Ged Carroll

Category: online | 線上 | 온라인으로 | オンライン

The online field has been one of the mainstays since I started writing online in 2003. My act of writing online was partly to understand online as a medium.

Online has changed in nature. It was first a destination and plane of travel. Early netizens saw it as virgin frontier territory, rather like the early American pioneers viewed the open vistas of the western United States. Or later travellers moving west into the newly developing cities and towns from San Francisco to Los Angeles.

America might now be fenced in and the land claimed, but there was a new boundless electronic frontier out there. As the frontier grew more people dialled up to log into it. Then there was the metaphor of web surfing. Surfing the internet as a phrase was popularised by computer programmer Mark McCahill. He saw it as a clear analogue to ‘channel surfing’ changing from station to station on a television set because nothing grabs your attention.

Web surfing tapped into the line of travel and 1990s cool. Surfing like all extreme sport at the time was cool. And the internet grabbed your attention.

Broadband access, wi-fi and mobile data changed the nature of things. It altered what was consumed and where it was consumed. The sitting room TV was connected to the internet to receive content from download and streaming services. Online radio, podcasts and playlists supplanted the transistor radio in the kitchen.

Multi-screening became a thing, tweeting along real time opinions to reality TV and live current affairs programmes. Online became a wrapper that at its worst envelopes us in a media miasma of shrill voices, vacuous content and disinformation.

  • Carol Bartz + Microsoft Excel

    Carol Bartz

    I started thinking about this post when I was reading Bob Cringely’s excellent analysis of Carol Bartz tenure at Yahoo!. I am not going to add my full analysis here but instead pull on a strand that highlights problems that exist at a number of internet companies and certainly existed at Yahoo! when I was there.
    Yahoo! star
    Part of the thought process that got me on the trail of this post was that it reminded me of the introduction to Cringely’s Accidental Empires book written in the 1991:

    … PCs killed the office typewriter, made most secretaries obsolete, and made it possible for a 27-year-old M.B.A. with a PC, a spreadsheet program, and three pieces of questionable data to talk his bosses into looting the company pension plan and doing a leveraged buy-out.

    Spreadsheets and the business models inside them can be extremely powerful business tools and also weapons of mass destruction.

    Powerful Business Tools

    Firstly about the power of spreadsheets and their models in an internet business. Whilst at Yahoo!, my former colleague Salim used to be able to take the first few months traffic figures for the search business and provide a pretty accurate forecast of what the rest of the year looked like. That could be further extrapolated into reasonable revenue projections based on average conversion rates and cost-per-click values. Pretty handy for a business that relied on the fickle general public.

    Weapons of Mass Destruction

    Efficiency and innovation

    Accounting models are often used to make cuts in terms of manpower. What they fail to do however is ensure that the cuts are sufficiently surgical. This is less of an issue in a conventional manufacturing setting where there is likely to be a degree of redundancy in skills due to process design. Business management theory and analytical tools came out of this industrial age. Software and web services follow much more of an artisan model – great coders like mathematicians can find elegant solutions to problems through intuitive leaps forward.

    Although there is a large amount of outsourcing to cheaper countries, many successful breakout products or features are developed by small teams or even individuals for example:

    • Andy Hertzfield – the MacOS QuickDraw 2D graphics library that has been used for over 25 years and is only now being phased out in the latest versions of OSX
    • Cal Henderson and Stewart Butterfield – Flickr and Glitch
    • Joshua Schachter – Delicious
    • Linus Torvalds – Linux kernel

    However spreadsheet models often don’t recognise who these rock-stars are.

    What this means is that in a time of cuts the very people who could drive the innovation that would fuel future growth are let go or choose to leave because their area has been hacked to pieces. A classic example of this under Carol Bartz was the Flickr team: George Oates was let go and others like Paul Hammond, Seth Fitzsimmons, and Matthew Rothenberg departed.

    Carol Bartz quite rightly once said that ‘you can’t cut yourself to growth‘, but you can’t outsource it in the longer term, you also need the tinkerers and the thinkers in the organisation creating the innovation seed corn to drive that future growth. There doesn’t seem to be a spreadsheet model that takes adequate account of this.

