broadstuff

What Hitler can teach Google

nospam@example.com (Alan Patrick) — Sat, 20 Mar 2010 13:04:24 +0000

Like Hitler, has Google over-reached itself?

There was a piece on Daring Fireball about the increasing rivalry between Google and Apple - commenting on an earlier NYT article he notes:

That last bit, regarding a general belief that Apple is gearing up for war against Google, echoes what I’ve heard lately from several sources who work at Apple. I know that conflict between companies — particularly big companies, and even more particularly big interesting companies like Apple and Google — tends to get played up in the press, often to the point of sensationalism, because conflict is interesting. But I’ve got the growing sense that there’s nothing sensational about it. I think Steve Jobs genuinely sees Google as threatening Apple’s core business. It doesn’t really matter whether he’s right (although the more I consider it, the more I think he is). Jobs believes it, and so Apple is going to war.

Hence the patent suit against HTC. That’s all about Google — about creating a situation where Android is no longer a free operating system for handset makers in the U.S., because the cost of using it is an expensive legal defense against Apple.

The article is called "Hope You Enjoy the Smell of Napalm in the Morning", and I thought it may be worth extending the military analogies.

At the same time as this, we have been following the rattling of virtual sabres as Google, via its proxy YouTube, squares off to Viacom in the hot/cold war between Olde Media and New. And then there is Buzz, aimed as other Social media players, there is Chrome and Google Docs aimed at Microsoft, there is a scrap brewing on data storage, handling and privacy with the European Union. Then there is the spat with China, the increasingly messy campaign against the Book Publishing industry, the start of a scrap with the ISP industry.

And all this against a backdrop of continuing skirmishes with Yahoo in the traditional battlegrounds of Search.

So what can Hitler teach Google? Quite simple - that it is possible to take on too enemies at once, over-reach oneself and the resulting implosion is not pretty. A quick recap:

(i) Germany is far better prepared for the "New Ways" of fighting than its opponents, and builds more modern equipment, infrastructure, methodologies etc. In Googleterms, they came into the New Media game later than many of their major opponents and are arguably one of the best equipped and smartest (in hired IQ terms) than any company before.

(ii) Initially, Germany took on fairly weak opposition that was on its borders - in fact the first forays were more "power diplomacy" into Austria and Czechoslovakia than actual warfare - these Anschlussii were almost "acquisitions" in International Relations speak. In Googleterms this is the purchase of various assets that help bolster the search advertising business at the expense of competitors. Major players like Yahoo (cf France, England) cede assets to it because they don't see Google as a particular threat in their space

(iii) Germany's first major military escapade is to agree to partition nearby territory between itself and other great powers, and the invasion as such (Poland) is relatively bloodless, In Google terms this is the ripping into the early search advertising market, partitioning it with the major players of the time (Yahoo, Microsoft)

(iv) Germany then invades the low countries and France in a rapid campaign, deploying its new weaponry and approach (Blitzkrieg) and rapidly outmanouvering the major opponents. It takes one major opponent (France) out the war and inflicts major reverses on another (Great Britain). In Googleterms this is the taking on of Yahoo, the ceding of the rich Alsace Lorraine area has its parallels with Google helping itself to Overture (a Yahoo company)'s, technology. Microsoft's MSN is a small part of this fight and is outmanouvred.

At this point it all looks very sustainable - Germany with its conquests has the economic resources to fight Great Britain and her empire to a standstill, and the access to the French resources gives it a major advantage - over time it will be the major power, all it has to do is exert continuous pressure over time and it will achive European hegemony. But it is still worried, as it knows that over the horizon is a great fight that will eventually emerge, with Soviet Russia. This is winnable, but there is a risk with letting the Soviets re-arm, It is very tempting to attack them now, while they are weak (Stalin having shot many of his senior officers), comparatively ill equipped (their military technology is one generation earlier).

Translating this into Googleterms, this is the fight vs Microsoft - steady pressure will give Google hegemony in its area. They are economically comparable. Over the horizon is the Olde Media empire, who are still woefully disorganised and poorly equipped. All the visionaries within it have been fired or sidelined after dotcom One, and their assets are all of that era. Attacking them now is very tempting.

But the hubris and arrogance of all the easy wins pushes Hitler to greater and bigger dreams, and he starts to make strategic mistakes:

(v) The last thing Hitler should have gone for at this point is a diversion, but he does - he fights the Battle of Britain and loses, and props up Italy as it's African empire collapses to the British Empire's counterattacks. Propping up Italy is a major diversion of Germany's energy, and it finds itself having to fight all sorts of small actions against a major power.

In Googleterms, this is the opening up of the Google Docs front against Microsoft. The Googlepanzers start to park on the Microsoft Empire's lawns, but this is home turf and much more comfortable ground for Microsoft. This is a high cost fight.

(vi) The decision is taken to fight the Old Empire is taken, and Russia is invaded - it is a huge play, a massive invasion, and initially things go well as the opposition is scattered, dispersed, poorly prepared - but the sheer size of the enemy terrain starts to tell on their resources. Winter, an enemy that starts to learn how to fight better, and their embrace of equal technology is a massive drain on German resources.

In Googleterms this is the acquisition of YouTube - a massive play into the heart of the video Old Media. Initially it sweeps all before it, but they start to get better and better at countering Google, and their resources to fight with are immense.

These were the 2 major strategic mistakes Germany made, and were in themselves enough to doom it's expansion plans - there is no ways it has the resources to fight against Great Britain and Soviet Russia at the same time. But this is still a Good Old European War, and the likely outcome - arguably - can still be penning Germany back into its own historic boundaries and re-establishing the status quo until the next time. Europe has been doing this for 400 years, after all. This is not the time to get the USA to fight you too......

So, here we have Google fighting the TV/Movie industry and ViacomGrad is looming, the Microsoft fight is see-sawing back and forth, but at El AlaBing, Microsoft lands the first tanks on Google's turf. Google does not have the resources to take on Microsoft and the whole Entertainment industry, but it could still negotiate a reasonable settlement by ceding the more controversial terrain back to the major opponent industries, and coming to terms with them.

So why, at this point, do you want to then also go to war against huge powers from far way - the whole Apple spat, pushing Android panzers into the Mobile/Telecoms/ISP industry, trying to outfight the Social Media industry with Buzz-bombs and taking on the European Union over data privacy?. This is overexpansion of resources at a level that even Hitler would probably have admired.

From 1943 to 1945, an alliance of powers that were only the most uneasy of allies first got even and then surpassed German technology and methods, but their sheer economic size made eventual victory certain even if they only had "good enough" stuff, as this war was one of attrition which Germany could not win.

From 2010 to 2013, its is predictable therefore that this ring of opponents facing Google (see picture above) will be able to equal and then surpass them - and the threat that Google has posed will drive all of them to want a fairly terminal solution. Besides, the wealth that is up for grabs within the Googlereich is too, too tempting to be passed over.

Here endeth the (future) history lesson.....

Update - bit of backchannel conversation and a few additional thoughts around "So what should Google Do"?:

*Keith McMahon has pointed out that Google now taking on Apple is akin to Germany deciding to declare war on Japan.

A shot across the Pirates' bows

nospam@example.com (Alan Patrick) — Fri, 19 Mar 2010 14:51:28 +0000

I've been following the "YouTube Roolz" blogfest with extreme boredom, its clearly pre-emptive posturing before the Viacom court case - but this response shot from Viacom piqued my curiosity as its sets out the Viacom position:

YouTube was intentionally built on infringement and there are countless internal YouTube communications demonstrating that YouTube’s founders and its employees intended to profit from that infringement. By their own admission, the site contained “truckloads” of infringing content and founder Steve Chen explained that YouTube needed to “steal” videos because those videos make “our traffic soar.”

Google bought YouTube because it was a haven of infringement. Google knew that YouTube’s popularity depended on infringing materials with several senior Google executives warning that YouTube was a “rogue enabler of content theft.” Instead of complying with the law, Google willfully and knowingly chose to continue YouTube’s illegal practices.

Google and YouTube had the technology to stop infringement at any time but deliberately chose not to use it. They would only offer to protect Viacom’s content if Viacom agreed to license those works, effectively holding copyright protection as ransom for a license.

The law is clear that Google and YouTube are liable for their infringement. The Supreme Court unanimously held in Grokster that a service that intends infringement is liable for that infringement. No case has ever suggested that the DMCA immunizes rampant intentional infringement of the sort Google and YouTube have engaged in.

These facts are undisputed. The statements by Google regarding Viacom activities are merely red herrings and have no relevance on the legal facts of this case.

Its interesting because it is in essence implying that even adopting the piracy business model is a de Jure illegal act. It has a huge impact - if you go back to our work on the evolution of the Web TV world, you will see that we assume that the very turbulent "Pirate World" holds sway in the next few years, and quite a few of the winners longer term are effectively the corporates bankrolling these Pirates (what we call Privateer Plays as a more accurate term here than Pirates). Google and YouTube being the prime example.

This is significant - when we build scenarios we add in "milestones" or "signposts" you have to watch for, and one of them that signals a shift back to The Olde Worlde media is important.

This is such. One of the conditions in our "Pirate World" and "New Model Media" scenarios was that the regulatory regimes did not shift to the side of existing rightsholders (when we did the work in 2008 the regulatory regime was fairly hands off, but its behaviour globally has been by and large increasingly "for" the rights of the rightsholder since then as country after country has become unwilling to lose the revenues from these large industries).

Thus, a 2 year refresh of our work would be to increase the probability of Olde Media doing better, and if Viacom wins this - with significant enough damages - it may put the kibosh on Privateer plays completely.

Arrr, so the winds be a-shiftin, Jim Lad. That'll send a shiver down the corporate timbers at Social Media Central.....but the pure Pirates, it seems, will be forever with us.

Semantic sh*t happens

nospam@example.com (Alan Patrick) — Fri, 19 Mar 2010 14:27:43 +0000

Copyright holders have long preferred the term "Piracy" to describe the people who use their content without paying, but now they are getting nervous as its too exciting...:

......with its suggestions of theft, destruction, and violence. The "pirates" have now co-opted the term, adopting it with gusto and hoisting the Jolly Roger across the Internet (The Pirate Bay being the most famous example).

Some of those concerned about online copyright infringement now realize that they may have created a monster by using the term "piracy." This week, at the unveiling of a new study for the International Chamber of Commerce which argued that 1.2 million jobs could be lost in Europe as a result of copyright infringement by 2015, the head of the International Actors' Federation lamented the term.

"We should change the word piracy," she said at a press conference. "To me, piracy is something adventurous, it makes you think about Johnny Depp. We all want to be a bit like Johnny Depp. But we're talking about a criminal act. We're talking about making it impossible to make a living from what you do."

Translation: we should have chosen a less-sexy term.

Thats from Arrrrs Technica by the way

James Murdoch is leading the charge in rebranding it as (Online) Shoplifting:

Rupert Murdoch's son James did his part to redefine the sexy "pirates" as common thieves and nothing more. "There is no difference with going into a store and stealing Pringles or a handbag and taking this stuff,"

The irony of the Rightsholding media industry having spent billions creating a great brand image for its nemesis is too amusing. Yo Ho Ho.......

A downside of Continuous Interconnectess

nospam@example.com (Alan Patrick) — Thu, 18 Mar 2010 10:04:09 +0000

No sooner do Toyota have an unexplained bug in their cars acceleration, than we get this classic from Wired:

More than 100 drivers in Austin, Texas found their cars disabled or the horns honking out of control, after an intruder ran amok in a web-based vehicle-immobilization system normally used to get the attention of consumers delinquent in their auto payments.

Police with Austin’s High Tech Crime Unit on Wednesday arrested 20-year-old Omar Ramos-Lopez, a former Texas Auto Center employee who was laid off last month, and allegedly sought revenge by bricking the cars sold from the dealership’s four Austin-area lots.

“We initially dismissed it as mechanical failure,” says Texas Auto Center manager Martin Garcia. “We started having a rash of up to a hundred customers at one time complaining. Some customers complained of the horns going off in the middle of the night. The only option they had was to remove the battery.”

This illustrates another of the downsides of simple mass interconnectness without robust security and risk mitigation systems (a similar example is computer trading systems that go into a downward sell spiral).

I recall reading a Sci Fi story many years ago (70's) about a "wired" world in which a country guy with an old petrol engined, non computerised car drives into town and is nearly killed by enraged townies who se him as eco-unfriendly, but then something goes wrong with The Grid in a levee flood and all their electric cars stop with them stuck inside, and they get drowned.

The dream is to hook up all cars so they can speed seamlessly along and optimise traffic flows. The reality, unless systems are very secure and resilient, will be massive pile ups and carnage.

Market for Mobile Apps will grow 10-fold, predicts...mobile App supplier

nospam@example.com (Alan Patrick) — Wed, 17 Mar 2010 22:17:05 +0000

Agence France Presse:

SAN FRANCISCO — A study released on Wednesday indicated that the market for mobile device software programs should rocket to 17.5 billion dollars (US) within three years.

Downloads of mobile applications to handsets will leap from slightly more than seven billion in 2009 to nearly 50 billion in 2012, according to the independent study commissioned by GetJar, the world's second largest app store.

"It is easy to see how mobile apps will eclipse the traditional desktop Internet," GetJar chief executive Ilja Laurs told AFP.

"It makes perfect sense that mobile devices will kill the desktop."

Ah, another piece of cautiously optimistic research work from Planet Mobile

For the record, a rule of thumb we have found to be pretty reliable over 10 years of watching the mobile industry is to halve the prediction and double the time it takes. $25bn by 2014? I could live with that......

SXSW and the 2010 Sarah Lacy Keynote Award

nospam@example.com (Alan Patrick) — Tue, 16 Mar 2010 12:33:46 +0000

2010 SXSW Keynote - Spot the Common Ground Competition

It is clearly becoming traditional at SXSW to have an Interview Keynote that everyone loves to hate, a process that is affectionately known as Lacyration. This year's tag team were Havas's Umair Haque and Twitter's Ev Williams. Just see here and here for the articles - but read the comments for a more balanced view than just the Twitter faithful.

But of course, this one was all predictable, as the chart above shows. Today's competition is to "spot the middle ground". Answers on a postcard.....

Update - Umair Haque's comments over here talks about a bigger picture than you can get in 140 characters.

The Privacy Tango a Go-Go

nospam@example.com (Alan Patrick) — Wed, 17 Mar 2010 22:45:23 +0000

It does seem like online privacy is starting to hit the big time. We got it wrong, thinking that 2009 would be the year it really hit home, but we were a year early. But now everyone is trying to get More Private Then Thou - see Google Chrome's attempts:

Google just launched a new stable version of Google Chrome, the company's increasingly popular browser, which introduces a number of new features and more advanced privacy controls. Chrome will now automatically detect the language of any site you surf to and offer you to translate the text for you. In addition, Google also added granular privacy controls to Chrome that allow you to turn off cookies and JavaScript on a site-by-site basis. For now, these new features are only available in the Windows version of Chrome.

But Google (and Facebook) are probably past the point of believability....PC World:

Several major U.S. Internet companies, including Google and Facebook, need to "step up" and better protect consumer privacy or face tougher penalties from the U.S. Federal Trade Commission, a commissioner said Wednesday.

And then there is this.....Twitter in its new "don't be evil" mode is getting the Security bug:

On Tuesday, Twitter added computer security veteran Bob Lord to the company's expanding employee roster as the manager of network and infrastructure security, bringing with him 20 years of experience focused on electronic security systems at large companies, most recently including Red Hat, AOL and Netscape. Highlights in Lord's background include his building security and encryption features into the Netscape browser, iPlanet servers (an alliance with Sun and Netscape) and the AOL Communicator product, which also included Mail, Address Book, Instant Messenger and Calendar. Since leaving AOL, Bob has worked with a team of cryptography experts to add security features to many projects including FireFox, Mozilla Thunderbird and Red Hat Linux.

Problem is, its hitting the mainstream - what we were writing 2 years ago is now hitting mainstream media - New York Times:

If a stranger came up to you on the street, would you give him your name, Social Security number and e-mail address?

Probably not.

