The Future of Less

Humor: Social Media Explained

2012-01-25T09:16:00.000-08:00

The First Real Smart Watch

2012-01-19T08:11:00.000-08:00

I'M WATCH, Simply The First from im watch on Vimeo.

Video: Networked Society On the Brink

2011-12-09T05:25:00.000-08:00

I Don't Understand What Anyone Is Saying Anymore

2011-12-07T15:01:00.001-08:00

http://blogs.hbr.org/pallotta/2011/12/i-dont-understand-what-anyone.html

Dan Pallotta is an expert in nonprofit sector innovation and a pioneering social entrepreneur. He is the founder of Pallotta TeamWorks, which invented the multiday AIDSRides and Breast Cancer 3-Days. He is the president of Advertising for Humanity and the author of Uncharitable: How Restraints on Nonprofits Undermine Their Potential.

I'd say that in about half of my business conversations, I have almost no idea what other people are saying to me. The language of internet business models has made the problem even worse. When I was younger, if I didn't understand what people were saying, I thought I was stupid. Now I realize that if it's to people's benefit that I understand them but I don't, then they're the ones who are stupid.

There are at least five strains of this epidemic.

Abstractionitis
We have forgotten how to use the real names of real things. Like doorknobs. Instead, people talk about the idea of doorknobs, without actually using the word "doorknob." So a new idea for a doorknob becomes "an innovation in residential access." Expose yourself repeatedly to the extrapolation of this practice to things more complicated than a doorknob and you really just need to carry Excedrin around with you all day.

Acronymitis
This is a disease of epic proportions in the world of charity. I was at a meeting just two days ago at which several well-meaning staff members of a charity were presenting to their board, and the meat of their discussion revolved around the acronyms SCEA and some other one that began with "R" that I can't recall. In the span of three minutes these acronyms must have been used eight times each. They were central to any understanding of the topic at hand, but they were never defined. So I had not the vaguest idea what the presenters were talking about. None. Could have been talking about how to make a beurre-blanc sauce for all I know.

Valley Girl 2.0
My partner and I were at a restaurant in the San Fernando Valley five years ago, and a real-live Valley girl was sitting in the booth behind us talking on her cell phone. We couldn't stop listening to her. She had a world-class ability to string together half-sentences devoid of any substance whatsoever. And yet you felt as if something important were being discussed! "And she was like, ummm, and I was just like, you know, umm, no way, really, like, yeah, and when she was like that, I was just like..umm...." She could go on in this way for extended periods of time without mentioning any actual people, actions, or thoughts. There's a business version of this illness. It involves the use of words such as "space," "around," "synergy," and "value-add" with a healthy dose of equivocators like "sort of" and "kind of" to ensure that there is no commitment to anything being said: "I'm in the sort of sustainability space around kind of bringing synergistic value-add to other people's work around this kind of space." Oh, OK, that explains it.

Meaningless Expressions
I wrote about the phrase "thinking outside the box" recently and how overused and utterly misunderstood the expression is. There are many more. Another term that has lost its meaning is "Let's exceed the customer's expectations." Employees who hear it just leave the pep rally, inhabit some kind of temporary dazed intensity, and then go back to doing things exactly the way they did before the speech. Customers almost universally never experience their expectations being met, much less exceeded. How can you exceed the customer's expectations if you have no idea what those expectations are? I was at a Hilton a few weeks ago. They had taken this absurdity to its logical end. There was a huge sign in the lobby that said, "Our goal is to exceed the customer's expectation." The best way to start would be to take down that bullshit sign that just reminds me, as a customer, how cosmic the gap is between what businesses say and what they do. My expectation is not to have signs around that tell me you want to exceed my expectations.

Abstract Valley Girl 2.0 Acronymitis Using Meaningless Expressions
This is when you combine the four diseases above. So you get phrases like, "You should meet this guy with the SIO. He's sort of this kind of social entrepreneur thinking outside of the box in the sustainability space and working on these ideas around sort of web-based social media, and he's in a round two capital raise in the VP space with the people at SVNP." How many times have you heard what you now recall to be precisely this sentence?

This would all be funny if it weren't true. People just don't make sense anymore. You'll save yourself a lot of trouble if you internalize this. Observe it, deconstruct it, and appreciate just how ridiculous most business conversation has become.

You will gain tremendous credibility, become much more productive, make those around you much more productive, and experience a great deal more joy in your working life if you look someone in the eye after hearing one of these verbal brain jammers and tell the person, "I don't have any idea what you just said to me."

Edible RFID tags track your food from beginning to end

2011-12-05T18:08:00.000-08:00

NutriSmart from HannesRemote on Vimeo.

Video: Internet Rising

2011-12-04T07:37:00.000-08:00

The Company that Outlawed (Internal) Email

2011-12-02T08:35:00.000-08:00

What if you came into work everyday with zero messages in your inbox? What if you didn't even have an inbox?

http://www.inc.com/jeff-haden/the-company-that-outlawed-email.html

By Jeff Haden | Dec 1, 2011

If contrarians can be defined as people who reject the majority opinion, Klick, a Toronto-based digital marketing agency that made the Technology Fast 500 list for the third year in a row, is a great example.

Why? Klick doesn’t use email internally.

“In the very early days of Klick we started to recognize some basic challenges with email and wanted to find a better solution,” says Klick CEO Leerom Segal. “While email makes for a decent communication tool with clients, internally it doesn’t facilitate collaboration and basic workflow. Email has no intelligent mechanisms for prioritization, lacks context, lacks a framework for knowledge management, and saps accountability.”

As Klick grew and the number of disciplines required for every project increased, basic commitments were increasingly more difficult to manage.

“We’ve all been on an e-mail thread where people are answering questions but really just creating more confusion,” Segal says, “or maybe referencing some missing yet critical attachment. So we looked for tools to help us better manage our basic workflow.”

Klick started by trying testing systems that managed basic work units. Using a work ticket, one individual clearly articulated a need, assigned it to another person, and included all relevant information. When the task was completed the ticket was routed back to the originator for verification.

Aaron Goldstein, Klick’s Chief Operating Officer, quickly recognized that work tickets could create the necessary level of accountability while overcoming two of the biggest weaknesses of email: Knowledge can get lost in a person’s mailbox and prioritization is basically nonexistent since inboxes assume that most recent equals most important.

But existing systems were far from perfect. “We found major problems with conventional work ticket systems,” Goldstein says. “And we were afraid of the impact on our culture, since there was little consideration for usability and adoption. The systems we explored all seemed unnecessarily bureaucratic. We want people to drive systems, not systems to drive people.”

So Klick decided to build their own workflow management system, one that would preserve the company’s culture and create a strategic advantage. The system is called “Genome,” and according to Segal has become an essential part of Klick’s identity.

“Our initial goal was to ensure that Genome was adopted naturally,” Segal says, “so we experimented with every team member’s suggestions: trying different interfaces, different mandatory fields, even different prioritization algorithms. We wanted our employees to want to use the system, so everything it did had to save them time and effort. Then, once we developed a habit of incrementally improving the platform, Genome started to evolve in ways we never imagined.”

One early insight was that evaluating the patterns work tickets took, in aggregate, could accurately predict project success and schedule integrity, a competitive advantage that has helped revenues triple over the past five years.

“It didn’t take long for us to recognize the potential and start to investigate additional ways to keep everybody on our team as forward-looking as possible,” Goldstein says.

“By moving away from internal email and creating a system that truly supports our employees, we do a better job of separating signal from noise so our organization can make small course corrections earlier in the process,” he adds. “We don’t want to remove emotion or the human side from decision-making, but we do want our team to make decisions that are always informed by data.

“And it all started because we weren’t satisfied with email. The fact most people use a tool doesn’t necessarily mean it’s the best tool to use.”

Malls track shoppers' cell phones on Black Friday

2011-11-30T09:43:00.000-08:00

http://money.cnn.com/2011/11/22/technology/malls_track_cell_phones_black_friday/

Attention holiday shoppers: your cell phone may be tracked this year.

Starting on Black Friday and running through New Year's Day, two U.S. malls -- Promenade Temecula in southern California and Short Pump Town Center in Richmond, Va. -- will track guests' movements by monitoring the signals from their cell phones.

While the data that's collected is anonymous, it can follow shoppers' paths from store to store.

The goal is for stores to answer questions like: How many Nordstrom shoppers also stop at Starbucks? How long do most customers linger in Victoria's Secret? Are there unpopular spots in the mall that aren't being visited?

While U.S. malls have long tracked how crowds move throughout their stores, this is the first time they've used cell phones.

But obtaining that information comes with privacy concerns.

The management company of both malls, Forest City Commercial Management, says personal data is not being tracked.

"We won't be looking at singular shoppers," said Stephanie Shriver-Engdahl, vice president of digital strategy for Forest City. "The system monitors patterns of movement. We can see, like migrating birds, where people are going to."

Still, the company is preemptively notifying customers by hanging small signs around the shopping centers. Consumers can opt out by turning off their phones.

The tracking system, called FootPath Technology, works through a series of antennas positioned throughout the shopping center that capture the unique identification number assigned to each phone (similar to a computer's IP address), and tracks its movement throughout the stores.

The system can't take photos or collect data on what shoppers have purchased. And it doesn't collect any personal details associated with the ID, like the user's name or phone number. That information is fiercely protected by mobile carriers, and often can be legally obtained only through a court order.

"We don't need to know who it is and we don't need to know anyone's cell phone number, nor do we want that," Shriver-Engdahl said.

Manufactured by a British company, Path Intelligence, this technology has already been used in shopping centers in Europe and Australia. And according to Path Intelligence CEO Sharon Biggar, hardly any shoppers decide to opt out.

"It's just not invasive of privacy," she said. "There are no risks to privacy, so I don't see why anyone would opt out."

Now, U.S. retailers including JCPenney (JCP, Fortune 500) and Home Depot (HD, Fortune 500) are also working with Path Intelligence to use their technology, Biggar said.

Home Depot has considered implementing the technology but is not currently using it any stores, a company spokesman said. JCPenney declined to comment on its relationship with the vendor.

Why Apple and Google need to stalk you

Some retail analysts say the new technology is nothing to be worried about. Malls have been tracking shoppers for years through people counters, security cameras, heat maps and even undercover researchers who follow shoppers around.

And some even say websites that track online shoppers are more invasive, recording not only a user's name and purchases, but then targeting them with ads even after they've left a site.

"It's important for shoppers to realize this sort of data is being collected anyway," Biggar said.

Whereas a website can track a customer who doesn't make a purchase, physical stores have been struggling to perfect this kind of research, Biggar said. By combining the data from FootPath with their own sales figures, stores will have better measurements to help them improve the shopping experience.

"We can now say, you had 100 people come to this product, but no one purchased it," Biggar said. "From there, we can help a retailer narrow down what's going wrong."
But some industry analysts worry about the broader implications of this kind of technology.

"Most of this information is harmless and nobody ever does anything nefarious with it," said Sucharita Mulpuru, retail analyst at Forrester Research. "But the reality is, what happens when you start having hackers potentially having access to this information and being able to track your movements?"

Last year, hackers hit AT&T, exposing the unique ID numbers and e-mail addresses of more than 100,000 iPad 3G owners. To make it harder for hackers to get at this information, Path Intelligence scrambles those numbers twice.

"I'm sure as more people get more cell phones, it's probably inevitable that it will continue as a resource," Mulpuru said. "But I think the future is going to have to be opt in, not opt out."

Federal Judge Orders Google, Facebook to Disappear Hundreds of Sites

2011-11-30T09:38:00.000-08:00

http://www.wired.com/threatlevel/2011/11/chanel-trademark/

After a series of one-sided hearings, luxury goods maker Chanel has won recent court orders against hundreds of websites trafficking in counterfeit luxury goods. A federal judge in Nevada has agreed that Chanel can seize the domain names in question and transfer them all to US-based registrar GoDaddy. The judge also ordered “all Internet search engines” and “all social media websites”—explicitly naming Facebook, Twitter, Google+, Bing, Yahoo, and Google—to “de-index” the domain names and to remove them from any search results.

The case has been a remarkable one. Concerned about counterfeiting, Chanel has filed a joint suit in Nevada against nearly 700 domain names that appear to have nothing in common. When Chanel finds more names, it simply uses the same case and files new requests for more seizures. (A recent November 14 order went after an additional 228 sites; none had a chance to contest the request until after it was approved and the names had been seized.)

How were the sites investigated? For the most recent batch of names, Chanel hired a Nevada investigator to order from three of the 228 sites in question. When the orders arrived, they were reviewed by a Chanel official and declared counterfeit. The other 225 sites were seized based on a Chanel anti-counterfeiting specialist browsing the Web.

That was good enough for Judge Kent Dawson to order the names seized and transferred to GoDaddy, where they would all redirect to a page serving notice of the seizure. In addition, a total ban on search engine indexing was ordered, one which neither Bing nor Google appears to have complied with yet.

Missing from the ruling is any discussion of the Internet’s global nature; the judge shows no awareness that the domains in question might not even be registered in this country, for instance, and his ban on search engine and social media indexing apparently extends to the entire world. (And, when applied to US-based companies like Twitter, apparently compels them to censor the links globally rather than only when accessed by people in the US.) Indeed, a cursory search through the list of offending domains turns up poshmoda.ws, a site registered in Germany. The German registrar has not yet complied with the US court order, though most other domain names on the list are .com or .net names and have been seized.

The US government has made similar domain name seizures through Operation In Our Sites, grabbing US-based domains that end in .com and .net even when the sites are located abroad. Such moves by themselves would seem to do little to stop piracy in the long-term; they simply teach would-be miscreants to register future domain names in other countries.

Why wait for SOPA?
Law professor Venkat Balasubramani, writing about the case yesterday, sums it up eloquently: “Wow.”

“I’m sympathetic to the ‘whack-a-mole’ problem rights owners face, but this relief is just extraordinarily broad and is on shaky procedural grounds,” he writes. “I’m not sure how this court can direct a registry to change a domain name’s registrar of record or Google to de-list a site, but the court does so anyway. This is probably the most problematic aspect of the court’s orders.”

Rightsholders have asked Congress to write these provisions (and a few more) into law, and they have pushed for government seizures like those from Operation In Our Sites (which just seized another batch of new domains this last weekend). But as Balasubramani points out, cases like Chanel’s show that rightsholders can already get what they want from judges, and they can go after far more sites more quickly than the government.

“The fight against SOPA [the Stop Online Piracy Act] may be a red herring in some ways,” he notes, “since IP plaintiffs are fashioning very similar remedies in court irrespective of the legislation. Thus, even if SOPA is defeated, it may turn out to be a Pyrrhic victory—opponents may win the battle but may not have gained much as a result.”

Adidas Bets on a Soccer-Shoe-with-a-Chip

2011-11-27T14:47:00.000-08:00

http://www.businessweek.com/magazine/adidas-bets-on-a-soccershoewithachip-11232011.html

Eager to thwart Nike’s advance, the German sports giant turns to technology

By Julie Cruz

Adidas (ADDDF) has made soccer shoes since the 1920s, ruling the sport for much of that time. Archrival Nike (NKE), which started ramping up its soccer business in the mid-1990s, has sought to surpass the German company as the sport’s biggest brand by sponsoring top teams like Barcelona and popular players such as Real Madrid’s Cristiano Ronaldo. Now Adidas has unveiled a new play to stay ahead: a shoe that uses an embedded chip to collect and wirelessly transmit information players can use to step up their game.

“We’re able to show you what you did, give you the key metrics of your game, and enable you to compare this to your previous performances, the performance of your friends, competitors, or our global stars,” says Ryan Mitchell, head of the product introduction team in Adidas’s interactive business unit.

The shoe, worn by two-time FIFA World Player of the Year Lionel Messi in an exhibition game in September, went on sale in Latin America, Europe, and Asia on Nov. 15 and hits U.S. stores Dec. 1. It was created to maintain what Adidas estimates is a one-third share of a market worth as much as €5 billion ($6.8 billion) a year. “Adidas has a heritage in football [soccer] that Nike doesn’t have, and its innovations should bring more growth,” says Joerg Frey, an analyst at M.M. Warburg in Hamburg.

