Thursday, September 8. 2011Google, Zagat...who is eating whose lunch?
Google has bought food review business Zagat - ZDNet:
Google on Thursday acquired Zagat in an effort to bolster its local products with the restaurant rating service. More notably is that Zagat is a content company. That says it all about why Google may have done the deal really, but the reason I'm even writing about this post is a few years back we were asked to do a study of what Zagat could become in a social media setting and who it may be sold to, and for how much, but I never dreamed Google would be the one to buy them as it made no sense (at the time) that Google would be a content owner. (Our client was not Zagat, but wanted to interest Zagat in a potential transaction - and this was not them as far as I know). ZDNet asks the right questions: - Will Google keep Zagat’s pay wall? Probably not. Even so, with opening up the reviews and sticking ads against them, this is not really going to move the Googleneedle. Zagat is not the quite Huffington Post, or even TechCrunch. So despite the purchase and the above justifications and possble strategic plays, does it make sense that Google is a content owner now? I must say I'm still not clear why Google would want to be a content owner, it's a whole different culture and business model compared to being an aggregator, especially for a search based one. It ws very fashinable in teh Muiltimedited Mid 90's, everyone talked about being "Gatekeepers" to content and extracting "surplus value" - a bkit like medieval castles on large rivers. Ironically it was Google that broke this content/aggregation model by allowing neutral searches on the open web. The argument clearly is the "Social" changes things, but we didn't see it at teh time we did the study, and don't see it now. Twitter and Facebook point to content outside themselves all the time, both can give me a restaurant review in a few seconds if I ask (or search them), and there are umpteen free startups out there already. One to watch, but at the moment I am scratching my head. W(h)ither TechCrunch
I was about to write down my thoughts about what happens now that Mr Arrington is no longer with TechCrunch*, until I saw Fred Wilson had written down pretty much what I would say - and even stolen the title I would have used
I also wonder what will happen to the European assets in the business, I think TC UK has been a good force over here. Fred also alludes to the thing I have always really liked about TechCrunch, and in my opinion is a real jewel in its crown - Crunchbase: There's also a super awesome asset inside TechCrunch that doesn't get much attention. It is Crunchbase.....Crunchbase, which is free, almost open, almost peer produced like Wikipedia, is fantastic. Whatever happens to TechCrunch AOL, please don't mess up Crunchbase. It is the premier data asset on the tech/startup world and an incredible example of how free beats paid in the online world we live in. I also feel it is incredibly valuable, and if correctly used is (IMO) longer term worth more than TechCrunch the Blog - as many have pointed out, there are so many others doing what it does now. *At the moment. The lady has yet to sing the death aria...... Wednesday, September 7. 2011Yahoo - Bored of the Board
GigaOm notes that firing Carol Bartz is not nearly the whole problem, its goes deeper than that:
There is one place Yahoo can easily finish first: the company with the worst and most ineffectual board with the spine of a centipede. I have not been a fan of Yahoo’s board for a long time and nothing really has changed my mind. Even before the firing of Carol Bartz, Yahoo’s board has been taking actions befitting a coalition government. Yahoo’s stock performance only proves that fact. From a high of $33 a share in October 2007, Yahoo is now down to $13.50 a share. I agree...I think Bartz has been made the scapegoat (sure, it comes wuth CEO territory) but getting a new CEO is not going to fix the problems of a company stuck in the peanut butter. There 's lots of talk about M&A, new businesses, back to basics etc etc - but only a mass transfusion of new blood at the head will work now. In my opinion, of course.... Update - seems to be Carol Bartz's view as well Ousted Yahoo CEO Carol Bartz has given an exit interview with Fortune magazine’s Patti Sellars, in which she says about Yahoo’s board of directors: “These people f*#&ed me over.” She also called them “doofuses.” This has been an entertaining week.... Tuesday, September 6. 2011TechCrunch - Lessons in Economics and Ethics Part II
In a post earlier today we noted that the problem with a blog like TechCrunch is that its Economics will conflict with Ethics, most specifically the Ethics* of being part of of a large corporate - "Fast and Loose" is great for a small independent organ, not so good for a slow and tightly run large media empire. When you are a small organ you can both write about, and invest in, the same companies. You can't as part of a large corporate media empire. Michael Arrington, TechCrunch founder, has pretty much laid this dilemma out in a post on TechCrunch in what looks a lot like an ultimatum to his acquirers:
We’ve proposed two options to AOL. AOL are unlikely to be able to do (1), for 2 main reasons: - They are a large corporate and a great, rich lawsuit/hate campaign target for any pressure group they upset, so allowing their Tech organ to effectively look like a DotCom style market analysis business for it's Editor's investment fund is a PR disaster and maybe a legal one. Remember Henry and Mary and all that from last time round - the resulting scandal made the SEC force banks to drop doing both analysis and sell side activities in the same unit and pay large fines ( Purely out of goodwill, of course For these reasons the financial and legal risks are probably too large to give TechCrunch pure editorial independence, especially now. Option (2) is quite hard as well - If they sold it back so soon after buying it, at a loss, they would looks like fools and no doubt prompt all sorts of questions about their management competence. Senior heads would roll. If they tried to sell it for more, who would buy? This is a real sign of the Bubbletimes, this whole brouhaha wouldn't be happening without the silly money now being thrown at Silicon valley technology startups, and all who sail with them. In fact one wonders why TechCrunch sold to AOL when it did (Sep 2010) as the Bubble was already evident (we opened our Bubblewatch section in April 2010) but to be fair it was only visible to geeky trend watchers like us - the really obvious froth only started about February 2011 (this year) after AOL bought HuffPo. One imagines a certain amount of D'Oh at TCHQ soon after that In our early post we pointed to the interesting insight into the economics of a Tech blog that the TechCrunch datasieve is opening up, but putting the backroom negotiations on the front page is a new one on us old M&A hands too. And given that that post has set the scene for this one, we do now turn a slightly quizzical eye at the alleged independence Messrs Siegler and Carr claimed they have In that post, I also commented on Stowe Boyd's point that this was looking like a tragedy like Titus Andronicus and wondered it was not a tragedy or even comedy. I am wondering now if this is more the Theatre of the Absurd....and here we all are in the front row. *Please note - When we talk about Ethics here, we are not talking about Morality - we are talking about What Gets You Flamed/Sued/Fined/Incarcerated. TechCrunch - Lessons in Economics and Ethics
There have been some interesting behind-the-screens revelations of TechCrunch's modus operandi as it implodes (or whatever its doing) - MG Siegler:
First and foremost, the concept of an “editor” at TechCrunch is essentially just a title and nothing more. Generally speaking, neither Mike nor Erick (TC’s two “co-editors”) are overlords that dictate what everyone else covers. With a few exceptions (mainly for newer writers), no one person even reads posts by any other author before they are posted. Then Paul Carr (apparently writing at the same time as MG above, apparently unknown to each other) For one thing, TechCrunch writers edit and publish their own stories. We don’t have a morning editorial meeting in which Mike — or anyone else — signs off on stories; we don’t have an editorial work flow at all in fact. Generally speaking, Mike doesn’t see stories until they appear on the site and if he has any input on what’s written it’s given after the fact. I have never, ever known Mike to tell even the most junior writer what line to take on a story. A personal example: I once wrote an extremely negative post about a company in which one of Mike’s friends is a significant investor. I heard nothing from Mike when I posted the piece. It was only months — literally months — later that he mentioned to me in passing how many calls he’d received complaining about the piece and demanding that he “do something” about me. Mike had laughed them all off: he doesn’t interfere with his writers. Low Overheads, Low Cost Management and Low Cost writers (I don't know how much the writers are paid, I'm assuming they are mainly on freelance rates) - a lesson in Economics for the serious News Organs if ever there was one. But it doesn't come without risks, and I think they are around what Stowe Boyd calls Linelessness, in that the New Media does not accept the invisible lines of the Old.... Even at a old school bastion of journalism like the NY Times, editors and authors have to pick what stories to follow, out of the infinity of potential stories in the universe. There is no infallible, objective mechanism to pick stories, one that is fair and unbiased in some truly general and provable sense. The reality is that all organizations (and individuals) have to settle for extreme approximations of what a hypothetically unbiased approach to news coverage would produce, if such a thing actually existed. They cry foul for good reason, as in the past you can quote examples ad infinitum where if the analyst and the investor are on the same side of the Chinese Walls*, you get very biassed advice ( Dot Com coverage anyone?) and over time, this destroys reputations and businesses. That is one sort of risk for an independent fast and loose blog to take (TechCrunch), but not for a slow and tightly managed wannabee major media (aka sue-able) empire (AOL/Hugffington/etc). As Stowe points out though, this brouhaha is all the product of the Machiavellian cocktail of greed, power...and fear of missing out on the Bubbletime. it wasn’t journalists that created Arrington, but the tech scene: a tight-knit, self-absorbed community of investors, entrepreneurs, and wannabes, all desperate for ink, share-of-mind, and a chance for the brass ring. So many hanging on every word printed in TechCrunch, trying to get written up, hoping for a leg up in the steeplechase that is the central animating goal of the tech scene. So - some predictions from the lessons of TechCrunch - the New Economics clearly are the future, but the Lineless New Ethics may not prove to be quite so stable. Stowe again:
All the world is a stage, but whether this is just another drama, an unfolding tragedy or a bit of comedy remains to be seen..... *Update - please note When we talk about Ethics here, we are not talking about Morality - we are talking about What Gets You Flamed/Sued/Fined/Incarcerated. The Auto-Oxymoron of Corporate Innovation
One of the things we write about every so often on here (and were therefore sufficienly motivated to co-write the Big Potatoes Innovation Manifesto) is that Innovation has been morphed in the current corporate climate to mean "continuous improvement" at best, and "don't-rock-the-boatism" all too often (see Innovation - What innovation for starters). Now, some research from Cornell (The Bias Against Creativity: Why People Desire But Reject Creative Ideas) shows that as a species we may be culturally adapted against Innovation and creativity it seems.