Yet people often dole out all kinds of personal information on the Internet that allows such identifying data to be deduced. Services like Facebook, Twitter and Flickr are oceans of personal minutiae — birthday greetings sent and received, school and work gossip, photos of family vacations, and movies watched.

Computer scientists and policy experts say that such seemingly innocuous bits of self-revelation can increasingly be collected and reassembled by computers to help create a picture of a person’s identity, sometimes down to the Social Security number.

They go on to note:

You may not disclose personal information, but your online friends and colleagues may do it for you, referring to your school or employer, gender, location and interests. Patterns of social communication, researchers say, are revealing.

“Personal privacy is no longer an individual thing,” said Harold Abelson, the computer science professor at M.I.T. “In today’s online world, what your mother told you is true, only more so: people really can judge you by your friends.”

Collected together, the pool of information about each individual can form a distinctive “social signature,” researchers say.

The power of computers to identify people from social patterns alone was demonstrated last year in a study by the same pair of researchers that cracked Netflix’s anonymous database: Vitaly Shmatikov, an associate professor of computer science at the University of Texas, and Arvind Narayanan, now a researcher at Stanford University.

By examining correlations between various online accounts, the scientists showed that they could identify more than 30 percent of the users of both Twitter, the microblogging service, and Flickr, an online photo-sharing service, even though the accounts had been stripped of identifying information like account names and e-mail addresses.

That prediction from connected data is an effect we've also noted.

And so the dance begins, as the companies whose business models rely on massive privacy violation (see above companies...) try and keep one step ahead in the dance of the seven veils that keeps the publoc from sussing them out. But it takes two to tango, and the user is getting a lot of notification about what is going on now from both the mainstream media and from New Media researchers such as dana boyd as well.

So, whose cards will be marked this year?

Dana Boyd, SXSW and Privacy Feudalism

nospam@example.com (Alan Patrick) — Mon, 15 Mar 2010 09:06:54 +0000

I'm beginning to like dana boyd No, seriously, I first came across her stuff a few years ago and found it a bit too "Social media right on" - Teen Brave New World laced liberally with Kool Aid - the sort of academic stuff Posy Simmonds would send up most wittily. But I think moving to Microsoft has been the making of her as she has started to embrace the real world outside academia and the Teen. In other words, I find myself agreeing with her more and more

SXSW this year (to me) has seen the scary trend of a vicious competition between various privacy-busting location based services for (ahem) Buzz. Thus this piece from SXSW by dana on Privacy is rather good - here are some highlights:

DEAR ERIC SCHMIDT, PRIVACY IS NOT DEAD. KTXBY.

No matter how many times a privileged straight white male technology executive pronounces the death of privacy, Privacy Is Not Dead. People of all ages care deeply about privacy. And they care just as much about privacy online as they do offline. But what privacy means may not be what you think.

Fundamentally, privacy is about having control over how information flows. It's about being able to understand the social setting in order to behave appropriately. To do so, people must trust their interpretation of the context, including the people in the room and the architecture that defines the setting. When they feel as though control has been taken away from them or when they lack the control they need to do the right thing, they scream privacy foul.

To get at the challenges around privacy, let's consider a recent privacy FAIL: Google Buzz. What the outrage around Google Buzz showed us is that people care deeply about privacy and control. Don't get me wrong - plenty of people will use the service and it will be extremely popular, but this doesn't mean Google didn’t screw up. They’re taking a hit in terms of trust, because not everyone benefited from what they did.

Hear hear. And then there is this:

THE BINARIES OF PUBLIC AND PRIVATE

It's easy to think that "public" and "private" are binaries. We certainly build a lot of technology with this assumption. At best, we break out of this with access-control lists where we list specific people who some piece of content should be available to. And at best, we expand our notion of "private" to include everything that is not "public." But this binary logic isn't good enough for understanding what people mean when they talk about privacy. What people experience when they talk about privacy is more complicated than what can be instantiated in a byte.

To get at this, let's talk about how people experience public and private in unmediated situations. Because it's not so binary there either.

First, think about a conversation that you may have with a close friend. You may think about that conversation as private, but there is nothing stopping your friend from telling someone else what was said, except for your trust in your friend. You actually learned to trust your friend, presumably through experience.

Learning who to trust is actually quite hard. Anyone who has middle school-aged kids knows that there's inevitably a point in time when someone says something that they shouldn't have and tears are shed. It's hard to learn to really know for sure that someone will keep their word. But we don't choose not to tell people things simply because they could spill the beans. We do our best to assess the situation and act accordingly.

Quite - we have been saying for 5 years that the trust seeking systems in Real Life are far more nuanced than a few puffs of whuffie, and that online systems are still very risky as they are so crude in ability to divine intentions - especially given the economic motives of some of the major players. She sums up with:

CHANGING THE RULES

Let's think of this in terms of a second privacy FAIL: Facebook's changes in December. For those who missed it, Facebook asked users to reconsider their privacy settings. The first instantiation of the process asked users to consider various types of content and choose whether to make that content available to "Everyone" or to keep their old settings. The default new choice was "Everyone." Many users encountered this pop-up when they logged in and just clicked on through because they wanted to get to Facebook itself. In doing so, these users changed all of their settings to public, many without realizing it. When challenged by the Federal Trade Commission, Facebook proudly announced that 35% of users had altered their privacy settings when they had encountered this popup. They were proud of this because, as research has shown, very few people actually change the defaults. But this means that 65% of users changed their settings to public.

If one believes that no one cares about privacy, one might think that Facebook users consciously made their content public. But I've spent a lot of time browsing Facebook's "Everybody" feed since the privacy setting debacle in December and I don't think a lot of what I'm seeing is meant to be public. [Picture of some "public" status updates on Facebook.] So I started asking non-techy users about their privacy settings on Facebook. I ask them what they think their settings are and then ask them to look at their settings with me. I have yet to find someone whose belief matched up with their reality. That is not good news. Facebook built its name and reputation on being a closed network that enabled privacy in new ways, something that its users deeply value and STILL believe is the case. Are there Facebook users who want their content to be publicly accessible? Of course. But 65% of all Facebook users? No way.

And she concludes with Five key issues:

PRIVACY DISCONNECTS

When thinking about privacy in a digital context, there are five main things you need to know.

First, you must differentiate between PII and PEI. If you've spent any time thinking about privacy, you've probably heard of PII - "Personally Identifiable Information." All too often, we assume that when people make PII available publicly that they don't care about privacy. While some folks are deeply concerned about PII, PII isn't the whole privacy story. What many people are concerned about is PEI - "Personally Embarrassing Information." This is what they're brokering, battling over, and trying to make sense of.

Second, we're seeing an inversion of defaults when it comes to what's public and what's private. Historically, a conversation that you might have in the hallway is private by default, public through effort. It's private because no one bothers to share what's being said. The conversation may be made public if something worth spreading is said. Even though the conversation took place in a public setting, the conversation is private by default, public through effort.

Third, people regularly calculate both what they have to lose and what they have to gain when entering public situations. Having control over a situation is extremely important, but it must be weighed against the opportunities that one might have to gain a friend or have a new experience by being public. The equations people use differ depending on where they are at in their life. Most generalizably, youth focus on all that they have to gain when entering into public spaces while adults are thinking about all that they have to lose. Part of the challenge in this is figuring out where someone's at and what their expectations are.

Fourth concept. Keep in mind that people don’t always make material publicly accessible because they want the world to see it. Consider this quote from 17-year-old Bly Lauritano-Warner:

"My mom always uses the excuse about the internet being "public" when she defends herself. It's not like I do anything to be ashamed of, but a girl needs her privacy. I do online journals so I can communicate with my friends. Not so my mother could catch up on the latest gossip of my life."

Finally, I want to come back to what I keep raising briefly but not properly addressing. Just because something is publicly accessible does not mean that people want it to be publicized. Making something that is public more public is a violation of privacy.

All very good stuff and I urge you to tread the whole original. But I want to leave you with an observation of my own, which is that the people who are heading the companies espousing Public Living the most, are also ensuring their own privacy the most - to the extent that I think we are seeing the emergence of "Privacy Feudalism" - there is a risk that in the future only the rich/powerful will have privacy, life will be lived in a public bubble except for those who can live behind the gated online communities.

Virtual Servers, virtual security

nospam@example.com (Alan Patrick) — Tue, 16 Mar 2010 21:57:20 +0000

Network World reporting on news from Gartner:

Sixty percent of virtual servers are less secure than the physical servers they replace, the analyst firm Gartner said in new research Monday.

This state of affairs will remain true until 2012, but security should improve substantially after that point, Gartner said.

Gartner predicted that by 2015, only 30% of virtualized servers will be less secure than the physical machines they replaced.

The basis of the issue is the new layer of virtualizing middleware that is emerging to help such virtual systems operate easily. These are new pieces of software, largely untested, and 40% are developed by people who know not a lot about high end system security.

There are 5 other main risks identified (see the press release here)

- A Compromise of the Virtualization Layer Could Result in the Compromise of All Hosted Workloads

- The Lack of Visibility and Controls on Internal Virtual Networks Created for VM-to-VM

- Workloads of Different Trust Levels Are Consolidated Onto a Single Physical Server Without Sufficient Separation

- Adequate Controls on Administrative Access to the Hypervisor/VMM Layer and to Administrative Tools Are Lacking

- There Is a Potential Loss of Separation of Duties for Network and Security Controls

Quite why its going to get amazingly better in 5 years is not made clear in the press release, I would have thought there is at least 5 years of FUD and Greed in there. The report is sitting behind a $95 paywall - so here's a free opinion:

There will be a load of cowboys entering the game in the next 3 years, by 2015 there will have been some major security f*ckups, and by 2015 many customers will have been spooked - and the big players who do this stuff in their sleep (they are called Telcos and Web 1.0 Hosters) will enter the game and just integrate it all as part of their infrastructure.

Location Wars

nospam@example.com (Alan Patrick) — Tue, 09 Mar 2010 23:55:00 +0000

So, the Location Wars have begun in earnest - Facebook and Twitter have joined Google in launching location based services.

NYT on Facebook:

Starting next month, the more than 400 million Facebook users could begin seeing a new kind of status update flow through their news feed: the current locations of their friends.

Facebook plans to take the wraps off a new location-based feature in late April at f8, the company’s yearly developer conference, according to several people briefed on the project, who spoke on condition of anonymity because they were not authorized to discuss unannounced services.

In preparation for the introduction, Facebook updated its privacy policy last November. The new policy states: “When you share your location with others or add a location to something you post, we treat that like any other content you post.”

At that time, the company also offered some foreshadowing of the new feature: “If we offer a service that supports this type of location sharing we will present you with an opt-in choice of whether you want to participate.”

The temptation to do opt-out is going to be very strong though.....on past performance it wouldn't be surprising is that "opt-in2 promise is very liberally interpreted,

Twitter too is gearing up - TechCrunch:

The service has just turned on geolocation on its website today for the first time.

While Twitter’s geolocation feature has been live through its API since last November, there was no sign of integration into the main twitter.com site until now. As you can see in the screenshot above, for tweets tagged with location, right next to the source of the tweet there is a location placemarker. When you hover over it, it turns blue, and clicking on it brings up a little Google map showing the location that tweet was sent from.

You can see these maps as overlays both on individual tweet pages, and on tweets in your main stream. In some cases, depending on how Twitter geolocation API is being used, it looks like place names are even passed through to Twitter.

Timing is of course to coincide with SXSWi, where Location startups Gowalla, Foursquae and who knows how many others are trying to get that lifegiving buzz going (Buzz - now there is another location ploy) in the biggest geekfest on the planet. SXSW lends itself to this sort of thing as thousands of hungry and thirsty (for knowledge, natch) geeks seek their networked friends for meals over the 12 or so blocks of Austin Olde Town.

What can we say that we haven't said already (just search for "location" on the blog) except be careful - Location based services play faster and looser with privacy than anything that has gone before.

The Hype Hyperbola

nospam@example.com (Alan Patrick) — Mon, 08 Mar 2010 21:26:31 +0000

The inverse relationship between a business's sexiness and profitability

While we're on the subject, Techmeme's Mahendra Palsule pointed me towards this C:Net article arguing that the media focus on what is sexy, not a decent business (he was noting it as a part-answer to this article I wrote awhile ago). The gist of it is:

A new report by ITDatabase that examines tech coverage over the last six months from eight top business news publications raises some questions, in particular: Does the business press factor companies' revenue and profits into their tech editorial agenda?

The report shows that Apple and Google dominate, while Twitter and Facebook are far more discussed in the business press than Intel, Dell, IBM, or even HP (the largest tech company in the world).

The eight publications surveyed are: The Wall Street Journal, The New York Times, Forbes, Fortune, BusinessWeek, The Economist, Financial Times, and USA Today. Over a period of six months, ITDatabase measured coverage by the number of times a tech company was mentioned in print and online in these publications, including blogs such as All Things Digital, which is affiliated with the Journal. (Disclosure: I am an adviser to ITDatabase.)

There is a chart in the post that shows Apple and Google getting the lions share of the publicity - its a power law graph by the looks of things - and it reminded me of a graph I saw many years ago, drawn in semi jest by a McKinsey colleague at the time, Ralph Lewinski. This curve explains the Hype Hyperbola (see the diagram above), ie the truism that sexy industries tend not to be profitable. This is typically due to one of 2 reasons:

- They are new industries, which usually tend to be unprofitable because they are giving away value to get market share (and/or have yet to find a business model)

- They are established and still sexy, in which case people will enter the market, and even work for them, for much less money than for less enjoyable industries

Which is of course why New Meedja startups are the poorest churchmice (its not a LOLcondition) of all as they fit both conditions Social Media profits (if you exclude the purchases of sites by the Dumb Money) drive the current "biggest $0 billion industry" going.

Google and Apple are exceptions in that they are both sexy and profitable and so really get the press attention. Typically they are profitable because (like old fashioned TV, which was once sexy) they have built strong barriers to entry. They are also both very powerful, especially in the Valley - the difference in coverage tone on Google Buzz between the independent bloggers and the Tech Media (including the big blogs) was quite remarkable.

We can haz minimum wage nao?

nospam@example.com (Alan Patrick) — Mon, 08 Mar 2010 22:54:31 +0000

NotLOLCat

Talking about Sexy New Media Startups being as poor as churchmice, here 's an example - the iconic LOLCat site is that most poverty-attracting thing, being a sexy and new media site. And it would appear its using Slave labour (or something like that) - Gawker:

Cheezburger Network might be the internet's largest "meme aggregator," according to Wired, with upwards of $4 million per year gleaned from other people's pet pictures, supplied to the company for free. But that doesn't mean the 30 or so employees share fairly in the bounty; as we reported last week, Huh has blogged about proudly offering jobs at Seattle's minimum wage of $8.55 or slightly higher, at $10.

Those low wages permeate the company, insiders and their associates tell us, with some former workers also describing worker misclassification unpaid overtime.

On the bright side, it sounds like people have fun with their co-workers, as even some detractors tell us, and one employee wrote in to say his experience at Cheezburger Network beat the pants off her/his (other?) minimum wage jobs — not exactly a high bar, but, given the state of the economy, a practical one.

Seemed like it was only right to put up an appropriate LOLCat picture then (hat tip Patrick Hadfield for the caption)

Media Memes - Navel Gazing Manouevres

nospam@example.com (Alan Patrick) — Mon, 08 Mar 2010 20:47:34 +0000

Techmeme has launched a new vertical, the fascinatingly recursive* Mediagazer:

Today we're launching our first new news vertical in almost four years: Mediagazer, which will focus on the content production and distribution business, organizing topics as wide as journalism, blogging, video production, e-books, and digital distribution technologies.

Meedja types given a mirror to look at themselves with...hmm, I recall a Greek Myth on the subject - ended in tears of course . Anyway, the venture will still have the Human Editing function:

Mediagazer incoporates all these lessons. We've taken great care in its construction, have outfitted the site with the latest iteration of our automation engine, and have launched it from the outset with a dedicated human editor.

That editor will be Megan McCarthy. While Megan's career in media has focused more on the technology space (both at Gawker and at Techmeme), she's long developed an interest in media industry buzz and should feel very much at home at Mediagazer.

