from you. From me. From the public domain -- the place that has been the pool of knowledge from which new art and scholarship have arisen over the centuries.

Your news site stats for...

Your news site stats for December 2002

Editor & Publisher has the most recent news Web site rankings and audience numbers from Nielsen/NetRatings. AOL News is making a move up the ladder, to Number 2. Note, however that these numbers do not include the "My" sites, (MyYahoo, MyMSN, etc.), which would likely drive several of these top-ranked sites well down the list.

Broadband Growth Exploding

Broadband Growth Exploding

Via Kevin Werbach, these numbers from Nielsen/NetRatings:

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Vindingo locks up route calculation

Vindingo locks up route calculation

Vindingo, the mobile city guide, company, has been awarded a patent for calculating drive/walking times on a digital map. While I am sure they optimized the storage of map data, it seems to me there was some prior art.

It appears even downside calls...

It appears even downside calls were corrupt

The assumption is always that stock analysts were hyping stocks to drive investment banking business. Now Holly Becker, of Lehman Bros., is under investigation for providing her husband, a trader at SAC Capital Advisors, early access to negative research reports so that he could profit on downside moves in response to her research calls.

Becker has been missing in action since June 2002 and Lehman won't say whether she is on a leave or still working.

Your GameBoy, your phone

Your GameBoy, your phone

Nintendo's GameBoy Advance SP. The company is working on a mobile phone capability.

The truce that wasn't

The truce that wasn't

CNET points out that the Motion Picture Association of America, among other organizations, were not part of the "landmark" truce on digital copyrights announced yesterday. Also, noticably absent were consumers, who are still on the short end of a sharp stick and seeing their rights to use the content they purchase eroded more every day.

Worldcom's future is in bit...

Worldcom's future is in bit delivery

Worldcom CEO Michael Capellas says convergence is happening. But what he's really saying is that the cost of bandwidth will continue to crash and the only option for Worldcom is to fill as much capacity as possible on its network to wring every penny of revenue from its capital investments to date.

Your European IT outlook: No...

Your European IT outlook: No growth ahead

Merrill Lynch projects European corporate IT spending growth of just 0.8 percent in 2003. Hardware will be the sector most likely to show the first signs of life, if there will be any, according to the CIOs surveyed.

Talk about fear being ahead...

Talk about fear being ahead of the curve

Nigerian postal workers are afraid the Net could take away their livelihoods, even though most post offices have typewriters and less than two percent of the country's 120 million people have Net access or email. This article is an interesting exercise in trying to find a silver lining while encouraging investment in modernization of both the postal and Internet infrastructures.

Fast jets, fast Internet

Fast jets, fast Internet

Boeing is getting closer to delivering fast data connectivity (156 Kbps per user on average) for passengers on its airliners. The idea of doing videoconferencing in the noisy environs of a plane is unlikely, but the surfing sounds good.

Internet dominates at-work news consumption

Internet dominates at-work news consumption

A Market Facts and Periscope Communications/MSNBC study finds that the Internet has become a leading source of news and information at work. Not a particularly stunning finding, since there are not that many offices with a TV turned on all day. Here are the numbers:

• 35% of study respondents used the Internet for news and information;
  
• 25% used newspapers
  
• 21% magazines
  
• 17% radio
  
• 6% broadcast television
  
• 3% cable television


• According to the survey, broadband users watch streaming video 5.1 times per month, versus 1.5 times per month for dial-up connections. 41% of broadband users have watched streaming video on demand and from this group 59% have watched live streaming video.

Supreme Court rules for extended...

Supreme Court rules for extended copyrights

In a decisive 7-2 ruling, the Supreme Court has decided in favor of the constitutionality of extending copyrights to 70 years after the death of a creator or 95 years for a corporation. Ironically, one of the major beneficiaries of this decision, the Disney Corp., has earned billions of dollars in revenue using fairy tales and other stories which are now beyond the reach of artists who would like to produce their own versions of the stories. Just one more small step by a court and a giant leap by America to squelch the creative commons.

UPDATE: From Lessig Blog:

with deep sadness

The Supreme Court has rejected our challenge to the Sonny Bono Law.

the opinions

There were three opinions. The majority was written by Justice Ginsburg. Justice Stevens wrote a dissent, as did Justice Breyer.

802.11i interpreted

802.11i interpreted

Glenn Fleishman admirably tackles the problem of explaining a complex security protocol that is still in the formative stages, which means he has to wrestle a passel of acronyms into some semblance of an explanation for the upcoming 802.11i wireless security protocol. The short version: Wireless LANs will have built-in cryptographic features that protects against:

1.) the contents of a message from being read not only by potential eavesdroppers, but also the access point that provides the connection;

2.) the easy-to-spoof access that has characterized wireless LANs, so far, because the current WEP protocol is, at best, among the worst cryptographic technologies ever shipped.

He goes on to explain how spoofing attacks might work, but there is still this simple issue: Most intrusions are achieved by cracking human habits, not technology. If the 802.11i protocols are embedded in wireless transceivers that can be swapped between devices, all one would need to do is steal a wireless card associated with a particular network (it could be a campus WLAN or a national carrier's 802.11 network) to break in. Or, if the crypto is tied to the OS or computer hardware MAC address, one could steal the computer or clone the computer's file system and MAC address to gain access.

Glenn concludes: "As we survey the road ahead, it's clear that the arrival of WPA and eventually 802.11i will reduce the administrative burden of WLANs, integrating them with existing authentication mechanisms and making the security issue disappear."

That's more easily said than done. Fact is, security is an ever-evolving practice that is best addressed by associating end-user devices with specific types of activity and watching for odd behavior. All the barriers erected security-wise will be bested, but if you watch for someone who suddenly changes their usage habits (if on a campus LAN, a user who switches from checking email from a particular cluster of access points to doing a lot of Telnetting from the parking lot, or on a public network, a user who suddenly switches logon locations) a security expert can identify intrusions more often. 802.11i, by making sessions anonymous, in that the access point or switch is no longer aware of what individual sessions are doing could actually reduce the ability to target intruders who invariably get through the technological minefields of authentication and access control.

UPDATE: The entire critique is based on the assumption that the primary purpose of 802.11i security is to protect the network from intruders rather than network users from in appropriate access to their communications. On that count, the spec looks like it could be beneficial, unless once an intruder has gained access to a network you've left guest file sharing enabled.

Reiter riffs on SPOT products

Reiter riffs on SPOT products

Alan Reiter has been thinking a lot about Bill Gates' visions for Smart Personal Objects Technology (SPOT), especially the watches he talked about at CES. I agree that no one will pay for the data services -- watch makers are going to end up giving away data services just as wireless data carriers have in order to retain voice customers. But the watches can be a lot cooler and command a higher price if Microsoft and the watch makers take Alan's advice and "Don't think mission critical. Think fun." An excerpt:

Ever since I heard about this wireless watch, I started thinking about both the myriad flaws in the strategy as well as ways to create a business.  After all, this is exactly what I do as a wireless data consultant:  I look at how to create new businesses and improve (or save) existing ones.

All the problems notwithstanding, I believe Microsoft -- and the watch vendors -- could indeed create a viable business.  But it won't be for the above-mentioned applications.  It will be for a variety of consumer-oriented personalization applications.  The "software-definable" watch face might be a success, especially if it offers many "user-definable" options.

If you don't like the face that came with the watch, change it.  Do you want large Roman numerals instead of small Arabic numbers?  Do you want a sweep second hand?  Do you want the day, date and phase of the moon?  Download a new watch face. 

The problem--and this is what I was getting at when I asked if Bill has ever worn a watch--is that Microsoft isn't a very fun bunch. If Gates and company don't recognize the prestige quality of a watch, as well as the fashion dimensions of these time-keeping artifacts, they will make maudlin services that fail. They think mission critical all day and, except for the gaming division, hasn't mastered consumer electronics for consumers (PocketPC is a business application in hardware). So, it's really up to the watch-makers (and other consumer device makers) to take the SPOT technology and run with it if there is any hope for its success.

FCC told to back off...

 FCC told to back off open-access rollback

Sen. Ernest Hollings (D - S.C.) may not have good ideas about how to enforce digital copyright protection, but he is an advocate of open access to the local loop. The senator railed on reported plans by the FCC to revoke rules that have been in place since the Telecommunications Act of 1996 was put into law that require local carriers to open their networks to competitors. He said competition is finally starting to work (I've seen little evidence of that) and called the Bell companies "liars."

The FCC should not reinstate the local monopoly, the old guard needs to change radically or fail fast.

Wireless hand-offs at driving speeds

Wireless hand-offs at driving speeds

Remember when your cell phone would drop a call as you drove along the highway? It probably still does. Wireless LAN providers have a long way to go on the path to high-speed hand-offs between access points. ArrayComm has just demonstrated hand-offs at 30 m.p.h. Flarion Technologies and IPWireless claim they have the capability and the WLAN systems take less time than cellular networks.

Not your broad-based trading day

Not your broad-based trading day

All hopes (and a lot of hedging) ride on technology stocks, based on Thomson I- Watch's view of institutional trading messages during the day on Tuesday.

Vienna Calling: Where are the...

Vienna Calling: Where are the commercial hotspots?

Vienna is claiming the global lead in commercial hotspots, but that's meaningless, because there are far denser penetration levels of free public hotspots in New York, San Francico and elsewhere. Counting Wi-Fi penetration by commercial hotspots alone is like counting just redheads and saying the number reflects the total human population of the Earth. The article linked above is a good source of information on WLAN deployments by wireless ISPs.

Intel: Cost-cutting pays off

Intel: Cost-cutting pays off

Intel beat expecations, turning in earnings of $0.16 a share compared to analysts' target of 14 cents a share on a 2.8 percent increase in revenues. The sales numbers are not encouraging in terms of an IT recovery.

Cellular/Wi-Fi agile devices collaboration

Cellular/Wi-Fi agile devices collaboration

Avaya, Proxim and Motorola are collaborating to deliver devices that can connect on cellular or 802.11b/a/g networks, depending on what is available to the user at the moment. Ultimately, this is the direction we'll see all IP networking going, as I've been saying for a while. This is a multi-mode device (with two transceivers, one for cellular and one for Wi-Fi), not true Software Defined Radio that roams across different frequencies and protocols using a single radio, so it is just a step toward the end-point of the evolution of wireless.

As a newly converted Vonage customer, I can't say enough good things about Voice over IP (the voice quality is excellent and the cost rock-bottom). There is no reason to pay a carrier for the use of a switch anymore. The devices described by the companies involved in today's announcement will approach the functionality of a the incumbent carriers' switches, since they will redirect traffic to the the packet network to avoid circuit-switched carriers whenever wireless LAN connectivity is available.

Recording industry giving in?

Recording industry giving in?

The Recording Industry Association of America (RIAA) is reportedly joining the opposition and lobbying against the Hollings Bill, which would have required digital copyright standards in all systems.

Cory Doctorow has a good summary, including Intel's rather duplicitous approach to the question of the Broadcast Flag.

UPDATE: This afternoon, Microsoft, IBM, Intel, Dell, the RIAA and others said they would collaborate to lobby against legislation that requires building copyright control mechanisms into consumer electronics devices AND legislation that requires consumers be permitted to make copies of digital titles, even for their personal use. It does bode well for eliminating the dumb Hollings Bill requirements, it also calls for the elimination of political input into a dialog about a key rights issue.

So, we're going to leave it to the market, and that will probably result in copyright protection technology in titles, if not devices, as well. The audience is losing.

States launching nonprofit drug pool

States launching nonprofit drug pool

Keep an eye on this project: Nine states and the District of Columbia are pooling efforts to purchase and distribute drugs to their state employees and Medicaid recipients in order to cut costs. If you want to see real economic stimulus, include small and medium size business and the independently employed. I do not know a single family in any tax bracket that isn't seeing the absurdity of drug costs as a major issue these days.

The prospect of going off to start a new business is daunting when insurance is $500 or $700 for a family of four and doesn't cover medications.

Reducing this barrier to entrepreneurial effort would be a bigger shot in the arm than the Bush tax plan. And the program doesn't reduce potential investment in drug development, since the purchasing pools exist at the wholesale level and don't undercut biopharma profits.

UPDATE: If you think this is a problem only for small and medium-sized business, see how bad health care costs are hurting GE's union relationships.

Case a "creator" not a...

Case a "creator" not a "suit"

David Ignatius of the Washington Post has a thoughtful summation of the career-to-date of AOL's Steve Case. Key idea, and correct:

At the center of all this corporate angst was the notion of synergy among different media properties. Indeed, that bad idea lay behind the original merger of Time and Warner Communications. More than a decade later, the Time Warner properties are doing well -- but that's because Time publishes good magazines, Warner Bros. makes good movies, HBO produces good television and Warner Music sells good tunes. The idea of cross-promotion is still dubious; indeed, it's still not clear that anyone has found a way truly to merge the different fiefdoms of Time Warner.

In the talent business, that's the way it should be. The "suits" with their merchandising schemes can never replace the individual creators.

Perhaps Case's mistake was that he was miscast as a "suit" when he was really a creator. Certainly he'll be remembered as an Internet pioneer long after his former Time Warner colleagues have stopped complaining about their soggy stock options.

Case's dedication to the notion of the Net is important to remember and understand. I was sitting with Denise Caruso and Case at the Computers, Freedom and Privacy Conference in 1992, immediately after AOL went public (it was the day of or the day after the IPO, if memory serves). He was oblivious to the IPO and totally focused on where the Net was going. The result was that he saw a lot further than most people and, I think, rightly guessed that cross-media use of content (as compared to the more glamorous "synergy") is an immensely profitable business.