    Niches versus the mainstream

    Back when I worked at Yahoo! there was an inordinate amount of attention paid to the number of unique users that properties got. This is important for a service like search that is universal in its appeal, but a general purpose metric like unique users falls down flat for many other properties that have a specific context around it.

    Let’s look at three examples:

    • In the West, Yahoo! Answers has a substantial user base of unique users, but a quick look at Google Adplanner shows that this user base is skewed to lower socioeconomic groups who are time-rich, but cash poor. This means that it could be hard to sell advertising inventory to many brands and the corresponding cost of inventory is likely to be cheaper
    • Yahoo! image service Flickr, has far less pictures than Facebook; but it is a highly engaged community of people passionate about photography and the creative classes. Facebook is like the digital equivalent of Prontaprint – who used to publish their film envelopes in local newspapers and develop the general public’s holiday snaps. This means you could charge more for the service, which is why Flickr has a freemium offering and come up with creative marketing packages for advertisers
    • Social bookmarking pioneer Delicious was a slow growing property beloved of geeks and the creative classes. Attractive both because  of its audience’s demographics but also the level of insight available from the data that these people provide voluntarily. A creative marketing vehicle similar in nature to Twitter’s promoted tweets has the potential to be a premium-priced product for advertisers

    However using spreadsheet models with metrics that lack distinction Yahoo! Answers looks like a great product whilst Delicious and Flickr look marginal at best. It is no coincidence that Flickr had an outflow of talent under Carol Bartz and Delicious was sold after a protracted period of uncertainty about the service’s future.

    Ultimately tools that can create a flawed understanding can be more damaging than no tools at all. Carol Bartz was brought into cut a business that she didn’t understand that well (it wasn’t anything like her previous roles) and had analytical tools at her disposal that weren’t sufficiently finessed for a modern information economy-based company. You add this to Bartz dogged personality and you can see at least part of the reason by she was not able to turn the company around. More related content can be found here.

    More links

    How not to run Yahoo! – I, Cringely
    Yahoo! Announces Leadership Reorganization – Yahoo!’s official statement

  • Funds of funds + more news

    Funds of Funds

    Funds of Funds May Actually Increase Risk, Study Finds – NYTimes.com – this feels counter-intuitive at first, until you realise that funds of funds are a synthetic financial instrument from the prospective of the end investor. Synthetic financial instruments led to problems like the 2008 financial crisis and the Savings and Loans crisis of the 1990s. The reason for the problem of funds of funds for the end investor is that there lots of known unknowns under the hood. It is conceivable that several funds make a similar wrong headed bet and get stung by it. Without directing the funds, how do you maintain continued diversity of investment and strategies to ensure the bet hedging. Lastly funds are less liquid assets in the grand scheme of things with limitations on when and how much you can withdraw. I wonder if a similar study has been done around thematic ETFs as well?

    Beauty

    At Makeup Alley, Advice From Online Peers – NYTimes.com – how user reviews are demolishing beauty treatment company claims and promoting other products that previously didn’t claim benefits

    Economics

    Wealthy Investors Grow Pessimistic About Economy – WSJ – US economy, due to government debt and economic growth

    Japan records surprise trade surplus – FT.com – rescheduling manufacturing work around power fluctuations

    Ethics

    danah boyd | apophenia » “Real Names” Policies Are an Abuse of Power

    A Billion Dollars Isn’t Cool. You Know What’s Cool? Basic Human Decency | TechCrunch – social norming around the social web

    Ideas

    Could Quantum Computing Kill Copyright? | TorrentFreak

    Korea

    Five Lessons From Samsung’s Second Quarter Results – WSJ – interesting that Samsung is husbanding its cash by reducing shareholder returns

    Luxury

    Second-Tier Spotlight: “Rich Second Generation” Fueling Ningbo Luxury Market « Jing Daily : The Business of Luxury and Culture in China – interesting divergence in consumer preferences