It was perhaps inevitable that such a thing aimed at The Meedja would happen, its is an interesting gambit, and I wonder if it will need more human editing than Tech. The sheer number of Media news magazines suggests it will work (I've always seen Techmeme etc as the equivalent of magazines rather than newspapers per se), with this most self-absorbed of sectors. What fascinates me is which other verticals will be launched - and survive.

*look it up

Safe for Work - the UK DMCA Bill

nospam@example.com (Alan Patrick) — Sun, 07 Mar 2010 21:43:10 +0000

Paul Carr is mellowing! Yes, dear readers - he has written a well thought out post on the UK's new Digital Economy Bill. Not only that, he actually read the Bill! I haven't in detail*, so I'm just going to cut and paste Paul's stuff. As he points out, some of the huffing and puffing about Draconian Crackdowns on Free Spirits is somewhat overstated:

For a start, the first point of contention – the compilation of a persistent offenders list, and the potential banning of them from accessing the Internet – isn’t quite as unfair as it sounds. Despite Doctorow’s claim that “your entire family [can] be cut off from the net if anyone who lives in your house is accused of copyright infringement, without proof or evidence or trial”, there are actually multiple points at which evidence comes into play, and the accused file-swapper is given a chance to defend themselves. The bill requires the creation of an independent tribunal body to hear claims of unfairness arising from the new laws, and alleged infringers have not one but two rights of appeal to the tribunal. With each alleged breach, the new law demands that the ISP send a letter to the subscriber putting the allegations and the evidence to them.

Only once a significant number of breaches have been alledged (the drafters of the bill suggest 50) will the subscriber be added to the persistent offenders list. Again, they will be notified. Only at this point can the copyright owner appeal to the court – using a law that has been around for 36 years – to get the name and address of the offender. Even then, though, they won’t be taken to court. Instead, the copyright owner has to send the subscriber yet another letter (this will be their 52nd) warning them that legal action is imminent if they don’t stop. It’s only then that legal action will be taken, leading to a possible fine and – only at the extreme end of the scale – their Internet access being disconnected.

And, as he points out, much of it is just confirming what already exists:

Yes, the courts will have the power to require ISPs to block sites that egregiously host copyrighted files. But they can only do so if the site involved has refused to remove the copyrighted files – a last resort against foreign file lockers who ignore British court injunctions. More importantly it’s also a power that the British courts have had since the 2002 E-Commerce Directive Regulations (with ISP’s being similarly liable for inaction): the new legislation simply creates a DMCA-style process for making take-down requests easier to issue.

As Paul points out, a lot of the opposition to the Bill is coming from people without any intention of actually reading it (the "numpties" who so frustrated me last year when there were public debates about the Digital Britain report). this does not help debate, nor do the inflamed headlines from those who oppose it on ideological grounds (The Grauniad has been pretty poor in its articles on all this in my opinion).

But the thing I still don't get is why Her Majesty's Government is so desperate to get this through in the dog days of the administration. As Paul says, this is the sort of thing we must get right, so surely we can wait until after the May elections?.

* Haven't read the latest British one but had to get our heads around the DMCA, WIPO and various bits of EU legislation a few years back. Exciting reading it is not

Can London be a Startup Hub?

nospam@example.com (Alan Patrick) — Sun, 07 Mar 2010 13:31:41 +0000

There is a rather useful article in the NYT about how New York is starting to pop up as a startup hub again, after Silicon Alley shut down in 2002. But what really struck me is how much of it could equally be said about London. The following are to my mind the key arguments:

Firstly, a thriving scene of mutual assistance:

THE two dozen or so people arranged around wooden tables, warming their hands and bellies with steaming mugs of coffee and plates of homemade biscuits, looked like just another Sunday brunch set in New York. But members of this group had braved knee-deep snow to gab about cutting-edge ideas and as they introduced themselves the roll call sounded like a Who’s Who of digital start-ups: Foursquare, Hot Potato, Six Apart, Flickr, Flavorpill, Trust Art, Vimeo.

The New York Tech Meet-Up is held monthly, and as many as 700 people attend, a sign of the revival of tech businesses in the city.

“There’s a lot happening right here in our ZIP code,” said Dorothy McGivney, a former Google employee who is a co-coordinator of this group, the North Brooklyn Breakfast Club, and runs Jauntsetter, a travel site for women. Like the others, she had come to the brunch to help foster the growth of her little local community of entrepreneurs.

The group had its inaugural meeting in January and is among a growing cluster of informal meet-and-greets for the local technology and media industries. A recent installment of another monthly event, called the New York Tech Meet-Up and held in Chelsea, drew 700 tech enthusiasts.

The London scene has been quite vibrant for about 3 years now, but I think what is missing is the emergence of some real category killer companies. New York has already given birth to a few, such as Etsy and DoubleClick. London doesn't really have this - yet.

As to where the London category killers may come from, London is more like New York than Silicon Valley - it's a hotbed of the more traditional Media industries which are helping drive New York startups:

Of course, services can be developed anywhere. But because so many industries now grappling with the Internet are based in New York, the city is finding surer footing among its peers as a thriving tech hub.

“Book publishing, advertising, media and even the fashion industry are all located in New York. These are the main industries that are being reshaped and redefined by technology and the Internet,” says AnnaLee Saxenian, a professor at the University of California, Berkeley, who studies regional economics and technology entrepreneurship.

And somewhere to work is key - there is a rise of incubators and workspaces again:

Some of the more interesting breeding grounds in the city are technology incubators that nurture and mentor young companies. One example is the new Manhattan arm of Dogpatch Labs, which is backed by Polaris Venture Partners, an investment firm in the Boston area.

Dogpatch, which opened in January, offers start-ups a place to work, rent-free, for several months, along with the possibility of securing an investment down the line.

Another critical factor is the input of the Universities in the area:

Colleges and universities have long helped fuel the dreams of entrepreneurs. An early pillar of Silicon Valley innovation was Stanford’s dean of engineering, Frederick Terman, who viewed the university as an incubator for the electronics industry. More recently, Facebook was born in a Harvard student’s dorm room and Google first percolated in the heads of two Stanford graduate students.

Hoping to replicate those kinds of successes, schools in New York are increasingly collaborating with local start-ups. Chris Wiggins, a professor of applied mathematics at Columbia University, regularly brings start-up founders to campus to speak to students about careers in technology and is establishing an internship program at the school.

NYC Seed works closely with the Polytechnic Institute of New York University to help students there translate promising ideas into profit-making ventures.

London has some of the best universities on the planet, so no excuses there - but more co-ordination and collaboration is required, for Cambridge to still be ahead of London is extraordinary given the assets at London's disposal. The reason for this is the main London scene-killer - funding. There is still a bigger (or at least more active) VC scene in Cambridge. New York is getting that right again, and the meltdown in teh financial sector (another thing it shares with London) is helping:

New York’s flashier industries, including big media and Wall Street, have long dwarfed the tech sector here. And the dot-com implosion only reinforced that reality. The fledgling tech scene that was just beginning to hum in the late 1990s flatlined as dozens of Internet companies folded, pink slips replaced party invitations and venture capital firms took their investments elsewhere.

During the dot-com boom, “venture capitalists were just throwing dollars at every Internet idea on every street corner,” says Owen Davis, a serial entrepreneur and managing director of NYC Seed, an early-stage technology investment fund. “There was little critical judgment about business models and ideas.”

Since then, Mr. Davis says, the New York technology industry has been steadily coming back on line and has managed to accelerate despite the economic turmoil besieging other industries.

To my mind this is still London's main weakness. All the other areas coild be done better, but are not on the critical path. But nearly every London startup I know of in the new mesia/web 2.0 space that has found funding has had to go Stateside to get it, or fairly soon after an initial round. That (and I know some of my London VC friends will disagree) to my mind is the main thing holding London back. Its not that there isn't any money here, its just that there is not enough of it, and I am concerned its not going to the right places. I think there is still too much of a tendency to give money to the "right" sort of people, rather than the sort of people who are right.

Managing within Social Networks

nospam@example.com (Alan Patrick) — Fri, 05 Mar 2010 14:28:49 +0000

Quite an interesting article in Harvard Business Review about some research from the University of warwick on "Open Learning" circles in the business world. (I read teh hard copy, there is a summary behind a partial paywall over here). It really struck a chord to juxtapose it with the "Social Media Reality Check" event at POLIS last night. Joanne Jacobs liveblogged that over here, wasn't there but my impression was that the thing checked in last night was social media reality - at the entrance door

Anyway, the researchers show start would be recognised by any Social media adherent:

United by a common professional passion, participants would huddle around conference tables and compare data, trade insights, and argue over which designs would work best with local water systems. And the community achieved results: Participants found ways to significantly cut the time and cost involved in system design by increasing the pool of experience that they could draw upon, tapping insights from different disciplines, and recycling design ideas from other projects.

"Let them run free" was the original thinking, but these networks started to hit limits:

Too much attention from management, went the thinking, would crush the group’s collaborative nature. But the very informality of this community eventually rendered it obsolete. What happened to it was typical: The members gained access to more sophisticated design tools and to vast amounts of data via the internet. Increased global connectivity drew more people into the community and into individual projects. Soon the engineers were spending more time at their desks, gathering and organizing data, sorting through multiple versions of designs, and managing remote contacts. The community started to feel less intimate, and its members, less obligated to their peers. Swamped, the engineers found it difficult to justify time for voluntary meetings. Today the community in effect has dissolved—along with the hopes that it would continue generating high-impact ideas.

Again, anyone familiar with Social Media over a number of cycles (ie the Kool Aid has been drunk, digested and d****ated) will recognise this. What works seems to be to give them some form of top down management structure!

Our research has shown that many other communities failed for similar reasons. Nevertheless, communities of practice aren’t dead. Many are thriving—you’ll find them developing global processes, resolving troubled implementation, and guiding operational efforts. But they differ from their forebears in some important respects. Today they’re an actively managed part of the organization, with specific goals, explicit accountability, and clear executive oversight. To get experts to dedicate time to them, companies have to make sure that communities contribute meaningfully to the organization and operate efficiently.

Heresy! I hear you cry. Nonetheless, thats the emerging evidence. Its also my experience - if you want a Social Net group to achieve something, someone actually has to take charge.

Smartphone Adoption by Country

nospam@example.com (Alan Patrick) — Fri, 05 Mar 2010 14:12:53 +0000

Smartphone Penetration Map (iCrossing)

Useful map of smartphone adoption by type and country (larger original is here). iPhone is triumphant, except for China which is mainly Nokia.

Caveat Info - in which countries is your privacy most at risk?

nospam@example.com (Alan Patrick) — Fri, 05 Mar 2010 14:05:30 +0000

Data Protection Heat Map from Forrester

Useful interactive chart from Forrester Research on where your data is most compromised. Caveat USA!

One Mobile App success does not a summer make

nospam@example.com (Alan Patrick) — Tue, 02 Mar 2010 23:02:11 +0000

There are a number of people whose blogs I always read, and when it comes to incisive comment on Planet Mobile one of those is Dean Bubley who writes Disruptive Wireless. I thought his recent piece on Mobile Apps was particularly useful when I read a story about an app on android selling $13,000 pm

Numbers

- About 70,000 downloads of the free version.
- 6,590 downloads of the paid version
- Price of the app was raised from $1.99 to $3.99
- The app steadily climbed the charts, briefly reaching a peak of #4 in the Travel category for paid apps.

Good luck to them, but putting one's business hat on I asked "is this a business model" - and then recalled Dean's post:

Wandering around Barcelona last week, I started feeling a deep unease at the current level of hysteria around mobile apps. It is was compounded this week by seeing a T-Mobile advert on the London Underground which didn't show a phone, but just said "Would you like a free phone with apps for just £20 a month?" [meaning "We'll sell you a cheap Android instead of an iPhone, but don't dare mention it or show it"]. Apple is bombarding the world with "apps, apps, apps" advertising as well.

That was what was on my mind too - as Dean says, this may not be sustainable:

But maybe it's just a fashion? After all, do you really want any form of ongoing "relationship" with a handset manufacturer? Will the mass market really want to keep adding new stuff to their device?

The first 100-200m owners of PCs bought and installed lots of applications. The most recent 100-200m have probably just got Office, a browser, Norton or some other security package, Skype and their favourite IM client. Apart from gamers, most people don't continually look for and download PC apps - although they're there occasionally if need strikes.

........

Most "cool new stuff" will be in the browser, just as it is with the PC. And maybe, just maybe after you've got used to it, you'll bother to find out if there's a 20%-better application. Once there are easy metaphors for multiple browser windows and tabs on mobile, and more ubiquitous support for multi-tasking, the idea of a "widget" becomes obsolete. They're just contrivances to get around small screen size, I think.

And the endgame?

The bottom line is that I'm wondering if the massed billions of phone users will really care about iPhone-style junk applications. Personalisation is all very well - but it's best done upfront, not on an ongoing basis. The hand of fashion could also start to dictate that people customise something else rather than phones.

A vision of 4 billion "modified" smartphones represents a dystopia of geekiness.

I must admit to having a lot of sympathy with this view, probably the kindest alternative view is to extrapolate the iPhone evolution, where an 80/20 (at best) is emerging - a small number of Apps are selling well (and these are the "$13,000 a month" stories), but a huge number are not.

Incidentally, in case you were wondering where the money really is, news today that the iPhone has a 60% gross margin.

Google's turn at the Network Computing Hype Cycle

nospam@example.com (Alan Patrick) — Thu, 04 Mar 2010 08:19:00 +0000

The Network Computer Hype Cycles (Broadsight Analysis)

Today we read with some amusement that Google is stating that the desktop is dead (again):

Google believes that in three or so years desktops will give way to mobile as the primary screen from which most people will consume information and entertainment. That’s according to Google Europe boss John Herlihy who said that smart phones enhance Google’s mission to make information universal.

Speaking at the Digital Landscapes conference at UCD, Herlihy said that the cloud-computing opportunity will make sure that every mobile device will be capable of doing rapid-scale applications.

“In three years time, desktops will be irrelevant. In Japan, most research is done today on smart phones, not PCs,” Herlihy told a baffled audience, echoing comments by Google CEO Eric Schmidt at the recent GSM Association Mobile World Congress 2010 that everything the company will do going forward will be via a mobile lens, centring on the cloud, computing and connectivity.

This of course was predictable, as the above chart shows. The "Network is the PC" meme comes around regularly every 10 years. Its one of the best examples of a perpetually reccurring hype cycle that we know of. To recap:

The IBM Network PC wave

In 1988 or so and to regain its position (and play to its overall strengths) IBM brought out the Network PC, essentially a dumbed down device that would serve its client faithfully on these new fangled Client-Server Local Area Networks. It failed of course, as (i) The network wasn't reliable enough, (ii) the users liked the standalone capability and control and (iii) the kit wasn't good enough to replace the desktop at that point

The Sun "Network is the Computer" Wave

Cometh the Internet, and Sun has a problem - its tins are in the server farms but not on the desktops. Clearly, the world needs to move towards this new fangled Internet thingy, and put all its data in the (I forget, I think it was called The Cloud at that time too). It failed of course, as (i) The network wasn't reliable enough, (ii) the users liked the standalone capability and control and (iii) the kit wasn't good enough to replace the desktop at that point

The Google "It will be in the Cloud" Cycle

Cometh Big Broadband, and Google has a problem - too many customers are irresponsibly sticking to their desktops rather than sticking all their data into the big GoogleMine. Hence the call for The Cloud rings out clarion like across the Valley. It will fail of course, as......

Why Ten Years? Our hypothesis is that that is the time it takes the Corporate Memory to wane to a level where the Bright New Things can haul the Network PC punt out again without some grizzled and wise old hand reminding them of the phenomenal waste of time and money the last cycle had been. Its also interesting that Eric Schmidt's company (Sun, now Google) has been the major proponent of these last two cycles.

What's interesting about the Googleshot is that this is almost a double top, in that they've tried the "netbook data in the cloud" gambit - which hasn't crossed the chasm - and now its a smartphone gambit. A sign of desperation surely, as if the netbook didn't work its a lot less clear that todays' (even less capable) smartphones will - which is why we think its a sign that this cycle is already on the wane.

Here, as they say, endeth the lesson.