Retail getting off to a...

Retail getting off to a slow start

As predicted, consumers are turning down the spending. Wal-Mart, Target and other retailers report that early January sales are below expectations.

The final frontier?

The final frontier?

The courts are preparing to decide the boundaries of jurisdication on the Internet when it comes to libel. Bag and Baggage has a good rundown of the coverage of this issue.

You want to talk the perils of globalization? Imagine your local laws coming into conflict with those in a jurisdiction half-way around the world where what's legal at home is perceived (and may not be) illegal. Using the courts just to ask these questions, as was the case in an Australian case relating to a claim of libel against Dow Jones' Barron's newsweekly.

Eric Norlin's Digital ID journey

Eric Norlin's Digital ID journey

My colleague in the Digital ID debate, Eric Norlin, describes his journey to realization, through that famous medium of business sense, Doc. It's a good read, since he shows rather than tells how his dawning realizations about Digital ID reveal successive layers of complexity through which designers must cut to succeed. Here are the challenges he sees still lying before us (he goes into greater depth on each):

Interoperability -- getting all of the technical stuff to work together

Managing the needs of ALL constituents (business, customer, government)....

Peering to the Nth degree problems....

Dispute Resolution: yeah....see above --- and multiply by 100.

Liability....

Quality Assurance....

Revocation...

Risk Management....

and oh yeah -- Privacy compliance....

Not to mention the fact that this "aligning" of constituent needs has to *somehow* address the perception issue that individuals have around the whole digital identity issue....i'm not simply speaking to the "why should i use this stuff" problem, but also the deeper fears about big brother, etc (something that Mr. Poindexter over at TIA isn't exactly making easier for any of us ;-).....

Bottom Line: in all of our conversations, we discovered that the federation of identity was *primarily* about issues that *weren't* technical in nature....and *that* is what we're here to raise before all of you today....

Read the whole posting.

Making blogs pay, the Jupiter...

Making blogs pay, the Jupiter way

Jupiter Research has launched a series of blogs staffed by its research team. They're free. They demonstrate that having a voice is most important in an environment where new perspectives are flourishing. (Thanks to Scott for the link)

Get Hip to it

Get Hip to it

HipLogs, composed on Danger hiptop communicators, are the new latest thing. People on the go capturing their lives from wherever they happen to be, right now. (Thanks Dave for the link)

Harold Gilchrist points to the hiptop syndication capability -- now, people can subscribe to their friends' lives in real-time. Want to know why someone is late for a meeting -- check their hiplog or your news aggregator.

WLAN: Billing for more than...

WLAN: Billing for more than connections

802.11-planet reports on the emerging market for WLAN billing services. The story takes a decidedly narrow view of the market, seeing through the lens of the company that apparently spurred the story, Portal Software. And it concludes with the dumb question, "where does that leave service providers who can't afford a $250,000+ billing system?" If a billing system is the main barrier to success, a WLAN provider shouldn't be in the business.

Fact is, this will be a terrifically competitive market, because there are a variety of competitors offering all or part (with billing integration) of the "solution" to billing for different services, setting traffic priorities for real-time applications and so forth. Besides Portal, Megisto, Airwave, Net6, Nomadix and Vernier Networks, to name just a few, are out for a portion of this market.

Russia's terrible business

Russia's terrible business

In a striking story of how competition can overtake all the limits of civil society, a 23-year-old Russian computer programmer has been beaten to death by police paid by a business rival.

Ivan Fedin, an investigator with the Nikulino district prosecutor's office, confirmed Monday that Sukhomlin's body was found Jan. 7 in an empty lot in Solntsevo on the outskirts of Moscow. Two police lieutenants from the town of Balashikhka and a private guard were arrested Thursday, five days after the killing. They said they were paid $1,150 to heavily beat but not kill Sukhomlin, Fedin said.

The lieutenants, both in their early 20s and identified only as Goncharov and Vorotnikov, pointed to Dmitry Ivanychev, 22, director of a small company called Plastorg, as the one who hired them, Fedin said in a telephone interview. Ivanychev was arrested and charged with the organization of a premeditated action to cause serious damage to Sukhomlin's health. The two lieutenants were charged with kidnapping and premeditated action to cause serious damage to someone's health.

Sony: Is this the future?

Sony: Is this the future?

Have been reading and thinking about Sony's approach to multimedia, which was described in some detail at the Consumer Electronic Show last week by Kunitake Ando, chief operating officer and president of the company. In particular, the Cocoon media hub, built on Linux, represents a significant move toward turning broadband network connections into a wide-ranging source of content, connectivity and, most critically, revenue. The PlayStation 2, which is sweeping ahead of competitors Microsoft (xBox) and Nintendo (Game Cube). The network-ready devices will feature extraordinarily rich graphics capability in the next version and could double as a PC, in the sense it could run "consumer applications" that include enhanced DVDs, email and other media/messaging services.

"Users will be the stars," Ando elaborated. "They will control their environment to enhance value of the network."

Add to all that the fact that Sony is already a leader in video, from cameras to televisions, and you can see how the company has more components to compete amidst the increasinly pervasive connectivity environment that will be enveloping people over the next decade. Cocoon, because it is Linux based, could be a foundation for as many great hacks as a computer OS and the basis of an extensible home network platform that integrates the recently acquired InterTrust DRM system or, better, a more enlightened approach to content delivery. One could expect, in a Cocoon-enabled environment, to transmit video from a camera (still or video) using Bluetooth, edit it on a Vaio (which still desperately needs new tools for video editing) and display it on a television or transmit it to Grandpa in Tulsa, where he can watch it when he isn't gaming with the grandkids over a broadband connection. And, of course, everything on television can be time-shifted with a disc-based media hub.

The question is whether Sony will see beyond the current paranoia of its fellow content owners.

Micrsoft, in particular, ought to be concerned about Sony's aggressive strategy to take the home media market by storm. But it could also give Sony an edge on distribution of new titles that move the cable MSO and other studios out of the primary role of promoter of new movies and programs.

What could happen with poorly...

What could happen with poorly designed Digital ID

German retailers are learning to hate the Web in the wake of a complicated law that requires extensive disclosure of the name of the company making an online offer and the details of how and what contractual obligations come into force when doing business online. The law on distance sales (TDG in the German acronym) has armed consumer groups to go after retailers they think do not comply with apparently vague rules governing what is required before and during an online transaction.

VB [a German consumer group] compiled a list of the most frequent violations of the regulations that govern distance sales:

• the address and identity of the company are missing
  
• customers are not informed about how to cancel orders or return goods
  
• authorized representatives, for example the managing director, are not identified
  
• address or contact information are difficult to find on the Web site
  
• there is no information about what happened to an order after it was placed
  
• it is unclear if the contract is saved after it has been concluded, and whether and how the customer can access that data
  
• there is no information on how the consumer can spot and correct data-entry errors before completing the order

A well designed digital ID system that allows consumers to deal transparently with different vendors based on their own standards for doing business online would be highly preferable to the German approach. It could even be configured to import and use various national personal data and transactional rules so that the confusion described in the Frankfurter Allgemeine article becomes transparent to both the buyer and seller -- if one party did not comply with the rules established by the other, an alert could be sent to either party saying there was an offer they may want to review, but only under the terms listed. An "Accept" button would open the site based on the newly established ground rules for interaction.

Otherwise, we're looking at a future already being played out in Germany, where companies are being sued and more than 140 warnings have been sent to Web retailers while 500 sites are under investigation.

Rambus earnings unchanged, sales up

Rambus earnings unchanged, sales up

Flat. That's about all you can say about Rambus' earnings. The company reported earnings of six cents a share, the same as the previous quarter and the year-earlier quarter. Revenue was up five percent quarter-over-quarter. The interesting statement came with the reaffirmation that Rambus is growing its engineering staff by 25 percent this year. Raising costs takes nerve and indicates the company sees light at the end of the tunnel or, at least, the ability to grab market share. The recently announced Sony PlayStation deal probably accounts for that hiring.

3G T&A

3G T&A

In the quest for higher revenues, 3G carriers are expected to wrack up more than $4 billion in porn revenues by 2006.

Kudlow smart, Cramer an idiot

Kudlow smart, Cramer an idiot

Watching CNBC's Kudlow and Cramer, wherein Cramer is lambasting AOL and Steve Case, saying the AOL division will be shut down. What an idiot, because Case did more to preserve the value of AOL shareholders than most CEOs in the Net era. He used an inflated stock to make a great deal.

David Vise, reporter for The Washington Post, is blowing the bad accounting out of proportion, making the accurate point that the inflated numbers helped make quarterly goals during the interim between the announcement and completion of the merger. But in light of the general deterioration of Net values and AOL's continued subscriber growth and the potential for adding revenue per customer with the broadband services it is working on, his damning assessment of the deal is misplaced. The relentless cost-cutting Vise reports will take place at AOL this year does not indicate the online business is taking a back seat to the rest of the business. It will simply be brought in line with the new realities of the online market.

The broadband "skin" that will allow AOL to provide tools and content from the Time Warner side of the business is the next generation of online services as we move away from being tied to an ISP *and* interface. Instead, we'll mix and match and AOL Time Warner's content will play a critical part in the success, if the company can embrace making content available online in a meaningful way.

Larry Kudlow asks Vanity Fair writer Nina Monk if Case wasn't a great Internet entrepreneur and good for him. She says AOL shareholders should be thankful to Case for having delivered the Time Warner deal, and that is dead-on. If Gerald Levin and Richard Parsons had done their job in the negotiations, Time Warner would have bought AOL. Instead, it took three years for the balance of power to shift. The New York Times take is more on-target, saying that Case's salemanship won the battle.

Long story short: In a few years, we'll be used to this new combination of media assets and the online revenues will be growing because Time Warner will eventually start to address the Web effectively through the AOL division.

CEOs tentative on 2003 economy

CEOs tentative on 2003 economy

The Conference Board's survey of CEOs shows that business confidence regained a bit of momentum in the fourth quarter of 2002 and that expectations for the next six months were slightly higher than in the third quarter. Thi is still repeate of the early part of previous years of the downturn, when CEO sentiment was in the same range. Twenty-seven percent of execs surveyed still think the economy has worsened over the past six months.

78% of Net users used...

78% of Net users used email for holiday greetings/planning

Still the number-one feature of the Net, email accounted for heavy usage around the holidays, as people used it to plan gatherings and religious events or to send holiday greetings, according to the Pew Internet & American Life Project:

More than three quarters of the nation’s Internet users (78%) did some form of holiday activity via email and the Web this holiday season. They used email to socialize and arrange holiday gatherings, reconnect with old friends, and plan religious activities. They browsed online malls and bought gifts in higher numbers than last year. In all, 71% of Internet users went online for some kind of social or spiritual activity and 53% did some kind of e-commerce – either online window-shopping or purchasing gifts.

Email is increasingly important to online Americans as a tool for arranging gatherings and sending greetings: 48% of email users sent and received messages from family members about holiday events and plans; 45% of email users did that with friends; and 27% exchanged holiday cards and letters via email. All of those activities have increased since last year.

This year’s survey picked up evidence that about a third of Internet users have now become relatively active online celebrants. They stand out from other online Americans because they use email more often to make holiday plans and share greetings and they use the Web fairly aggressively to make more purchases. Many enjoy the convenience and time savings that the Internet allows them while communicating and shopping.

In all, 28% bought holiday gifts online, up slightly from the 26% who bought last year. The average online gift buyer spent $407 this year, up from $392 last year. Convenience and time savings mattered most to them, but, in addition, 51% of online gift shoppers say that a major reason they went online to shop was to locate an unusual or hard-to-find present. Some 31% say saving money was a major reason.

Fully 30% of online Americans say they use the Internet to get spiritual and religious information now. That is an increase from the 25% that were seeking religious material last year. African-Americans and parents, especially mothers, are the most likely to have sought spiritual material online.

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Sturm, drang und headcold

Sturm, drang und headcold

Going to be a light day of posting today. Contracts galore to finish up. Need TheraFlu.

Too much noise about Steve Case "departing" when he is staying (I was thinking what Doc wrote, but I am wondering now if his "resigning" to focus on co-chairing the corporate strategy committee isn't a smart move. He can actually be operational now, instead of having to levitate at every appearance to satisfy people's expectations of a "chairman of a merged online/media giant." Dunno, but this feels like the right analysis to me.)

If Venezuela can raise gas...

If Venezuela can raise gas prices, what will war do?

On the Economy Watch front, the cost of gas at the pump has risen by four percent in the last three weeks -- from $1.41 a gallon to $1.47 (or an annualized rate of approximately 70 percent) -- because of concerns about the Venezuelan national strikes. Consumer spending will be in for a sharp blow in the face of rapidly rising gas costs if we go to war.

OPEC is raising production already, which may be helpful. But if the war spreads to a wider theater than Iraqi territory, it will be a global economic disaster; that may be compounded by a global environmental disaster if Saddam wrecks his own oil fields.

Europe will have to wait...

Europe will have to wait for Video on Demand

According to Forrester Research, video-on-demand services in Europe will be delayed by technology and slack demand for several years. Expect the first real glimmers for the VOD market in 2005. From Europemedia.net:

The report says that today's business case fails in every dimension: demand, investment, operating costs, and distribution margins, and that it won't improve until 2005.