Mark Josefson, an analyst at Silvia Quandt Research, estimates Adidas’s soccer sales may rise as much as 15 percent next year to €1.6 billion. “We definitely believe we will extend our lead in 2012,” says Chief Executive Officer Herbert Hainer. Nike, whose Mercurial Vapor soccer shoe is worn by Ronaldo, is seeing “great results” with soccer products, says spokeswoman Mary Remuzzi. She declined to give the company’s market share in the sport.

Adidas’s new shoe is a version of the Adizero f50, introduced in 2010 as the lightest on the market, at 165 grams for a men’s size 8.5. It carries an 8-gram chip inserted beneath the sole that transmits data on maximum speed, distance covered, and number of sprints to a computer or mobile device. The product uses a version of the miCoach system Adidas launched in 2006 to monitor runners’ performance. But measuring movement in soccer isn’t as easy because players move in more than one direction. The new chip, known as a speed cell, “is able to measure speed and distance in all 360-degree movements,” Mitchell says.

A package that includes the shoes, a speed chip, and software to analyze the data on a smartphone or computer will sell for €245 ($338). “The product will be a bit expensive for young people,” says Thomas Effler, an analyst at WestLB in Frankfurt. “However, parents are more willing to pay extra for clothing and shoes than for expensive electronic items, so I expect less price sensitivity. There’s a big brand awareness among kids today, and parents often pay for it.”

The bottom line: Adidas, the No. 2 sporting brand, is betting on a $338 soccer shoe that transmits performance data to maintain its lead in the sport.

Video: What can "Catvertising" do for your business?

2011-11-19T07:23:00.001-08:00

When You Mean Facebook but Type Faecbook

2011-11-14T06:42:00.001-08:00

http://www.businessweek.com/magazine/when-you-mean-facebook-but-type-faecbook-11032011.html

Scammy websites that capitalize on misspellings are on the rise—and can draw hundreds of thousands of accidental visitors

Any company that achieves a sizable online presence faces the threat of typosquatters. They’re the ones who buy up domain names spelled similarly to those of real companies and take advantage of fat-fingered users. In October, the National Arbitration Forum dismissed a complaint filed by (GOOG)Google seeking control of three typosquatting sites, goggle.com,goggle.net, and goggle.org. The arbitration panel said it lacked jurisdiction. The sites, registered to a Barbados-based businessman named David Csumrik—that’s not a typo—divert users to a visitor survey that promises a chance to win prizes such as iPads. According to several watchdog groups, it’s a scam: Victims don’t win any prizes, and their e-mail addresses are blitzed with spam. Csumrik did not respond to repeated requests for comment.

Small typing errors are causing outsize problems for companies. A 2010 study conducted by FairWinds Partners, a Washington (D.C.)-based Internet consulting firm, estimates that typosquatting costs the 250 most-trafficked websites $285 million annually in lost sales and other expenses. “Typosquatting is rampant,” says Benjamin G. Edelman, an assistant professor at Harvard Business School who has researched the topic. “It’s not unusual for a top website to be targeted by more than a thousand typosquatting domains.”

Typosquatting has been around since the dawn of the Internet, but Edelman says the practice has increased with the proliferation of online ad networks, which make it easier for squatters to earn money off their ill-gotten traffic. Companies can defend against attacks by registering any available typo domains themselves or by taking legal action, but tracking down the owners of typo domains is difficult and time-consuming. Sites can also submit a complaint to ICANN, the nonprofit that oversees domain names, but have to prove that squatters are using their name in “bad faith.”

In recent months, Google filed complaints with ICANN against two sites in the Philippines that took advantage of (GOOG)YouTube’s popularity to display the same type of survey scam used by the Goggle sites. In July, Facebook filed a lawsuit in California against more than 100 alleged typosquatters that the social network site contends are infringing on the company’s trademarks, using domain names such as facebobk.com, facemook.com, and faecbook.com.

Weather Underground, an Ann Arbor, Mich., online weather forecasting service, is litigating against four companies that registered more than three dozen domain names that are close misspellings of its wunderground.com URL. “Typosquatting harms trademark owners by confusing consumers, and that’s especially important to businesses that exist mostly online like ourselves,” says Chris Schwerzler, director of Weather Underground. The potential damage goes beyond mere confusion. Researchers at San Diego-based security firm (WBSN)Websense reported that more than 62 percent of the active domain names based on common misspellings of Facebook (and not owned by Facebook) led to scams or malicious sites.

Typosquatting is a cheap way to get a lot of traffic. According to Com-pete.com, Goggle.com received 824,850 unique U.S. visitors in September—more than many top blogs, including Lifehacker, Boingboing, and Daily Kos.

Google is in the unusual position of being both a victim and a beneficiary of typosquatting. Through its AdSense program, the search company splits the revenue from ads with third-party sites that agree to display them. Harvard’s Edelman, who served as co-counsel in an unsuccessful class action seeking to hold Google liable for benefiting from typosquatting, estimates that the search giant brings in $500 million annually from advertisements on typosquatters’ sites. Google spokeswoman Andrea Faville says “we take trademark violations very seriously” and, when they’re discovered, ” we take prompt action including disallowing ad serving.”

Typosquatting also potentially puts corporate secrets at risk. When a squatter registers a domain name, he can easily harvest any e-mails erroneously sent to that name. If an advertiser trying to reach his sales contact at Google mistypes and fires off a message to someone “@goggle.com,” for instance, the Goggle site’s owner receives the message. Godai Group, a San Francisco-based information security firm, recently conducted a test to see what kind of information typo—squatters can access. The researchers set up phony domains based on the names of the 500 largest U.S. companies by revenue, but omitting the period between the domain and subdomain. They managed to scoop up more than 120,000e-mails containing confidential employee user names, passwords, and trade secrets. One e-mail listed the passwords and configurations for the routers at a large IT consulting firm—basically a blueprint for would-be hackers. “It’s scary because in our test, we collected information that certainly could be used for corporate espionage,” says Garrett Gee, founder of Godai Group. And it’s a reminder that on the Internet, things are not always what they seem. Or, for that matter, what they sseem.

The bottom line: The top 250 websites lose $285 million annually due to typosquatting and are filing more lawsuits.

Building a Firewall for the Facebook Generation

2011-11-14T06:29:00.001-08:00

http://www.businessweek.com/magazine/building-a-firewall-for-the-facebook-generation-10202011.html

Palo Alto Networks is updating the corporate firewall to handle modern Web services like social networks, Skype, and Google Docs

For the past 15 years or so, security pros have relied on the trusty firewall and other hardware to keep bad guys from running amok on corporate networks. For the most part this has meant blocking tainted e-mails and keeping workers away from harmful websites. The latest wave of Web services— (MSFT)Skype, (GOOG)Google Docs, (CSCO)WebEx, (CRM)Salesforce, etc.—has introduced fresh problems. They can make workers more productive, but they also transfer files, store data, and allow remote computer access in ways that can’t be easily patrolled by the standard sentinels, most of which were developed before these services even existed. Many companies either hope for the best or block the services they can’t control.

Nir Zuk has another option. He’s a veteran of the traditional firewall and security industry who struck out on his own six years ago to create a product for today’s Web. The company he founded, Palo Alto Networks, sells a next-generation firewall that makes modern Web services safe for the workplace and gives companies precise control over how their employees can use them. Instead of the all-or-nothing approach, a company with a Palo Alto Networks box can let workers access, say, the updates on a social network, but not click on links or share sensitive information. “Our customers don’t want to block Facebook,” Zuk says. “They want to use it, but they also want some control.”

As interest in Web-based software has surged, so too have Palo Alto’s sales. The company has hopped from office to yet bigger offices since its birth at Zuk’s Palo Alto house in 2005. This year the company moved into a giant new headquarters in nearby Santa Clara. The building includes a showroom where specialized data center machines, costing $5,000 to $140,000 each, sit under spotlights. A year ago, Palo Alto claimed 1,000 customers; today it has 4,500, including (QCOM)Qualcomm, the city of Seattle, and (EBAY)EBay. Sales will exceed $200 million this year, according to Zuk, who adds that the company is gearing up for an initial public offering in the not-too-distant future.

Zuk, 40, says Palo Alto Networks owes much of its success to modern computing habits, which require more sophistication than what’s provided by traditional security products. Older firewalls are designed to monitor one-way traffic. E-mails and data from websites pour in, and the security products look for suspicious patterns; for the most part, they treat all websites the same. Yet threats can snake their way through a network in various ways: A worker might go to Facebook, click on a nefarious link, and download a virus. Soon enough, he’s using software from enterprise cloud computing company Salesforce.com to upload those infected sales data files and send them to colleagues. “Most security groups used to focus on blocking apps like Skype or (CTXS)GoToMyPC but now are often required to allow them to be used,” says John Pescatore, an analyst at the research firm (IT)Gartner. “That’s why firewalls needed to evolve.”

Palo Alto gives each Web service its own signature. This means that Palo Alto’s systems know when employees are using Skype or Salesforce.com, and have a general idea of what they’re doing there. Customers can set policies for how an application is used so that, for example, all employees can view Google Docs files, but only some can actually create new ones.

Keeping track of all the traffic flowing through a corporate network requires a lot of computing horsepower, and part of Palo Alto’s secret sauce is a homegrown chip that chews through data quickly. A Palo Alto system can even peer into encrypted traffic: It’s fast enough to decrypt packets of information, check whether they’re safe, and then pass them on to the employee who requested them, all without much lag.

Norm Fjeldheim, the chief information officer at chipmaker Qualcomm, says the Palo Alto systems he bought replaced not just firewalls but also things such as intrusion detection hardware and other types of security systems. “They are doing the work that was done by multiple things in the past,” says Fjeldheim. “They watch over everything.” Qualcomm now gives its employees access to a variety of Web services—something workers had been demanding—while regulating how they’re used. “We have detected lots of attacks that we would otherwise not be able to see,” Fjeldheim says.

Before founding Palo Alto, Zuk spent years working on security at companies such as (CHKP)Check Point Software Technologies and (JNPR)Juniper Networks. “I tried to fix these problems at my previous employers,” Zuk says. “But they would not let me.” He broke off on his own and spent 18 months writing the initial code for Palo Alto Networks, which has raised a total of $65 million to date. In August, Palo Alto lured Mark D. McLaughlin away from his role as CEO of (VRSN)VeriSign to run the young company and prepare it for an IPO. “I don’t think we’ve ever seen an enterprise technology company grow as quickly,” says Jim Goetz, a partner at venture capital firm and Palo Alto Networks investor Sequoia Capital.

Many competitors—and former Zuk employers—have started selling rival products. Juniper credits Palo Alto with pioneering the market for these types of products but plans on using its market heft and engineering expertise to outflank the upstart. The company plans to counter threats by gathering “even more intelligence for the type of device someone is using, their location and any other information you can pull in,” says Karim Toubba, vice-president of security strategy and product marketing at Juniper. Gartner estimates that by the end of 2014, about 60 percent of firewall-type purchases will be for these next-generation products. Zuk says his engineers, a who’s who of security pros, will help the company stay ahead. “Nir is bombastic at times and guilty of dropping the F-bomb and all that,” says Goetz. “But I think the incumbents underestimated his ambition and the ability to build this kind of team.”

The bottom line: Fast-growing Palo Alto Networks has a modified firewall that allows companies to block dangerous activity without blocking whole sites.

Video: 10 Future Technologies That Already Exist

2011-11-12T09:04:00.000-08:00

For Holiday Shopping, Gen Y Loses Its Tech Edge

2011-11-09T13:30:00.000-08:00

http://www.mediapost.com/publications/article/161606/for-holiday-shopping-gen-y-loses-its-tech-edge.html?edition=39876

As Deloitte continues to sift through its recent holiday spending survey, it’s noticing some unexpected generational differences as shoppers ready their Christmas lists. But there are also some big non-differences, as well, explains Scott Erickson, a Minneapolis-based partner in Deloitte’s retail practice. “When it comes to online and social media, we are seeing a bit of flattening of the bell curve,” he tells Marketing Daily. “It used to be that we saw a much higher usage in Gen Y, and now we’re seeing that the people utilizing digital and online experiences are spread pretty widely across all age and income groups.”

We asked about other segment distinctions:

Q: So how does Gen Y differ, at this point?

A: They’re still bigger users of social media when it comes to shopping, and it’s more broadly adopted. They’re also a lot less concerned about privacy in social media. Just 38% of those 18 to 24 say they have concern, versus 58% of those who are 55-plus. And they are more likely to be looking for deals. For example, Gen Y consumers are most likely to embrace the Black Friday tradition, with 42% getting involved. And 37% say they’ll shop on Cyber Monday. Among shoppers who are 25 or older, just 24% will shop on Black Friday, and 20% on Cyber Monday.

Q: What are the main income distinctions?

A: Well, lower income shoppers (earning less than $100,000) are certainly emphasizing finding bargains, especially via the Internet. They’re the most likely to express concerns about the economy and stability in their jobs. And they are spending a higher percentage of their income on necessities. But they aren’t pulling back too much. Overall, 59% of those in our survey plan to spend the same or more than they did last.

Q: Typically, lower income consumers do less online shopping. Still true?

A: Not really. We saw this preference to shop online across the board, with the Internet climbing 13 percentage points to tie discounters as the No. 1 place to buy gifts. It offers them more opportunities to shop on price, and get better deals.

Q: What were the other surprises?

A: The big drop in popularity for gift cards: They fell from No. 1 to No. 2 in our survey for the first time. They’re still very popular, with 45%, but clothing moved into first place with 48%. (Books were a distant third, with 35%.) We’ve explored it a bit, and think that it certainly has something to do with people trying to be more personalized. But it matches what retailers are doing with social media, online and in stores. They are really trying to get more personalized in their offerings, and technology is making it easier for them

Video: Only the USPS thinks an envelope in a box in front of your house is secure

2011-11-09T13:00:00.000-08:00

Idolize Bill Gates, Not Steve Jobs

2011-11-07T03:52:00.000-08:00

http://www.businessweek.com/management/idolize-bill-gates-not-steve-jobs-11012011.html

Both leaders are highly admirable, but Gates used his talents in ways that stretch further beyond the business world, says Harvard scholar Maxwell Wessel

Posted on Harvard Business Review: November 1, 2011

By Maxwell Wessel

Apple is undoubtedly the gold standard of today’s tech world. In fact, it’s probably the gold standard of American industry at the moment. Its innovative design, user interface, and ecosystem make it a titan in any category it enters. And it’s clear that Steve Jobs was the reason Apple rose to its current heights from the brink of bankruptcy. In the wake of his death, HBR espoused his greatness — something I’ve done as well. And he was great. Steve Jobs has likely been our generation’s most important leader in the world of business. But Steve Jobs is not the most important leader from the world of business. While Jobs should be who MBAs and industrial designers try to emulate, I’m not sure he’s who we should idolize. That respect should be bestowed on someone we talk less and less about, Bill Gates.

Both Jobs and Gates had immeasurable impacts on the world. Apple ushered in the era of personal computing in many respects. Microsoft’s platform made it possible for a generation of computer scientists to learn and flourish. Apple seems to have perfected the art of delivering fantastic consumer products. Microsoft has worked diligently to make the enterprise more and more efficient. Regardless of which camp you fall in today, it’s impossible to deny each corporation’s contribution. Jobs and Gates each deeply respected each other’s contributions.

But at the end of his life, Steve Jobs worried about Apple, Inc. Walter Isaacson quoted the wizard of Cupertino saying, “Hewlett and Packard built a great company, and they thought they had left it in good hands. But now it’s being dismembered and destroyed. I hope I’ve left a stronger legacy so that will never happen at Apple.” At the end of his life, Jobs saw his legacy as Apple.

