Ged Carroll

Category: media | 媒體 | 미디어 | メディア

It makes sense to start this category with warning. Marshall McLuhan was most famous for his insight – The medium is the message: it isn’t just the content of a media which matters, but the medium itself which most meaningfully changes the ways humans operate.

But McLuhan wasn’t an advocate of it, he saw dangers beneath the surface as this quote from his participation in the 1976 Canadian Forum shows.

“The violence that all electric media inflict in their users is that they are instantly invaded and deprived of their physical bodies and are merged in a network of extensions of their own nervous systems. As if this were not sufficient violence or invasion of individual rights, the elimination of the physical bodies of the electric media users also deprives them of the means of relating the program experience of their private, individual selves, even as instant involvement suppresses private identity. The loss of individual and personal meaning via the electronic media ensures a corresponding and reciprocal violence from those so deprived of their identities; for violence, whether spiritual or physical, is a quest for identity and the meaningful. The less identity, the more violence.”

McLuhan was concerned with the mass media, in particular the effect of television on society. Yet the content is atemporal. I am sure the warning would have fitted in with rock and roll singles during the 1950s or social media platforms today.

I am concerned not only changes in platforms and consumer behaviour but the interaction of those platforms with societal structures.

  • Zynga and the IPO

    I had held off writing on the ‘failed’ Zynga’s IPO at the end of last year. I am not going to say that Zynga is a great business; in many respects I don’t think it is, without even looking at its numbers I think that Zynga has three big challenges:

    • Facebook owns their customer base
    • Facebook owns their payment system
    • Facebook owns their customer acquisition strategy

    But was the Zynga IPO really a failure? Before I answer that I wanted to talk about another IPO.

    VA Linux IPO case study

    Back in 2000, I had the experience agencyside running the European launch of a company called VA Linux and took its then CEO Larry Augustin around the media. At the time VA Linux’s primary busness was building specialist workstations and servers were optimised for Linux and had Linux pre-installed. This meant that they thought carefully about component choices for instance the ethernet card (network interface card or NIC) in the computer was from Intel rather than 3Com because Intel did a better job in supporting Linux  in terms of the quality of its drivers.

    My experience of Augustin was of someone who was whip smart, with a dry wit and a genuinely nice guy – which made my job a hell of a lot easier to do. Life was good, Augustin gave good copy on the Judge Jackson finding of fact that had happened the previous November, Linux was building momentum in the enterprise and with web servers because it performed better than Windows, required less skill than the BSD distributions and was more of an entry level product than Sun Microsystems, SGI or IBM Unix hardware on specialised RISC architectures. One of the things that audiences wanted to talk about was VA Linux’s at the time record-breaking IPO.

    VA Linux’s underwriters had priced its IPO at US$30 per share, on the first day of trading the price topped US$320 per share. It was described as a stunning success but that success was double-edged. In economic terms, the bank staff working on the IPO had obviously under-priced it because the price had surged so much – depriving the company of a substantial amount of potential capital that it could have raised. Admittedly it was crazy times and VA Linux wasn’t worth the absurdly high valuation in the end, as businesses like Dell started competing with them head-on. But one has to ask what difference would the extra capital have made? How big does the pop have to be to go beyond rewarding initial investors and become negligent underpricing of a company’s stock?

    The Zynga comparison

    Back to Zynga, which had the opposite challenge, the bank staff working on the IPO had optimally priced the stock so that the company got pretty much the full amount that at least some people were prepared to pay. Rather than a pop, a price decline occurred which investors got upset about as late arrivals to the Zynga party made a financial loss. The underwriters for the IPO earned their money on this occasion. If you want to be the first kid on the block in a new set of the latest Nike Air Jordans, the latest gadget or the season’s must-have handbag, you have two choice get in early enough or pay over the odds. Who is to say if you’ve overpaid, once the heat goes those items are then likely to become cheaper again. And so it goes with Zynga, this shouldn’t be your pension fund; it is part of the new hotness, a fashion stock if you will and was priced and paid for as such.

    Disclaimer: this doesn’t constitute investment advice or a recommendation to buy stocks. I am not a financial services professional nor do I profess to be. If you want investment advice, pay someone who does this for a living for it.

    More information

    THE TRUTH ABOUT ZYNGA: The Only Reason The IPO ‘Flopped’ Is Because Idiot Investors Paid Too Much

  • STRATFOR breach

    I got an email about 40 minutes ago announcing that STRATFOR were looking into a breach of their servers and email. I’ve always found their analysis on international issues informative and insightful which has helped in my work thinking about international projects with NGOs and in my writing here on this blog. It is one of a a number of media outlets that I pay a subscription to.

    Given that Stratfor position themselves as not only domain experts in territories around the world and geopolitics, but also opsec (operational security); the data breach is a shockingly bad own goal. It will be interesting to see how their brand manages to recover. The hackers have made off with a trove of government, academic, media contacts as well as general people like me who are curious about what’s going on in the world.

    Dear Stratfor Member,

    We have learned that Stratfor’s web site was hacked by an unauthorized party. As a result of this incident the operation of Stratfor’s servers and email have been suspended.

    We have reason to believe that the names of our corporate subscribers have been posted on other web sites. We are diligently investigating the extent to which subscriber information may have been obtained.