With a 155 per cent increase in DVD player sales over the past year in
Europe, DVD presents a huge new revenue source for movie studios - and the biggest competition to VOD. Forrester expects consumer penetration of stand-alone DVD players to increase from 19 per cent today to 53 per cent by 2005. Crucially, without blockbuster movies, European VOD operators will struggle to attract large number of consumers.

Only in 2005, when an estimated 2 million European consumers will have access to VOD, up from fewer than 100,000 today, will VOD become viable with key market advances - in particular, the availability of blockbuster content. By then, video file-sharing on sites like Kazaa will have improved in quality and download times. " These factors will convince the studios to properly serve legitimate VOD users. Studios will shift from today's distribution model of block agreements by channel to more profitable dynamic transaction models - taking their share of sales, rentals, subscriptions, and even advertising commissions.

New York Times bars editors...

New York Times bars editors from owning stock

The response to the Internet bubble isn't stopping at Wall Street. The Grey Lady (okay, she's got some color on the front page now) is revising ethics rules to prevent editors from owning stock. An excerpt from Editor & Publisher:

While the 38-page policy covers ethical issues related to everything from freelance work to awards-program participation, the major changes involve stock ownership and involvement in public life, said William Schmidt, the Times associate managing editor who oversaw the review.

Under the old policy, only some business-section employees were barred from owning stock in companies on which they directly reported. The revised policy bars all staff members from having a financial interest in an entity that they cover regularly, as a reporter or as an editor. "Information moves markets," said Schmidt.

A Pentagon reporter, for example, would not be allowed to own any defense-related stocks.

Reuters' fall is someone's opportunity...

Reuters' fall is someone's opportunity in financial news

Time for a new delivery medium and approach to news gathering in financial news. Reuters will be laying off another 1,000 people, mostly top-heavy parts of the organization such as G&A and software development. Meantime, Bloomberg is shutting down its personal finance magazine. The times, they are a-changing.

Asia will drive half of...

Asia will drive half of wireless data revenues this decade

According to the UMTS Forum, the global wireless industry group, there will be as many as 700 million wireless data services subscribers in Asia by 2010 and they will account for the largest regional slice of wireless data revenues around the world. This is sort of recycled news, but here's an excerpt:

Asia Pacific will lead the world in generating revenues from wireless data services, forecasts third generation mobile industry body The UMTS Forum. The Asian region as a whole is predicted to exceed 700 million mobile data subscribers in 2010, with approximately half of these subscribers (320 million) coming from China.

In total, the UMTS Forum expects that annual 3G revenues for operators in the region will reach US$ 118 billion by 2010, with "customised infotainment" - personalised access to news, sports results, gaming and other forms of information and entertainment - representing 36% of all Asian 3G revenues, ahead of simple voice (28%), mobile access to the Internet and corporate networks (14%) and MMS (13%). Other revenues will come from location-based services and "rich voice" services such as videoconferencing that overlay speech with video, graphics and other forms of data.

Case to step down

Case to step down

I think Steve Case pulled off a great coup acquiring Time Warner. I've said it elsewhere, so I won't go into it again. Good to see that after he gives up the chairman's role, he'll be staying as a director in charge of corporate strategy.

This is a sign that being in-charge of a great company no longer holds the allure it once did. AOL Time Warner will ultimately prove to be a more vibrant and profitable company than the two were separately (they already make more revenues as a combined entity). Time was, an executive would stick to a chairmanship they knew would lead to success, but no more. Case cites shareholder disappointment not just with the merger but his role in it.

UPDATE: Here's the official statement. And in an odd confluence of events, former Time Warner chairman Gerry Levin is getting divorced after "falling in love...six weeks ago."

A few stocks to watch...

A few stocks to watch this week

Here are the earnings announcements I'll be watching to assess the health of IT and media this week:

Monday:

Rambus

Wednesday:

Apple
Hughes Electronics
NetFlix
Redback Networks
Symantec
Yahoo!

Thursday:

AMD
Andrew Corp.
eBay
Handspring
Juniper Networks
Microsoft
Scientific-Atlanta
Sun Microsystems

Friday:

General Electric (if it is talking operating savings, it's bad for IT)

A few financial/transactions players to watch, too:

Charles River Associates
Fannie Mae
Bank One
Capital One

More from Marc on an...

More from Marc on an open framework for media management

Grok this. An excerpt:

There is an entire eco-system out there - surrounding the world of media. I helped create one of the leading tool vendors 'in this space' - Macromedia - but there are others as well (Adobe, Avid, Discreet, Sonic - to name a few) - as well as hardware vendors (Sony, Phillips, Samsung, Matsushita, etc.) all who profit from media in one sense of the other.   All of these companies have some sort of 'grand media strategy' that usually includes the end-users and developers committing to their platform, standards and/or 'solutions'.  But when it's all said and done, at the end of the day, they all don't want to work together.

They may begrudgingly committ or even create standards, but (surprise, surprise) there's always some 'hitch' why this doesn't work with that, or why we haven't 'supported' that standard yet or why - for only $49.95 - "you can get this little widget, which will convert these incompatible files - into whatever format we decide you can, so that you can use your own files" - which you paid for or created yourself.

It's a total scam - something we call 'lock in' in our industry.  It's time that these companies realized that open stadnards are the future.  It's time that we showed them how to be open and still let them prosper.  There's a solution to alll this mess.

Read it all, think and discuss.

The death of managerial capitalism

The death of managerial capitalism

Britt Blaser, drawing on a key John Robb posting, writes about the desperate effort to move capital into the hands of managers through tax cuts. An excerpt: 

The key to Managerial Capitalism is a shortage of capital, not its abundance. This view requires an inversion in how we think of economic eras.

Each age defines itself by its dominant scarcity. The age of agriculture arose when agriculture was less usual than hunting and gathering. The Industrial Age was notable when mass production was novel rather than routine. Industrialism's handmaiden, Capitalism, became our defining modality when there wasn't enough capital available to fund all the useful industrial possibilities.

Money is Free. Get Used To It.

But it's the 21st century. The automobile, furniture, housing and appliance industries will put their goods into your hands for no money down and no payments for a while. (With housing, you'll pay a little to rent the capital each month, but at 6%, the cost of capital is no more than the $500 monthly increase in the value of your $100,000 home.) Today, capital is, essentially, free, which makes it common, uninteresting and subservient to stronger economic realities. The next time you hear some old fart praising the virtues of capitalism, you'll know you're listening to someone who doesn't get it that, when capital is free, Capitalism is passé.

Read the whole posting. Thanks, Doc, for the link.

The end of the retail...

The end of the retail ride

The National Post of Canada has this very succinct article about the end of the consumer spending bubble (we consumers have wanted to believe it was a bad dream, but the poor economy is too much to ignore now) and how it will affect retailing practices for years to come. A couple important excerpts:

The U.S. central bank said consumer debt fell US$2.2-billion in November after rising US$1.6-billion in October. That is the first time credit has fallen since January, 1998, and the largest decline since October, 1991....

"With apparel prices falling 2% over the past 12 months, versus a long-term gain of 1.5%, unit purchases of apparel are not unusually weak," [Steve Wieting of Salomon Smith Barney] said. "Americans are not making do without winter coats this holiday season and consequently, the need to spend on apparel and other consumer goods seems reasonably satisfied."

The same could be said about most other consumer goods. Prices of all imported consumer items has fallen 0.8% over the past year, meaning that these are making "a smaller claim on the consumer's wallet."

In essence, American retailing is changing.

No longer does the sector rely on U.S.-made products for the shelves but is, according to Mr. Wieting, essentially distributoring foreign-made goods. Foreign manufacturers, anxious to hang on to their share of the largest market in the world, are more than willing to cut prices.

More proof the tax cuts...

More proof the tax cuts won't help

The Bush tax plan proposed Tuesday is predicated on the notion that any cash flowing into the home will be spent on More Stuff. Here's what the local financial advisor is likely to tell you to do with the money, based on a Michelle Singletary column:

Establish an emergency savings of three to six months' living expenses.

Pay down your credit card debt.

Increase your contribution to your 401(k) or similar workplace retirement plan.

Play catch-up on your retirement savings.

Open a 529 college savings plan.

While some of this will result in additional capital flowing into the markets, it is not going to sustain consumer confidence. And, this time unlike the previous cut, people are more likely to take a conservative approach to the money they get to keep through reduced taxes, because consumer confidence is way down from 2001.

We'll see what the do...

We'll see what the do with the money

It is a good thing that the Securities and Exchange Commission will have more money, but we'll see if it really uses the increased budget (still less than originally promised by President Bush) to improve enforcement. I congratulate Bush on adding to the budget for the Department of Justice for corporate fraud enforcement and for the Department of Labor to recover pension-fund monies pilfered by fraud. That last effort, especially, needs to be pursued with vigor.

A proposed architecture for media...

A proposed architecture for media managment

Marc Canter outlines and diagrams the basic foundation for a distributed media management framework that would allow one client application to bridge many formats and sources (different servers) simultaneously. This is an important part of what he and Broadband Mechanics* has been working on and it is good to see it becoming public.

Read...Discuss! Dialog around these ideas will move the industry forward to viable business models for supporting media businesses that don't require idiotic DRMs, sane user access to the content they buy, user-modified (that is annotated) content that can be shared so people can better discuss issues through this media, and much, much more....

* Disclosure: I'm a consultant to Broadband Mechanics.

UPDATE: Bill Gates' watch

UPDATE: Bill Gates' watch

My queries about whether Bill Gates has ever worn a watch have produced a few results, one pointing to the video of Bill Gates introducing his data-enabled watch designs at CES. Well, of course he wore one then, in fact it was prominently hanging outside his shirt cuff, indicating he strapped it on for the speech and, probably, stripped it off and tossed it when he was finished (Bill's no sentimentalist).

Most telling response was from a Microsoft employee: "He wears a watch now." Another Microsoftie speculated that Gates relies on his cell phone for the time. No one I talked to or emailed with recalls seeing Bill with a watch before CES.

But my search for any evidence of a watch in Mr. Gates' life, which he now say we're all going to want because it receives data and can crash, will go on.

A billion TV networks

A billion TV networks

Oliver Willis gets the big picture, that we can all see what we want when we want it. This is so much closer than people think, especially the people at the networks, who have their eyes shut tightly and are saying "I'm not going to look. I'm not going to look." Willis says he needs $3 million to knock AOL Time Warner from its pedestal.

It could be done for less, because you need just one break-out program deliverable on people's own schedule to redefine the idea of "when is it on?" in people's consciousness.

Link from LazyWeb.

No converged client, thank you?

No converged client, thank you?

Adina Levin writes that she agrees with some of Phil Wolff's recent posting on the notion of a converged client and disagreeing "vehemently" (and constructively) about the prospect of a smart-fat client becoming bloatware, like Microsoft Office has (always) been.

Adina concludes with a key line: "The hard part is going to be maintaining simple entry points to the underlying complexity."

I know that this is precisely what Phil was getting at, that the converged client knows how to configure itself and the data based on the current way the user is working, minimize the complexity in the UI while maximizing the complexity that can be embedded in a collection of network services behind the UI. Want a different view or to add a new media file to append a textual one? Drag the video from your desktop into the converged client and a window opens to handle the video editing, keeping the context of the page where it will be place through relationships created in a compound document that, with the addition of the video, now represents links to both files. Sounds complicated, but if done by experienced and skilled programmers it could be magical.

Just how bad was holiday...

Just how bad was holiday retail?

Truly ghastly retail sales reports are breaking out all over the place. Best Buy just up and shut down 110 stores with no warning. But up here in the Northwest, retailers say things went well.

Macromedia working on rich media...

Macromedia working on rich media blogability

Jeremy Allaire, whose blog seems to have temporarily disappeared just now (so I am excerpting the entire posting here), writes about the challenge of placing rich media into a blog format. This is something that I am very interested in, as I'd like to have the ability to deliver audio and video along with text, have it accessible in a news aggregator and in a system that would download a kind of customized program based on my various sources:

Media Objects in Weblogs.

There has been an active discussion recently amongst blog software vendors about a proposed extension to the MetaWeblog API for handling binary media.  It appears to be getting traction and perhaps we'll see it soon in MoveableType and Radio, if not others.

 

It raises an interesting issue especially as it relates to long-form streaming audio and video, where the user isn't really uploading a binary image or document, as is typically the case with binary data in web pages.

 

I've been experimenting quite a bit with Flash as a container for multimedia messages and content, with user recorded audio and video as the primary data types.  But the architecture is very different than a document-based HTML page.  The audio and video data is captured and recorded to a streaming server (Flash Communication Server) in real-time from the client, and then a Flash application loads and streams it in real-time from within an HTML page.

 

The challanges here for an open API are a plenty:

• 
  
  With long-form video, especially, we can't assume (yet) that the weblog system is the primary storage and delivery vehicle for the streaming asset. 
  
  
• 
  
  Each streaming architecture for rich media is different, and weblog systems don't have a standard API to be aware of that data.
  
  
• 
  
  How can weblogs account for content and data external to their system?

The solution we've come up with is very simple --- don't use the weblog to store or deliver any of the binary data, just use it to encapsulate HTML fragments that do live in pages and therefore can apply category meta-data and participate in RSS feeds.  But this just doesn't feel right, it's sort of hacking around a system that hasn't yet been designed to handle multimedia conversations.

Jeremy's suggestion that the files be encapsulated in HTML but reside somewhere else off the blog is absolutely the right way to deal with the problem. The question is how to meta-tag and facilitate the integration of non-blogged material into a distributed a/v distribution system. Marc's got some of the keys to this puzzle....