Bill Gates stepped away from Microsoft in 2006 and, despite the company’s growing troubles in the face of the mobile disruption, has devoted his genius to solving the world’s biggest problems, despite the fact that solving those problems doesn’t create profit or fame.* Gates committed his talents to eliminating diseases, increasing development standards, and generally fighting inequality.

Since 1994, the Bill & Melinda Gates Foundation amassed an endowment of over $31 billion in funds to fight the world’s most difficult issues. But it hasn’t merely accumulated funds, the foundation has already given away over $25 billion. Those aren’t trivial numbers. In seventeen years, the foundation has raised and given away more than one-tenth of Apple’s extraordinary market capitalization. While the developed world takes things like clean water, basic healthcare, and the availability of food for granted — there are billions of human beings that don’t have such fundamental resources.

Gandhi famously said, “Be the change you want to see in the world.” I don’t doubt that, in recent years, both Gates and Jobs did just that. Jobs made the world more beautiful and the billion of us with resources loved him for it. Gates is making the world ideal, and the billions of us with no voice will be forever impacted.

Yesterday, I read a note Gates wrote to members of the Harvard community. It speaks for itself:

I hope you will reflect on what you’ve done with your talent and energy. I hope you will judge yourselves not on your professional accomplishments alone, but also on how well you work to address the world’s deepest inequities, on how well you treat people a world away who have nothing in common with you but their humanity.

Those are not the words of a leader of business. Those are the words of a leader of people. Those are the words of an idol.

As much as I love Apple, Inc, I would happily give up my iPhone to put food on the plates of starving children. Steve Jobs turned his company into a decade long leader in the truly new space of mobile computing. Bill Gates decided to eliminate malaria. Who do you think we should be putting up on a pedestal for our children to emulate?

Apple 'fires employee' for critical Facebook posting: Were they right to?

2011-11-03T06:35:00.000-07:00

http://www.zdnet.com/blog/igeneration/apple-fires-employee-for-critical-facebook-posting-were-they-right-to/13306

By Zack Whittaker November 2, 2011

Summary: Apple reportedly fired a retail store employee after they posted negative comments about the company on Facebook. Was Apple right to do so?

A UK employment tribunal reportedly upheld the sacking firing of an Apple retail store employee, who posted negative comments about the stores on the social network Facebook.

A supposed ‘friend’ showed the post to the store manager, who subsequently let the hapless employee go. Despite posting the negative comment as ‘private’, the employee appealed to an employment tribunal after being sacked for “gross misconduct”.

But was Apple in the right, or should it have issued a stern warning? It’s ‘this old chestnut’ once again.

(Source: Flickr, CC)

The Cupertino-based company has a series of serious brands to maintain, and clearly employees put their hearts and souls into maintaining that image. The brand, arguably, is what makes Apple what it is — a global giant for which tens, if not hundreds of millions around the world have utter adoration for.

But the company has strict social media rules to protect its commercial reputation, and forbids the posting of any negative comments on any social media site or social network.

According to the initial report, Apple “made it absolutely plain throughout the induction process that commentary on Apple products, or critical remarks about the brand, were strictly prohibited”.

The UK employment tribunal, according to CNET, upheld the firing because it ruled that posting even a seemingly private comment “does not give privacy protection”, therefore, “Apple successfully argued that it was justified and proportionate to limit this right (of posting) in order to protect its commercial reputation against potentially damaging posts.”

If this is the case, then any communication, whether verbal, written or electronically published, could be seen as ‘not private’, breaking the rules wide open for potential abuse by employers.

Companies can often be left in difficult territory when social media rules are not defined. A recent Cisco study suggests that amongst the Generation Y, two-thirds of college students will ask about social media policies during a job interview, with over half not accepting a job that bans social media in the workplace.

Social media is a tricky one to control. Anybody could copy and paste, and then tag — or not, if one were to be clandestine about it — and repost a comment; something which in itself leads to the spread of viral activity.

Many have been caught out by social media, particularly when it comes down to commenting on their jobs or colleagues. It was only during the summer where the U.S. National Labor Relations Board had to contend with a series of cases where employees were fired over Facebook.

But the rules between the U.S. and the UK are different. Had this case presented itself in ‘the land of the free’, perhaps the outcome would have been different. A settlement earlier this year led to a ruling whereby employees could not be disciplined by their employers over the content they post on Facebook.

For younger people, however, the divide between a ‘personal Facebook’ and a ‘work Facebook’ is yet to be differentiated. Ultimately, company policies need to be put in place to ensure that all employees are not only aware of social media risks, but also the brands they represent inside and outside of the workplace.

Google's Spreading Tentacles of Influence

2011-11-02T06:32:00.000-07:00

http://www.businessweek.com/magazine/googles-spreading-tentacles-of-influence-10272011.html

The search giant has ties to important organizations that help sway public opinion
By Robert Levine

Google isn’t hurting for a voice in Washington. Facing increasing regulatory scrutiny, the company spent $5.4 million on political outreach in the first three quarters of 2011, more than it did in all of 2010, and more even than (MSFT)Microsoft. But Google also exerts influence in more subtle—and pervasive—ways. Through donations, fellowship programs, and at conferences, the Mountain View (Calif.) company has established a network of ties to advocacy organizations, public intellectuals, and academic institutions. Although independent, these groups and people often take Google’s side in public debates and on national policy issues. In a recent interview with the Washington Post, Google Chairman Eric Schmidt suggested there are two kinds of lobbying: One is “where you pay an ex-senator to get the current senator to write a sentence into a bill,” he says. The other way—Google’s preferred way—is “to lobby based on ideas.”

The company is hardly the first to cozy up to organizations that share some of its interests. Pharmaceutical makers have been known to fund support groups for patients with illnesses that can be treated by the company’s drugs. Media companies often ally themselves with artists’ organizations to fight copyright abuses, even though the two sides oppose each other on other issues. Still, few technology companies have pursued such campaigns vigorously, in part because the issues they hope to affect (such as bandwidth licensing and patent reform) feel remote to the average citizen. Google’s high profile and “don’t be evil” image has made the public more receptive to its policy agenda.

One focus of Google’s efforts is the debate over the Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011, better known as the Protect IP Act. If it’s passed in its current form, the Senate bill would allow the Justice Dept. to seize the domain names of foreign websites “dedicated to infringing activities” and would compel search engines to remove those sites from their listings. Engineers and most technology companies worry the measure could interfere with the underpinnings of the Internet, but groups with ties to Google have been particularly vocal in the debate.

Some legal scholars oppose the proposal on the grounds that it limits free speech, a viewpoint bolstered by sites such as chillingeffects.org, run by the nonprofit Electronic Frontier Foundation and universities including Stanford and Harvard. It tracks demands for websites to remove copyrighted content, and Google has donated $180,000 to the site. Public Knowledge, a Washington (D.C.) public-interest advocacy organization that receives donations from the search giant, came out against the bill. Engage, a Washington political consultancy that works with Google on other issues but not Protect IP, created the website DontCensorTheNet, which lists arguments against the act and encourages visitors to broadcast their opposition through Twitter and Facebook.

Public Knowledge President Gigi Sohn points out that Google’s donations to her organization represent a fraction of its budget, and the group has opposed Google on other issues. Patrick Ruffini, the Engage strategist behind DontCensorTheNet, says his site is simply a reflection of his libertarian views. The campaign nonetheless shows Google’s effectiveness in encouraging, or at the very least supporting, groups that hold viewpoints similar to its own. Google did not respond to requests for comment.

Google has relied on this tactic, if it can be called that, for years. Two weeks after the company closed its 2006 deal to buy YouTube, it donated $2 million to the Stanford Center for Internet and Society, which is housed at Stanford Law School. The center announced the money would be used to “establish a balance between the right to access and use information and the ownership of information.” While its website says it “avoids litigation” involving Google, the center does litigate cases that could set precedents that would help the company. In Golan v. Holder, a case before the Supreme Court, the center is arguing that copyright laws need to be weighed against free speech concerns. When YouTube was sued by (VIA)Viacom in 2007, the legal scholar Lawrence Lessig, who directed the center when it received the $2 million donation, wrote an op-ed for the New York Times that took YouTube’s point of view. Lessig says he did not disclose the donation because he had no role in fundraising at Stanford, didn’t benefit from the money, and it did not influence his thinking. Says Judith Romero, a spokeswoman for the law school: “We do not take money for academic research with strings—either explicit or implicit—attached.” In 2010 a court issued a summary judgment in favor of YouTube. Viacom is appealing.

Google recently announced €4.5 million ($6.3 million) in funding for an Institute for Internet and Society in Berlin at a time when technology companies are struggling with Germany’s strict privacy laws. In October 2010, the company co-hosted a conference, Internet at Liberty 2010: The Promise and Peril of Online Free Expression, at the Central European University in Budapest. The event aimed to promote governmental transparency, free speech, and other ideas hardly anyone would find fault with, but the agenda also dealt with “making sure that platforms like Google aren’t held liable for the content they host.” In the U.S., the search giant grooms future online activists through its Google Policy Fellowship, which offers more than a dozen students a $7,500 stipend each for spending a summer working for groups that tend to agree with the company on Internet regulation.

These subtle acts of persuasion don’t always result in legislative successes. The Protect IP Act is a complicated bill that will evolve as it moves through Congress. But those who oppose it may have an easier time convincing consumers that copyright enforcement endangers free speech because Google’s allies have repeated that message so many times. In Washington, just as online, Google may have found a new way to go around established players and reach consumers directly.

The bottom line: More than most technology companies, Google supports nonprofits and other groups that try to sway public opinion in its favor.

Video: Microsoft's vision of productivity in the future

2011-11-01T17:14:00.000-07:00

Global Mobile: United States leads in Apps; Asia leads in Adoption

2011-11-01T15:05:00.000-07:00

http://www.mediapost.com/publications/article/161040/global-mobile-us-champions-apps-adoption-soars.html

The U.S. leads the way in mobile application use, but still trails China and other Asian countries in other types of advanced mobile activities. A new Forrester study looking at mobile behavior worldwide, for instance, finds that mobile Internet adoption is highest in the Asia-Pacific region, where about half of the population in Japan and metropolitan China use their phones to go online at least once a month.

Countries including the U.S., Australia, Sweden, the UK and the Netherlands show an uptake rate of between 28% and 36%, with other markets even lower. Cost and infrastructure challenges explain low mobile Internet penetration in countries such as India, but Forrester said low rates in wealthier nations like Germany, Spain, France and Italy were more surprising.

China also had the highest percentage of what the research firm refers to as “SuperConnecteds,” the most sophisticated mobile phone users. They access the mobile Web at least weekly and make regular use of multiple advanced mobile services and applications. More than half (52%) of mobile users in metro China could be called SuperConnecteds, compared to 33% in the U.S., 17% in the largest seven European countries, and 11% in metro India.

China is also tied with Spain for having the highest proportion of people owning two or more mobile phones, at 36%, followed by Hong Kong and the U.S., both at 34%, and the Netherlands, at 32%. “With China’s growing appetite for consumer goods, it’s no surprise that the percentage of Chinese adults owning two or more mobile phones has increased from 15% in 2008,” stated the report.

Asia also leads the way in mobile social networking, led by China (34%), Japan (28%) and Hong Kong and the U.S., both at 25%. Forrester noted the level of social networking reflects high overall mobile engagement in China, where 46% use the mobile Internet, 57% listen to music, and 36% play games on their phones at least monthly.

When it comes to using apps, the U.S. is by far the leader, with 90% of mobile users having downloaded an app in the last three months. The U.K. is second, at 66%, followed by the Netherlands (63%) and France (62%). The EU-7 as a whole stands at 61%.
Among the most popular app categories globally are weather, games, social networking, navigation/mapping, music, and news. However, there are local differences: While weather tops the list in the U.S., games and social networking lead in Europe.

Apps are not generally as popular in Asia, but music and gaming are the top categories. In India, for example, 74% of online consumers with access to mobile Internet who have downloaded a mobile app have used a music app in the past three months. That reflects the key role mobile phones play in India as entertainment devices because of the dearth of non-phone devices like iPods.

The study found similarities in mobile commerce on either side of the world. A quarter of mobile Internet users in the U.S. and metro China have used their phone to research products for purchase, but only between 9% and 16% have actually bought something online in both markets.
Other research, including that by comScore and the Pew Research Center, has found U.S. mobile users adopting certain mobile activities at higher rates than in the Forrester results. For instance, comScore estimates that 31% accessed a social networking site or blog on average for the three months ending in August, and 42% used a browser.

The Forrester findings were based on separate surveys conducted in North America, Europe and Asia earlier this year, involving from 10,802, 22,501 and 11,461 participants, respectively, in each region.

Is social media ruining students?

2011-10-19T11:27:00.001-07:00

Via: OnlineEducation.net

Video: A Magazine Is an iPad That Does Not Work

2011-10-18T14:30:00.000-07:00

The Great Tech War Of 2012

2011-10-18T14:21:00.000-07:00

http://www.fastcompany.com/magazine/160/tech-wars-2012-amazon-apple-google-facebook

Gilbert Wong, the mayor of Cupertino, California, calls his city council to order. "As you know, Cupertino is very famous for Apple Computer, and we're very honored to have Mr. Steve Jobs come here tonight to give a special presentation," the mayor says. "Mr. Jobs?" And there he is, in his black turtleneck and jeans, shuffling to the podium to the kind of uproarious applause absent from most city council meetings. It is a shock to see him here on ground level, a thin man amid other citizens, rather than on stage at San Francisco's Moscone Center with a larger-than-life projection screen behind him. He seems out of place, like a lion ambling through the mall.

"Apple is growing like a weed," Jobs begins, his voice quiet and sometimes shaky. But there's nothing timorous about his plan: Apple, he says, would like to build a gargantuan new campus on a 150-acre parcel of land that it acquired from Hewlett-Packard in 2010. The company has commissioned architects--"some of the best in the world"--to design something extraordinary, a single building that will house 12,000 Apple employees. "It's a pretty amazing building," Jobs says, as he unveils images of the futuristic edifice on the screen. The stunning glass-and-concrete circle looks "a little like a spaceship landed," he opines.

Nobody knew it at the time, but the Cupertino City Council meeting on June 7, 2011, was Jobs's last public appearance before his resignation as Apple's CEO in late August (and his passing in early October). It's a fitting way to go out. When completed in 2015, Apple's new campus will have a footprint slightly smaller than that of the Pentagon; its diameter will exceed the height of the Empire State Building. It will include its own natural-gas power plant and will use the grid only for backup power. This isn't just a new corporate campus but a statement: Apple--which now jockeys daily with ExxonMobil for the title of the world's most valuable company--plans to become a galactic force for the eons.

And as every sci-fi nerd knows, you totally need a tricked-out battleship if you're about to engage in serious battle.

"Our development is guided by the idea that every year, the amount that people want to add, share, and express is increasing," says Facebook CEO Mark Zuckerberg. "We can look into the future--and it's going to be really, really good."To state this as clearly as possible: The four American companies that have come to define 21st-century information technology and entertainment are on the verge of war. Over the next two years, Amazon, Apple, Facebook, and Google will increasingly collide in the markets for mobile phones and tablets, mobile apps, social networking, and more. This competition will be intense. Each of the four has shown competitive excellence, strategic genius, and superb execution that have left the rest of the world in the dust. HP, for example, tried to take a run at Apple head-on, with its TouchPad, the product of its $1.2 billion acquisition of Palm. HP bailed out after an embarrassingly short 49-day run, and it cost CEO Léo Apotheker his job. Microsoft's every move must be viewed as a reaction to the initiatives of these smarter, nimbler, and now, in the case of Apple, richer companies. When a company like Hulu goes on the block, these four companies are immediately seen as possible acquirers, and why not? They have the best weapons--weapons that will now be turned on one another as they seek more room to grow.

There was a time, not long ago, when you could sum up each company quite neatly: Apple made consumer electronics, Google ran a search engine, Amazon was a web store, and Facebook was a social network. How quaint that assessment seems today.