    Media

    To Spread Your Brand On Facebook, Don’t Target Your Fans–Target Their Friends | Fast Company – propagation planning

    More British papers dragged into hacking row ‹ Japan Today – not surprising, the practice may have started at the News of The World but could have been taken around the papers as journalists and editors move on to new roles

    Murdoch Selects Advisers Carefully – WSJ.com – it makes sense he needs a ‘clean’ team that can stay together through this

    Online

    danah boyd | apophenia » Designing for Social Norms (or How Not to Create Angry Mobs)

    With the Bing Search Engine, Microsoft Plays the Underdog – NYTimes.com – I am not seeing a cohesive vision to change search from Microsoft; this looks like the ‘we are innovative’ foot-stamping PR wrapped in a storytelling methodology that comes out of Microsoft corporate PR. I think that the social search stuff at Google and Facebook is of more interest. Bing needs to come out of the box with something 10 times better to get people to move in significant numbers. Qi Lu didn’t manage it at Yahoo!, what makes them think he can manage it at Microsoft?

    A Bomb in Oslo? What Google Lost by Ending Real-Time Search – The Atlantic – Google News just wasn’t as fast, it needs Realtime

    Official Google Blog: More wood behind fewer arrows – interesting change, more focus on fully formed products?

    Security

    Majority of South Koreans’ data exposed | FT.com – the interesting bit is the data wipe of PCs used in the attack to hide fingerprints

    Technology

    Data Centers Using Less Power Than Forecast, Report Says – NYTimes.com – green technology and virtualisation kicks in

    The Key Subtle Notes From Apple’s Earnings Call | TechCrunch – exclusives are doled out on the conference call without hype

    Wireless

    Apple Passes Nokia and Holds Off Samsung to Become World’s Top Smartphone Vendor [Updated] – Mac Rumors – Android is Toyota and Apple is Mercedes & Porsche

  • Facial recognition – ethics

    Former CEO Eric Schmidt made a big deal of facial recognition databases being the one technology that Google wouldn’t deploying as it is an ethical and privacy set too far. Face recognition is currently used in law enforcement situations from policing football matches to anti-terrorism detection and surveillance amongst crowds. Google does use a certain amount of face recognition technology in its Picasa photo-sharing application and has some patents on using facial recognition in a social network.

    Developments in face recognition technology are apparently taking place at a rapidly increasing pace according Schmidt, which means that even if Google doesn’t roll something out, others will, Facebook being the likely favourite.

    With geotagged images and video taken by smartphones, turning the world into a constantly surveiled system. There would be no privacy and few hiding places left. The idea of moving to a new town or city and reinventing yourself which young people do when they go to college or go and get their first job would fall at the first hurdle as your old life would be seamlessly sewn together to your new one online.

    The risk goes up considerably when you have battered spouses who have ran away or are looking escape a stalker.

    Google’s disinterest in face recognition could be seen as being more about dodging anti-trust regulations, particularly if this technology was merged with search. However once someone does it, Google will to be a reluctant but fast follower if it is to continue to compete in the online space, which probably explains why they bought PittPatt the other day and recently patented the use of facial recognition technology to pick famous people out of pictures (presumably to improve image search relevance). More related content can be found here.

    More information online

    One Counter To Schmidt’s Facial Recognition Claim | Stowe Boyd

    Google Acquires Facial Recognition Software Company PittPatt | Techcrunch

    Google warns against facial recognition database | The Telegraph

    Google Thinks Facial Recognition Is Very, Very Bad. Except Maybe For Famous People | Gizmodo

    Google debates face recognition technology | FT.com

  • News Of The World

    I was getting ready to give my presentation at the CIPR the other evening when the news broke on Twitter about the News of The World. There was a sense (which I personally believe to be wrong) that this was going to result in a revolution that would:

    • Take down News Corporation
    • Radically change the standards of journalism

    I want to hear a revolution out there

    When Karl Marx wrote his book The Communist Manifesto, he would have anticipated that the class struggle would have gone into revolution in the United Kingdom. At that time, the country was pioneering the industrial revolution and many members of society had every reason to be dissatisfied with their lot in life. Instead his writings inspired revolutions in the mainly agrarian societies of Russia and China. Whilst, the UK provides foreigners like Marx and Engel with the freedom to express their views in a manner that wouldn’t have been tolerated in their native Germany, the country also had an effective state security mechanism in the Special Branch of the police. But writers and thinkers have speculated that there is also something ‘counter revolutionary’ in the UK psyche.