One big shared intelligence

One big shared intelligence

Jon Udell has a very thought-provoking piece on the evolution of communication, urging us not to focus on the technology and stay attentive to way our shared consciousness is going to grow. He uses the historical example of NNTP, the still vibrant news transfer protocol, to discuss how newsgroups transcended their foundation technology to remind us that RSS and RPC-XML are simple means to an end.

My concern, rather, is that we'll get hung up once again on applications and protocols....

Smoking the FM crack pipe

Smoking the FM crack pipe

CNET has a piece about the strong reception of FM radio spectrum at CES, ignoring the fact that Alan Reiter pointed out about FM data subcarrier frequencies previous failures and presuming that the iBiquity system will roll out successfully. I spent lunch yesterday with a radio friend talking about iBiquity and digital FM technology and it sure sounds like the radio industry, beyond the stations owned by iBiquity's backers, is not jumping to adopt this technology.

Granted, iBiquity's backers, which include ClearChannel, Entercom and many others, own a lot of stations. The story makes digital FM and the Microsoft SPOT technology sound inevitable because only companies involved in the technologies are quoted -- not a single skeptic appears.

Online listening on the rise,...

Online listening on the rise, fast

The Total Time Spent Listening to online radio stations soared 82 percent in 2002, according to Arbitron. Time for some streaming audio on niche markets to grab high-value audiences.... I wonder who will do that?

December layoffs predictably biggest in...

December layoffs predictably biggest in 10 months

The employment picture darkened in December as more than 101,000 jobs were eliminated from the nation's payrolls and the number of people who have been unemployed for at least 15 weeks increased to 3.2 million while the Bureau of Labor statistics said the unemployment rate was "essentially flat" . With a weak retail season underway, the extra staffing, which would have been laid off in January-February in a good year, went out the door ahead of Christmas.

The reason the numbers are "essentially flat" is that as we reach an 8-year record level of unemployment it takes more people losing jobs to change the higher unemployment rate by more than a 1/10th. There are a lot of people out of work (8.6 million), so a 101,000, while a large number, is a relative bucket in a swimming pool.

This gives a slightly different meaning to the declining inventories I referred to last night. We may actually be seeing a decline in inventories due to a genuine lack of demand, which means production won't rise to meet unsatisfied consumer demand.

UPDATE: For those of you media folks reading along, Challenger, Gray & Christmas reports that 11,516 media workers were laid off in November. That's a lot of talent in the market for those of us who think it's time to launch new media ventures.

What kind of watch does...

What kind of watch does Bill Gates wear?

In email with Alan Reiter this morning, we started speculating about whether Bill Gates, who introduced the idea of data watches at CES this week, even wears a digital watch, or any watch at all. I went through more than 600 pictures on Google, but found none that showed a watch. Bill usually gestures with his right hand during speeches, left firmly planted in his pocket, and where you can see his whole left arm he isn't wearing a watch.

Interesting question: Does Gates wear what he is suggesting what we'll all want to upgrade with Microsoft software? If not, what does that say about his read on consumer demands? Anyone know the answer?

No more dual titles at...

No more dual titles at the top

The Conference Board is suggesting that one solution to restoring investor confidence in corporations would be to split the roles/titles of chairman and CEO so that one person cannot hold the same title. I'm not sure this is going to much for many companies, where the founder or the executive who led the company to success takes on these dual roles -- there is something to be said for the leadership embodied in a "Chairman and CEO" who heads both the board and the company. Of course, the real issue is whether public companies need to split these roles.

The report includes this interesting condemnation of institutional investors by, of all people, John Bogle, former chairman of Vanguard Group:

"To the extent institutional investors-holding more than half of all equity securities of U.S. companies-are traders rather than owners, they do not exercise their responsibilities of corporate ownership and they squander their potential influence on corporate management and policy."

Early stage and young maturing companies, especially now that we headed back to the era of having to show a profit for years before going public, needn't split these roles. The splitting of the roles would be a solid exercise in analyzing one's company's needs upon going public.

The full report can be downloaded here (it's a PDF).

Wi-Fi security: myths in the...

Wi-Fi security: myths in the marketing

Cory Doctorow, of BoingBoing, debunks a variety of the arguments against open Wi-Fi networks and explains how opening up an access point can benefit the contributor to the public weal. [Thanks for the link to Glenn Fleishman for the link.] Excerpts:

Contrary to conventional wisdom, Doctorow encourages enterprises that maintain Wi-Fi connections to leave them open to public access. Doing so is a service to the community: It builds goodwill and costs nothing. On the other hand, attempting to close off the Wi-Fi connection adds cost and complexity to the network.

"The problem is firewalls, which don't work, haven't worked and aren't going to work," Doctorow said. "Firewalls are bankrupt technology predicated on the idea that everyone on one side of the firewall is trustworthy, and no one on the other side of the firewall is trustworthy." But in fact, criminals often gain access to the network from the inside.

On liability: [T]he same laws that protect Internet service providers from liability protect entities providing Internet connectivity, Doctorow said. "If it were the case that the network provider were liable, no one would provide network service and the Internet would disappear," Doctorow said. "A good lawyer will tell you to laugh it off."

How did the deadly indicator...

How did the deadly indicator turn out?

Looking back to Sunday, when I suggested watching funeral giant Hillenbrand Industries' quarterly report to see if people are scrimping on funeral spending. What were the results?

Also contributing to the higher revenues were Batesville Casket, primarily as a result of improved price realization.... Gross profit as a percentage of revenues also improved nearly 340 basis points as a result of the improved price realization and manufacturing improvements and efficiencies at all operating companies.

Meaning less discounting took place. So, the deadly indicator points up.

Also, monthly wholesale sales rose by 1.2 percent in November while inventories were up slightly (0.2 percent) and down 1.7 percent from a year before. This points to increasing production, as inventories/sales ratios are at a 10-year low.

Irony , but when?

Irony , but when?

When was this written, and about what country?

The trend that emerges from the survey results is that even though social gaps keep widening, people no longer aspire for anything beyond what they deserve. They try to find satisfaction in whatever they have, and hope for a kind society where everyone will help one another in hard times.

Perhaps this is the wisdom they have acquired from their experiences through the frantic years of rapid economic growth and the insanity of the bubble era. Have they matured? Or have they just become resigned?

Answer: Asahi Shimbun, Jan. 9, 2003. The "bubble" is Japan's 1980s. Let's not be saying we no longer strive for anything beyond what we deserve in ten years.

Success is a declining volume...

Success is a declining volume of mail

In one of those you have to read to the end pay-offs this story about the privitization of the Saudi Arabian postal system. Approximately 100 "agencies set up by the private sector" have increased the number of inhabitants served per postal employee from 2,200 in 200 to 2,244 in 2001 (two percent), which could just as easily be due to statistical error and not improved efficiency.

So, read to the bottom and you also find that the postal statistics "revealed that the volume of mail was declining with the switchover to the e-mail as the means of communication."

In the United States, the Postal Service blamed a decrease of 1.6 billion-item fall-off in mail sent in the first calendar quarter of 2002 on the flagging economy.

Congrats to Dave!

Congrats to Dave!

Dave Winer is going to Harvard Law School's Berkman Center for Internet & Society, following such notables as John Perry Barlow into the Harvard yard.

Dan Gillmor on We Media

Dan Gillmor on We Media

Dan Gillmor has a piece in Columbia Journalism Review on the evolution of journalism in the era of pervasive communications and blogging. If you missed his Supernova talk, this is a great way to catch up on these good ideas.

Microsoft's FM sidecarrier strategy: The...

Microsoft's FM sidecarrier strategy: The technology that will die again

Alan Reiter blogs lengthily and articulately pointing out that the FM sidecarrier bands on which Bill Gates is basing his new glanceable data services technology have failed before, completely. It's not certain that Microsoft will follow Cue Corp. and Sieko's previous failures, but he's right when he describes the functionality Bill talked about as being attractively glanceable are "banal and already available."

The Japanese Liesure Time Matrix

The Japanese Liesure Time Matrix

Robert Reddick points to this very interesting matrix of the breakdown of Japanese liesure time habits by age group. Look how the tendency to do things in society diminishes as you move left on the matrix from old age to youth.

FCC irrationationality

FCC irrationationality

David Weinberger summarizes a thread going on in blogs and through email about the FCC. It covers David Isenberg's latest SMART letter (see my comments here) and Howard Greenstein's suggested explanation. Worth a read.

AOL's reported $10 billion write-down

AOL's reported $10 billion write-down

Okay, is anyone surprised that AOL is going to write down the value of its online service in the wake of the Time Warner merger? It was grotesquely over-valued and Steve Case got a killer deal on Time Warner, because he paid in inflated currency. It will be regarded as a coup someday. Meantime, I'd be happy to buy more stock on the downside of this announcement. Everyone said Steve Ross had botched the Time - Warner merger for several years after that deal, too.

What's left of Net M&A?...

What's left of Net M&A? Almost nothing.

Internet-related mergers and acquisitions measured by value fell by 70 percent in 2002, but the number of deals was down only 15 percent, says WebMergers.com.

Simple math tells us that inflated valuations have been wiped out and that any company still struggling along without a profit or imminent profit is going to be crammed down in an new round of funding. The value of a company is utterly unrelated to the money it has raised (the old measure) and is completely related to its ability to make money. The number of deals in 2003 will fall and valuations for profitable companies will be typical of growth companies, with P/E ratios in the 40x to 60x earnings range.

Watch Google go public with a post-IPO market cap of  between $4.5 billion and $5.1 billion.

Talk Radio: The numbers

Talk Radio: The numbers

MediaPost breaks down the listenership of talk radio by political affiliation, based on a Gallup poll:

Gallup looked at where partisans get their news each day, with talk radio and NPR among the options. The findings: 29% of Republicans tune into talk radio daily, compared to 15% of Democrats. Independents were in the middle, with 21% using talk radio each day. Even so, Gallup says only about 3 out of 10 Republicans listen to radio talk shows on a daily basis. “It is difficult, therefore, to argue that the thinking of the entire Republican base across the country is being controlled by such radio talk shows,” says Gallup. We’d also point out the difference was nearly non-existent, however, when comparing usage of NPR. 23% of Republicans tuned-into NPR each day, compared to 22% of Democrats.

Seniors all over the Web

Seniors all over the Web

SeniorNet conducted an unscientific (that is, respondents were self-selecting) poll of its users's Web habits and found that 67 percent of senior respoding are using the Net 10 or more hours a month. Ninety-four percent use the Net for keeping in touch with family and friends (that is, email)  and 72 percent count on Web news sources.

Lots and lots of good data here, but here are a few standouts:

The history of the future,...

The history of the future, from Japan

Joi Ito has a very involved and involving essay on everything digital, using the MetaWeblog API and Dave Winer's first DaveNet essay of 2003 as a jumping off point. The important element is his personal promise that "I will TRY to invest the rest of the $15mm I have into companies that develop things are end-to-end stupid network oriented, open standards compliant, blog community supportive, non-proprietary OS based and generally un-evil. I will also try to get others to invest with us. I'm going to try as hard as I can and still be fiduciarily responsible to my investors. I want everyone else to try very hard too. Let's see if we can make this happen."

Read... think, invest.

Glanceable information

Glanceable information

Mary Jo Foley of Microsoft Watch has a great summary of Bill Gates' Consumer Electronics Show keynote, where he announced "a sea change in what we can glance at." You see, soon, there will be a tiny Windows kernel everywhere we look. Consumer electronics are the next great frontier for computer-centric companies (think Dell's Axim PDA, TiVo and Replay's increasingly networked approach to the home, Apple's home media strategy).

This does put Apple and Microsoft on a collision course of sorts. Arik Hesseldahl at Forbes.com writes that Apple is set to attack Microsoft's Office market and he is right, but slightly off the mark in that the Apple strategy takes us away from the "productivity" market to deliver a more Web-centric personal data management feature set. Keynote, the "PowerPoint killer" presentation software Apple demoed this week is more a rich media authoring platform than a slide show application; the difference is subtle, I know, but the first signs that the productivity suite closed architecture approach to software is breaking up like the Antarctic ice shelf are already clear in XML and blogging tools.

Real's DRM

Real's DRM

Helix DRM (Digital Rights Management)is a new cross-format copyright protection technology from Real Networks. We'll get to the consumer implications in a moment.

It is simpler than many other cross-format DRMs, in that it is built into the Real Helix server and can interact with a variety of clients, but this statement by Dan Sheeran, vice president of media systems at Real is patently untrue: "This breaks the stranglehold that tied a content owner to using a given format if they wanted to use DRM." The folks at Intertrust, for example, would dispute that there is a stranglehold that ties a content owner to a particular format.

Using Helix DRM, one can add copyright management code to Real-encoded files, MP3, MPEG-4, AAC, ATRAC3 (a Sony format, probably because Rob Glaser likes to record his meetings on a Sony MD recorder) and Narrowband AMR audio, as well as the H.263 video format. That actually ignores more than a few formats, but what the heck. I also wonder how the various patent holders, including Intertrust and Audible*, will feel about the Real move to secure portable audio formats.

What this means for the consumer is that copyright controls are crawling into their systems along with streams and MP3s, etc., downloaded from a Helix server. The technology is open, so different rights management (that is, code for limiting playback, reproduction, archiving rights) can plug into the Helix DRM and support, as Real explains: "a broad set of business models including purchase, rental, video on-demand, and subscription services."