Jeff Bezos, who was ahead of the curve in creating a cloud data service, is pushing Amazon into digital media, book publishing, and, with his highly buzzed-about new line of Kindle tablets, including the $199 Fire, a direct assault on the iPad. Amazon almost doubled in size from 2008 to 2010, when it hit $34 billion in annual revenue; analysts expect it to reach $100 billion in annual revenue by 2015, faster than any company ever.

Remember when Google's goal was to catalog all the world's information? Guess that task was too tiny. In just a few months at the helm, CEO Larry Page has launched a social network (Google+) to challenge Facebook, and acquired Motorola Mobility for $12.5 billion, in part to compete more ferociously against Apple. Google's YouTube video service is courting producers to make original programming. Page can afford these big swings (and others) in the years ahead, given the way his advertising business just keeps growing. It's on pace to bring in more than $30 billion this year, almost double 2007's revenue.

Why Apple Will Win
The iPhone, iPad, and iEverything else will keep it merrily rolling along.
Facebook, meanwhile, is now more than just the world's biggest social network; it is the world's most expansive enabler of human communication. It has changed the ways in which we interact (witness its new Timeline interface); it has redefined the way we share--personal info, pictures (more than 250 million a day), and now news, music, TV, and movies. With access to the "Likes" of more than 800 million people, CEO Mark Zuckerberg has an unequaled trove of data on individual consumer behavior that he can use to personalize both media and advertising.

Amazon, Apple, Facebook, and Google don't recognize any borders; they feel no qualms about marching beyond the walls of tech into retailing, advertising, publishing, movies, TV, communications, and even finance. Across the economy, these four companies are increasingly setting the agenda. Bezos, Jobs, Zuckerberg, and Page look at the business world and justifiably imagine all of it funneling through their servers. Why not go for everything? And in their competition, each combatant is getting stronger, separating the quartet further from the rest of the pack.

Everyone reading this article is a customer of Amazon, Apple, Facebook, or Google, and most probably count on all four. This passion for the Fab Four of business is reflected in the blogosphere's panting coverage of their every move. ExxonMobil may sometimes be the world's most valuable company, but can you name its CEO? Do you scour the Internet for rumors about its next product? As the four companies encroach further and further into one another's space, consumers look forward to cooler and cooler products. The coming years will be fascinating to watch because this is a competition that might reinvent our daily lives even more than the four have changed our habits in the past decade. And that, dear reader, is why you need a program guide to the battle ahead.

1 The Road
Map Amazon, Apple, Facebook, and Google do not talk about their plans. Coca-Cola would tweet its secret formula before any of them would even hint at what's next. "That is a part of the magic of Apple," says new CEO Tim Cook.

That secrecy only fuels the zeal of those bent on sussing out their next moves. And it is certainly possible to decode the Fab Four's big-picture strategic ambitions: Over the next few years, each will infiltrate, digitize, and revolutionize every corner of your life, taking a slice out of each transaction that results. This is a vision shared by all four, and it hinges on three interrelated ideas.

First, each company has embraced what Jobs has branded the "post-PC world"--a vision of daily life that is enabled by, and comes to depend on, smartphones, tablets, and other small, mobile, easy-to-use computers. Each of these companies has already benefited more than others from this proliferation of mobile, a shift that underlies their extraordinary gains in revenue, cash reserves, and market cap.

The second idea is a function of the fact that these post-PC devices encourage and facilitate consumption, in just about every form. So each of these giants will deepen their efforts to serve up media--books, music, movies, TV shows, games, and anything else that might brighten your lonely hours (they're also socializing everything, so you can enjoy it with friends or meet new ones). But it's not just digital media; they will also make the consumption of everything easier. The new $79 Kindle, for example, isn't just a better reading device; it integrates Amazon's local-offers product. The Fire will be accompanied by a tablet-friendly redesign of Amazon.com that will make it easier for you to buy the physical goods that the company sells, from pet food to lawn mowers. Wherever and whenever you are online, they want to be there to assist you in your transaction.

All of our activity on these devices produces a wealth of data, which leads to the third big idea underpinning their vision. Data is like mother's milk for Amazon, Apple, Facebook, and Google. Data not only fuels new and better advertising systems (which Google and Facebook depend on) but better insights into what you'd like to buy next (which Amazon and Apple want to know). Data also powers new inventions: Google's voice-recognition system, its traffic maps, and its spell-checker are all based on large-scale, anonymous customer tracking. These three ideas feed one another in a continuous (and often virtuous) loop. Post-PC devices are intimately connected to individual users. Think of this: You have a family desktop computer, but you probably don't have a family Kindle. E-books are tied to a single Amazon account and can be read by one person at a time. The same for phones and apps. For the Fab Four, this is a beautiful thing because it means that everything done on your phone, tablet, or e-reader can be associated with you. Your likes, dislikes, and preferences feed new products and creative ways to market them to you. Collectively, the Fab Four have all registered credit-card info on a vast cross-section of Americans. They collect payments (Apple through iTunes, Google with Checkout, Amazon with Amazon Payments, Facebook with in-house credits). Both Google and Amazon recently launched Groupon-like daily-deals services, and Facebook is pursuing deals through its check-in service (after publicly retreating from its own offers product).

It would be a mistake to see their ambitions as simply a grab for territory (and money). These four companies firmly believe that they possess the ability to enhance rather than merely replace our current products and services. They want to apply server power and software code to make every transaction more efficient for you and more profitable for them.

2 The Inevitable
War Hardware. Media. Data. With each company sharing a vision dependent on these three big ideas, conflict over pretty much every strategic move seems guaranteed. Amazon, for example, needs a better media tablet to drive more customers to its Kindle, MP3, and app stores. But how to avoid an HP-like disaster? The Kindle Fire has just a 7-inch screen, rolls up all of Amazon's streaming services, and retails for a mere $199, thus slotting into a price and feature niche just between an iPhone and an iPad. Who knew there even was a niche there? Apple doesn't believe that niche exists (see the next section), but you can bet it will if the Kindle Fire succeeds.

Why Facebook Will Win
Everything is social--and Zuckerberg hasn't even gone public yet.
When Google introduced its new social network Google+, it was seen, rightly, as a challenge to Zuckerberg's Facebook. But at its core, Google+, along with +1, Google's version of the like button, should be understood as a product that will generate more data about what users like. Those data improve search algorithms and other existing services, and can even lead to new products. So Google's search for self-improvement is what has brought it into direct competition with Facebook.

Why did Zuckerberg flirt with a "Facebook phone" earlier this year? (HTC released a handset called the Status that included a built-in button that let users post to the social network with one click.) While Facebook is the most-downloaded app on the iPhone and acts as a central contacts repository for millions of Android, Windows, and BlackBerry devices, its rivals all have competing social networks that could siphon away users. Most strikingly, Apple has integrated Twitter throughout iOS 5, letting you tweet from any app, a feature clearly aimed at dulling Facebook's mobile growth. Page now has Google+. Amazon's Kindle has a social network that connects readers of the same book. Zuckerberg needs to maintain a direct line to the pockets of Facebook members, and that's why you can discount his repeated dismissal of rumors that he'll enter the hardware business.

The torrent of news and rumor surrounding these companies and their initiatives is already overwhelming, and it's only going to grow stronger. But viewing their moves through the lens of hardware, media, and data is the first step toward understanding their strategies.

3 The Profit
Game Late in 2010, Jobs made a surprise visit to Apple's quarterly earnings call. The purported reason was to celebrate Apple's first $20 billion quarter, but Jobs clearly had something else on his mind: Android. At the time, Google's free mobile operating system was beginning to eclipse the iPhone's market share, and Jobs was miffed. He launched into a prepared rant about Android's shortcomings. "This is going to be a mess for both users and developers," he said, citing the inevitable complications that arise from the fact that Android phones look and work differently from one another. As for the crop of 7-inch Android tablets being developed to take on the iPad? "DOA--dead on arrival," Jobs asserted. (Jeff Bezos, for one, has ignored Jobs's perspective.)

What Jobs didn't say in his outburst, though, was how little Android's market share matters to Apple. According to Nielsen, Android now powers about 40% of smartphones; 28% run Apple's iOS. But here's the twist: Android could command even 70% of the smartphone business without having a meaningful impact on Apple's finances. Why? Because Apple makes a profit on iOS devices, while Google and many Android handset makers do not. This is part of a major strategic difference between Apple and the other members of the Fab Four. Apple doesn't need a dominant market share to win. Everyone else does. The more people who use Google search or Facebook, the more revenue those companies can generate from ads. Amazon, too, depends on scale; retail is a low-margin business dependent on volume.

Apple, on the other hand, makes a significant profit on every device it sells. Some analysts estimate that it books $368 on each iPhone. You may pay $199 for the phone, but that's after a subsidy that the wireless carriers pay Apple. Google, in contrast, makes less than $10 annually per device for the ads it places on Android phones and tablets. That's because it gives away the OS to phone makers as part of its quest for market share. Google's revenue per phone won't go up after the Motorola purchase closes--Motorola Mobility's consumer-device division has lost money the past few quarters. So despite Google's market-share lead, Apple is making all the money. By some estimates, it's now sucking up half of all the profits in smartphones.

Making a lot of profit on every device has always been Apple's MO, but in recent years it has added something extra to this plan. In the past, Apple's profit margins were a function of higher prices--the company sold computers at luxury price points and booked luxury profits. But in smartphones and tablets, Apple has managed to match mass-market prices and still make luxury profits. This neat trick is the work of new CEO Cook, who, during his years as COO, mastered the global production cycle. He did so by aggressively using cash to bolster the power of Apple's considerable scale; several times over the past few years, he's dipped into the company's reserves to secure long-term contracts for important components like flash memory and touch screens. Buying up much of the world's supply of these commodities has one convenient added benefit: It makes them more expensive for everyone else.

One of Cook's great challenges will be to maintain this edge. While Amazon will continue to pursue audience at the expense of profit margins, Google (and eventually Facebook) will try to make like Apple and increase profits. When Google's only goal was to proliferate Android software, it could live with that sawbuck per phone, per year. But with Motorola, Google now has a direct stake in the profitability of Android devices. Developing, marketing, and distributing attractive phones and tablets requires a much more substantial investment than selling software. Google has pledged to run Motorola as a separate entity, but its shareholders won't stomach a series of money-losing quarters that could depress Google's earnings or stock. In short, now that Page is in the hardware business, he's going to have to start thinking about phones the way Cook does.

4 The Dangerous
Decoys For a onetime agricultural hub that's been turned into suburbia, Silicon Valley is home to an awful lot of talk about moats these days. Warren Buffett deserves credit for the metaphor, which describes the companies he's most interested in pursuing--ones with huge revenues (a castle of money) whose businesses are protected by unbeatable competitive advantages (or very wide moats). The Fab Four all have moats to rival those at Angkor Wat.

As a result of these wide moats, these companies generate so much money that they can spend freely on new ventures; and in some cases, they're willing to do so even if the business won't ever bring the kinds of gains they're used to. Look at Apple's efforts in e-books: Does the company really want to overthrow Amazon or is it simply trying to offer one more reason to buy iPhones and iPads and, thus, guard its cash cow? When Google invests billions to build smartphones and a new social network, is it really trying to topple Apple and Facebook--or is it simply building a wider moat to protect its core interest, search revenue? "We don't do things that we don't think will generate really big returns over time," says Larry Page. But if a possibly unprofitable social network beefs up search revenue? That's just fine.

These ventures are decoy threats that tax a rival's resources. Google+ will be hard-pressed to ever match Facebook's global reach, but it will certainly keep Zuckerberg and his engineers on their toes. Indeed, it already has. Facebook has clearly copied the most-lauded Google+ features, such as fine-grained privacy controls and smart groupings, and pushed new ideas such as Timeline and auto-sharing. Zuckerberg has to do this--he simply must eliminate any incentive for leaving Facebook. And Page knows that the more time Zuckerberg worries about Google+, the less time and fewer resources Facebook has to build a search engine that will threaten Google. Such is life in Silicon Valley, especially when companies have money to burn. Every offensive move is also a defensive move--and every move has potential. You never know what's going to hit big in tech. So if you can, why wouldn't you try everything?

5 The Living
Room In the spring of 2010, Rishi Chandra, a Google product manager, took to the stage at the company's developer conference to announce Google's next victim: the TV business. Chandra described television as the most important mass medium that hadn't yet been breached by the digital world. Four billion people watch TV; in the U.S. alone, the medium generates $70 billion a year in advertising revenue. Google, Chandra promised, was going to "change the future of television." He turned on a prototype of Google's new device, a set-top box called Google TV that would bring the web to the tube--and that's when things got awkward. His Bluetooth remote didn't work. Chandra and his team called for the guys backstage, who blamed the problem on all the phone signals floating about the room. Several minutes passed while engineers fiddled furiously with the device, the scene playing out like the worst Curb Your Enthusiasm episode ever. Engineers fixed the problem, but like a racehorse stumbling out of the starting gate, Google TV never recovered. Released a few months later, the product was panned and sold quite poorly.

Why Google Will Win
Its CEO is daring, decisive--and willing to wait for his big bets to pay off.
Each of the Fab Four believes that it can somehow define the future of television, when that flat panel in your living room (and every other device you own) is connected to the web, pulling in the video you want at the moment you want it. With the universe of choice now available, the moribund channel grid will need to be revolutionized with a fresh interface for finding programs. Social signals--such as indications of what shows your friends are watching and hints as to what shows you might like given those friendships--will be part of the mix, as will live conversations with friends watching the same show. And the advertising will be more targeted and relevant. Each of the Fab Four wants a piece of this. The honey pot? Not only that $70 billion in domestic ad revenue but also $74 billion in cable-subscriber fees.

That's the idea anyway. So far the Fab Four is the Failed Four when it comes to TV. There are many reasons for this, starting with the fact that they are trying to unseat entrenched players who are fiercely protective of the business model they've relied on for decades. Network execs, for example, had no intention of handing Google the right to give Google TV customers access to the full-length shows that are currently available for streaming only on their own network websites. Not without a lot more money, anyway, given that their online ad revenue is a fraction of their TV take. Google approached its negotiations with the networks with arrogance, and the networks responded by blocking access.

Then there's the fact that none of the Fab Four want to think of itself as being in the TV business--rather, each sees television as a means to an end. For instance, Amazon offers free streaming movies and TV as an incentive to join Prime, a service that offers a year's worth of free two-day shipping (on most purchases) for $79. Bezos has recently made deals to bolster his video library. He paid CBS a reported $100 million to offer old Star Trek and Cheers episodes, among other things, for 18 months. And he made a similar partnership with Fox. "We're just getting started," Bezos said at the Kindle rollout event in late September. But on balance, Prime is not a way to give the people lots of great TV; TV is a way to get people to Prime.

And creating next-generation television hardware has proved difficult. Apple TV, a box that first and foremost connects your iTunes video library to your TV, has been remade several times since its 2007 debut and is still a product for early adopters. Even Jobs and Cook have dismissed it as "a hobby" for the company.

Still, the massive, old, and profitable business of television does seem ripe for disruption, perhaps through the invention of some magical device. Cook had barely erased "interim" from his CEO title before analyst and media speculation began that his first bravura move as CEO would be an honest-to-goodness Apple-branded television set, perhaps as early as Christmas 2012 (cue fanboy swooning). The dreamers note that Apple could create an Internet TV that would merge web services and standard broadcasts; it does, of course, already make the world's best remote controls in the iPhone and iPad.

But don't hold your breath for iTV. Of all four companies, Apple is the one that provokes the most rumors. That's been the case for years; iPhone whispers started around 1999, but the product didn't go on sale until 2007. And selling TV sets is almost a commodity venture, so Cook will either have to master a new supply chain or deliver so much magic that customers will pay a significant premium.