Update - well, not quite endeth - as my learned commentators have pointed out:

(i) There has always been a (shifting) balance between client side and server side, its juts that companies (and bloggers) always push the edges for their own ends

(ii) Each wave does result in a new layer of cloud service usage - networked data, web services etc.

But we suspect static services will be around for a long, long time as (i) people are largely static and (ii) they too improve over time. Th high power workstation with 2 large screens has attractions all of its own.

Books the new game in Smartphones

nospam@example.com (Alan Patrick) — Wed, 03 Mar 2010 08:34:00 +0000

iPhone - Books as Apps (from Mobclix data)

Matthew Ingram writing on GigaOm about the fascinating rise of the Book as the Killer App on the iPhone (see above chart):

According to Mobclix, which does mobile advertising for apps, the number of books in the iTunes store now exceeds the number of games for the first time since the device was launched, making books the largest category in the store. The numbers from Mobclix, which keeps a regular tally on the most popular apps and downloads, show that there are more than 26,000 books in iTunes, compared with a little over 24,000 games.

And just yesterday we wrote that the market for small, stand alone apps on the iPhone (and by extension other smartphones) was probably an early adopter fad. Prescient or what As Matthew notes, this is disruptive to an already Disrupted 1.0 industry

This fits in with something Om wrote recently based on data from Flurry, which also showed a substantial increase in the number of books being downloaded to the iPhone. At the time, Flurry said that Apple was “positioned to take market share from the Amazon Kindle” for book reading, despite the small size of the display, and that “with Apple working on a larger tablet form factor [Aka iPad], running on the iPhone OS, we believe Jeff Bezos and team will face significant competition.”

The Battle for the Book is thus looking very interesting, albeit it seems to be taking an initial backward step as various publishers and hardware providers try and jockey for proprietary supply models. This of course will be a hit with the customer like it has been every other time its been tried (not!)

So - some predictions in this space over the next few years:

(i) Greedy and shortsighted players will try and make proprietary content-to-device deals and attempt to lock in high prices of eBooks despite much lower production costs

(ii) This will be accompanied by the wails from the Book Industry that billions are being lost to e-Piracy (oh wait, that's started) and demand the Government Must Do Something

(iii) One player (my money is on Apple as the have form) will break the logjam allowing you to get most of the content on one (ie their) device

(iv) Les Autres will wail about unfair competition, but they have only themselves to blame - after all, the playout of the music industry is plain for all to see

(v) Authors still won't see more money for their work, so will start all teh alternative channels as musicians have.

In other words, another Santayana Moment

The Life of a Social Media 3rd Party Developer will be nasty, brutish and short

nospam@example.com (Alan Patrick) — Wed, 03 Mar 2010 10:30:04 +0000

A few days ago we remarked on the inevitability of Twitter looking at the best 3rd party Apps areas and grabbing them for itself. News comes today of Facebook throttling developers ability to virally market (aka spam) their apps - All Facebook:

Just over 24 hours after Facebook turned off application notifications, developers are reporting a dramatic decrease in traffic. Speaking to a number of developers, we’ve heard traffic has decreased in the range of 10 to 50 percent, depending on the application, most hovering between an 18 to 27 percent decrease. While our poll sample was small, Facebook developers are now entering the “post-notifications era”.

And why do this? To regain control of their own distribution channels and put their own castles on them of course:

With an estimated $350 million in revenue last year from performance advertising, Facebook is heavily focused on this space. However, virtual goods are also an area which Facebook is hoping to experience a large amount of growth.

While it’s not known whether or not Facebook will force developers to use their Credits platform, there’s a very good chance Facebook will become the primary payment provider of all virtual goods on their site. This means Credits could very well become a business worth over $300 million a year if the platform is expected to generate over $1 billion in revenue each year.

..............

There are two parties now who are “paying to play”: developers, who will now purchase more ads to drive traffic to their applications, and users, who will increasingly pay for virtual goods in games. While it appears that application requests and other channels still drive traffic, developers have become one of the largest buyers of Facebook ads.

Do developers have other options? In theory they can decamp to other platforms but of course those have their own dominant ecosystems so new entrants have to spend even more resources to clamber up the greasy pole, and it is probably inevitable that all ecosystem holders will increase rents over time. But in the sort term....

...developers will have to deal with the short-term implications of the removal of notifications and figure out ways to regain traction, as they always do. The entire time it’s important for developers operating on the Facebook Platform realize: this is Facebook’s world. If you don’t want to put up with the challenges of the platform, you can just set up your application off the site.

So - for app developers a caveat. Its a jungle out there - and its their jungle, not yours. As an ecosystem matures, life is probably going to be nasty, as the interests of customer and ecosystem holder do not align with that of the developer once the Ecosystem is functioning. Its also going to be brutish, as its about who gets (a lot of) the money, and - if you are a funding VC you will need to take this into consideration - its probably going to be short. In this eat-or-be-eaten world, there is probably only one App in each category that can sell itself to the Ecosystem, the others will have real problems surviving.

Twitter starts shooting tanks parked on own lawn(?)

nospam@example.com (Alan Patrick) — Mon, 01 Mar 2010 08:58:45 +0000

Well, if this wasn't predictable.... Twitter is apparently starting to build the successful features that 3rd party sites on its ecosystem have pioneered - SAI:

It seems Twitter's had enough with other folks taking control of millions of Twitter users (and the money they represent). If Twitter's new business model is based on copying Google with Twitter AdWords, controlling the end-user interface will be very valuable. And this move seems designed to address that.

Specifically, it's the difference between Google Sites revenue (Google.com), in which Google keeps 100% of the money and Google Network revenue, in which Google has to hand over 50%-80% of the money to a distribution partner.

It was predictable (this is a standard tactic of an open ecosystem play - get YOU! to do the work and then clean up once one knows what works), we predicted it*, but of course that didn't stop hordes of companies developing applications, all hoping to get a small place in the sun early. Its not all said and done of course, the Twitter functions still have to delight the customer - but of course "transactional troubles" may plague the competing sites of les autres until the end user gets the message.

So what do you do if you are a Tweetdeck, or Tweetmeme or Tweetthang etc etc? Traditionally, the ideal would be to sell the platform to Twitter - that's an exit for one (probably the most heavily used) in each area (mobile, PC, alerts, etc). After that the options look nastier in the medium term - essentially its a franchise model similar to small shops in a mall - renting space on the Twitter platform, continually worrying that your subniche is the one that Twitter goes after next.

Or maybe not - maybe Twitter will run a "big tent" model for quite a while longer, using the 3rd parties to continue to push its services ever outward to expand reach via resources it cannot command internally, and take a cut of a potentially bigger pie. If it were a Facebook the former is the no brainer option, but Twitter culture (and the game theory to beat Facebook and Google) is sufficiently different to suggest this may be on the cards for quite a while longer.

But you all know the endgame........right?

Update - Ian Betteridge points out in the comments that this story is being rubbished. I think that while this story in itself is based on small datapoints (and its a Henry Blodget story - 'nuff said), the big picture is directionally correct. To me it is very risky to assume that Twitter, over time, will not pick off the bits of its own ecosystem that maximise its own business model.

*As, of course did all the other observers with some savvy. The thing that fascinated me was all the VCs pumping money into the 3rd party ecosystem when the underlying company had no declared business model. They are clearly betting on Twitter being slow to eat its own hit head (the long tail can be given to 3rd parties ad infinitum)

Books the new game in Smartphones

nospam@example.com (Alan Patrick) — Wed, 03 Mar 2010 09:54:56 +0000

iPhone - Books as Apps (from Mobclix data)

Matthew Ingram writing on GigaOm about the fascinating rise of the Book as the Killer App on the iPhone (see above chart):

According to Mobclix, which does mobile advertising for apps, the number of books in the iTunes store now exceeds the number of games for the first time since the device was launched, making books the largest category in the store. The numbers from Mobclix, which keeps a regular tally on the most popular apps and downloads, show that there are more than 26,000 books in iTunes, compared with a little over 24,000 games.

This fits in with something Om wrote recently based on data from Flurry, which also showed a substantial increase in the number of books being downloaded to the iPhone. At the time, Flurry said that Apple was “positioned to take market share from the Amazon Kindle” for book reading, despite the small size of the display, and that “with Apple working on a larger tablet form factor [Aka iPad], running on the iPhone OS, we believe Jeff Bezos and team will face significant competition.”

(i) Greedy and shortsighted players will try and make proprietary content-to-device deals and attempt to lock in high prices of eBooks despite much lower production costs

(ii) This will be accompanied by the wails from the Book Industry that billions are being lost to e-Piracy (oh wait, that's started) and demand the Government Must Do Something

(iii) One player (my money is on Apple as the have form) will break the logjam allowing you to get most of the content on one (ie their) device

(iv) Les Autres will wail about unfair competition, but they have only themselves to blame - after all, the playout of the music industry is plain for all to see

(v) Authors still won't see more money for their work, so will start all teh alternative channels as musicians have.

In other words, another Santayana Moment

Web TV and Winter Olympics

nospam@example.com (Alan Patrick) — Sat, 27 Feb 2010 15:42:36 +0000

Norwegians (who took silver) Curling in Pyjamas (Huffington Post)

Liz Gannes on the US experience of Winter Olympic Web TV

NBC knew at the outset of the games it would be losing money on broadcasting them due to licensing costs but still took an extremely cautious approach to making events accessible online, rather than experimenting with the web to goose revenue. To its credit, the network finally opened up a couple of high-profile events toward the end of the Olympics for live streaming, allowing access to users without requiring them to authenticate themselves as paying cable subscribers. But I found it incredibly frustrating that given the major advances in live-streaming video and video advertising since the Beijing Olympics (see my sub req’d story on GigaOM Pro about adaptive bitrate streaming), NBC ratcheted down its content so tightly — offering an estimated 400 hours of live video coverage compared to 2,200 two years ago.

There are two interesting subtexts here:

Firstly, the US stuff was in the same timezone, ideal for the established Web TV "watch later" model to function. In the UK it was on late at night so we were watching it live on conventional TV during the usual "catch up" time late at night. Web TV still can't compete with "real" TV for this, it was a no-brainer to be up a 2.30am watching the BBC

Secondly, there was far more going on at any one time than a few standard TV network channels could cover. This is where Web TV should really complement broadcast TV. The high profile event shown live on Web TV was the Ice Hockey game, with 500,000 streams - but long term I can't really see the point of trying to compete head to head on the main events, as that is not where Web TV economics really work except as a way of goosing revenue (as Liz puts it )

But to me, the really amazing lesson of the Winter Olympics has been how exciting the Curling has been. Partly its been the very close matches, but as the Huffington Post points out, it may also be because so many of the players are so cute

McKinsey on the Internet of Things

nospam@example.com (Alan Patrick) — Mon, 01 Mar 2010 22:26:20 +0000

Article in the latest McKinsey Quarterly on The IOT, its interesting insofar as McKinsey looks at it with a bit more economic responsibility than many. Expurgated version:

Information and analysis

1. Tracking behavior

When products are embedded with sensors, companies can track the movements of these products and even monitor interactions with them. Business models can be fine-tuned to take advantage of this behavioral data. Some insurance companies, for example, are offering to install location sensors in customers’ cars. That allows these companies to base the price of policies on how a car is driven as well as where it travels. Pricing can be customized to the actual risks of operating a vehicle rather than based on proxies such as a driver’s age, gender, or place of residence.

2. Enhanced situational awareness

Data from large numbers of sensors, deployed in infrastructure (such as roads and buildings) or to report on environmental conditions (including soil moisture, ocean currents, or weather), can give decision makers a heightened awareness of real-time events, particularly when the sensors are used with advanced display or visualization technologies.

3. Sensor-driven decision analytics

The Internet of Things also can support longer-range, more complex human planning and decision making. The technology requirements—tremendous storage and computing resources linked with advanced software systems that generate a variety of graphical displays for analyzing data—rise accordingly.

Automation and control

1. Process optimization

The Internet of Things is opening new frontiers for improving processes. Some industries, such as chemical production, are installing legions of sensors to bring much greater granularity to monitoring. These sensors feed data to computers, which in turn analyze them and then send signals to actuators that adjust processes—for example, by modifying ingredient mixtures, temperatures, or pressures. Sensors and actuators can also be used to change the position of a physical object as it moves down an assembly line, ensuring that it arrives at machine tools in an optimum position (small deviations in the position of work in process can jam or even damage machine tools). This improved instrumentation, multiplied hundreds of times during an entire process, allows for major reductions in waste, energy costs, and human intervention.

2. Optimized resource consumption

Networked sensors and automated feedback mechanisms can change usage patterns for scarce resources, including energy and water, often by enabling more dynamic pricing. Utilities such as Enel in Italy and Pacific Gas and Electric (PG&E) in the United States, for example, are deploying “smart” meters that provide residential and industrial customers with visual displays showing energy usage and the real-time costs of providing it. (The traditional residential fixed-price-per-kilowatt-hour billing masks the fact that the cost of producing energy varies substantially throughout the day.) Based on time-of-use pricing and better information residential consumers could shut down air conditioners or delay running dishwashers during peak times. Commercial customers can shift energy-intensive processes and production away from high-priced periods of peak energy demand to low-priced off-peak hours.

3. Complex autonomous systems

The most demanding use of the Internet of Things involves the rapid, real-time sensing of unpredictable conditions and instantaneous responses guided by automated systems. This kind of machine decision making mimics human reactions, though at vastly enhanced performance levels. The automobile industry, for instance, is stepping up the development of systems that can detect imminent collisions and take evasive action. Certain basic applications, such as automatic braking systems, are available in high-end autos. The potential accident reduction savings flowing from wider deployment could surpass $100 billion annually. Some companies and research organizations are experimenting with a form of automotive autopilot for networked vehicles driven in coordinated patterns at highway speeds. This technology would reduce the number of “phantom jams” caused by small disturbances (such as suddenly illuminated brake lights) that cascade into traffic bottlenecks.

And the conclusion (italics are mine)?

The Internet of Things has great promise, yet business, policy, and technical challenges must be tackled before these systems are widely embraced. Early adopters will need to prove that the new sensor-driven business models create superior value. Industry groups and government regulators should study rules on data privacy and data security, particularly for uses that touch on sensitive consumer information. Legal liability frameworks for the bad decisions of automated systems will have to be established by governments, companies, and risk analysts, in consort with insurers. On the technology side, the cost of sensors and actuators must fall to levels that will spark widespread use. Networking technologies and the standards that support them must evolve to the point where data can flow freely among sensors, computers, and actuators. Software to aggregate and analyze data, as well as graphic display techniques, must improve to the point where huge volumes of data can be absorbed by human decision makers or synthesized to guide automated systems more appropriately.

Its that price thing.....we last looked at The Internet Of Things in economic detail about 2 years ago, came to the conclusion there were 2 or 3 cycles of "Moore's Law" still to go before it was cheap enough to take off. so we're looking at 2012 - 2014 before things really start to take off outside of large industries like Chemicals etc.

Pinpointing the Location Based Service Market

nospam@example.com (Alan Patrick) — Fri, 26 Feb 2010 09:44:28 +0000

Location Based Services

View more presentations from Broadsight.

My slides from Mashupevent's Location Based Service Session last night - these are the notes, they are based on client research we did about a year ago.:

Predictability - of a sort

Location based Services is one of those cyclical hypes, coming round every 10 years or so. Like all overhyped areas, it comes complete with way overoptimistic market projections. The last time round, in the WAP fuelled dotcom atmosphere, $20bn was typical of the froth. 5 years alter, a few millions was more like the truth.

This time round, $13bn are the sorts of numbers thrown about. Suffice to say that we believe these numbers too are way overstated. However, it does give us predictability of a sort, in that the peak of each hype wave is 60% of the last one, which allows us to predict that the peak of the next LBS hype cycle will be c $7bn in 2018

Four Squares

So what is the size of the market? The honest answer is it is too early to tell (a scenario based approach is better, which is our approach of course ). The two key determinants are penetration and Average Revenue Per User.

Penetration can vary between "only smartphone users" (bottom of the chart) and a set of scenarios that imagines location aware consumer devices, cars, etc etc - and if you add low cost "Internet of Things" devices it can be immense

ARPU can vary between "Free" - is location services are given away as part of something else, and directly "paid for" - the horizontal axis - and depending on your assumption here that gives you a number to multiply by your no. of users, and you get a market size.