These tools solve one "problem" for content owners, the securing of content, but actually exaggerate the other, which is creating fair and valuable content offers. Companies have tended to use DRM to inflict misguided limits on the use of content paid for by the listener/viewer, so we'll see where the addition of DRM to Real streams takes us.

* I am a consultant to Audible, but in no way should be construed as speaking for the company on the matter of its patents.

Yoinks! Playstation sales were up...

Yoinks! Playstation sales were up 42%

Four million Playstation 2 game consoles were sold in North America in November and December -- that's a 42% gain over the previous Christmas season and represents 10 percent of the total installed base of all networked game consoles in mid-2002. How long until Sony starts delivering movies to these things?

DoCoMo sinks debt to fund...

DoCoMo sinks debt to fund 3G

Striving to prop up its 3G services with increased capital spending to expand coverage and services, NTT DoCoMo is raising $6.7 billion through a bond offering. The service has only 150,000 subscribers, so it remains to be seen whether 3G is going to be a value-add or simply a way to retain voice and, in DoCoMo's case, iMode's 34 million subscribers. Moody's cut DoCoMo's rating to Aa1, still in premium territory, on Tuesday.

There's also an interesting dialog among readers at 3G Newsroom about when Hutchison Whompoa's 3G networks will be sold. The bets are on some time within 18 months and there is good inside scuttlebutt from laid-off employees.

Streaming media on GPRS and...

Streaming media on GPRS and 3G from BT

Oplayo and BT Broadcast Services announced they will enable streaming to GPRS (which is available on many cell phones and from many carriers today) and 3G phones using Oplayo's player software and authoring tool. The product is aimed at content providers, though you can download a player for the Nokia 7650 mobile.

I'll bet it looks better in the Flash demo than over GPRS. Just a hunch.

MSN gets a Charter

MSN gets a Charter

MSN announced the closing of a deal with Microsoft co-founder Paul Allen's Charter Communications cable service to deliver MSN as part of the cabler's high-speed Internet services. Now, if only something was on, eh? We're going to have broadband "skins" aplenty and very little rich media to fill it.

The markets says "no" to...

The markets says "no" to Bush's push

George W. Bush says his tax plan will "push the economy" out of recession. The Dow has offered a resounding condemnation of his plan, falling 145.28 points after having a day to digest the nostrums and prevarications of our president.

Here is what the man said in Chicago yesterday:

These tax reductions will bring real and immediate benefits to middle-income Americans. Ninety-two million Americans will keep an average of $1,083 more of their own money. A family of four with two earners and $39,000 in income will receive more than $1,100 in tax relief -- real money to help pay the bills and push the economy forward. And the sooner Congress acts, the sooner the help will come. (Applause.)

Taken together, these income tax cuts will put an additional $70 billion to work in the private economy over the next 18 months. And there's no better way to help our economy grow than to leave more money in the hands of the men and women who earned it.

Here is what the market said today:

Dave Winer on the Two-way...

Dave Winer on the Two-way Web

In his first DaveNet essay of the new year, Dave Winer of Userland/Radio fame talks about the demands on technology and the form blogging is taking. An excerpt:

So far the focus has been on weblogs for journalists and would-be journalists, leading to the question about how we make money with weblogs. This is very important, and I don't want to minimize it, but there are other important questions to ask.

If a weblog is used by a workgroup to keep the members informed, and to connect with other workgroups; and if their feeds are aggregated to inform shareholders, management, regulators, and other interested parties, you might measure the money-making in the form of money saved, or shortcuts found, or new ideas discovered, or blind alleys averted. Weblogs have a place in business that's as strong as their place in decentralizing news gathering and reporting.

And there's more. Imagine a weblog for each patient in the hospital. Each patient defines a community, the people who want to know what's going on and how the guy is doing. I know my friends and family would have found that useful when I was hospitalized last summer. I certainly wouldn't have minded them having the information (although I'd want to control who could access this particular weblog).

Jeremy Allaire's response is interesting too. An excerpt from Jeremy:

The question it really provoked for me, and one that has been lurking in my mind for the past few months, is whether weblogging as we know it will truly become a mainstream form of personal communications and sharing, rather than it's current perceived niche as form of personal or independent Internet journalism.

Often, when smart people hear about weblogs/blogs/blogging they really ask -- isn't this just the web?  Isn't this just web publishing?  Indeed, it is, and as Dave responded to someone in his essay, it's the promise of the web but just made easier (and more sharable).  So what makes it different and how could it be transformed into a mainstream phenomenon?

From my perspective, weblogs are revolutionary because:

• They make publishing to the web really simple --- they are very simple, consumer-level content management systems.  No HTML, no scripting, no knowledge of web servers, page layout, etc.
  
• They fulfill the promise of the semantic web (partially) by ensuring that your content is well structured (it's all XML!), and shareable (through RSS) in a standard way, and even well-described so their content can be harvested (RSS 2.0 in action will take is there)

But they're also very constrained in terms of what consumers will ultimately want if they are to become mainstream forms of personal communications, equivailent to email and the written word.  For weblogs to become mainstream they need to...[read the rest of Jeremy's posting]

Repeating today's theme, the tools we're talking about are predicated on rich participation from the edge of the network, so we need synchronous data connectivity in order to assure the richest input from the home and small office, where most of the economic value in any country resides.

Pew surveys dissembled and analyzed

Pew surveys dissembled and analyzed

Staci Kramer of Online Journalism Review has an excellent analysis of the statistical candy that is the Pew Research Center for the People & The Press and Pew Internet & American Life Project, which have a lot to say about how we use media to be informed. Summary: "They should be able to do a better job of filling in the white space."

Send cash, Cuban cigars and...

Send cash, Cuban cigars and hookers

David Weinberger says we should prepare supplies for the lobbying effort on behalf of the Digital Media Consumer Rights Bill reintroduced Tuesday by Rep. Rick Boucher (D-Va.), Rep. John Doolittle (R-Ca.), Rep. Spencer Bachus (R-Ala.) and Rep. Patrick Kennedy (D-R.I.)

Did you know that the Clerk of the House maintains what amounts to a blog of floor debate each day?

Doc: Necessity as mutha

Doc: Necessity as mutha

Doc thinks we're stuck. Not really, we're building steam. He says wisely: "We need a new DigID invention that mother's necessity. Something that enables the marketplace to make itself. We don't have it. And we won't get it from the usual BigCo suspects, either."

We're running out of names...

We're running out of names for things

Okay, so Intel has a chipset for mobile computing, perhaps the most "de-centralized" of technologies and what does it name it? Centrino.

Asynchrony is slavery!

Asynchrony is slavery!

Jeremy Allaire points to Dan Gillmor's dissection of a Wall Street Journal story about content fees. Dan writes, in part:

The cable and telephone companies now poised to dominate these services, thanks to a federal government that is pushing the idea of a new oligopoly in Internet connections, will let you download at a relatively high speed. They will not permit the converse.

There are several reasons, beyond the merely technical problems (which could be solved) of an old infrastructure. One is to prohibit unauthorized sharing of copyrighted materials. The other is to ensure that competitive media have no chance of getting established.

It's all about control. As usual.

And Jeremy adds:

Embracing the idea of the two-way web starts taking us there, but I don't think this is so much about consumers becomming media/content providers as it is about consumers communicating and sharing life experiences in a much richer way.  There are counterveiling forces here, some backed by large industries (the software, consumer electronics and communications industries in particular) that want bigger two-way pipes.  Why?  The world is moving towards richer communications, where consumers share life experiences and communicate in an ad hoc way using audio and video, and use their new digital devices to capture, create and share those experiences.

For broadband suppliers, it's ultimately about the bottom-line.  If bigger upstream pipes translates to metered or premium services that leverage two-way rich media and communications, they'll bite.  Or so I hope.

I think they'll bite if content and carriage are decoupled or if one of the big players (AOL) has an epiphany and realizes that user created content or, even, user-manipulation of Time Warner content, is a much larger source of revenue than simply forcing people to remain consumers of information.

For years, I have been arguing that synchronous data connectivity is a must in order to really transform the economy. If getting to and from "work" remains a matter of getting in the car, home data usage will never reach its full potential. I've said it here and here and here and here, going all the way back to 1994. And I'll say it, again: Asynchrony is slavery.

Competition from below -- I...

Competition from below -- I like it

Upstarts are what make the world go around. Cisco CEO John Chambers says "Our next generation of competition is going to come from below," from the Dells and low-end networking systems manufacturers. "We're going to move downmarket," Chambers said. "We will not just play defense, we will play offense as well." Infoworld reports on Chambers' new strategy from the Morgan Stanley Software Services Internet and Networking Conference.

When you have a big stupid network, simple routing and switching features are a commodity, something Cisco would not have admitted even a month ago.

Open source mobile phones would...

Open source mobile phones would deliver consumer empowerment

NEC is reportedly considering shipping a mobile handset based on the Linux OS kernel, which would provide all sorts of interesting openings for open-source application development. As Julian Bond points out, an open source phone that is not tied to a single carrier is a rare and costly creature that is largely mythical.

I think all smart phones will eventually be able to liberate users from a single carrier, partly due to the move to software-defined radio that provides both frequency and protocol agility and partly as a result of the migration to web services. However, if the various OS providers (Palm, Microsoft, Qualcomm's BREW, Symbian, etc.) are going to provide that freedom they will have to be pushed by an open source alternative; and this just may be it.

Can you subpeona records that...

Can you subpeona records that don't exist?

Lawmeme reports on Cryptome's being served a subpeona for its server logs in a case relating to access to this Web page. Problem is, Cryptome deletes its logs every day as a matter of practice. The subpeona deals with records of who visited the site between November 7, 2002 and November 14, 2002. It's not clear to me that there is any legal way to subpeona a log except after the fact, so daily log deletion seems a perfectly reasonable way to protect users' identities.

Rumors of Apple's fading are...

Rumors of Apple's fading are exaggerated

I'm jazzed about the new Apple hardware. OS X is at least as useful as Windows XP as a platform for what I do day-to-day, and besides I've always got two or three different systems running side-by-side at any time (I run both XP and Jaguar now). Sure, the new huge laptop is oversized, but so is my neighbor's SUV. Get it, it is not about convenience but, as Steve Jobs put it a couple years back, about "the sex."

Apple is the Porsche of PC design and development and its products excite people. There is nothing wrong with a company when someone with 18 years on Windows and DOS, like John Robb, says about its hardware: "OK.  That's it.  My next computer is going to be an Apple.  After 18 years on a PC, I am ready to call it quits.  Windows is waaaay too much of a hassle for me to maintain." He'll find Apple's OS flawed, but more "tight" in the Goldmember sense.

Newspaper revenues on the rise?

Newspaper revenues on the rise?

According to the Newspaper Association of America, newspaper ad revenues will climb by at least 3.2 percent and as much as 6.1 percent this year. But the fourth quarter of 2002 numbers aren't in and this assumes the trend in 3Q 2002 continues.

"The advertising recovery currently under way means that although spending declined sharply in 2001, conditions are improving a little more rapidly than they did in the last downturn in 1990-1991. Performance in 2003 should be better, albeit with the overhang of uncertainty," wrote [NAA Vice President of Business Analysis and Research Jim] Conaghan in the article.

After a miserable 2001, it's hardly surprising that 2002 was an improvement in that it was almost flat growth for the full year. This sounds like cheerleading and not a solid prediction.

Canadian CD taxes

Canadian CD taxes

Blame Canada! Sheer idiocy north of the border as Canada is hiking the levy on blank CDs to 59 cents (in that Canada money) per disc. The money goes to artists. But what if I am buying the discs to back up my data. What if each day I need 30 discs for reproducing my own music, not someone else's? Then I am paying an extra $17.70 (in, granted, Canada money) per day for blank media. And additional fees may be charged if the music industry has its way. Open the door to stupidity and the greed-mongers rush in.

No diversity in radio, so...

No diversity in radio, so where are you going to find it?

Wired has a piece on the Future of Music Coalition policy summit. Sen. Russ Feingold (D.-Wis.) is preparing to introduce legislation that attacks payola (paying for play), which boosts shitty music into the charts. But it all comes down to the fact that the massively consolidated radio business is filling our ears with white noize. Use the Net, Luke....

Cox and Wyden introduce permanent...

Cox and Wyden introduce permanent Net tax moratorium

We don't need sales taxes on the Net, rather local and state governments need to capture revenue from the businesses in their states, which will be enhanced by competing more efficiently and successfully via the Net. A bi-partisan bill was introduced today to make the current ban on Net taxes permanent. Rep. Christopher Cox (R.-Calif.) and Senator Ron Wyden (D-Ore.) submitted the bill, the Internet Tax Freedom Act to extend the law they authored in 1998, which expired last October.

Bryan chimes in on Digital...

Bryan chimes in on Digital ID

Bryan Field-Elliot, of PingID, adds his two cents:

From where I'm sitting, the Liberty Alliance really is just a technical spec committee, trying to solve single sign-on today, and more rich identity applications later. But, it will always be just a wire protocol, and a fairly reasonable one at that.

Agreed. It is just a tool that does pretty much what it is designed to do, provide a form of transactional identity. It's what you do with the tool and what it is designed to do that shape the choices humans have when they use it. The more we talk about it, the more flexible those tools will become, because we are the market shaping the demands the Liberty Alliance is trying to address.