While Apple is the focus of all the next-gen TV rumors, the most interesting player in this space might be the most overlooked: Facebook. CEO Zuckerberg has made deals with several studios to release streaming movies and TV pilots on the site. But Facebook's real strength is in facilitating the conversation surrounding TV. Every show and star has a fan page, and Facebook knows exactly what each of its 800 million users like and don't like. Millions of people watch TV with a computer, tablet, or smartphone beside them, so they can chat with friends around the globe about the show they're watching. At Facebook's f8 developers conference in late September, it integrated Hulu and Netflix (the latter in 44 countries, though not in the U.S.) and made it seamless to share what you're watching. Sure, this will allow Facebook to create an even more engaging experience for its users, but this also taps a new gold mine of data that's invaluable to advertisers and the entertainment studios. Why not make it easy for Facebook users to click like during their favorite moments of a show, and monitor that activity? Nielsen, whose 61-year-old TV ratings are the linchpin of its $5 billion global research business, is built on extrapolating information from small samples, so what if advertisers and studios could pay to get actual data on actual individuals? With one trivial technological shift, Facebook could remake the TV business without even touching the remote.

6 The Next
Steve Jobs In 2005, Google bought Android, a tiny company led by Andy Rubin, who at his previous startup created a proto-smartphone that was marketed as the T-Mobile Sidekick. At that point, the Android team had spent two years working on what it thought would be the next killer mobile platform; it spent two more years building out its vision at Google. In 2007, a few images of Android hardware and software leaked online. They landed with a thud. Android's revolutionary phone smacked of a BlackBerry knock-off--hard buttons on the bottom, a small screen on top, ugly all over. There were no touch gestures; to point to something, you used a hardware direction button. There was nothing novel about the on-screen user interface--to choose something, you navigated through nested menus, a concept that harked back to Windows 95. Android circa 2007 is the nightmare vision of tech: It's what smartphones would look like if it weren't for Steve Jobs.

"A big piece of the story we tell ourselves about who we are is that we are willing to invent," says Amazon CEO Jeff Bezos. "And, very importantly, we are willing to be misunderstood for long periods of time."Today's Android--the touch gesture, app-enabled operating system that's helped make smartphones the majority of all new phones sold in the United States--is testament to Google's engineering prowess and marketing acumen. But it is also, obviously, a direct descendant of the iPhone. After Rubin and his team saw what Jobs had cooked up, they remade Android in Apple's image. And they weren't alone: Almost every smartphone that's come along since borrows major and minor features from Apple. (Ironically, the most original mobile platform is the one developed by Microsoft, of all companies--Windows Phone.) Apple's brilliant reinvention of the cell phone, and its equally brilliant invention of the modern tablet, are the reasons Amazon built an app store, the reasons Facebook is rumored to be flirting with making a smartphone, the only reason that any company is competing in those particular hardware businesses. This is what has been amazing about Steve Jobs: Nurturing the next great thing in tech wasn't simply the most important thing for Apple. It has been the most important thing for the entire tech industry.

And that is why the industry's next Steve Jobs is . . . Steve Jobs. Thanks to its founder, Apple has a long-term product road map in place--keep making better iOS products, keep bringing innovations it discovered in the mobile world to the Mac--and you can bet that Cook and his rivals will follow Jobs's path for the foreseeable future. We know Cook is an operational genius. Anyone who claims to know if he is a visionary is lying.

Over the next two years, Bezos, Page, and Zuckerberg will gingerly start to vie for Jobs's innovator-in-chief mantle. (One way to consider this battle among the Fab Four is as a fight for this honor.) Of them, Bezos has the best record with new products. Amazon Web Services and the Kindle were true innovations that changed and inspired the rest of the industry. (According to some reports, even Apple relies in part on Amazon's cloud infrastructure for its iCloud service.) Bezos also seems the most temperamentally attuned to the creation of Next Big Things. "A big piece of the story we tell ourselves about who we are is that we are willing to invent," he told investors at Amazon's annual meeting this summer. "We are willing to think long-term. We start with the customer and work backward. And, very importantly, we are willing to be misunderstood for long periods of time."

Page, too, has the "think different" gene, and his CEO stint has been characterized by swift, decisive action to reinvigorate the company. He has impressively bet on Android, YouTube, and Chrome, and "we have some new businesses--Google+, Commerce, and Local--that we are really excited about and are pretty early stage," Page told analysts over the summer. There is another way of looking at this, though--as an example of Page's reactive streak. In the past, when Google offered a new take on an old thing--see Gmail or Google Maps--the search company's version was so radically novel that it instantly rendered the incumbents obsolete. That's not true of Google+, for example. Google's social network has earned praise for an elegant interface and some innovative features, but it clearly mimics Facebook and Twitter, rather than offering something wholly new. Page has tied every Googler's bonus, even those not working on social, to Google's ability to beat Facebook. So while the Google CEO can be seen as making big, bold moves, he might also appear to be spending an awful lot of time fretting about beating something old.

As for Zuckerberg . . .

7 The Age
Of Zuck In some ways, it's unfair to compare Facebook to Amazon, Apple, and Google. While Facebook's growth is impressive, its actual numbers barely register next to the other three: Facebook is reported to have made $1.6 billion during the first half of 2011 (about double what it made in the first half of 2010), but Apple makes that much in nine days. Facebook's only direct competition with these companies is Google in the global $24 billion online display-advertising business, an arena that Google believes will be a $200-billion-a-year market in the next few years. As a private company, Facebook can shield itself from scrutiny (an advantage that Bezos, Cook, and Page would dearly love), but being private has also hampered Facebook. It lacks the capital the others have to make major strategic acquisitions, or to finance the production of factories that would make a Facebook device.

Why Amazon Will Win
Its retail engine keeps humming, and its ambitions feed the beast.
Zuckerberg's ambitions will only be fully realized after Facebook goes public. Its path will then likely mirror Google's post-IPO trajectory--it will evolve from a company with one product into a many-tentacled beast that uses its newfound capital to disrupt all of its rivals. Zuckerberg isn't given to Jobsian rants, but when he discusses how the web will shift over the next few years, he can sound like a hoodie-burning revolutionary. "Just like Intel with Moore's law, our development is guided by the idea that every year, the amount that people want to add, share, and express is increasing," he proclaimed at f8 in late September. "We can look into the future and we can see what might exist--and it's going to be really, really good." Zuckerberg is even maturing into a capable presenter. Compared to Bezos, Cook, and Page, he's most adept at mimicking Jobs's singular skills, and comes off as infectiously visionary when unveiling a new product.

From search to ads to phones to tablets to TV to games, Facebook aims to be in everything. In some cases, as with music or gaming, it will partner with others to serve its massive audience. But over time, look for Zuckerberg to build his own products. Search is the most provocative example. Facebook's partnership with Bing already shows off links that your friends liked; Facebook Search could go even deeper, sorting the web according to your social interactions. It would use everything it knows about you to decipher your queries in a way that Google can't muster. Type in "jobs" and FB Search would know you're looking for news on the Apple founder and not employment. (It knows you have a job; it even knows how often you goof off there.)

Zuckerberg's app strategy is also ambitious and intriguing. At f8, he debuted a new class of Facebook media apps that let Facebook users read, watch, and listen to content without ever leaving the site--and share it seamlessly. He's lured impressive media partners such as The Wall Street Journal, Spotify, and Netflix. If Zuckerberg can bring those apps to the social network's mobile product, he'll have a winner on his hands: an app ecosystem that works on every phone and tablet, rather than on just one company's devices, and one that captures the next generation of mobile developers (not to mention all those Facebook credits). Watch out, Apple: Zuck is coming for you.

8 The Phone
Barrier One industry stands directly between the Fab Four and global domination. It's an industry that frustrates you every day, one that consistently ranks at the bottom of consumer satisfaction surveys, that poster child for stifling innovation and creativity: your phone carrier. And your cable or DSL firm. For Amazon, Apple, Facebook, and Google, the world's wireless and broadband companies are a blessing and a curse. By investing in the infrastructure that powers the Internet, they've made the four firms' services possible. But the telcos and cable companies are also gatekeepers to customers, and Amazon, Apple, Google, and Facebook would love to cut them out of the equation. In the long run, they actually stand a shot at doing so.

While Google has historically had a difficult relationship with the telcos, that will have to change as the company keeps pushing Android into the market. That leaves Apple as the thorn in the carriers' side. Before the iPhone, carriers routinely prevented smartphone users from installing their own apps, and they regularly disabled hardware features that competed with their revenue streams. (Verizon once crippled BlackBerry's GPS system because the carrier sold its own subscription location plan.) The iPhone forever changed this culture: It conditioned phone users to expect to download any apps they choose (actually, any app approved of by Apple). Carriers can no longer tell you that you can't run, say, Skype, or an app that gives you free text messages. Buy a smartphone, and you've earned that right. Apple's move to expand its carrier lineup in the U.S. is the next great front in the battle with communications companies. Now that you can get the iPhone on AT&T, Verizon, and Sprint, carriers will be forced to compete with one another on network speed, price, and customer service. This will be a first: Back in 2009, when Apple unveiled "iPhone tethering"--the ability to use your phone's network connection to surf the web on your computer--AT&T took a year to implement the service, while other carriers around the world launched it instantly. But if AT&T dithers now, you can go somewhere else.

The best tech companies stay at their peak for a decade at most. Amazon, Apple, Facebook, and Google have the potential to be exceptions.That's small potatoes compared to some potential breakthroughs. All but Amazon have a videophone service: Apple's FaceTime, Google+ Hangouts, and Facebook's Skype integration. Apple's iMessage and Facebook's Messenger, which offer text, photo, video, and group messaging, intend to get people to route all of their communications through the Internet rather than the carriers. If either takes off--and, given that iMessage will be built into the next iPhone and Messenger will be available to every Facebook user on iPhone and Android, they both seem sure to be hits--they'll stand a good chance at replacing SMS, which is highly lucrative for carriers, as the standard for mobile conversations.

In a larger sense, all these companies have devalued the idea of talking on the phone; paying for minutes is passé when you can text, IM, and video chat instead. Now we all just pay for data, delivered via high-speed networks that might be built around and between what the carriers offer. (Of course, the Fab Four seems to assume retailers and municipalities will build those networks to enable their vision--anyone but them.) Verizon is a $100 billion company built on dumb pipes, and dumb pipes may not make for a smart business model for the long run.

9 The Bank
Heist The other outfit standing between you and the Fab Four is one that barely registers: your credit-card company. When you buy something through iTunes, the Android Market, Amazon, or Facebook, the credit-card company gets a small cut of your payment. To these giants, the cut represents a terrible inefficiency--why surrender all that cash to an interloper? And not just any interloper, but an inefficient, unfriendly one that rarely innovates for its consumers. These credit-card giants seem ripe for the picking.

While this attack is less mapped out than the one on your phone and cable company, here's how the scenario would play out. The first step is getting consumers used to the idea of paying by phone. The second step is to encourage consumers to link their bank accounts directly to their devices, thus eliminating the credit-card middleman. For example, Google just launched Wallet, a service that allows you to pay for purchases by waving your phone at a merchant paypad. Google is not billing the system as a credit-card killer; in fact, it's partnering with MasterCard and Citi on Wallet. But if customers embrace Wallet to make payments, Google could add services that make it the central repository of all our coupons and other special deals, taking a bite out of the likes of Groupon and LivingSocial (in which Amazon is a major investor). The move is so ambitious that it's already rattled the leader in online payments: PayPal sued Google just hours after the Wallet announcement, back in May, claiming that Google stole its intellectual property when it poached Osama Bedier, a former exec who now runs Google's payment project.

Both Amazon and Facebook could transform their online-payments services into similar walletlike mobile apps, while Facebook could create a significant PayPal rival in web commerce if it rolled out payments as part of Facebook Connect. Apple has a very different, but potentially more disruptive, shot at this market. The company has long been rumored to add near-field-communication chips--which allow for waving your phone to pay--into its phones. If it does, an Apple payments system would have two advantages over everyone else. First, the iTunes database of customers is huge. Second, there's the iPad, which is fast gaining traction as a next-gen cash register in small businesses around the country. This sets up Apple to own both sides of potentially millions of transactions: Go to your coffee shop, wave your iPhone against the cashier's iPad, and voilà, you're done. Multiply that by every hipster in America and you see the scale of Apple's ambition.

10 The Hit
Men So who could derail these best-laid plans? Well, let's start with the lawyers, of course. Over the past year, the tech industry has become an increasingly ugly place, with Apple, Google, Microsoft, Amazon, and just about every handset maker joining a legal scrum over patents. Everyone is suing everyone else, while the government, spurred on by the likes of, yes, Microsoft, is considering an antitrust suit against Google. None of this bodes well. Over the summer, Apple succeeded in getting Samsung's Galaxy tablet (which runs Android) banned from release in Germany and delayed its launch in Australia. This is part of a global fight about design and Android, complicated by the fact that Samsung is Apple's largest component supplier.

The Samsung suits were also the most significant sign that Google may have a problem with the intellectual property underpinning Android, since its "free and open" operating system is forcing its device makers into expensive courtroom battles over their Android phones and tablets. This, in turn, has set off a buying frenzy of global patents that might have anything to do with transmitting mobile data. A coalition that included Apple and Microsoft spent $4.5 billion to outbid Google for a stash of 6,000 mobile-related patents from Nortel. Page responded by spending $12.5 billion for Motorola and its slug of 17,000 patents, and by then making two deals with IBM for more than 2,000 patents in all (the purchase price was not disclosed).

All these patent suits could stifle innovation. Most new devices are so complicated--touching on so many specialized areas, from intricate chip design to battery placement to touch-screen dynamics--that it's impossible for any company's devices to be wholly original. Tech companies used to let minor patent violations slide, but the rise of patent-hording trolls has changed this. Now everyone's instinct is to sue.

It's almost as if they'd never studied Microsoft's decline in relevance. The software giant never resumed its place as an agenda setter after its antitrust trial in the late 1990s. The suit consumed so much time and brainpower that the company fell behind on a decade's worth of trends. That's the risk in today's patent wars: The more time Page spends defending Android, the less effort he puts into making sure Google is actually inventing new stuff.

Tech companies are ephemeral enterprises, with a built-in obsolescence much like their products. The best firms stay at their peak for a decade tops; most get snuffed out before anyone even notices them. Amazon, Apple, Facebook, and Google have the potential to be exceptions to this rule. Their CEOs are driven, disciplined, and relatively young (Cook, the oldest, will be 51 in November). All but Cook are founders, and their personalities are such that they seem unlikely to get tired or bored by their empire building. Their market caps and strong revenue growth should allow them to neutralize other would-be rivals--witness Bezos acquiring Zappos and Quidisi (Diapers.com) before either could become a threat.

As our modern oligarchy, and as individual companies, Amazon, Apple, Facebook, and Google will not last forever. But despite this oncoming war, in which attacking one another becomes standard operating practice, their inevitable slide into irrelevancy likely won't be at the hands of one of their fellow rivals. As always, the real future of tech belongs to some smart-ass kid in a Palo Alto garage.

Growth of the Gadget

2011-10-16T14:42:00.000-07:00

Read the whole article at http://www.economist.com/node/21531109

Who should run the Internet?

2011-10-15T13:30:00.000-07:00

http://www.economist.com/node/21530955

Internet governance is under attack; it may have to mend its ways to survive

NETHEADS build, run and protect the internet. They often profit from it too. More than 2,000 of them from more than 100 countries descended on Nairobi this week for the latest Internet Governance Forum (IGF), a conference organised under United Nations auspices. The ponderous official theme was the internet “as a catalyst for change”, with a lot of nodding to WikiLeaks and the Arab spring. The reality outside the conference hall, the UN headquarters in the Kenyan capital, was more striking. Kenyans nowadays often go online on their mobile phones. Surfing the web is getting faster and cheaper by the day. The internet is no longer a geeks’ affair in the rich world, but woven into the fabric of business and life even in the poor one.

The IGF is not a typical UN meeting with a carefully staged agenda and much diplomatic protocol. All participants had the same right to take the floor. Government suits had to listen patiently to the complaints of internet activists. And the end of the shindig was not marked by a finely tuned communiqué, but by a workshop dedicated to what the organisers should do better.