Update (forgot to add): One also has to be very careful about who gets this new money. The owners of the real estate - the device and the LBS info transport networks (eg operators) - have real market power here and will absorb a lot of any surplus.

We built a number of scenarios for our client, and its worth looking at the two key ones - ie there will be a large number of users for services which are low cost to use, ie are typically funded in some other way (ie the "market" as such will never see the value). Ad funding - the beloved "Ad push discount to find a cool restaurant for your friends" business case - will be a small, and "difficult to get right" part of this in our view, mainly because it is invasive of the very limited real estate on the smartphone.

Another viable market will be niche services that deliver real value to a group of people, and they will pay for these. This will be a market of smaller numbers of users but far higher ARPU.

In our view the $13bn market projections is of the "Pangloss" school of forecasting - assuming the best of all possible outcomes in the best of all possible worlds, and our scenarios tended to give an order of magnitude lower set of answers.

I'm OK, You're.....

This slide segments the most likely strategies that consumer based mobile services will adopt, and looks at the likelihood of success. We covered this area in more detail in the post over here, and the potential privacy issues over here

There's always someone looking at you....

We believe that privacy and intelligent usage of people's digital footprint will be critical - as Google Buzz found out, do this wrong and even the most respected player will be torpedoed below the waterline. The slide mentions two amusing "hacks" that illustrate the privacy issues with LBS

- Robmyhouse.com - shows what you can do to mashup location data for helpful services - for burglars . We covered this in more detail over here

- The Invasion of the Foursquare Bot Snatchers - fun hacks of Foursquare to show what a malicious approach could do - we covered this in more detail here

Other issues that were covered in the Q&A (not on slides)

- Biggest B2B markets? In our view, Logistics (Transport, Scheduling, empty truck ride clearing etc) is the major market.

- Why do people use Foursquare, Gowalla etc? First Gen LBS like Dopple failed, 2nd Gen are more "game" like as that has been shown to be more "sticky" for a user, increases the potential of selling virtual goods, and is more likely to get them to divulge personal data

Somebody asked me afterwards why we are so "down" on LBS. I replied that the problem is not us, its the hype cycle around the industry that is driving it to an artificial overvaluation (hey, even a $2bn industry by 2015 is still good) - and everyone is colluding in this. For example, we were interviewed by one of the MSM's (fairly well known) tech journalists on this topic last year, and gave our fairy rational prognosis - as above. The piece when it eventually appeared was totally upbeat and didn't even mention our views as a counter-story. This, if I may say so, is a total dis-service to all those who work in a sector. Big it up by all means, but you are on a hiding to nothing if you don't understand the limits to growth.

Pending: Patent Enclosures Program

nospam@example.com (Alan Patrick) — Fri, 26 Feb 2010 16:14:26 +0000

Today Facebook patented its NewsFeed (I read on RWW). The patent says that they are the patent holders for:

A method for displaying a news feed in a social network environment is described. The method includes generating news items regarding activities associated with a user of a social network environment and attaching an informational link associated with at least one of the activities, to at least one of the news items, as well as limiting access to the news items to a predetermined set of viewers and assigning an order to the news items. The method further may further include displaying the news items in the assigned order to at least one viewing user of the predetermined set of viewers and dynamically limiting the number of news items displayed.

I cannot believe that there is no prior art here! The Facebook Fanboi Nick O'Neill piously believes that:

It appears that this patent surrounds implicit actions. This means status updates, which is what Twitter is based on, are not part of this patent. Instead, this is about stories about the actions of a user's friends. While still significant, the implications for competing social networks may be less substantial.

Pull the other one, Nick. Based on Facebook's well documented benign and gentle past (for US readers - that's irony ) they are not likely to use this for commercial advantage? The main problem is that the patent system in the US is increasingly compromised, but we have covered this ad nausea before.

But I think this is becoming a real issue now, and there may be worse to come in my opinion. The problem the system has is that it is part subsidised by the state and probably costs far more to operate than it costs applicants, so its creaking. And what concerns me even more is the Vulture Capitalists are circling, this article by Nathan Myrhvold in the March Edition of HBR is quite scary- its basically a defence of his company, Intellectual Ventures', wish to Bunker Hunt the Patent market:

My company, Intellectual Ventures, is misunderstood. We have been reviled as a patent troll—a renegade outfit that buys up patents and then uses them to hold up innocent companies. What we’re really trying to do is create a capital market for inventions akin to the venture capital market that supports start-ups and the private equity market that revitalizes inefficient companies. Our goal is to make applied research a profitable activity that attracts vastly more private investment than it does today so that the number of inventions generated soars.

The basic idea is that there is a VC type market for "Invention Capital":

....a full-fledged invention capital system could solve many of the problems that have long plagued both inventors and the consumers of inventions: inadequate funding for applied research, an inefficient market for connecting companies with the inventions they need and for monetizing inventions, a balkanization of the inventors and inventions required to tackle big problems, and an enforcement and arbitration system that simultaneously permits too much infringement and relies too heavily on lawsuits to determine price.

Anyway, the argument is that the Government based patent system is not fit for purpose (true) and the solution is thus to privatise it (probably false, in our view - or at least not without a lot more safeguards than I suspect Mr Myrvold would want).

Another interpretation is that they have seen how big business has managed to buy up DNA IPR which by rights are global Common Stock, and are reselling this at vast profit to its original providers by the simple trick of legal enforcement based on having the money. In medieval England this was known as the Enclosure system, where rich Barons enclosed common peasant land and forced the peasants to pay for using it. One would also feel more re-assured IV were "doing it for us" if they didn't currently use "idea generation" sessions where their lawyers float round writing stuff down to run off and patent.

But one can see how these things will take root simply because they will get the money from backers to do them given the vast profit potential, as the existing creaking system will have few backers and defenders, and there is little financial/lobbying/ethical resource available to "Do The Right Thing".

So there is a strong argument that it behooves the Tech industry to fix the patent system, as what may replace it could be infinitely worse. One non-Myrhvoldian approach could be to wholesale import the European system, which is not yet as broken - but that would require the US to get over the Not Invented Here syndrome.

Italians decide YouTube is a Just Another Publisher

nospam@example.com (Alan Patrick) — Thu, 25 Feb 2010 10:49:31 +0000

The court case against Google's YouTube / Google Video subsidiary is very interesting. A summary here from the NYT:

Three Google executives were convicted of violating Italian privacy laws on Wednesday, the first case to hold the company’s executives criminally responsible for the content posted on its system.

The verdict, though subject to appeal, could have sweeping implications worldwide for Internet freedom: It suggests that Google is not simply a tool for its users, as it contends, but is effectively no different from any other media company, like newspapers or television, that provides content and could be regulated.

Now as you can imagine, there has been a vociferous outcry in some quarters that this is a crime against the Internet, and in others that this is Big Media attempting to strangle the poor innocents through legal hands around their jugulars.

But its simpler than that - it is a question of "when do you become a publisher" - in short:

Google maintains that the ruling contradicted a European Union directive on electronic commerce that gives service providers safe harbor from liability for the content they host.

But prosecutors argued that because Google handled user data — and used content to generate advertising revenue — it was a content provider, not a service provider, and therefore broke Italian privacy law.

Clearly, searching a large number of other sites and aggregating results (Google Search) is not being a publisher. But once you are holding a large amount of content in your own databases (YouTube, Google Video), and are clearly running a for-profit service that's business model is attracting customers by aggregating and advertising against it, it is not hugely different to any other publisher.

Google Argues:

Common sense dictates that only the person who films and uploads a video to a hosting platform could take the steps necessary to protect the privacy and obtain the consent of the people they are filming.

But imagine if a cinema argued that showing illegal movies was not it's problem as it was merely a hosting plaftorm. One man's publisher is another man's platform and as Web models come closer to looking like "real life" models..... so the question really is - should the Web based publisher be treated differently under law to ones that have come before?

One of the reasons that Web based media has done so well is precisely that they have not yet been put under the same constraints as older media, and while some old shibboleths like IP and Rights need reforming, a levelling of the playing field is also long overdue.

"Lotus Notes was conceived before Mark Zuckerberg"

nospam@example.com (Alan Patrick) — Thu, 25 Feb 2010 17:02:37 +0000

Interesting article from Salesforce.com's Marc Benioff about why Enterprise Social media software is so cr*p. The headline we used - "Lotus Notes was conceived before Mark Zuckerberg" - is a quote and says it all really, but he makes some other points:

We need to transform the business conversation the same way Facebook has changed the consumer conversation. Market shifts happen in real time, deals are won and lost in real time, and data changes in real time. Yet the software we use to run our enterprises is in anything but real time. We need tools that work smarter, make better use of new technology (like the mobile devices in everyone’s hands), and fully leverage the opportunities of the Internet.

We actually did quite a bit of work on the benefits of real time services in business about 2 years ago, and the issue is this - most businesses do not operate in true real time, and in fact most of the software back-end infrastructure works quickly enough most of the time - but the presentation layers to the users are just cr*p compared to modern consumer software.

But this is due to a different dynamic - when you are giving away free services to users, the User Experience is absolutely critical to takeup - which is why consumer Web 2.0 companies obsess about this. Enterprise software economics are based on getting through client ticklists, and user delight is seldom a criteria for this.

So - when user delight becomes a key differentiator in company software selection, Lotus Notes will finally be thrown out.

The wobbly future of Web Porn

nospam@example.com (Alan Patrick) — Wed, 24 Feb 2010 11:24:00 +0000

Worrying message for the Future of Web Porn - Apple is pulling the Adult apps out (theough a rumour surfaced that they may let some back in) back in, while Walmart is pulling them out of Vudu:

An email is currently being sent out by Vudu letting its After Dark (the adult portion of its service run with adult publication AVN) partners that the section will be discontinued in the “coming days.” Find the full email at the bottom of this post.

Vudu has the distinction of being the only major streaming service with an adult section which includes hundreds of titles (including many in HD) from the leading porn studios.

What with all the free sites like YouPorn, its hard to see where a moneymaking model for Web Mass - Videoporn is.

In theory - in theory - if there is no money in the market then eventually new content will disappear and the market collapse. Will this happen for Porn - probably not, because this seems to be the one area of user generated content where the cult of the amateur still has a large part (as it were).

Google shows how online privacy really works

nospam@example.com (Alan Patrick) — Tue, 23 Feb 2010 23:46:00 +0000

Poor old Google - first the bad Buzz, now the EC is after them for search gerrymandering. But the story we like most is a classic of privacy hypocrisy - as we have noted before, the leaders of the various social networks try every stratagem they can imagine to get you to give up your privacy, but have totally the opposite view of privacy for themselves.

So it is with some delight we record that Eric Schmidt, Google CEO, recently (in)famous for saying

"If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place."

....is desperately trying to ensure we don't know something he did in the first place, and is pursuing his ex-mistress and her pesky website via the heavy mob - Gawker:

Now the site has been removed from Google's Blogspot, where it was hosted.

Bohner removed the site after threats from Schmidt's lawyers this weekend, according to a source close to the situation.

"When a billionaire threatens you, you get in line," this person said.

It made for a frightening weekend for Bohner, and no wonder: Not only is the former CNBC and Forbes journalist trying to come to terms with her sobriety and past addiction, she doesn't appear to be swimming in the money it would take to mount a plausible legal challenge to a powerful and well-connected tech executive worth $4 billion.

So what's the lesson here, apart from the well known issue of the law too often being on the side of the deep pockets?

Simple, for all you social media-ites - when it comes to matters of giving up online privacy, going for open-ness and transparency and all the Kool-Aid 2.0 - don't lap up what the big dogs say, watch what they do instead.

And just in case you thought that you can always find the dirt by searching on Google, turns out part of the reason the EC is after Google is that others are alleging that Google buries websites it doesn't want you to see.

Google from a (digital) strategist's point of view

nospam@example.com (Alan Patrick) — Mon, 22 Feb 2010 09:33:32 +0000

Google as a BCG matrix

There is an interesting article in the San Francisco Chronicle today about Google's strategic mis-steps:

The recent privacy backlash over Google Buzz, the company's new social-networking service, is the latest in a series of launch fumbles that some argue reveal troubling blind spots within the Internet giant.

The huge amount of cash generated by the Mountain View company's search business has enabled it to hop from product to product, moving into mobile, software, social networking, broadband and other areas.

But in the process, it's overlooking predictable consumer concerns, like privacy worries, the need for prompt customer service, or the importance of intuitive products, industry observers say.

"Google is clearly looking like a company that is doing a lot of things, few of them well," said Rob Enderle, principal analyst with the Enderle Group. "They have this attitude that if you're getting it for free, you should be happy with what you get."

Putting my strategist's hat on, and looking at Google through the lens of the venerable old Boston Consulting Group matrix, you can see what Google is trying to do.

Cash Cow - The Search-Ad business is Google's Cash Cow, and at the moment makes all the profit Google earns - they have a very large (dominant) market share, but over time it is a slowing market (relative to the rapid growth of technology sectors and under increasing competitive pressure). They are thus doing what every company is advised to do in this position, ie to invest their surplus in faster growing industries and so keep up the pace. To this end their rate of acquisition has been phenomenal, not least because - by and large - their ability to launch their own successful products has so far been pretty lacklustre (Buzz is just the most recent to join the list)

Question Marks - most of Google's acquisitions tend to be in the Question Mark camp - small market shares but in rapidly growing markets. No doubt the strategic thinking is that the Google infrastructure will be able to rapidly ramp up the growth of these small companies. In the pst, Google has been quite good at this, and refined the offerings before finally launching - problem is that by and large it hasn't worked more recently, and many of the acquisitions have withered, finding themselves becoming...

Dogs - these are plays that lose market share and/or the sector declines. Google places some bets early so the sector fizzles out, which is fine - low cost option plays are a creditable achievement. The problem is when too many Google acquisitions look like Jaiku - it was a decent competitor to Twitter but died as Twitter exploded, forcing Google into some far more high cost/high risk plays (such as Buzz) later in the day. Chrome could be a dog - the browser market is mature, they have a low market share - if the current consumer Ad campaign doesn't massively increase market share then its likely to be another failure.

Stars - the aim of all the acquisitions is clearly to become Stars, those businesses that surpass the old business and launch Google into new areas. GMail / Google Docs and YouTube are the current successes - but none of them make any money, in fact YouTube would be spectacularly bankrupt if it wasn't for massive subsidies. And Stars have to make money eventually - very large services that lose money are a millstone around any company, and may well attract regulatory attention for being anticompetitive. So right now, these ain't real Stars, given their unprofitability they are more like black holes. So Google has to engineer something more here.

But this, as the SF Chronicle implies, is something that Google is increasingly struggling to achieve, especially in the realm of social media services:

Observers say there are two things in particular that Google isn't paying adequate attention to in its rush to deliver the next new thing: privacy and complexity.

.....

Both blind spots are byproducts of the engineering-centric culture of Google, several analysts said. Their typical hires can puzzle out eye-crossing brain teasers the company famously issues in job interviews but can't always predict how real people will react to their services.

Google "doesn't always recognize or anticipate some of the human problems, the people problems, the customer service, the concerns over privacy," Sterling said. "They tested Buzz internally and everyone liked it, so they just had no idea it would cause the fear it did."

In other words Google may well have the wrong sort of company culture - if not the wrong sort of people - for these new services. This is not uncommon, often it's the company "DNA" - the skills, economic priorities and culture among other things - that prevent successful companies in one phase of the industry moving on to the next. Google will hardly be the first large corporate not to follow the next turn of its industry.

Perhaps Android is the success waiting to happen, but its early days and - with the best will in the world - Google's DNA is not in the business of flogging mobile handsets (nor is its infrastructure) either.

So, what next if one is a Google? If the past is any guide to the future, Google will now settle down to be a a Search / Ad behemoth - a new Microsoft or IBM or AT&T, dominating its space increasingly via legal muscle and scale economics rather than great innovation. It will use its market power to drive into ancillary markets as Microsoft did with browsers. But the very culture that drives it to success in its traditional areas may well militate against its success in new sectors. Historically, companies that have succeeded in building new businesses have had to create totally new cultures, in one of a number of ways:

- Independent Business / Spinoffs - businessesses given a lot of independence to find their own way.
- Joint Ventures - infusion of DNA with others' hopefully dilutes the business culture enough
- Tough Times - companies under severe pressure can change culture sufficiently to break out into new industries. Nokia is a prime example, moving from rubber to mobile phones.
- "Re-Invention" - a business sets out to re-invent itself without prodding - very rare, 3M with its race towards employee-sourced innovation and Toyota with its approach to JIT are the only large successful ones that come immediately to mind.