    Probably the closest we came to seeing it was the economic induced Jarrow march and the industrial disputes of the 1970s; which were as much a kick back against useless management teams in companies and a lack of investment, as they were a rising up of the proletariat.

    Social rather than political movements didn’t get much further; the summer of love brought the modern fractured nuclear family. The backlash of punk ushered in the yuppie and the ravers of 1988 that were a reaction to the grim social and cultural reality of Thatcherite Britain with a bit of weekend hedonism turned into the controlling Big Society of today. All of these events felt as if the world was going to be changed; but it didn’t in any meaningful way. The UK hasn’t had a media industry equivalent of the Arab spring.

    Most of the noise around this is happening on Twitter and in the media of the middle classes rather than the heartland of the News of The World. They don’t speak for the minicab driver, the hairdresser, the plumber or the joiner; who are more likely to be worried about the latest antics of Cheryl Cole and where are they going to find the same quality of sports reporting in another Sunday paper?

    News Corporation resilience

    Rupert Murdoch has experienced many ups and downs as he built News Corporation and whilst the current News Of The World scandal is no doubt upsetting it isn’t the closest his business has come to going under. In terms of the organisation as a whole, the boiler plate on News Corporation press releases says everything that needs to be said:

    News Corporation (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV) had total assets as of March 31, 2011 of approximately US$60 billion and total annual revenues of approximately US$33 billion. News Corporation is a diversified global media company with operations in six industry segments: cable network programming; filmed entertainment; television; direct broadcast satellite television; publishing; and other. The activities of News Corporation are conducted principally in the United States, Continental Europe, the United Kingdom, Australia, Asia and Latin America.

    As a business it exists pretty much as they present it, it is not a paper tiger like the investment banks or Enron and the current event is considered in the wider world to be a UK issue, so there is little likelihood of contagion to his other properties worldwide in terms of lasting reputational damage.

    Regroup, rebrand

    As the News Of The World shut down, rumours swirled around about The Sun going to a seven-day production. There is a strong business case for them to do this and the current phone hacking scandal debate just provided a great catalyst. Moving to a seven-day newspaper provides a number of opportunities for News International:

    • The Sun’s brand has been stronger and it simplifies the company’s brand portfolio; money is only required to support one brand
    • It allows News International to remove duplication, particularly at senior levels within the papers, so reducing the wage bill whilst increasing profitability

    Unlike the Wapping strikes of the 1980s News Of The World journalists being laid off would have little sympathy from the public at large; I doubt even the NUJ would be likely to back them in the face of the current scandal. This provides News International with a unique opportunity to rebrand and regroup around it’s flagship Sun brand. I think that it’s no coincidence that Rebekah Brooks said that News International would seek to ensure that as many of the journalists as possible were re-employed as soon as possible.

    Confluence of interest

    The proposed media revolution exposes too many interests to chaos and the system like a knitted jumper is too intertwined: pull one thread and the entire sweater would unravel leaving something useless behind. It is in no one’s long term interest to tug on that thread.

    In 1992, with the re-election of a Conservative government backed by News International’s media The Sun ran a headline ‘It’s The Sun Wot Won It’. Tony Blair worked hard to build a relationship with Rupert Murdoch and one of the factors that was seen to help him win power was the tacit approval of the News International papers. Like the political power masters of old, News International can move a bigger block of voters than the Guardian Media Trust papers or the Trinity Mirror Group.

    Secondly, for every story that gets run, there are ten papers that don’t see the light of day. What would happen if the media was threatened?