All this makes the IGF an unusual grouping. It is in effect a poster child for what insiders like to call the “multi-stakeholder” model. All involved have a say and decisions are taken by “rough consensus”. This approach has worked for the internet so far, but it is increasingly under attack. Governments now want to be given the last word on contentious issues rather than being merely treated as just another stakeholder.

The multi-stakeholder approach dates from the beginnings of the internet. Its founding fathers believed that more openness would be both more secure and better for innovation. What is more, since the internet is a network of independent networks, it is hard to construct a form of governance that allows anyone to dictate things from the top.

Until the early 2000s most governments were happy—at least in Western countries where most internet users lived. They had no problem with the network’s standards being set by such organisations as the Internet Engineering Task Force, which is open to everybody. Nor did governments balk when America in 1998 set up the Internet Corporation for Assigned Names and Numbers (ICANN), also based on the multi-stakeholder model, to manage the internet’s core: its address system.

Yet as the internet has become a global medium attitudes have changed. At the World Summit on the Information Society 2005 in Tunis, many participants pushed for the UN and one of its agencies, the International Telecommunication Union (ITU), which co-ordinates the radio spectrum among other things, to take over the running of the internet. The effort was resisted by America and other Western countries. The compromise included the creation of the IGF.

Now some countries are at it again, even more forcefully than before. In most places the internet is now a crucial driver of the economy. More importantly, says Shawn Gunnarson of Kirton & McConkie, a law firm, the Arab spring has shown governments that social-media networks can become powerful tools for the organisation of political protest.

China, Russia and others have proposed an “International Code of Conduct for Information Security”—an attempt to strengthen the role of governments. Some of the same countries have launched a renewed push to get the ITU more involved when the treaty that defines its remit is up for renegotiation next year. India, Brazil and South Africa have called for the creation of a “new global body” to regulate the internet. Against all these efforts, the OECD, a club of mostly rich countries, felt compelled to hold a high-level meeting in June to defend multi-stakeholderism.

The most immediate power struggle is taking place inside ICANN—between the body’s board and its stakeholder panel for countries, the Governmental Advisory Committee (GAC). Governments, even many Western ones, have long been unhappy with ICANN, which they think is not sufficiently transparent or accountable. The tensions came to a head when the board moved last year to allow many more “generic top-level domains”, as the suffixes of web addresses such as .com or the just launched .xxx (see article (http://www.economist.com/node/21530956) ) are called. Officials are particularly worried about the introduction of controversial new domain names such as .jesus.

In June the board and the GAC at last agreed on a procedure to weed out unwanted domains. After all applications for new domains have been filed, countries can issue “early warnings” to signal that they object to a new domain. But only if the GAC as a whole does not like a suffix must the board take these objections into account—and then issue a detailed explanation if it overrides them. “Nobody really knows how this will work,” says Kieren McCarthy, who runs .Nxt, an online source of internet punditry.

If even ICANN cannot command the respect of its stakeholders, the entire multi-stakeholder model may be in danger. That is why the American government, long an ardent defender of the model, is expected to put a lot of pressure on ICANN to change its ways when a decision is taken next year whether the group should remain in charge of running the physical infrastructure of the internet’s address system, which—as critics keep pointing out—is still controlled by the American government.

Yet some experts argue that ICANN—and thus the multi-stakeholder model itself—can firmly establish itself only when it is underpinned by a proper constitution, complete with a bill of rights for stakeholders and a separate board of review (or supreme court). ICANN, they say, resembles the kings and parliaments of old whose power is coercive and unconstrained. Only if internet governance has a “constitutional moment”, declares Viktor Mayer-Schönberger, a professor at Oxford University, will it avoid becoming the “plaything of powerful nations”.

More Mobiles Than People Worldwide by the End of 2012

2011-10-11T06:10:00.000-07:00

http://www.cellular-news.com/story/51223.php?s=h

By the end of 2012 there will be more mobile devices in use globally than people. The claim is made by the new President of Europe's largest professional society of engineers, Dr Mike Short, who takes office today.

The current global population is around 7 billion, but Dr Mike Short is confident that uptake of mobile devices will pass that mark during the course of next year. He also predicts that China and India will each have more than 1 billion mobile subscriptions during the first half of 2012.

Dr Mike Short said, "Right now there are more mobile phones than toothbrushes. Unlike toothbrushes, mobile phones and devices are wonderfully inclusive and with access to the Internet they are empowering for billions of people - especially those in emerging nations who will access the internet for the first time through mobile."

For Dr Short, this is a welcome development that will bring benefits of shared innovation, connectivity , internet access and many new applications associated with people's education , transport, and health needs. The accelerating use of machine to machine communications will also continue to propel this growth of services in cars, smart meters and smart cities.

Dr Short continued, "We are all innovators now in a digital world, thanks to the marriage between the two great innovation platforms of the last 20 years now coming together : internet and mobile. This combination will drive digital innovation everywhere as these technologies become ever more pervasive and useful to all people.

Dreaming of An M-Christmas: M-Shopping May Soar This Holiday

2011-10-11T06:06:00.000-07:00

http://www.mediapost.com/publications/article/159579/

Holiday shoppers may have limited spending capacity this year, but they will be using their phones early and often during the holiday season to make smarter buying decisions, says mobile ad network Mojiva in its latest user survey of predominantly smartphone owners.

When asked what types of product information they would find their phone most useful to obtain, 56% cited product information and the same number targeted coupons and sale info. More than half of users (23%) expect their phones to be useful in getting product reviews, and 51% would expect to find store hours. The findings were just published in Mojiva's holiday edition of its Mobile Audience Guide.

But perhaps the most encouraging momentum is toward mobile purchasing itself. Almost a third (32%) believed that buying products on their phone would be helpful. There seems to be a considerable willingness at least to entertain the possibility of buying merchandise on mobile devices.

When asked what kinds of products they could see themselves purchasing this coming shopping season on their mobile device, 52% said toys and games, 51% said electronics, including media; 40% said clothing; and 27% would consider booking flights or hotel rooms.

Mojiva finds that 21% of mobile customers still do not feel comfortable making holiday purchases on their devices, and this is about the same as previous surveys.

Still, when it comes to holiday purchases, as much as 40% of mobile users are comfortable spending at least $50 on a single gift via a mobile purchase.

To be sure, the Mojiva sample set skews higher on the handset end. While about 43% of mobile subscribers generally now own a smartphone, 73% of this sample had the more advanced devices and presumably may evidence more enthusiastic attitudes toward the role of their devices.

Comfort levels with e-commerce took many years to improve -- mainly because it represented a wholly new digital channel where security and vendor reliability were persistent concerns among consumers. But on mobile, consumers generally are interacting with familiar entities with whom they already have digital relationships like popular e-retailers and the mobile carriers themselves.

In a recent market report on m-commerce, Amazon was the clear leader in mobile sales, both because of its seamless mobile experiences and for the relationship it has already established with users. Likewise, eBay -- which claims billions in mobile sales already -- is in a strong position to move its existing base to mobile.

In other words, the comfort zone for m-commerce is likely to be considerably closer than we expected only a few years ago.

Bulletins from the future

2011-10-05T03:55:00.000-07:00

http://www.economist.com/node/18904136

The internet has turned the news industry upside down, making it more participatory, social, diverse and partisan—as it used to be before the arrival of the mass media, says Tom Standage
Jul 7th 2011 from the print edition

EVEN IF YOU are not a news junkie, you will have noticed that your daily news has undergone a transformation. Television newscasts now include amateur videos, taken from video-sharing websites such as YouTube, covering events like the Arab spring or the Japanese tsunami. Such videos, with their shaky cameras and people’s unguarded reactions, have much greater immediacy than professional footage. Messages posted on Twitter, the microblogging service, have been woven into coverage of these events and many others. “You have these really intimate man-in-the-street accounts, and you can craft a narrative around them,” says Jack Dorsey, co-founder of Twitter. A computer consultant in Pakistan unwittingly described the raid on Osama bin Laden’s compound in a series of tweets. The terrorist attacks in Mumbai in 2008, too, were reported on Twitter in real time by people who were there.

The past year has also seen the rise to fame of WikiLeaks, an organisation that publishes leaked documents supplied to it anonymously. WikiLeaks and its media partners have published detailed records of the Afghan and Iraq wars, hundreds of classified American diplomatic cables and records from the Guantánamo Bay detention centre. “We believe that true information does good,” says Julian Assange, WikiLeaks’ founder. “Our goal is not just to have people reading documents, but to achieve political reforms through the release of information.”

In January this year Al Jazeera, a news organisation based in Qatar, published its own cache of leaked documents, known as the Palestine Papers, which lifted the lid on more than a decade of Israeli-Palestinian negotiations. And by broadcasting amateur videos of the Tunisian uprising to its millions of satellite viewers across the Arab world, the channel played an active role in spreading the protests across the region. Among television news organisations it has led the way in integrating social media (such as tweets, Facebook posts and amateur online video) into its operations in order to engage with its increasingly wired audience. “The way we operate has changed because the landscape has changed dramatically,” says Moeed Ahmad, the firm’s head of new media.

Clearly something dramatic has happened to the news business. That something is, of course, the internet, which has disrupted this industry just as it has disrupted so many others. By undermining advertising revenue, making news reports a commodity and blurring the boundaries between previously distinct news organisations, the internet has upended newspapers’ traditional business model. But as well as demolishing old ways of doing things, it has also made new ones possible. As patterns of news consumption shift, much experimentation is under way. The internet may have hurt some newspapers financially, but it has stimulated innovation in journalism.

Reporters all

For consumers, the internet has made the news a far more participatory and social experience. Non-journalists are acting as sources for a growing number of news organisations, either by volunteering information directly or by posting comments, pictures or video that can be picked up and republished. Journalists initially saw this as a threat but are coming to appreciate its benefits, though not without much heart-searching. Some organisations have enlisted volunteers to gather or sift data, creating new kinds of “crowdsourced” journalism. Readers can also share stories with their friends, and the most popular stories cause a flood of traffic as recommendations ripple across social networks. Referrals from social networks are now the fastest-growing source of traffic for many news websites. Readers are being woven into the increasingly complex news ecosystem as sources, participants and distributors. “They don’t just consume news, they share it, develop it, add to it—it’s a very dynamic relationship with news,” says Arianna Huffington, co-founder of the Huffington Post, a news website in the vanguard of integrating news with social media.

As well as making Twitter, Facebook and Google part of the news ecosystem, the internet has also made possible entirely new kinds of specialist news organisations. It has allowed WikiLeaks, for example, to accept documents anonymously and publish them to a global audience, while floating in cyberspace above national jurisdictions, operated by a small, nomadic team. Other newcomers include a host of not-for-profit news organisations that rely on philanthropic funding and specialise in particular kinds of journalism. Many of these new outfits collaborate with traditional news organisations, taking advantage of their broad reach and trusted, established brands.

All these new inhabitants of the news ecosystem have brought an unprecedented breadth and diversity of news and opinion to the business. This has cast new light on a long-running debate about the politics of journalism: when there are so many sources, does political objectivity become less important?

This special report will consider all these trends in turn, starting with a look at the state of the industry and the new business models that are emerging. It will argue that as news becomes more social, participatory, diverse and partisan, it is in many ways returning to the more chaotic, freewheeling and politically charged environment of the era before the emergence of mass media in the 19th century. And although the internet has proved hugely disruptive to journalists, for consumers—who now have a wider choice than ever of news sources and ways of accessing them—it has proved an almost unqualified blessing.

Amazon - Walmart of the Web

2011-10-03T08:41:00.001-07:00

http://www.economist.com/node/21530980

The internet giant’s new tablet computer fits its strategy of developing big businesses by charging small prices
Oct 1st 2011 SAN FRANCISCO from the print edition

A COUPLE of years after it launched its website in 1995, Amazon was the subject of an unflattering report entitled “Amazon.Toast”. The pundit who penned it predicted that the fledgling online bookseller would soon be crushed by Barnes & Noble (B&N), a book-retailing behemoth which had just launched its own site.

Far from being crushed, Amazon is doing the crushing. Borders, a once-mighty book chain, was flattened this year. B&N looks like a frightened capybara running from a fierce Brazilian she-warrior. Amazon is now one of the web’s most successful e-tailers. Even Apple is feeling the heat.

On September 28th Jeff Bezos, Amazon’s boss, unveiled a tablet computer called the Kindle Fire. It will compete with gadgets such as B&N’s Nook Color tablet and Apple’s iPad. The new Amazon tablet, which has a somewhat smaller screen than the iPad and only offers Wi-Fi connectivity, is likely to be just the first salvo in a titanic battle.

Like Apple, Amazon boasts a huge collection of online content, including e-books, films and music. And like Apple, it lets people store their content in a computing “cloud” and retrieve it from almost anywhere. But the two firms part company when it comes to pricing. The Kindle Fire, which will be available from mid-November in America, will cost only $199. That is far less than the cheapest iPad, a Wi-Fi-only device which costs $499. B&N responded to the Kindle Fire by cutting the price of its Nook Color to $224. This week Amazon also rolled out a new range of Kindle e-readers, the cheapest of which costs just $79. “We are building premium products and offering them at non-premium prices,” beamed Mr Bezos.

Amazon’s decision to undercut its rivals is partly a tactic designed to disrupt the tablet market, which is still dominated by the iPad. Gartner, a research firm, reckons that Apple’s device will account for almost three-quarters of the 64m tablets it thinks will be sold worldwide this year. Amazon’s pricing strategy also reflects one of the firm’s core beliefs, which is that cheap stuff makes customers cheerful. Call it the Walmart of the web.

Low prices are not the only thing underpinning Amazon’s success. The company is technologically adept, and it has a knack of delighting customers with innovations such as its $79-a-year “Amazon Prime” shopping service in America, which offers members free, two-day shipping and other benefits. Such goodies have been crucial to its growth. But its ability to drive down the prices of everything from cameras to cloud computing gives it a colossal competitive advantage.

A recent study by William Blair, an investment bank, underlines the price gap between Amazon and its rivals in the retailing world (see table). The report compared the prices of 100 randomly selected goods at each of 24 American retailers with those items that were also available on Amazon.com. It found that almost half of the goods were listed on the online retailer’s site too, and that Amazon’s prices for individual products were on average 11% below those of the stores. The study also noted that Amazon’s discounts were in many cases deeper than those offered by the retailers’ own websites.

Admittedly, as an online outfit Amazon does not pay sales tax in American states where it has no physical presence. Many cash-strapped states are now keen to pass laws that would change this—a move Amazon is loudly and unsurprisingly opposing. But the William Blair study concludes that even if it has to cough up more tax, Amazon will still be able to offer prices that are lower than many rivals’. The firm’s huge scale and its massively popular website, which it will use to promote the Kindle Fire, give it an edge. And it enjoys another advantage too. “Amazon does not have to worry about the impact of its pricing on a legacy store system,” explains Kirthi Kalyanam, a professor at Santa Clara University’s Retail Management Institute.

Amazon Web Services (AWS), which rents computing capacity in its giant data centres to customers, has also won a reputation for being cheap. Comparing cloud-computing prices is tricky, but observers of the market report that AWS is typically one of the lowest-cost providers. “Amazon operates with economies of scale that are practically impossible to match,” says Reuven Cohen of Enomaly, which runs SpotCloud, an online marketplace where firms sell excess cloud-computing capacity.

The cloud is crucial to the success of Amazon’s gadget strategy. Most analysts think that the firm loses money on the hardware that it sells. But it hopes that its cheap tablet will be wildly popular and therefore boost sales of Amazon’s cloud-based content, just as the Kindle e-reader boosted sales of e-books. It’s like free parking outside Walmart—you want potential customers to see what’s in the window.

The good news for Amazon is that tablet users seem more inclined to splash out on stuff than web shoppers who use PCs, according to Forrester, another research firm. One possible explanation for this is that tablet buyers tend to be richer; another is that the immersive experience tablets create encourages more impulse buying.