That isn't to say that some companies involved with Liberty, might desire to collude over customer data. For all I know, some of them may already be. The tools to collude have always been there, techniques like the 1x1 invisible pixel for doing "virtual" cross-domain cookie reads, several years old. (Mitch recently wrote about the technique here). The Liberty protocol itself doesn't offer anything at all to make this kind of collusion easier; in fact it has provisions which are supposed to make it harder, such as the "opaque pseudonym" provisions.

I don't think pseudonymous transactions addresses the post-transaction revocation of rights to use one's identity. It deals with pre-transaction negotiation just fine, but not retrospective solutions to the possession of identity-related information (including things we think of as reputation). If it isn't easy to revoke permissions, it becomes as complicated as, say, trying to get your name off a direct marketer's mailing list. Imagine the world just sucking up your information--it's not hard, since it's how the Net works today and, look, everyone hates it.

There's nothing to stop an organization, like PingID, like the Identity Commons, or like something Mitch may try to start up himself, from implementing the Liberty protocol on its own server, getting people to trust it and establish Digital Identities there, and acting as the trusted gatekeeper, for-the-people as it were, for all Identity interchange with other sites via the Liberty protocol. The protocol works, is being extended with new capabilities, and the tools will soon be there too (I'm feverishly working on an open-source Java implementation of the Liberty protocol as we speak). With enough momentum, such an organization could become the de-facto standard Identity Provider "for the people", and the beauty of it is, you've already got 175 companies (mentioned in today's press release) re-tooling their websites as we speak so that they can be well-behaved, Liberty-compliant consumers of your Identity providing service.

Really, go do it. Ask me how.

I have some ideas, too, But I really don't have time to start something, because of all the other stuff, so I'll just support the debate with constant vigilance. There are some out there, though.... But I'll leave them to self-identify, and I'll point to them when they do. Though we really ought to be learning more about Genio.

Britt blazes on Digital ID

Britt blazes on Digital ID

Following my screed on the Liberty Alliance press release, Britt Blaser adds eloquently:

Perhaps we'd understand how close we are to a solution if we remember how clumsy companies are. Trust me on this: companies are far more scared of us than we of them. It's just that they've managed to camouflage the irritation we collectively feel about depending on them to allocate resources (Us) to extract resources from the Consumer Us. When we recognize and organize our voice speaking to ourselves, we'll find it easier to take the small steps to finish the story we imagine but don't know how to conclude.

The solution is NEA web applications. Design our culture, not widgets. If we don't like the economy, design a better one (our mission here). If we don't like the way the Electoral College works, design the Electoral Collage, the silent majority made deafening by broadcasting preferences derived from the most of us using a UI so compelling we won't leave it alone. Even if things don't resonate with the designers' preferences, who cares? Once we establish our collective voice, we'll learn to live with the elegance of equitable disappointment and the power of our own awakening.

Read the whole post... think. Recognize that you are the only one who can change the basic assumptions of product design, that we wait for delivery and take what we get. Britt's right, we have to organize to push the digital ID debate in the right direction. If Genio is something new and amazing, it has to be discussed, not delivered as a completed technology that becomes inflexible by its implementation. Lawrence Lessig introduced the Creative Commons concepts and debated them publicly for more than a year before the group released technology. If markets are conversations and the Genio Protocol (or is it this secure site?) wants to play, it better be the subject of a lot of discussion. If it can't survive in the open, it can't survive in the market.

Cable rates have risen, subscribership...

Cable rates have risen, subscribership falling

The cable industry has reached the point of price resistence. It needs new features and services to bring new revenues and revive customer sign-ups. A new report from the FCC has Senator John McCain contemplating hearings on cable reregulation.

The announcement that cable was losing subs, apparently to DBS, wasn't entirely unexpected, a telecom lobbyist explained. DBS gained about 2 million new viewers, accounting for 20.3% of the subscription TV market. As of June 2002 cable had 76.5% of that market, down two points. A lobbyist opined that the FCC was suggesting a link between consumer satisfaction and sub losses, though an FCC staffer said that was not the case.

Despite the bad news, Morgan Stanley's cable analyst is raising guidance on share values in anticipation of further consolidation in 2003. Contrast his assumptions about values with the facts above. Point two is predicated on decreasing competition among channels. Point three won't be realized if the industry continues to lose customers:

Underlying the shift are three main themes, he said. First, despite big cable companies being drastically undervalued, they are finally seeing revenue from selling value-added services to existing customers. Second, content companies have never before had to deal with a company of the size and scale of Comcast. And third, cable operators are seeing better returns on invested capital. While the big content companies such as Viacom and Disney are seeing returns on invested capital of 3% to 6%, cable companies are seeing returns as high as 20%.

Bought a CD? Get $20

Bought a CD? Get $20

The recording industry has settled a price-fixing suit with the RIAA, the same people who now claim you are a thief if you copy a song. If you've purchased a CD between 1995 and late 2000, you can go here to sign up for a $20 payment from the recording industry. Do it just for the Karmic pleasure of it. You have until March 3rd to file a claim.

The Distributor Defendants are: Capitol Records, Inc. d/b/a EMI Music Distribution, Virgin Records America, Inc., and Priority Records LLC; Time Warner, Inc., Warner-Elektra-Atlantic Corp., WEA, Inc., Warner Music Group, Inc., Warner Bros. Records, Inc., Atlantic Recording Corporation, Elektra Entertainment Group, Inc., and Rhino Entertainment Company; Universal Music & Video Distribution Corporation, Universal Music Group, Inc., and UMG Recordings, Inc.; Bertelsmann Music Group, Inc. and BMG Music; and Sony Music Entertainment Inc. The Retailer Defendants are: MTS, Inc. d/b/a Tower Records, Musicland Stores Corp., and Trans World Entertainment Corp.

Germany: Record trade surplus still...

Germany: Record trade surplus still not enough

On the watch out for a global depression front, Frankfurter Allgemeine reports:

Germany produced the biggest trade surplus in its postwar history in 2002, according to the Federal Statistics Office, but the lively export industry was not catalyst enough to generate even sluggish growth in Europe's largest economy....Economists estimate that last year's foreign trade bonanza contributed 0.75 percent to economic growth for 2002. But the domestic economy shrank by over half a percent, making an estimated 0.2 percent overall growth for the year....This year, the government is placing its hopes squarely on the country's exports again. But economists and industry leaders fear that the strong euro will put a damper on foreign trade in 2003. They say a euro worth 1.10 dollars would be enough to slow exports. The euro is currently trading at around $1.04.

In the U.K., the Times of London reports profitability among companies is at a ten-year low:

The rate of return on capital invested in UK non-financial companies dropped in the third quarter of last year to only 11.0 per cent — the worst figure since the end of 1993, official figures showed.

The news was seized on by the Conservatives, who accused the Government of undermining business with tax rises and excessive regulation.

Of course, the Times of London likes the Bush plan:

By putting value back into dividends, Mr Bush should ultimately do more than put money into pensioners’ pockets. He will give Wall Street a chance to revive its fortunes by offering a different story to investors. In the bubble years, paying dividends was reckoned old hat. Microsoft, for much of that time the world’s most valuable company, never paid a regular dividend or had any intention of doing so.

A plan in the hand...

A plan in the hand is better than two in a Bush

The $670 billion "growth and jobs plan" introduced by President Bush today didn't move the markets. The Nasdaq was up 10.25 and the Dow down 23.98. Let's follow Bush's beliefs and take the market as a diviner of value to make some judgement about the value of the plan: It fails.

It does nothing to deal with the short-term problems of the economy, despite the fact Bush's economic advisors claim it will create 2.1 million jobs in the next three years. Eliminating the dividend tax will "help" a small fraction of the elderly population he holds out as examples of beneficiaries of the cut. The elderly pitch rings hollow, because they are not likely to increase spending in response to the lowered taxes, and it's spending the economy needs. In fact, most of the dividend relief would flow to approximately 5 percent of the total population, the richest five percent and not just to a group of elderly investors.

Doling out another tax refund check to families will only contribute to higher interest rates and falling support for education and various programs that benefit families. There are actually services, like education, that are more efficiently delivered when everyone pays a little toward the cost. We need education to improve, because in 20 years the country still needs to be competitive, more so than today. With state governments headed for bankruptcy, the Federal government should be shouldering some of the burdens the states are dropping.

Another area we can and should spend on now is defense technology, so that when our soldiers do fight they are the best armed, best protected soldiers on the planet. That investment would translate into jobs in manufacturing, technology and throughout the supply chain. But, no, cutting taxes is the only and absolute solution on which Bush is hanging the future of our economy.

And only one-half of one percent of the total package is for the "folks" (as Bush puts it) who are looking for work: Just $3.6 billion of the $670 billion for job retraining and child care for the unemployed, and they have to pay back the cash if they don't get a job in 13 weeks. I think that sends another clear message. The president doesn't care about the folks, he just talks compassion.

Take some advice from Japan...

Take some advice from Japan on the SEC

The Asahi Shimbun editorializes:

Market oversight requires a watchdog with teeth.

If Japan is to have more solid, more effective securities markets, one job that needs to be done quickly is the creation of a securities-trading oversight body with as much independence and authority as the Securities and Exchange Commission (SEC) of the United States....

In Japan, too, a rash of stock trading illegalities, including brokerage houses compensating key corporate clients for losses, brought about the creation of the Securities and Exchange Surveillance Commission (SESC) in 1992.

But the SESC, unlike its American counterpart, has neither power nor independence.

Unfortunately, the editorial is about some U.S. SEC that exists in some alternate universe. Our politicized SEC has dentures and it takes them out often.

I am Steve I am

I am Steve I am

JD has a great summary of the product releases at Macworld and this photo of Steve Jobs carrying the two tablets of knowledge that will lead the people to wisdom. It wasn't until I wrote the headline on this story that I realized how much  the character Sam-I-am in Dr. Seuss' Green Eggs and Ham sounds like God speaking to Moses.

Hotels.com: The "first crack"

Hotels.com: The "first crack"

U.S. Bancorp Piper Jaffray's Safa Rashtchy is downgrading Hotels.com, saying its lower-than-expected results "will be seen as the "first crack" in the online market, which has so far eluded the broader offline travel recessions." This is a stock trading at 46.48 and Rashtchy lowered price targets from $70 to $42.

There is a good reason to lower a $70 price target on a stock with a P/E ratio of 58.28, but there is no evidence in the continuing growth in online commerce that Hotels.com is an indicator that other online travel sites are going to suffer. This looks more like correcting previous overly optimistic ratings on one stock rather than a trend.

Eric faces me?

Eric faces me?

I went to college with this guy whose nickname was "Chunsey," and Chunsey liked to mock people who didn't know the answers to his very smug questions by shouting "Face!" and rubbing his hand all over his face. Eric Norlin has responded to my challenge to find any projects using Liberty Alliance technology that give people control of their identities with a resounding "Face!"

He fires back that the Genio Protocol, built on the Liberty Alliance platform, is going to give people control of their identity. Unfortunately, it wasn't mentioned in either the story or press release I pointed to. Nor was it produced by a search of the Liberty Alliance. Nor does the genioprotocol site include the phrase "Liberty Alliance," so pardon the fuck out of me!

What is it? The Genio Protocol is a Digital ID protocol that Eric alledges is built on Liberty Alliance technology that has a really stirring mission statement that says all the right things (it's just lacking a business model). But, as I say, I don't see evidence of the Genio Protocol's use of Liberty Alliance code and I wonder why this hasn't been pointed out earlier in the Digital ID debate, since it is clearly aiming at empowering the individual. Doc's on the board of advisors and he didn't point this out?

You can sign up for the GenioDevelopment mailing list here.

Eric also says I'm being melodramatic about the Liberty Alliance view of individuals -- there, at least, he is wrong. It's the implementations by organizations that will treat us like slaves/consumers/baby-birds-to-be-stuffed-full-of-shit; the Liberty Alliance is simply facilitating organizational control of individual identity.

The Stupid Post Office

The Stupid Post Office

Stuart Henshall comes out with a new twist on the spawning of a business model for personal ownership of identity, drawing on David Isenberg's notion of a stupid network. "We are close to the point where consumer can have a STUPID POST OFFICE," he wrote in email to me. "I'd like to think it was more open source... a postal bazaar, than a new cathedral."

Like Paypal provided a verification system for linking e-mails with physical names and addresses, the same can be done for our digital mail box. A PayPal POST type system would enable "franked" mail only to go though. Franking can be determined by the rate card and other features, like contact list updates.

By setting a fee for a "registered" mailbox.... direct mailers, billers etc can quickly move expensive inefficient mailing to more effective online formats. It works virally. Imagine I open an e-mail box for everyone in the whitepages and enable direct marketers to send mail to these accounts. They will pay me a portion of the fee for mail handling (just like Visa) and the balance of the fee will be handled like an unclaimed PayPal account. When the unclaimed digital post value reaches $10.00 then a traditional physical postcard is electronically printed and sent to the physical address. It says... you have digital post, sign your account and collect $10.00. The recipient then opens the account and receives payment for each "letter" opened. This is now an active account. Legal obligations can be contracted, eg collection daily or levels of frequency.

This would be made rapidly smarter with different levels of profile access. In the beginning 25 cents may almost represent a drop box. However, additional levels will use mail profiles to create additional value. Eg accept mail from Sears, Wallmart, Target.... rejects from Nordstroms, Macy's etc. may enable another retailer to more appropriately search paying a higher value to obtain a more targeted distribution. This might pay the consumer a dollar for looking! I can see agents emerging manipulating this info trying to find markets. Now consumers may also be prepared to sell additional profile information. Eg age, favorite brands, plenty of possibilities, these could be bundled as well. A few simply research questions would create a system vastly more sophisticated than the current one quickly. The more partiticipation the greater the definitions and the larger the market for segmenting data. I might even tie it to my TIVO account!