    Ethics: the thin end of the wedge

    There is speculation that the phone hacking tactics that News of The World employees and contractors have been accused of has also been practiced at other media publications and that evidence will come to light of contagion of dishonesty. A measure of how true that is, was the desire for British journalists to work on the US equivalent of the UK red tops because of their unique no-holds barred approach.

    • What about payments for stories? Do these induce whistle-blowing for profit, or computer hacking?
    • What about dumpster-diving?
    • Or getting people drunk to then interrogate them?
    • What about the use of blackmail to persuade sources to cooperate which was one of the allegations made in the Max Moseley case?
    • How ethical is if for the government or organisations to leak stories?
    • Will journalists now need to be completely transparent about ‘sources close to the matter’? This would mean that journalists couldn’t pad their articles out with speculation, but it also means that PR teams would have to restrict access to spokespeople as briefings couldn’t be done to provide context or background without attribution

    The interface between society and the media would fall apart with the media left out in the cold about hard news stories. The social norming around these issues would be shut down and the sausage factory would be put back under wraps before lasting damage is done or the ramifications in business, politics and even the arts would ripple through every aspect of society. It is an imperfect system as it is, but one that works for most of the people most of the time.

    The media marketplace

    The Romans used to talk about ‘bread and circuses’ to keep a population happy and there is still an element of truth in that phrase today. The News of The World and their peers fill that gap. A media that falls to deliver to that need, fails to sell to a large proportion of the UK population. Whilst lip service may be paid to high standards, journalists will have to deliver what ever is required to keep the printing presses running and the website online. Despite the moral stance of O2 amongst others in pulling advertising from The News of The World; advertisers generally follow the audience in terms of their media spend. More media related commentary can be found here.

    More reading

    Did Twitter kill a newspaper? Of course not – GigaOM

    Phone Hacking Scandal live updates – The Guardian

    Why did Murdoch close the News Of The World? Daily View – BBC News blog

    Message from Rebekah Brooks to all News International staff

    Statement from Rupert Murdoch, Chairman and CEO, News Corporation regarding the phone hacking allegations

  • MySpace

    This has taken longer to write than I would have liked since TalkTalk Business still has me living the analogue lifestyle at home. I wanted to put finger to keyboard because much of the coverage around MySpace acquistion focused on:

    • The difference between what News Corporation paid for the social network and what it then sold the assets for
    • The decline in MySpace as a social network, the sale was another milestone for the MySpace story to be repeated

    There was less attention paid to the Specific Media side of the story and what would they be likely to do? It’s probably easier filter this out by what they won’t do.

    • Revitalise MySpace as a social network. That dog won’t hunt: like a restaurant that is no longer fashionable or a nightclub that has lost its buzz – lightning won’t strike twice. You would be better off starting again, simply because you could get rid of a lot negative brand perceptions, rather than trying to get people to come back. This is pretty much the same fate for ideas around going back to being a music-marketing brand
    • Change the game. This is the path that Friendster is taking with its new Malaysian owners, who are keeping customers network login in details and their social graph, but positioning the site towards social gaming. Existing social network members had the opportunity to download photographs and other details from their soon to disappear profiles. MySpace could try that but it would need some social gaming content like Farmville…

    Do nothing but monetise it. I personally think that this is the most attractive option. At the time of writing this post, Demand Media has a market value of about 1.1 billion US dollars. But it has that valuation based on the growth potential in its content factory model, one which according to Business Insider isn’t making sufficient money. What MySpace allows Specific Media to do is flip the Demand Media model on its head.

    It is primarily a sale of people’s content to which advertising can be put against. Consumers generally leave MySpace profiles dormant. Drop them an email, talk about new features and at the bottom of it an opt-out option to make their blog posts public and ‘Hey presto’ instant content farm.

    What people didn’t realise about MySpace was that it wasn’t only music marketing and Tila Tequila pictures, but professional content from the likes of the CIPD and soccer mom’s photo albums. So there is a diverse range of material to be monetised. Well worth the 35 million US dollars that Specific Media has paid out for the moribund social network.

    Sure it’s cheap advertising, but it could be put against relevant content and it wouldn’t even have to split the profits with the content providers in the way Google has to. More related content can be found here.