Google is not in tough times, so that is a hard act to imagine. Independent business units and Joint Ventures are currently near anathema to their culture and business models, so those are probably not going to happen anytime soon (though in my view, if anything is crying out for a joint venture it's the Android project). 3M may well be a model Google could study as it has no shortage of smart people.

In fact, if 'twere me, rather than acquiring a lot of the companies they do, I would look more at taking a stake in them but leaving them at arms length to grow into their own space.

Google Buzz lets Pervs stalk your Kids

nospam@example.com (Alan Patrick) — Mon, 22 Feb 2010 12:38:41 +0000

This is the sort of headline every service must dread*, and for the much battered Google Buzz it comes from a near unimpeachable source - Social Media doyenne Charlene Li of Altimeter who saw that what her 4th Grade daughter was chatting to friends about was public on Google Buzz:

But what was most disturbing was looking at her friends’ conversations and realizing that some of them were chatting with complete strangers, and in some cases, sharing personal information like emails. Absolutely terrifying as these are 4th graders who have no clue.

I quickly turned off Google Buzz, (but I didn’t totally disable it, more on that below), dashed off an email to the parents of the friends she had been chatting with inside of Buzz (again, all in public, with their real names), and then finally took a long hard look at the situation.

She found, for example, that “iorgyinbathrooms” was following her child. Also, that Google is less than careful with the age of GMail users:

... I discovered that buried in Google’s terms of service somewhere is that children under the age of 13 are not allowed to have Gmail accounts. But unlike Facebook, which requires that people enter their birthdates when setting up accounts, Google makes no such attempt to educate people signing up for Gmail that such a provision is in place. As a result, while Google is absolved of responsibility because of the TOS, it could and should do a better job of complying with the Child Online Privacy Protection Act (COPPA).

This follows hot on the heels of Buzz being accused of all sorts of adult privacy errors including re-installing abusive ex husbands as stalkers, but as an issue this one trumps everything to date - and not even the Silicon Valley A List Apologistas that have defended Buzz to date will dare bat this one away.

Yet again, as we wrote in our piece about Buzz being a slow motion train wreck, it has been the total inability of a young, male, (probably largely) childless techie elite to imagine what the average user's life and concerns look like, and Google's systemic inability to rein them in that has led to this unnecessary situation (you would have thought that the hoo-ha last weekend would have sent alarm bells ringing on this sort of issue).

*Strictly speaking it was "New Google Buzz Privacy Nightmare: Scumbags Can Follow Your Kids!" from SAI which then pointed to Charlene's article. I merely translated it for a UK Sun-reading audience

Social Media is less trusted today shock!

nospam@example.com (Alan Patrick) — Mon, 22 Feb 2010 11:14:57 +0000

Yes, it is true - Social Media is less trusted as a source of product recommendation, says Edelman's latest trust barometer. Why is this, I hear you cry - well, BBH labs obfuscates it in it's article ""Will Social Media Eat Itself":

In difficult times, we are drawn to authority: we want there to be expert opinions and definitive answers.

As the network expands, connections weaken: It is perhaps inevitable that the bigger our networks get, the less absolute trust we have in the individuals within them.

As social media adopts the behaviours of old media, it loses credibility: We’ve pay per tweet, but the influx of blunt commercial messages into Social Media does seem to be impacting trust.

Genuinely useful and relevant uses of the social graph have been slow to emerge: Some of the developments we’ve collectively been most enthused by seem to have stalled in development.

They offer some solutions to the predicament, but these seem to be much on the line of "how to skew the medium to make people unable to avoid the marketing message" - you will be marketed to, and trust us while we do it dammit

I would argue that they are avoiding the fundamental problem - social media is not trusted as much now because the people driving it and using it are not as trustworthy as they were.

The combination of:

- Perversion of social media from a communication to a commercial medium (the massive rise of flacking on Twitter for example)

- Widespread abuse of people's privacy and information (From Beacon to Buzz - nuff said?)

Its the classic case of marketeering, like tourism, destroying what gives it succour. The solution is obvious - to make social media trusted again, eradicate the untrustworthy people on it. But that includes most marketeers.....

The issue is not so much social media eating itself, but marketeers not realising that then sh*tting in one's own pool is a dumb idea. But so long as a social media system is seen as a flogger's free-for-all, then the tragedy of the (marketing) commons will be prevalent.

Update - Tom Ewing points out the latest survey show trust in all media falling - but this doesn't reconcile with stuff we have from a few years back showing that other media had by and large fallen already. Will have to dig more......

Some WebTV is different - it watches you!

nospam@example.com (Alan Patrick) — Thu, 18 Feb 2010 16:27:11 +0000

From BoingBoing:

According to the filings in Blake J Robbins v Lower Merion School District (PA) et al, the laptops issued to high-school students in the well-heeled Philly suburb have webcams that can be covertly activated by the schools' administrators, who have used this facility to spy on students and even their families. The issue came to light when the Robbins's child was disciplined for "improper behavior in his home" and the Vice Principal used a photo taken by the webcam as evidence. The suit is a class action, brought on behalf of all students issued with these machines.

I juxtapose this with the seemingly co-ordinated posts of some of the Silicon Valley Tech Bloggers weighing in today to rubbish those who were concerned about Buzz's privacy issues - Thomas Hawk for example:

Similarly a very small, but vocal, group of individuals are shrieking from the mountain top about the fact that Google Buzz might have allowed people to see who you email alot. Big deal. The story came out quickly. Those privacy zealots could quickly correct this by making their contact list private if they wanted to, while the vast majority of us don’t really care that Buzz lets people know who we follow. Want to know who I follow? It’s right here for the whole world to see, go for it. The whining about these privacy issues (which have now been fixed by the way) is getting old.

The price of freedom, a wise person once said, is eternal vigilance. In the Philadelphia school's case it has been wilfully misapplied, in Mr Hawk's case it has been (at best) forgotten.

Update - the School District has responded, saying it is turning the feature off - but the answer begs more questions:

• How did the security feature work?

Upon a report of a suspected lost, stolen or missing laptop, the feature was activated by the District's security and technology departments. The tracking-security feature was limited to taking a still image of the operator and the operator's screen. This feature has only been used for the limited purpose of locating a lost, stolen or missing laptop. The District has not used the tracking feature or web cam for any other purpose or in any other manner whatsoever.

So, if it was only turned on if the laptop was stolen, then how did it take a photo of a student and why are they now having to de-activate the feature?

Facebook uses South American Dictator tactics on South American Dissidents

nospam@example.com (Alan Patrick) — Fri, 19 Feb 2010 11:29:50 +0000

I recall someone blogging last week that the bad news buzz about Buzz would be short lived, all Google had to do was wait for the next Facebook violation - well, they were right. Last year a satire called Faceboom was published in Argentina, but then it went European and the Facebook mafia stepped in - VentureBeat:

But in January, Faerman [the author] launched the book in Europe and drew a lot of attention after appearing on Buena Fuente, a popular night-time talk show.

Within days, his profile vanished. The same happened to Guillermo Otero and Fernanda Gaitan Broun, both involved with the book and its’ marketing. In addition, a Facebook group of fans of Faceboom was deleted. The trio claims it had 30,000 members at the time.

I spoke to Faerman and he showed me emails he sent to Facebook going back to January 27, requesting an explanation. Here’s a YouTube video showing him trying to sign in with his old login and receiving the message “cuenta deshabilitada,” which means “account inactivated.”

It has now been restored suddenly, the explanation being it was "an error" after a media uproar in the Hispanic speaking world then started to cross over to the English speaking one. However the Faceboom fan page with its 30,000 members will not be restored, and in fact Facebook have threatened legal action against the author if another is created, as they say the Faceboom logo is too close to their own and breaches the Facebook T&C. Leaving aside that this is probably spurious, since Facebook's T&C's allow them to help themselves to anything on the site into perpetuity, is this little social wrangle:

There’s only one problem – Faerman did not create his fan group. In fact, he says he has never met the creator. So it is unclear how Facebook can take future action against him, or how it would be justified in doing so given he does not control his fans.

This, as they say, can only get better. And Facebook using a "disappearing" strategy for Argentine dissidents - it seems they've learned the lessons from the various South American dictators well then

Post Script - I meant to say that this is not new behaviour for Facebook (our blog's page was "dissapeared" from Facebook years ago, ostensibly because we breached T&C at the time but maybe it was because we too were sometimes critical).

Thing is, what happens to a Facebook if a significant minority of users start to think it is no longer benign? Facebook hasn't IPO'd yet so the VC's, Founders etc have yet to fill their boots and are still on paper valuations. Trade buyers are much more aware now (after Bebo and MySpace) of buying the social boom town just as the tumbleweeds start to roll through it. Remember Friendster!

Rob, Rob me do!

nospam@example.com (Alan Patrick) — Thu, 18 Feb 2010 14:13:22 +0000

Appearing on Please Rob Me today.....this is public information, easy to aggregate and mash up

As you may know, one of the areas of technology we monitor is online Location Based Services, and one of our hypotheses is that people are massively under-estimating the downsides of these services. For example, the recent Google Buzz service was launched complete with a back door into people's locations that was easily hackable.

Anyway, one of the more obvious applications of Location Based Dis-Service is typified by PleaseRobMe.com, a service that take your utterances on various LBS systems about where you are and aggregates them (see the graphic above).

Bit of fun, you may say, where 's the harm in that. I can already see harrumphing from those who are upset about all those people who didn't like Buzz's privacy issues - such as Louis Gray, who said:

Amidst the din of the pack clustering around the body of Buzz, kicking at it like a group of children at a 6-year-olds' youth soccer match striking at a ball, some folks have seen beyond the tin foil hat nonsense and told people to look forward to something new.

What would you say if I told you that I have seen beyond the Tin Foil Hat and seen something new? Oh yes, I took one of the people on the first PleaseRobMe screen I looked at (its not one of the people in the graphic above by the way), and found their home address via a quick use of Twitter and Google. Took 5 minutes or so (the person was about the 10th I tried). You could fairly quickly build some algorithms to automate that mashup process

So when Louis says that people who worry about social network privacy are:

....the shrill minority [that] has taken its pound of flesh, as Google's momentum with Buzz has taken body blow after body blow, primarily from an older generation of tech bloggers and business journalists unwilling or undesiring to embrace today's world of active sharing and aggregation.

All I would say in response to these arguments is, are you not therefore advocating "Please Rob Me" type services in this race to active sharing and aggregation?

And for whom

(Update - I am told Twitter has disabled PleaseRobMe, but that is irrelevant - this stuff is easy to get)

SecretLondon's public accounts

nospam@example.com (Alan Patrick) — Thu, 18 Feb 2010 09:12:35 +0000

Cost of a Startup when Friends are Involved

Interesting article in TechCrunch Europe about the SecretLondon startup, mainly for its exploration of the economics of getting a local B2C service off the ground (see chart above). The issues started when the Facebook group SecretLondon (a sort of crowdsourcing site for Londoners to find and/or report great bits of the Metropolis eg places for coffee) hit 180,000+ members, it became too hard to find what you wanted on the facebook group - so the need emerged to build a proper website. But as Tiffany Philippou, who has moved from being starter of a Facebook group to starter of a startup in under a month notes, it was community built, over a weekend, and the economics were amazing:

Including the domain names for us and future secretcities, catering and all the other out of pocket costs, our total cost for the entire process have been less than £3,000.

When I went round the room on Sunday night and asked all the contributing designers, developers product managers and editors what motivated them to give up their weekend they said it was the feeling of being part of something amazing. They astonished us with their enthusiasm and talent.

secretlondon has shown the power of the community. The group has always been about engaging its members every step of the way. We ran a logo competition to get a logo design, and then asked members on our blog to vote for their favourite. We sought the opinions of the community on the functionality of the site and tried to incorporate as many of the ideas as possible into the launch site.

I must admit to being a great fan of this sort of grassroots development for B2C sites, as by setting up a facebook page you demonstrate that the concept is good, and clearly being able to leverage the community to give a kickstart to the beta-build gives an amazing economic advantage - that looks like a £30k (minimum) project otherwise. To be fair, this would not have happened if it wasn't deemed a worthy thing to do - but its a different sort of worthy to the pious "charitable" plays - this is worthy because its worthwhile, because it adds real value to the participants and to Londoners (and tourists)

However, the issue for these sorts of sites is not the Build phase, its the Operate - as Tiffany is clearly aware - so one approach is to crowdsource ongoing development:

Since this is an ongoing project, anyone who wants to get involved to take the site to the next level – whether that’s helping Tim maintain the code, or making improvements and widgets – is extremely welcome. We’ll be building an API shortly, so if you’re an iPhone developer and want to work on an app to access the thousands of secrets then we want to hear from you. We also want to cluster data for better recommendations and make recommendations based on places your friends have liked. Get in touch if this is something you can help with.

A fascinating experiment. They will get by, they plan, with a little help from their friends......

I'd suggest one lesson from successful Open Source developments such as Linux here though - someone will need to hold the design authority and configuration management keys as it develops, or all hell will break loose over time. Also, the hard part of systems like these is fielding the support calls at 3am on a Sunday morning. This means staff.

In other words, at some point SecretLondon will need a business model that brings in real money - fortunately a site like this is great for sponsorship and other forms of advertising as it would almost be expected - the trick is just not to make it intrusive.

I also like sites like these because to me they get the "Right to Brand" in the Location Based Services space as they offer a service first and foremost, and Location is an added value - whereas so many of the LBS service startups seem to put Location as the core proposition and then trry and find reasons for it to exist. They are also the most user-benign as they fit into the Top Left quadrant of our LBS matrix (see here).

I am also amused that "food" and "pizza" are different line items in the accounts. That's probably right...

The Demographics of Social Networks

nospam@example.com (Alan Patrick) — Wed, 17 Feb 2010 16:32:17 +0000

Social Media Demographics from Pingdom

Interesting piece on Pingdom about the age demographics of who is on which Social Network (see diagram above). Some corollaries are:

- The average social network user is 37 years old.
- LinkedIn, with its business focus, has a predictably high average user age; 44.
- The average Twitter user is 39 years old.
- The average Facebook user is 38 years old.
- The average MySpace user is 31 years old.
- Bebo has by far the youngest users, as witnessed earlier, with an average age of 28.

As high as 28 for Bebo! Maybe it's bimodal - Teens and Dirty Old Men? )

The mean usage by age groups are fascinating - check out 18 - 24 year olds:

- 0-17 Years - 15%
- 18-24 Years - 9% (The theoretical Facebook Generation?)
- 25-34 Years - 18%
- 35-44 Years - 25%
- 45-54 Years - 19%
- 55-64 Years - 10%
- 65+ Years - 3%

What does this tell me? That Social Media users, far from being "The Youth" are actually more of "The Fogeys" - the key demographics are those in mid-breeding, i.e. those that are stuck at home the most . The pre-kids and post kids demographics are out partying!

The real Buzz is in the Rise of Social Algorithms

nospam@example.com (Alan Patrick) — Mon, 15 Feb 2010 17:37:27 +0000

Practice is starting to look like theory. When Social Networking started, it was clear that people would use it to find things that way as well as using search engines. Its just that the volumes were small and Social Networks, by and large, had crap comms to share things by. Twitter changed all that, and now Facebook - having implemented far better and simpler comms - is finding the same:

According to Web measurement firm Compete Inc., Facebook has passed search-engine giant Google to become the top source for traffic to major portals like Yahoo and MSN, and is among the leaders for other types of sites.

For what its worth this blog has had more referrals from Twitter than Google for some time, which has made us far less impressed with all the arcania of Google SEO).

But now that its happening in scale, it puts Google's model under pressure as it is simply cruder for Advertising:

David Berkowitz, director of emerging media and client strategy for the digital marketing firm 360i of New York, said the importance of search engines isn't going away.