Whatever the reason, Amazon will have to hope that its gambit works, because its business model has at least one worrying downside. Its profit margin is a page-thin 3-4%, partly because it has invested so heavily in the cloud. Now it is going head-to-head with Apple, which made a juicy $7.3 billion net profit on revenues of $28.6 billion in the latest quarter. Apple may not want to provoke a price war in the tablet market, where it sees plenty of growth to come. But if it does return fire, Amazon could get its fingers toasted.

The Tablet Competition: Apple vs. Amazon

2011-10-03T04:36:00.001-07:00

http://www.businessweek.com/magazine/the-omnivore-09282011.html

Amazon, the Company That Ate the World

Jeff Bezos’ new tablet, the Kindle Fire, is cheap, pretty, and puts Amazon in perfect position to take a bite out of Apple—and every online transaction you make

By Brad Stone

Jeff Bezos is channeling Steve Jobs. It’s mid-September and the wiry billionaire founder of (AMZN)Amazon.com is at his brand-new corporate headquarters in Seattle, in a building named Day One South after his conviction that 17-year-old Amazon is still in its infancy. Almost giddy with excitement, Bezos retrieves one by one the new crop of dirt-cheap Kindle e-readers—they start at $79—from a hidden perch on a chair tucked into a conference room table. When he’s done showing them off, he stands up, and, for an audience of a single journalist, announces, “Now, I’ve got one more thing to show you.” He waits a half-beat to make sure the reference to Jobs’s famous line from (AAPL)Apple presentations hasn’t been missed, then gives his notorious barking laugh. With that, Bezos pulls out the Kindle Fire, Amazon’s long-anticipated tablet computer—and the first credible response to the Apple iPad.

Unlike a wave of other tablets that have emerged hopefully only to flop, such as the HP TouchPad, the Motorola Xoom, and the RIM PlayBook, the Kindle Fire has a good shot at turning the newest theater of war in high-tech into a two-tablet battle. With a 7-inch display, the Fire is about half the size of the iPad. At $199, it’s also less than half the price of the cheapest Apple model. Amazon has painted over the rough surfaces of (GOOG)Google’s Android operating system with a fresh and easy-to-use interface and tied the device closely to its own large and growing content library. Kindle Fire owners can watch the film Rio, scroll through magazines such as The New Yorker or Esquire, and access their music collection on Amazon’s servers.

“What we are doing is offering premium products at non-premium prices,” Bezos says. Other tablet contenders “have not been competitive on price” and “have just sold a piece of hardware. We don’t think of the Kindle Fire as a tablet. We think of it as a service.”

To demonstrate the Kindle Fire, Bezos pulls up a chair. He proudly shows off a lightning-fast Web browser that runs on Amazon’s EC2 cloud computing engine and Amazon’s version of the Android app store, with over 10,000 games, e-mail programs, shopping guides, and the like. Bezos pauses briefly to exhibit his dexterity at a game called Fruit Ninja, zapping watermelons and kiwis that fly across the screen, and appears to momentarily lose himself in the effort. “I do find it strangely therapeutic, uncomfortably therapeutic,” he says.

There are some limitations to the Kindle Fire. Unlike the iPad 2, it doesn’t have embedded cameras or a microphone, and there’s no 3G cellular connection, only Wi-Fi. Its diminutive size, which makes it so handy for stashing in a coat pocket, also makes it unlikely to satisfy more than one antsy kid on a long car ride. The versatile iPad 2, with its video chatting capabilities and exquisite screen resolution, is a lifestyle-defining objet d’art. The stripped-down Fire is more of a sit-back-on-the-sofa-and-shop device. It crystallizes the difference between Apple, which tends to keep prices (and profit margins) high, and Amazon, which likes to start low and drive lower in an effort to knee-cap the competition. The tablet is symbolic of Amazon’s remarkable ability to adapt and reluctance to cede the future to anyone. If the Fire and its inevitable sequels are successful, they will add even more might to one of the fastest-growing retail operations the world has ever seen.

Amazon’s 1990s slogan—”Earth’s largest bookstore”—stood for an ambition that now seems cute. Amazon boasted of its unlimited selection of books, even though in most cases it was simply having them shipped directly from distributors. Today, Amazon sells millions of goods and services, from toys and high-definition televisions to server space for other Internet companies and digital reading devices for book lovers. Borders found it impossible to match Amazon’s selection and went out of business earlier this year. (BBY)Best Buy has watched Amazon undercut it and commoditize whole product categories, and is now trying to shrink the square footage of its superstores. (WMT)Wal-Mart Stores has struggled to match the ease and reliability of Amazon’s shipping network, and posted nine straight quarters of declining same-store sales. Websites that have matched Amazon in selection, price, and customer service—Zappos, Diapers.com—Bezos has quickly acquired.

“Amazon is not a fight-on-their-knees kind of company,” says Rob Glaser, the Seattle entrepreneur behind (RNWKD)RealNetworks and now also a venture capitalist at Accel Partners. “Jeff’s a hyper-competitor.”

As its rivals steadily asphyxiate, Amazon is ringing up 50 percent growth in quarterly revenues, and could reach $50 billion in sales this year. Walmart needed almost twice the time—33 years—to cross that threshold. “Amazon is such a smart learning organization,” says Nancy F. Koehn, a professor of business administration at Harvard Business School. “It’s like a biological organism that through natural selection and adaptation just keeps learning and growing.”

Amazon is also facing a new kind of challenge that competitors like Walmart are intimately familiar with—cultural backlash, or at least the early signs of it. The company has been criticized for waging an expensive state-by-state battle to avoid collecting sales taxes, and more recently for skimping on air conditioning in its East Coast distribution centers during a brutally hot summer.

If the Kindle Fire is half as good as it looked in Bezos’ conference room, it will fan the fears about Amazon’s growing dominance. The tablet funnels users into Amazon’s meticulously constructed world of content, commerce, and cloud computing. Just like owners of Kindle e-reading devices tend to start buying all their books from Amazon, Kindle Fire owners are likely to hand over an increasing chunk of their entertainment budget to Jeff Bezos.

Tablets represent a huge opportunity for Bezos, not only to sell a new kind of device but also to entice people to buy more stuff. Even with only 28.7 million iPads sold, e-commerce sites say they see an increasing amount of traffic coming from tablets. (FORR)Forrester Research reported this summer that online purchases made on tablets now account for 20 percent of all mobile e-commerce sales, and that nearly 60 percent of tablet owners have used them to shop. Bezos says tablets “are a huge tailwind for our business.” Amazon once saw spikes in traffic during the workday lunch hours. Now traffic is more evenly distributed as people pick up their tablets anytime of the week, buying the books and albums they see on television and making impulsive decisions about replacing their dishwashers.

The Kindle Fire (internal code name: Otter) is designed to ensure that even more of those purchases go to Amazon. The company has built a tablet-optimized shopping application, with simplified and streamlined pages but none of the clutter of the main website. The app is pre-installed and sits at the bottom of the Fire’s main screen (users can get rid of it if they want). The device also comes with the enticement of a 30-day free trial of Amazon Prime, the company’s $79-a-year two-day delivery program that tends to convert members into Amazon addicts who triple or even quadruple the amount they spend on the site. Since March, Amazon has also administered its own app store for Android devices, culling Google’s more comprehensive selection and removing everything that’s offensive and unreliable. Kindle Fire owners will have access to apps from (P)Pandora, Twitter, Facebook, and (NFLX)Netflix. Other competitors such as (BKS)Barnes & Noble can submit their apps, but it will be much easier for Kindle Fire owners to find Amazon’s own content.

That’s one reason Amazon is in the best position to turn the tablet battle into a two-combatant war. The other is price. Analysts speculating on the new device widely pegged the Kindle Fire at $250 to $300. (Samsung, (RIMM)RIM, and others have entered the tablet race with similar devices at those prices and above.) Bezos is able to go lower because he can make his profit on media content and with additional subscriptions to Amazon Prime—which then will drive additional purchases of toys, toasters, diapers, etc. He’s also exploiting his company’s popular cloud computing initiative, called Amazon Web Services. Amazon saves money on the Kindle Fire by packing it with only 8 gigabytes of memory (the costliest version of the iPad has 64 gigs), but owners of the device get to store as many books, songs, movies, and personal documents on Amazon’s cloud servers as they like for free.

Bezos won’t say whether he thinks he’ll lose money on the device itself, only that he’s at ease flirting with red ink. “Certainly this is a for-profit business,” he says. “Let’s put it this way. We are and always have been very comfortable at operating at extremely low margins.”

Although the decision to design and build its own hardware is a high-stakes bet, it’s equally true that Bezos had no choice but to enter the tablet business. About 40 percent of Amazon’s revenues comes from media—books, music, and movies—and those formats are rapidly going digital. Amazon was late to understand the speed of that transition; Apple, which launched the iPod in 2001 and iTunes two years later, wasn’t. The iPad has only strengthened Apple’s hold over digital media. There’s a Kindle app for the iPad, but Apple takes a 30 percent slice of all content that app makers sell on the tablet and has restricted Amazon from directing iPad users to its website in order to avoid giving Apple its cut. Doing business on the iPad threatens Amazon’s already thin profit margins.

Bezos claims he doesn’t think defensively. “Everything we do is driven by seeing opportunity rather than being worried about defending,” he says. Given Apple’s inroads into the media business, that’s hard to believe. Bezos is magnanimous toward Jobs. “On a personal level we have a tremendous amount of respect for Apple and Steve. I think that’s returned,” he says. “Our cultures start in the same place. Both companies like to invent, both companies like to pioneer, both companies start with the customer and work backwards. There’s a like-mindedness.” Pause. “Are two companies like Amazon and Apple occasionally going to step on each others toes? Yes.”

Amazon has recovered more quickly than other tech companies in the race to catch up with Apple in digital media. Amazon introduced an online TV and movie store in 2006, the Kindle e-book store in 2007, and the MP3 digital music store in 2008. Earlier this year, Amazon also aimed its sights on Netflix with an Instant Video streaming service that’s free for members of Amazon Prime, and it’s now spending hundreds of millions to increase its catalog with TV shows and movies from studios like (NWS)Fox and NBCUniversal. The music and video stores haven’t been huge hits. That may change on the Kindle Fire. On a tablet those apps will give users the impression that most songs, TV shows, and movies are just a click away. “We are leaning into this,” Bezos says. “It’s not a small initiative for us.” Amazon is also among the companies in the final round of bidding for the online video site Hulu, according to people with knowledge of that process who were not allowed to speak on the record.

Apple’s success with the iPod taught the entire tech industry another valuable lesson. There were other digital music players on the market back in the 1990s, but Apple’s device, which seamlessly blended hardware, software, and eventually an online service in iTunes, made the experience simple and unintimidating for non-techies.

There is a sense, as one easily holds the Kindle Fire in one hand (try doing that with an iPad), that Bezos is working from the same set of principles as Jobs: Content matters. Simplicity is key. How do companies allow users to easily buy songs, movies, and other digital goodies? They persuade customers to entrust them with their credit cards—as both Amazon and Apple have done. How do they ensure that the device is easy to use? They design and build it themselves.

“What should Amazon be doing in 20 years?”

That was the first question Bezos asked Jateen Parekh, a Silicon Valley systems engineer who had worked for the digital video recorder pioneer Replay-TV, an early (TIVO)TiVo rival, and Philips Research, a division of the Dutch consumer electronics maker. It was August 2004, and Bezos and his new senior vice-president in charge of worldwide digital media, Steven Kessel, were exploring what seemed like a radical idea for an online retailer: making their own hardware. “The question impressed me,” recalls Parekh, who is now the founder and chief technology officer of digital radio startup Jelli. “The fact that the CEO was thinking that far out was huge.”

Parekh joined Amazon that September, becoming the first employee of Lab126, a secret Silicon Valley skunkworks. At first, Parekh didn’t have an office to report to: He and the few industrial designers and engineers hired soon after, including Gregg Zehr, a former vice-president of hardware engineering at Palm Computing, set up shop in an empty room in the offices of A9, Amazon’s Palo Alto (Calif.)-based search subsidiary. Parekh recalls spending his first few weeks investigating the possibility of building Internet-connected set-top boxes and even an MP3 player.

Bezos loved reading far more than listening to music, and Amazon had deep expertise in the book market, so the next decision was a natural one. Amazon’s new hardware geeks would build an e-reader. Parekh and Zehr, who became president of the new division, researched existing e-readers of the time, such as the Sony Librie, which required AAA batteries, sold poorly, and never made it out of Japan. They concluded the market was wide open. “It was the one thing that wasn’t being done well by anyone else out there,” Parekh says.

First, though, Amazon’s engineers needed a better name for the original “A2Z Development Corp.” Parekh and his colleagues hated it, and thought it ill-suited to luring the best and brightest engineers from places like Apple and Palm. They eventually settled on the more mysterious “Lab126.” The 1 stands for a, the 26 for z, a geeky naming convention inside Amazon where groups like the personalization team are referred to by the abbreviation P13N. (If you’re confused by that, count the letters in the word “personalization.”)

Other people who worked for Lab126 in those early years recall it as a loosely managed startup. The group piggybacked on A9′s infrastructure for most of the next year. When the search division moved to the former offices of a Palo Alto law firm, Lab126 moved with them and took up residence in the old law library.

Lab126 was eventually given nearly unlimited resources. It also had to contend with the unfettered imagination of Bezos. Amazon’s founder wanted his new e-reading device to be drop-dead simple to use and argued that configuring devices to Wi-Fi networks was too complicated for non-tech-savvy users. He also didn’t want to force customers to connect the device to a PC, so the only alternative was to build cellular access into the device, the equivalent of embedding a wireless phone in the hardware. Nothing like that had been tried before. Bezos insisted that customers should never have to know the wireless connection was there or even pay for access. “I thought it was insane, I really did,” Parekh recalls.

The effort to develop the first Kindle ended up taking more than three years. Nearly everything went wrong. The black-and-white displays from E Ink, an offshoot of the Massachusetts Institute of Technology Media Lab that makes screens resembling the printed page and requiring very little power, would look good for one month and then degrade alarmingly. (QCOM)Qualcomm, which was set to provide the wireless chips, was sued by a competitor, (BRCM)Broadcom, and for months was enjoined by a judge from selling its wares in the U.S. The Lab126 team repeatedly urged Bezos to make their project easier by considering a Wi-Fi-only connection for the Kindle. He rejected the idea, constantly suggesting new ones for complicated features, like the notion that customers’ annotations of books should be backed up on Amazon’s servers.

That original Kindle, code-named “Fiona” after a character in Neal Stephenson’s futuristic novel The Diamond Age, was finally ready to go in the fall of 2007. Still, Amazon nearly blew it. Modeling demand after the first-year sales of the original iPod, Amazon dramatically underestimated what a hit the Kindle would turn out to be. The first batch sold out in just a few hours. Amazon then discovered that one of its Taiwanese suppliers had discontinued a key part and spent months getting a replacement. “You look at the history of the Kindle, they developed some real skills around the creation of that product. They’ve cut their teeth so to speak,” says Brian Blair, a New York-based analyst at Wedge Partners.

Making four successive versions of the Kindle e-reader also led Amazon down the path toward the Kindle Fire. For years the engineers at Lab126 tried to create a workable and reader-friendly color Kindle, according to three former employees. New color display technologies like Qualcomm’s Mirasol and another MIT IT-offshoot called Pixel Qi proved unreliable and difficult to produce in large quantities. In January 2010, the iPad demonstrated the broad appeal of a new kind of color LCD tablet with better image quality, wider viewing angles, and, near to Amazon’s heart, Apple’s own selection of e-books. People close to Lab126 say that work on tablets, including the Kindle Fire, started soon after.

Amazon’s devices division now employs around 800 hardware and software engineers in Cupertino, Calif., who fill up all but one floor of an entire eight-floor office building and part of a second building in the same office park, less than a mile from Apple’s corporate headquarters. In the unit’s industrial design lab, according to a person who has visited that top-secret floor but was not authorized to speak on the record, naked e-ink displays hang from the walls with images from books imprinted on their screens. They’re used to demonstrate to potential new hires how an e-ink screen can hold an image indefinitely without being connected to a power supply. There’s also another office of Kindle employees at Amazon’s new corporate campus in the South Lake Union district of Seattle, in a building nostalgically named Fiona. The group is cordoned off from other Amazon employees, whose company badges do not grant them access.