There's a lot more there there. Read... think.

Digital ID: Reality bites

Digital ID: Reality bites

Sounding like the marching sentries at the Wicked Witch's castle in The Wizard of Oz the Liberty Alliance trumpets the first roll-out plans of its members while we people, whose identities they will be abusing cower in the shadows, like a Strawman, Lion and Tin Man waiting to sneak in to see if we can rescue innocence. Read this Infoworld story about the Liberty Alliance. Check out the press release announcing 22 new members of the Libery Alliance.

I challenge anyone to find a single example of a project that will give the individual control of their identity; instead it is all about hanging tags around our necks and tracking us, like the security systems at all those Web startups that have gone out of business. These top-down identity regimes will not produce an equitable relationship between companies who want access to our identities and each of us, the sovereigns of our personal information. Instead the dialog is going to end up like this: You [sheep] need a card to open this door. You [slaves] need a card to access this building. You [consumers, the wide-mouthed baby birds of the economy] need a card to be issued food from the cafeteria.

We must own our identities and that process must begin from the edge and grow into the networks so that people end up in greater control of their personal information. What these projects describe is a world dominated by T2 and T3 identity in Andre Durand's hierarchy. I cannot imagine anyone arguing that, if 802.11 wireless had been rolled out by carriers before it started growing organically, the results would have been revolutionary in any sense. However, we're giving in on identity before the first skirmish because there is an assumption that only organizations give people identity.

Because we need to say...

Because we need to say it again and again: Here comes the bailout

David Isenberg predicted the end of the old phone system in his 1997 paper, The Rise of the Stupid Network. In his latest email SMART newsletter, he reiterates all the reasons the FCC's plan to bail out the local telephone companies is a bad un-smart idea. The need to fail fast, as a group of us put it in a letter to Chairman Powell. Confirming what I wrote here and here, David says:

Internet M&A ahead?

Internet M&A ahead?

FindProfit, an excellent subscription blog for the active trader from Bill Martin and Matt Ragas, has a note today on Internet mergers and acquisition activity increasing in 2003. Here, with permission, is an excerpt with a few of my comments:

Over the weekend, I had the opportunity to connect with a friend of mine who's a veteran of the dot com business (can we call it a business now!?) and a former VP of a major Internet media company. He had some very interesting thoughts to share about the outlook for M&A activity in the Internet media and commerce sectors in 2003. A few of his more interesting scuttlebutt included:

1) He expects Yahoo! (YHOO) to become a very aggressive acquirer in the New Year now that the company has regained top and bottom line momentum. In particular, Yahoo! is interested in bulking up and filling out some of the gaps in its content offerings and in enhancing its revenues from subscriptions, listings/classifieds/marketplaces, and bolstering its shopping engine offerings. We recently saw YHOO make a strategic acquisition when it purchased Inktomi to enhance its search offerings.

Mitch: Yahoo! will buy only services (like search and classifieds), not content producers. The company is moving to become a conduit for other companies' content, not a creator of its own.

2) Since we're long CNET Networks (CNET) in our high risk, high return Babe Ruth model portfolio, I asked him what he thought about CNET's prospects. He said that he's heard rumors that an additional round of layoffs could be in the cards for the coming weeks to insure that CNET will be solidly profitable in 2003, tech ad recovery or not. Also, he said he's heard that CNET's management feels intensely pressured to get its stock up or be bought out by Yahoo! or someone else. At $2.85 per share, we're currently up 238% on our initial August CNET purchase, and we've taken profits in the stock on three occasions. A few weeks ago, we posted that we would be interested in re-adding to our CNET position if the stock would come in a bit, perhaps to the low $2.00 range.

Mitch: That CNET is focused on profits is absolutely right. That's what I hear all the time from within the company. I don't think, per my comments about Yahoo! above, that the prospect of an acquisition by Yahoo! is realistic at all. But a Jupiter Media or even one of the television network-owners, could snap up CNET with a hostile tender offer.

3) He said that he really liked our TMP WorldWide (TMPW) pick for our new "Five Must-Own Bargain Stocks for 2003" report, saying that, good labor market or bad, TMPW's Monster.com has a strong position in the online jobs market that could be attractive to any number of players. He cited USA Interactive (USAI), which is an Internet commerce play that we own in our long term growth Tiger Woods model portfolio, and Microsoft's (MSFT) MSN as potential acquirers at these prices.

Mitch: If Monster is good, then Yahoo! benefits from its HotJobs.com purchase, too. Again, it will be all about services with Yahoo!. USAI will be an active acquirer for years to come, a kind of Ghengis Khan of the Internet, snapping up companies as they begin to show real profits and rolling it into its portfolio, which includes Ticketmaster and Match.com. MSN as an acquirer of anything but application services is highly unlikely.

Fandango gets funding

Fandango gets funding

Interesting to note that online movie ticket vendor Fandango brought in a $15.3 million investment to extend alliances with studios and theaters. The company is branching out into other products and ticketing-at-home.

Former FDA commissioner says biotechs...

Former FDA commissioner says biotechs should stop whining

David Kessler, the dean of the Yale School of Medicine and former commissioner of the Food and Drug Administration, says biotechs should stop complaining about the FDA's approval process and invest in better research, according to Wired.

1997, when Kessler left his FDA post, the approval process for a drug took about a year. In the last three years that time has increased to almost 16 months. But he's not so sure that's because the agency has gotten tougher. Instead, he said, the applications they're receiving might be of poorer quality.

"FDA is only as good as what comes in the door," Kessler said....

"We as a country have not invested in physician-scientists who can do clinical investigation," he said.

Too many companies are targeting the same diseases and the same molecules, he said. "Our collective focus should shift, and I think we need to think a little more boldly," Kessler said.

For starters, he suggested that the United States establish national labs to focus on biological science, much like the energy research labs the government set up in the 1950s.

I tend to agree that national labs programs would be good, though they should be built out of existing university labs and not become separate operations (kind of like land grant colleges, but for biopharma).

But Kessler also needs to acknowledge that the very notion of treatment is changing from mass solutions to customized ones that can help some people while potentially hurting others. That said, the research from biotechs has to be designed to show this and provide clinicians guidance on how to use these double-edged drugs and that should smooth the way to faster FDA approval.

All in all, Kessler is partly right and unsympathetic to the dilemma of companies that decide to invest in these complex new drugs and therapies.

Joi's reaction to the Japanese...

Joi's reaction to the Japanese entrepreneurial committee

Here's Joi Ito on my question about the viability of a plan to develop a program to support Japanese entrepreneurs. A key excerpt:

There is a survey by the Global Entrepreneurship Monitor that shows that in 1999, people asked whether "people around you respect entrepreneurs" 90% of Japanese answered "no". Almost 100% of the people interviewed in Spain and about 80% in the US answered "yes". Why? Because, you have to be damn stupid or a loser to not keep your cushy job in a big company. Japan is still low-risk / high-return for people following the "elite" path. There's not much a committee can do about this, and most people are already aware of this.

Read the whole posting.

Plan? We don't need no...

Plan? We don't need no stinkin' plan

Washington Post editorial on the need for a comprehensive plan for economic recovery rather than the seriously flawed, transfer of wealth to the rich shotgun approach about to be offered by our president:

Time out. Where's our economic game plan?

Five months ago, when the president held a pre-election economic summit in Waco, Tex., to demonstrate his concern about the ailing economy, he was persuaded not to propose a tax cut on dividends. Then as now, economists said it would not yield a short-term stimulus, and political advisers said it would provide fodder for charges of giveaways to the rich.

The notion of passing off an expensive, permanent change to the tax code that benefits the most affluent taxpayers under the guise of creating jobs for desperate unemployed workers should still generate hoots. And the warning by the president that his help-the-rich proposal may elicit "class warfare" from its opponents should be greeted by groans, if not outright boos.

But outrageous contradictions are not even a novelty these days.

This is followed by a clear set of steps for immediate economic results. Read.... think.

Judi jumps into the identity...

Judi jumps into the identity debate

Doc writes that my old buddy (and original computer mentor to my son, Taylor), Judi, has entered the debate over Digital ID:

Identity, it was reported, falls into three "tiers:" assumed/personal, assigned/commercial, and abstracted/aggregate/marketing.

I see, but I don't agree. Identity is different from reputation: reputation is outside looking in, identity is inside looking out. The second and third tiers are really reputations of a commercial sort.

And more good stuff.... read, think.

So it's not illegal to...

So it's not illegal to develop software in Norway after all

From BoingBoing: Jon Johansen acquitted!. Jon Johansen, the Norweigan teenager who helped develop DeCSS -- a piece of software that allowed him to watch the DVDs he'd bought in France on the DVD player he'd bought in Norway -- has finally been acquitted. Pending appeal.

The three-member Oslo City Court found Johansen, now 19 and a household name as DVD-Jon in Norway, innocent on all counts in a unanimous 25-page ruling in the latest setback for the film industry's drive to prevent film copying.

Radio revenues climb for second...

Radio revenues climb for second month

In a sign that the advertising economy, at least, is recovering, radio revenues rose 13 percent in October compared to the previous month. The Radio Advertising Bureau says the year-over-year gain was 23 percent. We'll have to see how revenues fared late in the holiday shopping season and immediately after to get a sense if this is sustainable. It is also good news for Net ad revenues, as the two media are highly complementary.

Radio Advertising Bureau Index Of Radio Revenue Pool Numbers

Squirrels and stuff

Squirrels and stuff

Gordon Bell, whose book, High-Tech Ventures: The Guide for Entrepreneurial Success, is a must-read, has been spending years recording everything into his computer in pursuit of Vannevar Bush's concept of a memex laid down in 1945, a "enlarged intimate supplement to [one's] memory." I think he's trying a little too hard with this:

When did you start actually start capturing your life in this way?
I started this in 1998. I had all this material, and was even moving around with boxes of stuff, some of it going back to Digital Equipment days, and I thought, I'm going to start capturing it. Jim humored me, and we ended up with all this material, and we thought, this is starting to get interesting, and this is something that people should naturally do in their life.

Why?
I think it's more natural now because so much of the material originates with a file or it comes to you electronically. I think people are naturally

There was a pull quote here, but I cut it out, because you don't need to record every damn thing that comes along.

sort of squirrels-whether that's information or thing squirrels. At one point I thought, I want to get rid of everything. I want to melt down the gold medals and that sort of thing. I want my life in a bunch of bits.

A blog from the heart...

A blog from the heart of cyberspace

BoingBoing points us to the newly launched blog of science fiction writer William Gibson. This is the guy who coined the word "cyberspace." Watch it. Think.

His first posting includes a reference to Thomas Pynchon, another of my favorite writers:

In spite of (or perhaps because of) my reputation as a reclusive quasi-Pynchonian luddite shunning the net (or word-processors, depending on what you Google) I hope to be here on a more or less daily basis.

If it weren't for that...

If it weren't for that darn piracy

Terry Frazier has a nicely performed dissection in four sentences of the claims by the music industry that piracy is responsible for the entire decrease in sales it has experienced since 2000. They blame all this on piracy:

In bad news for the music industry, album sales declined for the second straight year in 2002, down 10.7 per cent from the previous year.

Nielsen SoundScan says album sales fell to 681 million, from 763 million in 2001. Overall music sales in 2001 had been down 5 per cent -- the first decline since SoundScan began tracking music sales in 1991.

That whole decline is due to Napster and Kazaa, according to the RIAA.

More gloom in Britain

More gloom in Britain

A whole raft of bad news from the Times of London. The financial industry will be laying off "thousands" and the services sector in general shrank for the second consecutive quarter. Business orders were down.

I'm telling you, for the large cap stocks that have stayed strong, the slowdown is catching up and will take its bite in 2003. Of course, in Russia, they're happy as clams until reality sets in.

The oligarchs have increased their hold on the economy; corruption is still widespread; foreign investment remains laughably low; the banking sector, as always, is acutely anemic; no end is in sight for restructuring the natural monopolies; World Trade Organization membership looks an increasingly distant dream; and the year's two biggest privatization projects were blotted by failure and farce.

Japan will encourage entrepreneurs, by...

Japan will encourage entrepreneurs, by committee

The Japanese Ministry of Economy, Trade and Industry is hoping to ignite startups and will set up a 10-member committee to study the issue. I wonder what Joi Ito thinks about this approach. Here's what he had to say about structural reforms and the recession in Japan:

Although reforms don't have as much of a direct effect on the macro-economy as people say per Hiroo's argument, it's difficult to have a healthy economy without entrepreneurs, a healthy, open market, transparency and a democracy that people trust. I think that it is much easier to cause reform during a down market because people are willing to bite the bullet and change in order to survive, power-structures are more fragile and susceptible to change and people are in pain and possibly willing to become more politically active. Now there are a lot of "maybe's and might's" here but I think that when people are happy shopping and getting paid for doing almost nothing, it's pretty hard to stage a revolution.

Saudi Telecom completes public offering

Saudi Telecom completes public offering

The government of Saudi Arabia sold 30 percent of the shares in its state monopoly telecommunications network on Tuesday. The IPO raised $4 billion for the Saudi government, which didn't open the market to competitors. Only Saudi citizens were allowed to buy. No wonder the company is so profitable.