"But there's always been one downside to search," he said. "Consumers only spend about 5 percent of their time online searching and the other 95 percent of the time at the destination. Social media is quickly accounting for a large percentage of that 95 percent. Google's biggest acquisitions, DoubleClick and YouTube, have been all about playing a big role in the rest of consumers' Web usage."

But Social search just isn't scalable without the Signal to Noise ratio getting unmanageable - so we expect to see a whole raft of Social Algorithms emerge to help automate, speed up and filter the process. How do we know this - because we, and a whole lot of other people we know, are fiddling with them, and they show a lot of early promise.

Steve Rubel hypothesized Buzz was launched half baked and half cocked to get out there before Facebook launched its FBMail service, and that may be so - but to our mind the real Buzz is in the algorithms dealing with the blend of social graph and social data.

Buzz even bypassed Google User Testing

nospam@example.com (Alan Patrick) — Tue, 16 Feb 2010 17:21:58 +0000

When we wrote about the factors that made Buzz into a Slow Motion Train Wreck, one of our hypotheses was that they didn't test it with a representative sample of typical users. We wrote:

Google say Buzz product was user tested, but I suspect it was by the same demographic who built it rather than the people who may use it.

Turns out that they didn't even test it with the standard Google "friends and family" groups either! Its on the BBC.

Many of the firm's new services are tested by the so-called Google Trusted Tester program, a network of friends and family of Google employees who are given confidential access to products before they launch.

Buzz was not tested by this program.

The result has been one of the biggest f*ck-ups Google has ever made, and in an area as sensitive as Social Media Privacy - what with Social Media being an area where Google has been less than stellar to date and Privacy being something they are increasingly in the dock over, that is absolutely incredible.

Various theories have emerged as to the why Google did this, from pure inexperienced hubris to the view that they were racing to get something out before Facebook launched its alternative webmail service, to protect Ad revenues.

In the old days, Kremlin watchers used to look at the fate that befell various apparatchiks, so watching the fate of Buzz Project manager (Todd Jackson) may tell which of these hypotheses is the case.

Of course, one could always shoot an Intern

Google Buzz - anatomy of a slow motion train wreck

nospam@example.com (Alan Patrick) — Sat, 13 Feb 2010 18:02:04 +0000

It is quite interesting watching this unfold. As far as I can see, with Buzz, Google made a number of fundamental errors:

- The team that developed Buzz are apparently all young, male, supergeeks - alpha early adopters - who have clearly supped deep of the Kool Aid that is Google approach to Privacy (ie its dead, get used to it), a la Eric Schmidt

- The Google Business Model wants to open up people's data as much as possible (hence the Schmidtian view on Privacy), and thus the service was built to grab and expose all data it sees as the default condition

- Google say Buzz product was user tested, but I suspect it was by the same demographic who built it rather than the people who may use it.

- Older, Wiser heads were clearly either not involved in the product review process, or overruled due to the above points' considerations.

So the stage is set for a service that is built to be massively abusive of user privacy. This is of course despite the mounting evidence out there that:

- Get it wrong and you are in for a blogstorm - see Facebook Beacon.

- There has been a clear hardening of attitudes towards privacy abuse from users overall, in the last 2 months especially

I suspect Google, having the level of self belief it already does, was unable to properly account for these emerging risks in any internal review processes.

And so Buzz launches, and Google, being the biggest gorilla on the block and no slouch at self-promotion, gets 9 million messages in as many minutes, or whatever, and crows this from the rafters - but on Twitter people are saying "Hey, I'm just testing it not a rabid user, and its filling my inbox with sh*t I don't wan and calling that a win" (I paraphrase) and are starting to grumble about the privacy implications.

And then the sh*t hits the fan as all those users start to realise that Buzz is exposing their Gmail addresses to all and sundry. What the Googlers also probably didn't grok is that the email social graph is totally different to the curated, friend based social media one, and that scared a lot of people as all sorts of people who are not safely screened friends start to appear for all their followers to see.

Google's initial approach - as per any extremely self-confident company - was to tell these users not to be silly, that this was the way, the truth and so on, and to get its PR flacks and proxies to blog about how this was no big deal etc etc.

Which was dumb, and again showed the misunderstanding of the difference between email and social networks - it was only a matter of time before something like this happened (they had been warned already by a number of bloggers):

F**k you, Google — I use my private Gmail account to email my boyfriend and my mother. — There's a BIG drop-off between them and my other “most frequent” contacts. — You know who my third most frequent contact is? — My abusive ex-husband. — Which is why it's SO EXCITING

At this point they had started to hit the train buffers, but the Google position was amazingly conceited still (I'm looking at the timeline on Techmeme for all this by the way) - making some basic changes but not addressing the central issue of privacy:

We designed Buzz to make it easy to connect with others and have conversations about things that interest you, and it's great to see millions of you doing this already. It's still early, and we have a long list of improvements on the way. We look forward to hearing more suggestions and will continue to improve the Buzz experience with user transparency and control top of mind.

No worry, no hurry. Belatedly they scurry to start fixing Harriet's issues, but even so its lazy, casual:

We reached out to blogger in question this morning and addressed her concerns with Google Buzz and Google Reader. Some of the concerns were due to confusion the product experience created. Her report also helped us discover one bug and one product issue in Google Reader:

1) If you block people in Buzz, they still show up as following you in Reader. This is a bug, and we're working to fix it. Provided that your Google Reader shared items are protected, only the people you've explicitly allowed to see them can do so -- regardless of who appears to be following you in Reader.

2) Until now, there has not been functionality to block people from following you in Google Reader. We're adding this to the Reader interface.

We are making these two changes as fast as possible and we'll get them live in the next few days.

Next Few Days! Guys, you have got a few hours at most to sort this out - its the weekend, loads of people have now got the time to look at it (like this blog post) and loads of ordinary Gmail users are going to come home from work and discover this happening to them.

It is very clear what Google will have to do in the short term:

- Firstly, disconnect Buzz from GMail until they've sorted all this out. But they will resist it (update - are resisting this) as it destroys their instant market share massive

- Secondly, make the "expose privacy" functionality opt-in, not default. But they will resist this even more strongly as that is no doubt the core internal value proposition.

- Thirdly, Grovel. Admit they got it wrong. Blame an Intern for it all. Just do something to show they understand the errors of their ways.

It will be this grudging retreat to the obvious endgame position that will send tech blogger and user concerns into the stratosphere, and watching it take place is like watching a trainwreck happen in slow motion!.

(Update - first reluctant steps to change as we suggested seen over here - still not any formal heavy duty apology though, I think that's an error. I also don't know if this enough yet - especially given the legal interests that are apparently lining up)

Dislocation Based Services

nospam@example.com (Alan Patrick) — Tue, 16 Feb 2010 09:32:27 +0000

I will be talking about some of our location based service research next week at Mashup events, and one of the areas I want to talk about is abuse of LBS - one of the issues I see is that people who drink the LBS Kool Aid assume that all participants will have good intentions at all times - ie these systems are woefully inadequately protected, and this is a major risk as history show that when money appears, human motives shift from benign and altruistic to power, greed and fear (to quote Machiavelli).

However, instead of me being boring and banging on about it, excerpts from this brilliant essay on how to pervert Foursquare should both amuse you and make the point. Jim Bumgardner first used the Foursquare API to create lots of new locations to make himself Mayor of:

At some point last week, I devolved into a 12 year old hacker, and I spent many spare hours (and my computer’s spare cycles) abusing the system with a set of scripts operating fake accounts. Not only did I add new venues like the North Pole, but I started persistently checking into coveted landmarks, like the Statue of Liberty.

What can I say? It was fun, and foursquare’s incentives (badges and mayorships) spurred me on. Incentives invite abuse, even from mild-mannered folks like me.

Then he started to use the API and a bit of hacking to bump off other people:

I created five “Java Monkeys” which grabbed about 120 different Starbucks in different regions (east, west, midwest, south, intl). I identified and targeted hotly contested Starbucks by searching Twitter for recent oustings. My script automatically visited those ones, to the consternation of the new mayors.

And then he started creating fake personae:

I created a fake Martha Stewart who checks into dollar stores and pawnshops when not visiting Martha Stewart Omnimedia and the set of her TV Show.

I created a fake Simon Cowell who visits massage parlors and gets lunch at Hotdog on a Stick when not visiting the Kodak theater.

I think you can start to see the potential for the damage that can be done, and he also covers how he started to use algorithms to monitor Foursquare activity to pick up behaviour patterns (he used it to get badges for creating swarms, though you can imagine less benign uses). My favourite abuse was when he started to re-categorise landlocked areas as boats:

Finally, I started giving people free sailboats. I found that if you checked into a venue tagged “boat,” you automatically get the awesome “I’m on a boat” badge; and unlike the other badges, it only requires a single check-in. So I started identifying high-traffic places via the above Twitter search, and then adding the tag “boat”. Suddenly, visitors to metropolitan airports and various sports arenas got free sailboats for Valentine’s Day.

Though its interesting what people value:

The “Java Monkeys” got the biggest reactions. Foursquare users get far more irate when they lose mayorship of a Starbucks, as compared to a Statue of Liberty or Mount Rushmore. People are much more attached to the small places they visit over and over, and have some personal investment in. The smaller the venue, the bigger the value.

Now, think of all that wonderfully funny creativity being used to subvert a service that is using real user data and making transactions. As you can see, just a few of these sort of raids would lead to a Google Buzz level of bad buzz.

Buzz and the Lament of Solomon Grundy

nospam@example.com (Alan Patrick) — Sun, 14 Feb 2010 17:37:38 +0000

The nursery rhyme Solomon Grundy as applied to Google Buzz (if you want to see our more serious analysis of what went wrong, go to Google Buzz - Anatomy of a Trainwreck in Slow Motion):

The Lament of Google Buzz (with apologies to Solomon Grundy)

Google Buzz, hey!
Launched on Tuesday,
Hyped all Wednesday,
Concerns by Thursday
F*ck You on Friday,
Blogstorm Saturday,
Retreat by Sunday,
Buried by Monday?
And that is the Story of Google Buzz, nay?

Well, maybe not buried by tomorrow, but Buzz is probably holed below the waterline now - this is not going to be a mass market service as it has neither the functionality nor the trusted reputation for mass market adoption.

I'd say it was at best a Friendfeed killer, if Friendfeed was alive.

The Microsoft XBox "3 Light #Fail" - and how Not to Run Customer Service

nospam@example.com (Alan Patrick) — Sat, 13 Feb 2010 12:17:57 +0000

So, the kids' XBox 360 gets a 3 lights error, after 18 months ownership. We go through the online diagnostic, this basically means there has been a complete hardware #Fail on the system, and is a well known fault with the earlier XBox and has been since 2007. The Microsoft website tells us:

Solution: Submit a console repair request

Your console is in need of a repair. There are no additional troubleshooting steps. To begin the online repair process, click one of the following links:

- I am a U.S. customer (http://support.xbox.com/support/en/us/nxe/registerdevice.aspx?step=repair)
- I am a customer outside the U.S (http://www.xbox.com/support/)

So, being the dad wot owns it, I go online (from work). And this is when the sh*t starts:

Firstly, to sign in for your repair, you have to sign in with your Live ID. This is your ID as an online XBoX gamer. You don't have a Live ID? - well, to get your machine repaired you need a Live ID. I don't have a live ID, and I can't for the life of me see why I need a Live ID, invent a gamer tag, get a picture for my avatar, and hand over all that other personal data just to get a tin with a known #Fail repaired.

Microsoft says that they are doing this to "enhance my experience" - but as far as I can see all they are doing it to make it hard to get a machine with a manufacturer's fault repaired.

So, I decide to email them instead, I just want the tin, serial No 1234567890, address 1 Broadstuff Towers, fixed after all. That what I do with PCs when they fail. I duly find the the email system, write the email, and get the promise that I will hear in 48 hours. 24 hours later I get the response:

Kindly note that we have received your inquiry, we would like to inform you that the only ways to create repair order are through our web site or through our agents on our support line. So, if you it is not possible to create it online, please give us a call on our support line and we will be more than happy to assist you.

Keep in mind, dear reader, that this is the dreaded "3 Ring " fault - a well known design fault on XBox's, akin to the sort of thing that forces Toyota Pious recalls etc. It is not an exotic hardware problem. Nor is this a build to order supercomputer, its a bog standard game console.

Anyway, the email suggests I call Customer Service (at my cost of course, if you use a mobile which I have to do as I'm doing this at lunch time on a client site).

Well!

The ACD system leads me through a series of steps, essentially it keeps on trying to get me to go back to the website and log on. I doggedly hang on till I get to an agent, after 1 dropped call, and a lot of frustration with the voice (un)recognition system.

The agent wants me to do a diagnostic first, as described on the website. I tell him the kids did that, thats why I'm emailing/calling etc. (Is it unreasonable to want a process that can handle a paying parent phoning from work?)

The next gambit is to get me to to log in on the website and do it all that way. I say the reason I am calling is that I am not an XBox Live gamer, don't want to be an XBox Live gamer - thats the kids' schtick, I just want my sodding tin, with a #factory fault #fail, Serial No 123456789, fixed Now! Please. (I say Please because I'm still being polite)

Then we have a discussion about whether the XBox is with me at the time, can we run some tests. At this point my politeness becomes extreme (I do that when I'm cross) as it becomes clear they are just trying to avoid getting my tin in for a repair. I point out that we know what the problem is, they know what the problem is as its common and featured on their own help sites, and I just want the bloody box fixed without all this crap.

Silence

Then, after a delay for backroom conflab, they finally agree to take it back and we agree to hand it back, and go through it all. It will cost £100, they say, as it is out of warranty and because I haven't logged in on the website, and can't therefore write down the fault, and can't do the diagnostic online there and then and answer in detail some questions about power lights etc (I can't promise that its 3, not 4 lights that go on, and that the power light is green, not orange etc), they seem to want to treat it as a "daft customer caused error". In essence, its my system's fault, my system is out of warranty, if I want it fixed, I need to pay to fix it.

Thoughts of irreparable psychic damage to kids if I don't return with a "fixed XBox" story that evening fills my guilty conscience - besides, I have a conference call in 10 minutes, its taken nearly an hour to get to this stage so I agree, and the credit card number is duly handed over.

Conference call over, I am thrown back into work and that takes over my day - and so today, 24 hours later, I am closing down the XBox website tabs when something catches my eye - a Wikipedia entry, from 2007, saying that:

On July 5, 2007, the Vice-President of Microsoft's Interactive Entertainment Business division published an open letter recognizing the console's problems, as well as announcing a three-year warranty extension for every Xbox 360 console that experiences the "general hardware failure" indicated by three flashing red LEDs on the console.

What! A 3 Year warranty for this fault. Waiddaminit - I have had to hand over £100 to get it fixed and Microsoft offered a 3 year warranty 3 years ago! And my machine is only 18 months old. Where on the Microsoft site does it say this? (I still can't find it...)

And so, dear reader, I am back on the phone service, trying to get my £100 back. Will keep you updated. Watch this space! (Update - phoned up customer service - I read that if you just say "agent" to the ACD, it goes straight to the call centre, which worked). The rep said yes, it is a 3 year warranty and then disappeared for various periods as they conflabbed as to what to do at each twist and turn of the complexity of all this. Result - cancel original works order, set up new one, refund money, time taken - 1 hour 04 minutes - money to be paid within 30 days (hold on to that money for a month for the interest, why dont you....).

But is this any way to "enhance my experience" via Customer Service? It created total frustration as it is:

- clearly designed to create roadblocks to getting things sorted, I had to hang on to teh phone for an hour twice
- designed to extract as much unnecessary customer data in the process, and probably to bump up reported XBox LIVE users
- attempts to extract £100 repair fees unless you are switched on and know what's going on. How many non-Geek parents have been nailed like this - the guys at the local game shop said lots of parents choose to buy a new tin (c £130) rather than shell out £100 for a repair, so clearly its not just me who took awhile to work out its a free repair - in fact seems like many never do

Surely, if one wanted to delight one's customers, you would have a big webpage, easy to get to, with a "Hey, we have a manufacturer's fault, it works like this, we've extended the warranty to 3 years and here is a fast track to getting it fixed" or somesuch.