    Stratfor and I take this incident very seriously. Stratfor’s relationship with its members and, in particular, the confidentiality of their subscriber information, are very important to Stratfor and me. We are working closely with law enforcement in their investigation and will assist them with the identification of the individual(s) who are responsible.

    Although we are still learning more and the law enforcement investigation is active and ongoing, we wanted to provide you with notice of this incident as quickly as possible. We will keep you updated regarding these matters.

    Sincerely,

    George Friedman

    Cryptonome have more details here: complete with the obligatory Pastebin links. Twitter currently has a lively discussion on the hack.

    Update (February 2023): Stratfor bought all its subscribers an Equifax monitoring package for their credentials and offered discounted subscriptions. It revamped its infrastructure and carried on. Stratfor never completely recovered from the breach. It eventually sold itself to a larger group Rane. As part of Rane the Stratfor work continues and they still sell expert consultancy.

    Rane have since embraced social media to promote its content to prospective customers. The quality is the same high standards as what it used to be under Stratfor before the data breach.

  • Video futures

    Peter Jackson has been shooting a really interesting video diary for the forthcoming Hobbit two-part film. Whilst all the Tolkien geeks are pouring over it salivating at what they are going to spend their next ten year’s disposable income on, I was curious to know what it was likely to tell us about the future of video. Jackson heads up Weta Workshop and Weta Digital, constantly innovating in video production. Below is the first entry, it is worthwhile working through all of them

    • Technology still hasn’t addressed the need to shoot 3D in an elegant way. Much of this is down to the fact that the economics and scale that has driven semiconductor innovation hasn’t been replicated in other aspects of technology such as camera optics, so they use Heath Robinson-esque mirrored set ups to get around the interocular (replicate the distance between your eyes) distance issue
    • The amount of dedicated cameras that Jackson is having to use suggests that 3D product isn’t likely to come down in cost anytime soon; so we are still likely to have shoddy post-production versions plied on cinema audiences for a good while yet. I could see the demand for 3D dying out, at least until VR starts to make a serious impact on lean back experiences.
    • Higher frame rates make a difference. I hadn’t realised that the human eye can distinguish at up to the equivalent of 60 frames per second. Shooting at this speed makes imagery more believable. So we are more likely to go to 60fps 4K video than 24fps at 8K resolution.
    • Digital doesn’t mean perfect reproduction. If you’ve listened to an iPod versus a decent CD player; or a decent CD player versus a decent record player – it would be easy to understand this point; despite the historic branding as digital having a higher fidelity to the original. However it was still interesting to hear how the high quality digital cameras de-saturate the video and the make-up artists and set designers have to work hard to compensate for the colour loss on screen

    More related content, alongside other aspects of technology can be found here.

  • Asian woman & more news

    Asian woman observations

    Marketing to the modern Asian woman: Trends to watch by Vic Corsi, Landor – WPP – “Shopping is a social activity and the goal is not necessarily to make a purchase. Group shopping is one of an Asian woman’s main hobbies—over 20 percent of Asian women go shopping every weekend with no expectation of purchasing. While she peruses the malls contemplating what to buy—either now or on some future shopping mission—the Asian woman is looking for brands to convince and entertain.” – the author is writing from a Singapore perspective, but still great content. The big challenge is that the asian woman as a demographic isn’t homogeneous. Shopping is an activity, partly because of air conditioning, which occurs in certain markets like Singapore or Hong Kong. But many asian women are very value orientated. A classic example of this Asian woman would be in lower tier Chinese cities, Indonesia or the Philippines where is the a huge difference in incomes. I suspect that the modern asian woman of the title is code for wealthy and relatively young.

    Consumer behaviour

    Report: Workers in China and India Most Likely to Play Hooky – WSJ

    Design

    JNKsystem.com　 : NEIGHBORHOOD C.W.P. ALT.Zippo – I love the way Neighbourhood puts pocket wear and tear on these to provide authenticity

    Ethics

    A VC: Following Facebook Down The Wrong Path – interesting post on Facebook privacy

    Ideas

    Text of Steve Jobs’ Commencement address (2005)

    Talking To The Future Humans – Bruce Sterling | VICE

    Japan

    Japanese manufacturers see positive signs – FT.com

    Media

    Irish Post bought as going concern – RTÉ News – this is potentially good news

    UK Labour Party wants journalism licenses, will prohibit “journalism” by people who are “struck off” the register of licensed journalists – Boing Boing – this sounds very suspect

    Technology in Schools Faces Questions on Value – NYTimes.com – e-education doesn’t necessarily work: schools are spending billions on technology, even as they cut budgets and lay off teachers, with little proof that this approach is improving basic learning

    Online

    Questions Arise Over Yahoo’s Value as Buyers Weigh Bids – NYTimes.com

    Facebook: Sharing it all | The Economist – Facebook the sociopathic network

    Software

    Communities Dominate Brands: Analysis of Smartphone Wars and 3 Big News last week or so: Part 1 of 3: Intel + Samung – Nokia = Tizen (not MeeGo)

    Technology

    Why do some people really hate Apple | guardian.co.uk

    Michael Dell Advises Hewlett-Packard – NYTimes.com – its about scale in other areas rather than margins

    Wireless

    Sony Ericsson CEO: We Should Have Taken The iPhone More Seriously | TechCrunch

    Chinese phone systems ‘no threat’ to Google – FT.com – yeah right

  • 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