Camcoder phone

Camcoder phone

Samsung is readying a video camera in a phone that captures up to 20 minutes of audio/video clips. Talk about your moblogging potential.

The 300,000-pixel camera built into all these models features a 2-power zoom lens with nine settings. They can shoot and store up to 20 minutes of video clips with sound, and the video is played back on a high-quality TFT-LCD with a color gamut of 262,000. The user only has to press the shutter once to shoot clips at 11 frames a second.

Apple11.g

Apple11.g

Having been outfront on wireless from the very beginning, Apple is expected to announce an 802.11g enabled device on Tuesday. Apple was the first company to petition the FCC for wireless bandwidth; I was MacWeek's networking editor at the time and the wireless technology was a mission. 802.11g, which is a 54 Mbps network, much faster than other PC makers are are building in to their systems.

The speculation is that the device is either a media device or a tablet computer. I'd say they have all the pieces for both, a device or suite of devices that allows you to carry video and networked applications along on a thin flat screen running the OS X kernel and the recently revived Newton handwriting recognition technology. Hell, if you are going to make predictions -- and everyone is guessing -- go for the gold. Media and tablet with blazing-fast wireless. If they need beta testers, I'd be happy to volunteer.

How much did you say...

How much did you say that content in the window is selling for?

The Net is beginning to pay. The irony is that as the cost of bandwidth falls after years of artificially high prices, the pricing of content has become reasonable and people are paying for it. Olivier Travers points to this Jupiter Research study that shows resistance to paying for everything from text to music is decreasing. Last year 47 percent of people surveyed said they wouldn't pay for anything, now it's 41 percent -- the adoption curve in reverse. So, as the cost of delivery falls the resistance to paying will fall, too.

How the wireless revolution will...

How the wireless revolution will happen

Unlike the wired network, which is sinking under the weight of dilapidated business models and a Federal Communications Commission that is trying to save a dying infrastructure by shutting competitors out of the local loop. John Markoff's article on Long Beach, Calif., following the growing trend and installing a free civic wireless network based on donated equipment (the companies get their technology in place and can leverage that with value-added services offered within the network).

Don't fear public/private networks. Build networks and everyone -- people and companies -- can win, because everyone will be focused on the value of what flows over the network instead of the capital expenditure associated with building redundant infrastructures.

DOJ and Microsoft: Together, at...

DOJ and Microsoft: Together, at last

The Department of Justice and Microsoft have combined forces to argue their settlement should not be interfered with by industry organizations that say the remedies imposed on Microsoft are not sufficient. Basically, they are saying companies in the industry don't have standing to comment on a major antitrust case:

...the DOJ and Microsoft claimed in their separately filed opposition memoranda that the groups do not meet the Act's requirements for intervention, especially given that their opposition, according to Microsoft, "rests on the flawed assumption that it is 'imperative that the outcome of this case endure the greatest possible judicial scrutiny.' "

Researchers wondering if anyone's out...

Researchers wondering if anyone's out there

Boston.com reports that research companies, like Forrester, Giga, IDC and Yankee Group are seeing very slow growth in revenues. I guess there are enough heroine addicts, at last.

''I don't think the market is looking for us to come up with big ideas,'' says Brian Adamik, CEO of the Yankee Group. ''Nobody wants to hear about a new box or a new technology or trend that's going to change everything. They want help in the trenches, day to day.'

The problem is, no one ever wanted vision, they thought they were getting facts. Kind of like life and heroine for an addict.

Why I don't enable comments

Why I don't enable comments

Maybe it's a mistake, but I don't have comments on my site.

I publish most of the feedback I get and track responses on other sites (which is why we desperately need what Nick Denton describes in his Comments and Communities posting), but I don't open my site to floods of abuse, either of myself or other people. Forcing people to mail me makes them think first and the result is really good discussion.

Nick believes we'll all have blogs and we'll all use comments in dialogs that flow around the world. I think that many folks will follow along, using tools like Marc, Dave (who asked today why Halley's Comment blog doesn't allow comments) Mitch (Chandler, since it has a compound document architecture foundation will address tracking communications) and others are building, but there will be nodes where groups gather -- people do that naturally and we all know 95 percent of Web traffic is lurkers.

Every time I explain blogging, the first reaction from the listener is "sounds like information overload." This is why it's important to keep comments flowing through the author of some blogs. There are plenty that allow comments, and that's okay, but I'm with Dan Gillmor on this. My site is for structured and constructive thinking, not a free-for-all, which is why I think you'll find it valuable.

Making me nervous

Making me nervous

Just the headline makes my hair stand on end: US Congress returns Tuesday, focus on economy. It's not that I don't think politics has a role in our lives, it's just that when you leave it to professionals, they fuck things up.

FCC to make life easy...

FCC to make life easy for Baby Bells

The remaining RBOCs (regional Bell operating companies, artifacts of the AT&T break-up) will have it easy if FCC chairman Michael Powell has his way. He's readying a change in rules that will force anyone wanting to compete in the local loop to build their own network, basically locking in consumers to whichever company has wires passing their house today. I say "Go Vonage," which I just signed up for so that I can escape both my local and long distance carrier with voice-over-IP (VoIP) services -- more on this when the equipment arrives.

This move by the FCC virtually assures that SBC or BellSouth will move in to buy Worldcom, at something close to today's price (the stock is worthless, the battle will be among creditors), which is less than one cent on the dollar compared to the total capital expenditures by the company, not to mention all the paper losses piled on by management.

The FCC is leading the industry astray, back to the past. What we'll see is a new AT&T-like behemoth at exactly the wrong moment for that behemoth, because customers are ready to bolt to wireless and VoIP for voice calling and 802.11 wireless for fast data, building out from fast Net connections in homes and offices. If the FCC wants change it should have embraced what it fought most. It should have encouraged massive balkanization of the telecom infrastructure years ago by having local utilities take over and build hybrid fiber-coaxial network in public private partnerships, like I wrote about last night. With publicly-owned fiber in the ground and companies vying to add value to that big stupid network, consumers would have seen real change.

PeterMe: Local blogging plans

PeterMe: Local blogging plans

How would you create a network of local blogs, so that every city (or, at least, some) could have its own Gawker. Great discussion going on in the comments thread at Peter Merholz's blog. It will likely be a self-organizing effort and the really interesting events will happen as individual regional efforts are knitted into a national network that people use to keep track of their home towns or cities they will be visiting (find interesting dining companions, understand local politics or just to get the gossip ahead of time).

Thankful for blogs

Thankful for blogs

Washington Times columnist Bruce Bartlett waxes enthusiastic about blogging. Of course, being the Washington Times, all the guy's favorite blogs are conservative, but what the heck.

Notable is Bartlett's endorsement of blogs' ability to correct themselves quickly. There is no institutional resistence, as there is at a company publishing a paper or running a television network, to acknowledging mistakes. This is a very human thing to do, which is why blogs connect with readers on such a basic level. He writes:

    However, where blogs excel is in almost instantaneously correcting themselves. By contrast, papers like the New York Times often take weeks to publish corrections of factual errors, and television news programs almost never admit error, ever.

     I think blogging is one of the most interesting ways in which the Internet empowers people. They cost almost nothing to put up and they allow anyone with an opinion the ability reach millions of people instantly and simultaneously. Blogs have become a kind of early warning system for me, alerting me about things like Trent Lott's political problems days before it appeared in the conventional press.

     Blogs are here to stay and their power will only grow. I think they are going to revolutionize politics and newsgathering permanently

$13.7 billion in holiday spending...

$13.7 billion in holiday spending online

Scott Loftesness points to a press release from Goldman Sachs, Harris Interactive and Nielsen/NetRatings that shows online spending between November 2 and December 27 totaled $13.7 billion, a 24 percent year-over-year increase.

An excerpt of Scott's interesting note: Playing with the numbers, this survey estimated $3.1 billion in book sales during this eight week period. If I'm doing the math correctly (assuming an average book costs $25), that's on average about 25.7 books being sold every second during that eight week period.

Elliot Spitzer on the integrity...

Elliot Spitzer on the integrity of the Institutional Investor All-Star Team

New York State Attorney General Elliot Spitzer cracked down on Wall Street. Now he's looking at the performance of the Institutional Investor All-Star analyst picks. In a speech at the Institutional Investor Dinner, he said, among other things:

The results are in, and they're telling. In many instances, those named to the all-star team are turning in lackluster performances. The advice of analysts not chosen would very often have been more profitable to individual investors than the advice of all-star team members.

Let me be clear:  this does not mean that the analysts honored here tonight all performed poorly, or that they do not deserve their awards. Some performed quite well, and based on the criteria employed by those who voted, you are all indeed all-stars. But it does mean that it is inappropriate for your employers to cite these awards when touting your buy, sell and hold recommendations to individual investors.

There is no need for me to go into great detail about the specifics of Investars' results. Here are some of the highlights:

1. When measured by the performance of their stock recommendations, only one of this year's 51 first team all-stars included in the study ranked first in their sector.
   
   
2. When measured by the performance of their stock recommendations, only one of the more than 100 members of the 2000 and 2001 first team all-stars included in their study ranked first in their sector.
   
   
3. When measured by the performance of their stock recommendations, only 16 of 51 of this year's first team all-stars are in their sector's top 5. That is an improvement over last year, when only 10 of 51 first team all-stars studied cracked the top 5. In 2000, only 13 of 51 made the top 5.
   
   
4. More than 40% of this year's first team all-stars did not perform as well as the average analyst for their sector. The same is true of the 2000 and 2001 first team all-stars whose performance was reviewed.
   

   Investars ran several checks to ensure that their methodology was not biased against big firm analysts.
   

   
   
5. In fact, their results indicate that 40% of tonight's first team all-stars underperformed when measured against the average performance of other big firm analysts covering their sector. 20 of the 2002 first team all-stars whose performance was reviewed performed below their sector's average for big firm analysts; 23 of the 51 2001 first team members Investars reviewed performed below the average of their colleagues at big firms, and 21 of 51 of the 2000 first team all-stars in the study similarly underperformed.
   
   
6. Moreover, 25 of the 51 members of this year's first team were outperformed by at least one of their runners-up named to the second or third team, and half of the 2000 and 2001 first team all-stars reviewed were bested by their runners-up.

Frankly, what is more troubling than the performance of the stock picks of some of the all-star analysts is the lack of transparency about that performance. When we first attempted to gather this data ourselves, we encountered significant obstacles -- and we have certain data gathering advantages over the individual investor.

Keep your disruptions simple

Keep your disruptions simple

Jon Udell sums up the basic rules of introducing disruptive Web services: keep it simple, stick to standards, establish reputation. His Infoworld column fills out the story. Thanks Jeremy for the link.

Finally, talking about identity as...

Finally, talking about identity as property

Doc has a good summation of the current thread of the Digital ID debate, which is beginning to really focus on the question of who owns your identity and when it is permissable to attach reputation to that sovereign identity. Robin Lane's comments are easy to understand, because they are put in the context of our relationship with government.

Doc writes: "Permission is the key. And that's all about property, no?" That's been my point all along. I like his idea of Digital Identity Management, but that still requires an economic model which must precede the marketing thereof.

MSNBC viewership on the rise

MSNBC viewership on the rise

According to MediaDaily News, MSNBC saw double-digit growth in several timeslots and 26 percent gains in prime time in the fourth quarter of 2002. Just to put that in perspective, this is a network with 408,000 viewers in prime time. Niche, niche, niche. If you understand that and can produce at a scale for audiences of this size, you will be a god, a god, I say.

Consumer electronics orgy

Consumer electronics orgy

The Consumer Electronics Show, which is one of the most interesting phenomena in trade shows (I remember when I first attended being surprised after attending several Comdex shows, which were largely dry, to see liquor served on the CES show floor). Dan Gillmor sums up the buzz for this year's event. It seems to be a show on the rebound. PC Mag sums up the tech trends.

Edge.org Question of the Year

Edge.org Question of the Year

From SlashDot via Timothy Lord: John Brockman's Edge.org has published the results of its annual big question, this year contrived as a question from George W. Bush: "What are the pressing scientific issues for the nation and the world, and what is your advice on how I can begin to deal with them?" Oh, if only the president would ask that....

Some samples of the answers, which come from a 85 great thinkers (by Brockman's reckoning and many, I believe, his clients -- he's a literary agent):

Steven Pinker: First and foremost, we must apply a scientific mindset to the educational process. People outside of the educational establishment are often shocked to learn how little in instructional practice has been evaluated using the standard paraphernalia of social science–control groups, random assignment, data collection, statistics. Instead, classroom practice is set by fads, romantic theories, slick packages, and political crusades.

Joel Garreau: Human organization is always structured by the technology of the time—"We shape our houses, then they shape us," as Churchill put it. But culture moves more slowly than invention.

There are a lot of interesting ideas here. A good weekend read, but stuff to be taken with salt, pepper, wine....

$10 billion telecom blowout in...

$10 billion telecom blowout in 2003

Did you know that $10 billion in business telecom contracts, most signed during the bubble, will expire this year? Look for a 60 percent or more reduction in data services prices this year as remaining carriers battle for these contracts.

Coder taking on Micrsoft eBook...

Coder taking on Micrsoft eBook DRM

Tired of having the eBooks he pays for restricted to one mode of use on one type of device, British programmer Dan Jackson has set up a project to crack Microsoft's DRM5-protected eBook software.

The answer to all these problems is to produce code that treats the buyers of content fairly, allowing them to use what they pay for as freely as they would a book or movie.

Pro-big media hyperbole