Surely?

This is a product design fault, remember. Do they think the labyrinthine support process they have implemented is designed to make me a faithful XBox customer? To shout about my delight of how they sorted it out from the rooftops, and enthuse others? If so, let me tell Microsoft this:

- No way are we ever buying another Microsoft Game console - ever! And as for any other consumer product - forget about it..... (I contrast this to our Nintendo and Sony devices which have survived all sorts of ignominies for far longer)
- I am blogging it, here - we get nearly a million hits a month on this blog, so that's the impact of p*ssing this customer off.
- It reduces my willingness to use other Microsoft PC products - the same Dad who is frustrated with this process for avoiding repairing his kids' game console also owns a load of PCs professionally and domestically, and advises clients on IT architectures.

To be fair, Microsoft business support is better than consumer support, but that just increases the irritation if anything.

Microsoft isn't the only one to do this, of course - don't these companies get the interconnected knock ons that the same person looking for support here is a customer for future purchases? Why do companies do this?

An update from Nic Butler sheds some light:

"...your experience is 100% opposite to mine. I had the problem (18mnths) and in the same day I got the paper work in to get it fixed.

heh, well I did use my live account via the web filled out the details made 1 10min call and it was all in progress."

It seems therefore that the only repair use case is a gamer, with Live ID, sorting it out with console in front of them. A non gaming parent sorting it out from work is bad news. Here is what we don't understand though - from the Twitter conversation:

- @edent: why didn't you just take it back to the shop & get them to fix it under SOGA?

- @loudmouthman: my PS3 experience was even better. GAME just swapped it out and gave me a 80g in place of my 40gb ! So I was even happier.

Well, we did take it back to the store initially (Game as it happens) who said that it was out of the 12 month warranty so we had to go direct to Microsoft. As Nic notes, service from a retailer is much better, so given that Microsoft had already extended warranty to 3 years for this fault, why not let the retailers handle it and delight the customer?

Nudging us towards Happiness the Tory Way

nospam@example.com (Alan Patrick) — Thu, 11 Feb 2010 21:16:40 +0000

Last night David Cameron spoke at the TED event, in London. It was in the stream dealing with Behavioural Psychology and Economics (I covered it here) and his talk was essentially a thesis in how this may be used by a future administration. My notes during the talk:

He started off very well - "politics is showbiz for ugly people"

Then moved to the first point - the central debate of the 21st century is..... global public debt - $32 trillion and counting. So how do we make things better without money?

- Give power to the people
- Go with the grain of human nature
- Use digital technology

There was then the regulatory discussion about the view that people get happier until income hits $60,000 (there must be a UK equivalent, quoth he) and then increased happiness tails off. He actually said that the differences between the middle class and the very rich therefore didn't matter, and took the view that the critical thing was to help poorer people who earn less than this to earn more. He didn't seem to get that if he did that, all that happens is that the "$60,000" number will go up, because its a relative difference.

I also think he's wrong re rich not causing envy among the middle class, but there are clearly Tories who want to believe this one.

There were quite a few other references to Happiness Theory, Behavioural Economics, especially Nudge etc

He also reckoned we have gone from pre-bureaucratic ages local power to industrial age, central power (bureaucratic stage) and we are now moving to ..... People Power.

As part of this, we were going to get Transparency, Accountability and Choice

Also, all government contracts above £20k were to be published online. I delight to see what will happen when We The People see how much they are spending on consultants

He then showed examples of potential mashups of government data, with true Government 2.0 fervour ...which prompted the first concerned Twts:

[Cameron] reveals he plans to publish live crime maps. Won't this lead to vigilantism, panic,fear?

Kevin Anderson has live blogged the whole thing over here.

So, All Good Stuff - Happiness, Nudge, Equality, Government 2.0 - what's not to like?

Here's what:

Firstly. he is picking and choosing his Behavioural Economics - one person picked him up on too much focus on Choice, pointing out that BE also shows too much choice is bad.

Secondly, he seemed to believe that moderation will be done by We The People being vigilant - as questioners pointed out, thats not the way it works now so why would it work online - "the only people who have the time to do this are the media, so we will have rule by media mob" as one questioner put it. (This by the way had many social mediarati grumpy when I twittered it, but I think the worriers may have a point, watching the way Social Media Mob Rule works)

Thirdly, he was dreadfully optimistic (naive?) about the sorts of things people will get up to with all the public's data out there - his approach to all the questions about how to control cheating behaviour, miscreants etc was to believe all people were Good Citizens at heart and to play the "shame on you for believing people are bad" card.

Fourthly, and most worryingly, overall I got the very strong impression that they (the Tories) do not have the inclination to take on the financial sector to get any of the $32 Trillion back. He made no reference to the Robin Hood Tax video that had just been shown before (see above YouTube video), suggesting that 0.05% tax on bank transactions could pay back a lot of what we had given them and solve global warming and poverty to boot. His thesis seemed to boil down to the approach that we should do all this low cost Government 2.0 / BE stuff to keep us happy in our new-found poverty while we rendered the loot unto the Bankers.

In fact, Government 2.0 looked like it was just a way of introducing Feudal 2.0 and BE will Nudge us towards Happiness, which will be the new opiate of the masses. Get ready to tug your virtual forelock to the New Barons Rothschild

(By the way, I am fairly apolitical - "don't vote, it only encourages them" seems as good a motto as any these days, anarchism without bombs works for me - but I got a very strong Brave New World feeling last night, and it would worry me, except of course I believe in the Wisdom of the People to resist it......ummmm )

Speaking of voting, by the way - it looks like Goldman Sachs rigged up a huge campaign to vote against the Robin Hood Tax proposal.

Buzz is Google's Beacon

nospam@example.com (Alan Patrick) — Fri, 12 Feb 2010 00:08:11 +0000

As we noted in our review of Buzz, one of the worrying things it does is expose your email contacts list for all and sundry to see. As others are tumbling onto this one the buzz about Buzz being a buzztard is growing. Evgeny Morozov has put it very eloquently:

It's business decisions like this that make me very suspicious of Google's highfalutin speeches about their commitment to defending the freedom of expression. From a business perspective, such decisions do make some sense -- how else, after all, can Google Buzz compete with Twitter and Facebook, who are already light years ahead of Google in terms of building up their user base -- but the ethics of such business decisions is extremely shoddy, to say the least. If Google executives are really committed to defending the freedom of expression, then they must be inhabiting in a dream world, where freedom of expression somehow always survives despite horrendous attacks on privacy.

I am coming to the conclusion, after listening to David Cameron last night, that drinking the Social Media Kool Aid produces a cognitive dissonance in which you have to believe that all people are good, all the time (or at least you profess to believe that while you build your service out with minimal privacy safeguards, as that is where the money is)

But watching the emerging kickback on this one, I think Google has - despite no doubt studying the Social Graphs of all the other networks intensely - f*cked up big time in its desperation to link up people's information for its own benefit.

Up to now their social media services have just been lame, this one looks like giving them the sort of rap that Beacon did for Facebook, and this will rebound far wider in my view - for example, I am increasingly looking at Google on my iPhone and thinking - do I want them on my device?.

I predict a few more days of bluster about this being "what we want", then an apology, and a shift to a default no show of email contacts by Sunday evening.

(Update - it's started as of Friday morning - Google is "responding to customer feedback" already! )

And then an attempt to back-door reintroduce it all in 6 months.

(By the way, did you know Buzz works on all iPhones but not on most Android phones, only those with v 2.0. Nothing like supporting your own mobile developers' efforts eh

Social Media in the Enterprise @ Cass Business School

nospam@example.com (Alan Patrick) — Thu, 04 Feb 2010 06:49:50 +0000

Patchwork Elephants in the Enterprise Ecosystem

On Tuesday night David Terrar and I ran the first Social media in Enterprise session (#smie on Twitter), as part of London's Social media Week (and Benjamin Ellis took some pictures). We only thought of doing it a week before, in fact one of the lessons of Social media is that it was very easy to organise the event - though one of the social technologies used was email, which many "social" purists think of anathema . Its interesting to look at that in fact - Twitter DMs and email were the main "back end" tools used to organise and co-ordinate, Twitter and blogs were the main tools used to publicise, and a cloud based app - Eventbrite - was used to take tickets and Paypal used to collect payment. All this was set up in about 48 hours, part time (Kudos to Cass Business School for stepping up to the plate). You have to stop and think about how easy it would have been to do that even 5 years ago.

We used the Patchwork Elephant to symbolise how the area was still confused, we are like blind men feeling our way around the elephant and by looking at various viewpoints we may see it completely. But its also a patchwork, in that tere are many types of Enterprises - not for profit vs for profit, physical vs digital, manufacturing vs service etc etc.

Anyway, on to the show - the speakers ran in alphabetical order, but I'm going to re-organise it in sequence of big picture to detailed actions (David has a good summary of teh speakers and their organisations over here on his take of the evening).

Umair Haque talked about "Peak Organisations" - in a fascinating talk, he outlined his thesis that organisations designed on 18th century principles are just not fit for purpose today, and that hierarchies built to organise masses of people to perform the same menial tasks do not work when the key issue is to maximise knowledge work. He went through some of the new principles of organisation design that will maximise value.

Benjamin Ellis took this point to the next level of detail, looking at the differences between corporate hierarchy networks, the "real" networks that make things work (his slides are over here). He then mapped this to how a social media network works and what the likely organisational impacts will be - and where the fault lines are. Now people have been writing about "hollowed out" organisations for years, and Social media gurus have long noted that its structure is more sympathetic to knowledge work - but Benjamin is one of the few I''ve seen pointing out that an in-enterprise social network is very different to a friendship one and has all sorts of "plumbing" issues to work through. (a point later picked up by Mat when he noted two different types of capital - social and financial - existed uncomfortable together. Render unto Caesar....! Adriana and Euan picked up on this in other ways too).

Mat Morrison then took this to another level of detail again, showing work he had done on the actual social networks in real organisations. One of teh fascinating lessons was that a social network left to grow "au naturel" in an organisation is patchy and has a few massive nodes, who cause mass failure if taken out. He showed that a certain amount of design is necessary, as well as "automatic implementation" onto desktops to ensure both that everyone was networked and the resilience was acceptable.

My talk was on the challenges Social Media faces to convince people of its overall Return on Investment, I looked at the potential role of Social Media in 3 key areas of value creation (slides are here):

- Innovation
- Operational Excellence - Sales, Operating costs, etc etc
- Agility - the ability to react quickly to changes in a marketplace, and deal with disruption.

In essence this was a discussion on the business economics of SM, and where the biggest levers may be found, It is dependent on the company - for example SM seems quite useful to handle churn, great if you are in a high churn industry, but if you are a low churn industry its not a great benefit.

Adriana Lukas looked at her experience of implementing social media in large corporates (see her slides here), and drew some conclusions about how to do it effectively. Her view reflected the theme that Benjamin and Umair had already floated about traditional hierarchies being orthogonal to social media structures. She pointed out that even the social media structure in an enterprise looks different. Her main hypothesis is that it is not going to be possible to re-engineer today's organisation to use social media - you have to build them this way from the ground up. to build stuff in businesses you have to have small pilots, below the radar, so you can prove it.

Euan Semple talked without notes (he came on towards the end of the event and I think talking powerpointless was very high impact at that time) about his 10 years of experience of working with social media tools in organisations. His basic point, like Adriana's, was that the way social media works is orthogonal to the way rigid heirarchies work. He then noted that Social Media does actually map quite closely to the way people like to work. He also showed that there is no inevitable move towards Social Media , looking at the Burtian Era in the BBC as an example (John Burt tried to impose a Tory style internal market plus industrial grade hierarchy to a creative public service)

What I took away from this and Adriana's talk is that it may be possible to re-engineer some businesses, similar to the way you had to re-engineer to use JIT techniques - but it is very hard, and JIT only took off in this way because some companies like Toyota had spent decades changing to operate that way, and were now whipping competitive asses.

Sue Black talked case study - how she utilised Social Media for a Not for profit Enterprise - Bletchley Park (where the German codes were broken in World War 2) has been left in a shabby state (the UK does not love its technology heroes much - poor old Frank Whittle, who invented the jet engine, was only remembered by an Industrial Estate named after him for decades). What she described was a masterful use of social media - at very low cost - to mobilise people to help. What really struck me was that Sue didn't pretend she had a perfect strategy, but in fact had to try many different things in the process, some worked, some didn't. A reminder that this is experimental stuff.

Dave Terrar then gave a number of case studies from companies doing things today - Swiss Re, Cisco amd Wachovia, noting that what is now needed is to aggregate an emerging body of knowledge about what works and what doesn't. His key point was that this may move like the ERP market in future:

Although a lot of my social media colleagues favour a bottom up, disruptive or even "skunk works" approach to implementation, which can all work… the old rules of project implementation still apply inside the culture of many, or even most, businesses. Swiss Re is a perfect example of how you get senior executive buy in and sponsorship to ensure success, and then spread the word to 11,500 employees. It was the way we used to get a successful ERP implementation going, and it can be done for the change management required for implementing these sorts of collaboration tools too. One of my key messages is that these tools need to work with, enhance and improve the existing business processes, not go around or subvert them.

I think what we are seeing here is two phases in the evolution of a system (Dave puts Enterprise 2.0 in The Chasm right now) - before ERP there was MRP, and in its early days it was skunkworked, then when it was shown to work it got taken up by a few go ahead companies, whose success drove others to emulate it.

Shefaly Yogendra and Will McInness couldn't make it unfortunately, but have put up thir contributions online here and here. Well worth the read, Shefaly dealing with highly regulated industries and Will taking up the theme of it being inevitable as it works as we do. (I will link to people's stuff as they paste it up)

In the Q&A and discussions afterwards there were quite a few interesting threads around what the endgame will look like - Ronald Coase's work on sizes of firms being driven by transaction costs, abiut Dunbar and the optimal size of hierarchies, about the industrial era organisation of current enterprises vs the organic structure of social media (a few old salts noted the smallest unit in a Just In Time organisation is a self reliant "cell" - a thread I want to push further in future). But one has to come back to a corollary of Umair's thesis - before we see major changes there needs to be a structural change in the way capital is accumulated (the rich get richer regardless) and distributed (small, nimble companies find it far harder to get money than large, sclerotic ones) whereas most of the innovation and value is being created outside of these existing systems.

To end - an observation by Patrick Hadfield:

To change the culture and behaviour in organisations, we need to look at all aspects of working – including the processes and the reward structure. If we don’t tackle these aspects of organisation life, we will have little success: people will work to the outcome they are rewarded for and by which they are managed.

The move to flatter, less hierarchical organisations – even, perhaps, the fabled “virtual” organisations where almost all aspects of business are outsourced – may be the most fertile ground for social media in enterprises: they can be nimble, and they rely on effective communication to function properly. Here, use of social media could provide a real business advantage – and maybe this is where the real value of social media in business will be found.

Afterthought - on reading this, I know a number of people will say "we've heard this before". To them I'd say, you are right - but you have also heard a lot of other stuff, a lot of which is total snake oil, that was NOT said. This is the considered view of a bunch of smart people who have been looking at this for a long time, long before there was a bandwagon to jump on. I'm not saying this is canonical, but i can see the glimmerings of an elephant taking shape. More later, as they say.

A Patchwork Elephant a bit better described, then. There does seem to a considerable feeling to do another one, and there were at least 8 people in the audience who could as easily have been speaking, so I think this may, like our elephant, have legs

The Official Broadstuff Google Buzz Analysis

nospam@example.com (Alan Patrick) — Thu, 11 Feb 2010 01:13:35 +0000

The BlogoPimposphere of course is besides itself, but if we may take a more long term view:

Orkut begat Jaiku begat OpenSocial begat Wave begat Buzz.....

In other words it cannot fail. But lo - despite the hype, I see the reasonable people I know saying things like:

- Its just added an order of magnitude to my inbox, I was trying to cut it down by that
- its just another inbox
- really didn't enjoy having my contacts exposed by google buzz

And so on.....

I predict another bird that won't fly, at least not without without a lot of mods - which if the past is anything to go by Google won't do.

But of course its job is not to work, its job is to disrupt the economics of fledgling competitors like Facebook trying to get to profitability.

What will it be in 6 months time then?.