The next time your great idea at work elicits silence or eye rolls, you might just pity those co-workers. Fresh research indicates they don't even know what a creative idea looks like and that creativity, hailed as a positive change agent, actually makes people squirm. The lesson for companies that want to take advantage of creativity and real innovation is that teh problem not fostering it, but making sure it isn't strangled at birth. "uncertainty also makes us less able to recognize creativity, perhaps when we need it most," the researchers wrote. "Revealing the existence and nature of a bias against creativity can help explain why people might reject creative ideas and stifle scientific advancements, even in the face of strong intentions to the contrary. ... The field of creativity may need to shift its current focus from identifying how to generate more creative ideas to identify how to help innovative institutions recognize and accept creativity." Now, I always felt this was the actual case. I think that too often, fighting this problem is too hard as it is institutionalised in most heirarchies, and is a classic "ekephant in the room" - so Creativity Consultants find it easier to sell a comfortable project on "fostering creativity" than a hearts and minds change program based on culling their clients' ability to stop the dangerous mavericks in the business.I never saw companies where there were no creative people - but I don't think I'm the only one who has observed in their corporate careers that the Power of No is an endemic problem - here's Machiavelli on the subject in the 1500's pre-saging a host of 20th century Business Sages:
QED as they say. Nice of Cornell to put the academic verification in 500 years later Monday, September 5. 2011TechCrunch Crunchtime
Something is in the air at TechCrunch:
The only thing that surprises me is that anyone thinks you can (i) sell to AOL and then (ii) "pivot" from writing about, to investing in, startups without major changes. It's a Bubbleworld brouhaha, as it means the money flooding into funding flimsy startups is higher than the money going into talking about them. The old Gartner Hype Curve says it all - when a market moves from talking about some new new thing at conferences to actually investing serious money in it, its getting to the top - the "Peak of Unrealistic Expectations" - of the hype curve. Thursday, September 1. 2011Mixed signals in the BubbleconomyBroadstuff Bubble-O-Meter Its business as usual on BubbleWatch, as AOL/TechCrunch's Michael Arrington starts a startup fund: Mr. Arrington is starting a venture capital fund to invest in the start-ups that TechCrunch covers. Nothing like a conflict of interest there......but so far, so predictably bubbly (In fact he's a bit late to the startup fund party, see our Bubble-O-Meter above - but the more the merrier in Bubbletimes) And yet, there is also this interesting aberration - Analysts are calling Groupon overvalued, the bounders - PE Hub: In one of the nicer reports to be published about the daily deals company in recent weeks, Benchmark Co. analyst Fred Moran told Reuters that he considers the company’s oft-cited valuation of $25 billion “very high.” Well, that's Henry for you, ever the optimist...but it is interesting that a DotCom II darling is actually being called OverValued. Sarah Lacy thinks its because essentially they Werent Invented In the Valley. I think its because they are overvalued. What will be interesting is to see if this new crop of analysts have a pop at some other overvalued IPO's in waiting......We have a sniff that step 6 is starting, but Step 7 in the Bubble-O-Meter may be delayed a bit! 10% Influence Rule on Social Networks![]() Tippng Point in social network influence - Courtesy Rensellaer Polytechnic Institute Don't know if anybody saw this study on how influence works on different social network structures, but its very interesting: In a study of networking, researchers at Rensselaer Polytechnic Institute in Troy, NY developed computer models showing that when 10 percent of the population holds an unshakable belief, that belief will be adopted by the majority of society. Their study of minority belief becoming majority opinion appears in the July 22, 2011 online edition of the journal Physical Review E. More interestingly, they modelled how it spreads on different social network structures and found that the type of network and the location where an opinion starts and spreads in society have little bearing on the percent of committed opinion holders required to shift majority opinion. To reach their conclusion, the scientists developed computer models of various types of social networks.
Each of these individuals held a view but was also, importantly, open-minded to other views. The human dynamic is something like this:
I recall research about 20 years ago (can't find it now of course) that said once about 10% of a population cheat, then its nearly impossible to stop cheating proliferating. Also, early Memetic Artificlal Life models showed that once an idea had "infected" about 5% of a population in a clustered aea it was very hard to eradicate as they kept on reinfecting each other, and at about 8 - 10% it started to become viral. This is no doubt something that will be used for good and evil in the coming years. Saturday, August 27. 2011British IT Education
Eric Schmidt laid into British IT education today - BBC:
"The UK is home of so many media-related inventions. You invented photography. You invented TV. You invented computers in both concept and practice. There are 3 reasons for this - economics,entrepreneurialism,and education The Economics is simple - the US is a far larger homogenous market, so any company that starts to get momentum there can grow far larger than a comparable British one. The usual plotline is that British companies either Go West (eg MicroMuse) and becomeamerican or get bought by Americans (eg not-so-Autonomy). The Commonwealth - the engine that once allowed British companies to grow larger than the home UK market - is gone and the EU, with its polyglot cultures and (often subsidised) local heroes - is a far tougher prospect to expand into. The Entrepreneurialism issue is well known too - study after study shows that the barriers are higher for startups in the UK than the US - less money available, ,unVenturous capital, tougher labour laws, more business red tape. The only things on our side are that we speak a reasonably understandable dialect of American and our conditions are still marginally better than most other Western European countries. The US gets a Silicon Valley with universities and an ecosystem, we get a Roundabout as a PR wheeze with a contraflow. And then there is Education. Schmidt said he had been flabbergasted to learn that computer science was not taught as standard in UK schools, despite what he called the "fabulous initiative" in the 1980s when the BBC not only broadcast programmes for children about coding, but shipped over a million BBC Micro computers into schools and homes. "Your IT curriculum focuses on teaching how to use software, but gives no insight into how it's made. That is just throwing away your great computing heritage," he said. Its more than that though. In the UK, Engineering and Science have always been lower class things. In every other country I have worked in or lived in (and that encompasses Europe, US, Asia and Africa), being good at Maths and Science are hugely respected abilities and parents agonise about how to improve kids skills at these subjects. Engineering is a registered profession like Accounting, Law or Medicine. And then I fly back into the UK and its like being on another planet. The guys that fix my boiler are Engineers. Universities are warning (my) teenage kids that ICT and Computer Science are not seen as a "real" subjects for University entrance - rather do (say) Geography and Chemistry. The way to get ahead is still the Oxbridge PPE (Politics, Philosophy and Economics) rather than the Sciences. The thinking man (and woman's) airwaves are more full of Luvvies than ever, often giving technology a good kicking en passant. The Luddites seem to have have won. PhDs in Physics and maths Tutors in Universities get paid a less than Bar owners, never mind Accountants or Lawyers. Quids (or lack of) Est Demonstratum. I think Schmidt had it right when he talked about a "back to Renaissance Man" necessity (albeit Victorian ones):
In the US when I go to a magazine stand there are lots of publications on Science and Technology, in the UK there are more on faux metaphysics and (typically very British centred) history. That is the difference. I think there are things the Government can do to help all of the 3 areas, but the key is to do them holistically. No point in making a big deal of maths and science and computing in Education if the job outcomes are crap, or if companies starting in the space can't get money/cant take on subsidised rivals/strangle under the red tape. But Eric's right too. A start is making damn sure that the top Universities can't get away with the attitude that ICT and Computing are not "real" subjects, whereas say Georaphy and Chemistry are. It'll need some reforming of the syllabuses I'm sure, but it also needs some knocking old attitudes out of heads.
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