Bezos won’t say what kind of devices he’s cooking up next. People with knowledge of the division’s plans say that the Kindle Fire is only the first of a line of Amazon tablets, not an isolated product, and that the group has always considered the possibility of building Amazon cell phones and Internet-connected TVs. “We are a company with a lot of ideas,” Bezos says, when asked directly about his plans. And then, of course, he laughs uproariously.

For those already competing with Amazon.com, the Kindle Fire will not be good news. Kevin Ryan, the co-owner of Green Apple Books, a 44-year-old bookstore in San Francisco, says that Amazon has lowered the prices in the book business beyond his ability to match them. Amazon has also locked up several big authors to publishing contracts, and though it says it will produce their books in print as well as digital formats, that has competing retailers nervous. “They’re bullies. They really are. I think they really want to be a monopoly,” Ryan says from the 8,000-square-foot store that features tribal masks over the bookshelves, and which has watched sales drop for much of the past decade. Of the growing group of authors like George R.R. Martin, whose books have sold over a million digital copies through Amazon, he says, “You have to assume that people joining the million book Kindle club is taking business away from you.”

In the past year major chains like Toys “R” Us, Sports Authority, and (RSH)Radio Shack have teamed up to combat Amazon’s might, forming a free shipping program called ShopRunner that, like Amazon Prime, also offers free two-day shipping for $79 a year. It’s not clear yet how ShopRunner is doing; the group won’t release subscriber numbers. Fiona Dias, ShopRunner’s chief strategy officer, says that by locking in a new wave of customers with the Kindle Fire, Amazon will make their jobs even harder. “It’s a phenomenal concentration of power,” she says. “If we were scared of Amazon in the Web world, we should be absolutely terrified of them in the tablet world.”

It’s not just competitors that are assessing Amazon’s dominance. Over the past year, lawmakers, the media, and even some customers have begun weighing Amazon’s growing sales and size against the impact for communities, commerce, and the local job market.

Amazon has brought some of this scrutiny on itself. It touts its hiring of workers for its growing network of shipping centers, yet those jobs aren’t exactly plumb: They start at around $11 an hour (with health benefits), and conditions can be tough. The recent newspaper account in the Allentown (Pa.) Morning Call not only revealed that temperatures over the summer in a local Amazon facility reached 120F, but that workers who were slowed by the heat felt penalized by their bosses. (Amazon has promised to put in air conditioners.)

The report is consistent with a company that’s notoriously frugal with employees, who get few perks aside from 10 percent off $1,000 in annual purchases. Unlike Google and Apple, Amazon does not subsidize meals or provide free sodas. Even the pet dogs of Amazon employees get a better deal: There’s a bucket of free milk bones at the front desk of every company building in Seattle.

The vicious, multi-state battle over state sales tax has created perhaps the most controversy around Amazon. Legislators in more than a dozen states, pressed by such politically connected competitors as Walmart, have been pushing Amazon to collect the sales tax that their customers technically already owe on online purchases, to better repair widening budget deficits and pay firemen and school teachers. Bezos has tenaciously fought that effort, arguing that only federal legislation can overrule a U.S. Supreme Court ruling from 1992 that retailers with no physical presence in a state should not have to pay sales tax there. Critics have charged he’s just stringing out his price advantage as long as possible.

On Sept. 7, Amazon finally compromised in California, agreeing to start collecting sales tax in the state by November 2012. Bezos thinks that by then the federal government will uniformly set nationwide standards for the collection of online sales tax. “You have to do what you think is correct,” he says. “Obviously we care about perception, but we also value substance and the right place to fix this is in federal legislation.”

Losing the tax advantage may not be such a bad thing. If and when Amazon starts collecting sales tax, it will be free to set up distribution centers right outside major cities, which would enable even faster deliveries than it offers now. As part of Amazon’s deal with California, for example, the company has pledged to spend $500 million on new warehouses and hire 10,000 full-time workers and 25,000 seasonal employees. Customers in California could soon end up getting same-day deliveries of products and even produce. Amazon’s experimental “Fresh” grocery program is now active in Seattle, where the company already collects sales tax.

Nancy Koehn of Harvard Business School thinks Amazon may be getting big enough for people to finally start considering the ramifications—for towns, shopping centers, and jobs—of a world dominated by online buying. She recently discussed Amazon on Wisconsin Public Radio—not the most neutral forum—but was surprised when almost all of the phone calls from listeners were critical of the company. “Americans get very nervous about centralized power that affects their communities,” she says. “We get a little bit nervous about bigness, yet we want the convenience and the pricing and the material plenty that bigness allows.”

Amazon’s new Seattle campus testifies to that growing size. The company has leased 11 brand-new buildings in the burgeoning South Lake Union neighborhood from real estate developer and (MSFT)Microsoft co-founder Paul Allen. It’s classic Amazon: unostentatious, and no company signs on any of the buildings. The entire campus is due to be completed by 2013 and will host several thousand employees, but the company is growing so fast, it’s already looking for even more space.

In Day One South, Bezos would clearly rather discuss the Kindle Fire than real estate, sales taxes, or air conditioning. Former employees of Lab126 say the chief executive officer spends an unusual amount of his time delving into the gritty details of his fledgling hardware business, and can happily talk for hours about the location of this or that button on a device. “I spent a huge amount of time working on Kindle Fire,” he says.

He’s right to sweat the details, especially now that his competition has gone from slow-moving big-box retailers to tech giants like Apple, which has even deeper deep pockets and is as comfortable with long-term investments as Amazon. “I believe these industries are so big, there are going to be multiple winners,” Bezos says. He’s been saying that for 10 years, during which time he’s helped consign Circuit City, Borders, and others to oblivion. “When I look at something like the Kindle Fire, what I want is to be one of the winners.”

Video: Social Media is NOT about Technology

2011-10-02T14:22:00.000-07:00

TED Video: The six killer apps of prosperity

2011-09-25T14:24:00.000-07:00

Virtual Grocery Shopping in South Korea

2011-07-08T07:12:00.000-07:00

South Korea plans to convert all textbooks to digital by 2015

2011-07-03T10:21:00.000-07:00

http://www.engadget.com/2011/07/03/south-korea-plans-to-convert-all-textbooks-to-digital-swap-back/

By Zach Honig

Well, that oversized Kindle didn't become the textbook killer Amazon hoped it would be, but at least one country is moving forward with plans to lighten the load on its future generation of Samsung execs. South Korea announced this week that it plans to spend over $2 billion developing digital textbooks, replacing paper in all of its schools by 2015. Students would access paper-free learning materials from a cloud-based system, supplementing traditional content with multimedia on school-supplied tablets. The system would also enable homebound students to catch up on work remotely -- they won't be practicing taekwondo on a virtual mat, but could participate in math or reading lessons while away from school, for example. Both programs clearly offer significant advantages for the country's education system, but don't expect to see a similar solution pop up closer to home -- with the US population numbering six times that of our ally in the Far East, many of our future leaders could be carrying paper for a long time to come.

Video: Billy Gardell on Technology

2011-06-11T15:26:00.000-07:00

CTIA's "Less with Wireless" Commercial

2011-05-26T06:25:00.000-07:00

Incremental Innovation - More on Pencils

2011-03-30T18:38:00.000-07:00

I delivered a TEDx talk about incremental innovation (http://www.youtube.com/watch?v=R0-PS4dr2iM) and talked about pencils. A friend sent me the email below - one of those "today in history" kind of things.

On this day in 1858, Hymen Lipman of Philadelphia patented the first pencil to have an attached eraser. The eraser-tipped pencil is still something of an American phenomenon; most European pencils are still eraserless. The humble pencil has a long and storied history, going back to the Roman stylus, which was sometimes made of lead, and why we still call the business end of the pencil the "lead," even though it's been made of nontoxic graphite since 1564.

Pencils were first mass-produced in Nuremberg, Germany, in 1662, and the Industrial Revolution of the 19th century really allowed the manufacture to flourish. Before he became known for Walden and "Civil Disobedience," Henry David Thoreau and his father were famous for manufacturing the hardest, blackest pencils in the United States. Edison was fond of short pencils that fit neatly into a vest pocket, readily accessible for the jotting down of ideas. John Steinbeck loved the pencil and started every day with 24 freshly sharpened ones; it's said that he went through 300 pencils in writing East of Eden (1952), and used 60 a day on The Grapes of Wrath (1939) and Cannery Row (1945).

Our common pencils are hexagonal to keep them from rolling off the table, and they're yellow because the best graphite came from China, and yellow is traditionally associated with Chinese royalty. A single pencil can draw a line 35 miles long, or write around 45,000 words. And if you make a mistake, thanks to Hymen Lipman, you've probably got an eraser handy.

Video: Welcome to Cloud 2.0

2011-03-11T05:33:00.000-08:00

Mary Meeker: Top Mobile Internet Trends

2011-02-11T10:43:00.001-08:00

Top Mobile Internet Trends Meeker

Europe's Need for Improved Continental e-Commerce

2010-11-17T07:26:00.000-08:00

http://www.economist.com/node/17361454?story_id=17361454&fsrc=rss

Internet commerce reveals the limits of Europe’s single market. Freeing it up will bring growth and social benefits

It is wise, in times of austerity, to do one’s Christmas shopping early. Why put up with inflated holiday-season prices? In Brussels there are cheerful flea markets aplenty and impressive warehouses of charity goods. And if the “heart of Europe” is hardly the capital for bargains when it comes to new products, it matters little. The euro makes it easy to compare prices across 16 countries, and the single market allows goods to move freely within the European Union. So with a fast internet connection, it should be easy to find the best deals from Lisbon to Lapland. Saint Nick need never leave home.

Time, then, to raise a glass of mulled wine to the EU’s four freedoms of movement: people, goods, services and capital? Up to a point. The EU likes to think of itself as a continent-sized market of 500m consumers and 20m firms. In practice, it is often an agglomeration of national markets, each with its rules and oddities. Ask the French retailer, Carrefour, Europe’s biggest. It wants to buy its own-brand cheese from the Netherlands, but is prevented from doing so by France. Why? Because Dutch emmenthal is produced in 15kg (33lb) moulds, and France insists that it be made in 40kg ones. When Carrefour ships French-made chairs to its stores in Italy, the French safety certificates must be countersigned by an Italian laboratory. Absurdly, Carrefour says it has to confirm that the chairs will not be used for the purposes of torture.

Scan the European Commission’s consumer reports, and the distortions are visible. Pre-tax car prices may be fairly uniform across the EU, but the same is not true of vacuum cleaners. How to explain that food costs 28% more in Belgium than next door in the Netherlands, when the two countries are of broadly similar size and wealth? Paracetamol costs 14 times as much in France as it does in the Netherlands. Some variation may be explained by tax rates and the cost of real estate, wages and transport. Even so, the single market is clearly not living up to its name.

In the past such differences might just about have been sustainable. Shoppers usually travel only a few kilometres from home or work to compare prices. But in the internet age such stubborn gaps are perplexing. Surely, consumers should be getting online to take advantage of cheaper prices. And yet it is not happening. Only a tiny share of e-commerce transactions in the EU—which themselves make up a small fraction of European transactions overall—are conducted across national borders.

In part this reflects a problem common to all European retailing. Some shops like to segment their markets to maximise margins where they face less competition. Big retailers, in turn, complain that suppliers impose geographical barriers: identical goods produced in the same factory must often be bought at different prices to be sold in different countries. Eurocrats suspect there is much market-fixing going on, in breach of the EU’s services directive. This forbids “discrimination” against consumers in different countries, except where differences are justified by “objective criteria”. How these should be interpreted and enforced is a matter for individual countries.

In part, the obstacles to cross-border internet trading are peculiar to the online world. Price-comparison websites remain obstinately national. A bigger problem is that most online retailers don’t want the hassle of 27 different consumer-protection laws, VAT rules, electronic waste regulations and postal systems. Varying copyright rules hinder pan-European downloads of music and video files, and even sales of music players and blank CDs.

In short, European shoppers and firms still think nationally. Oddly, it is American online traders such as Dell, Amazon, eBay and Apple that are the most active in Europe (though not without problems). Maybe they had an early advantage. Maybe only big players have the administrative strength to cope with so many national rules. Or maybe Europeans just can’t think big. Whatever the reason, European shoppers often find it easier to buy goods from America than from a neighbouring country.

Break down the barriers

The single market is perhaps the EU’s biggest achievement. At a time of economic weakness, freeing the retail sector—online and offline—is a good way to improve competitiveness and boost growth. But for Michel Barnier, the internal-market commissioner, the single market is both “more and more necessary, and less and less popular”. As the man who ran the failed French referendum campaign to approve the European constitution in 2005, he is acutely aware of the danger of voter backlash.

On October 27th Mr Barnier unveiled 50 proposals to relaunch the single market, including the promotion of internet commerce. He has tried to sugar the pill with a layer of “social” policies and rhetoric. Some have been removed from the text. In any case, ritual reaffirmation of the European charter of fundamental rights, including workers’ right to take “collective action”, will not convince those who dislike the single market.

A better strategy would be to demonstrate its benefits. So extend the four freedoms online. This will need more active policing of existing rules, for example on discrimination and unfair trading practices. The commission should help countries align the way they apply directives, and find a way of simplifying VAT payments. In some areas, countries should harmonise consumer and copyright laws.

The gains will be worth it. Small and medium-sized firms will find it easier to grow; to succeed, though, they will have to develop the same global ambition as American incumbents. With a thriving online economy, citizens would enjoy greater choice and cheaper prices; those living in remote areas, and the elderly who struggle to go to the shops, would more easily get the goods and services they need. That would be a fitting Christmas present.

Nexus One successor to be a mobile credit card?

2010-11-16T16:10:00.000-08:00

By: Mark Raby
http://www.tgdaily.com/mobility-brief/52541-nexus-one-successor-to-be-a-mobile-credit-card

While we still have virtually no details about what Google's alleged follow-up to the Nexus One phone will be able to do, thanks to a presentation from CEO Eric Schmidt yesterday, we're pretty sure that mobile payments is at the top of the list.

Schmidt showed off a device that was obscured so as not to reveal the manufacturer or other specifics. What he did demonstrate was that it was running Android 2.3, the latest version of the mobile operating system, and that it is able to function as a mobile payment solution.
The device has what's called a Near Field Communication chip, which could replace credit cards for point-of-sale transaction payments.

"This could replace your credit card," said Schmidt. It will assumedly become a regular feature for future phones. Any device with an NFC chip and Android 2.3 could function as a mobile payment device.

Mobile payments are being looked at by a whole bunch of players in the mobile segment. Right now, the credit card oligopoly has an exclusive hold on cashless retail payments in the US. There is no alternative, period. Google is the frontrunner on the technology lines to change that.

Of course, the next step is to get retailers on board. That shouldn't be too difficult of a process, as long as Google is able to entice them with lower fees than the credit card companies currently charge.

During Schmidt's presentation, he also confirmed that Android 2.3 will be rolling out in the "next few weeks," providing the first solid timeline for the new OS. It had been expected, however, that 2.3 would become available a couple weeks ago and it's believed there were internal delays preventing that from happening.

Why Do We Still Get So Much Spam?

2010-11-15T11:14:00.001-08:00

http://www.wired.com/magazine/2010/09/pr_burningquestion_spam/

Our corporate network employs that kick-ass security gateway we’ve seen advertised in airports. We use Gmail. We stopped giving out our email address to pornography sites months ago. So why is our inbox still peppered with messages from huckster automatons?

It may be bad form to blame the victim, but seriously, this is all our own damn fault. Spam persists because we keep buying V1aG3A, think we can earn $1,000 a week from home, and actually believe there’s a fortune in Africa we can get half of.

“It’s simple economics,” says Jamie Tomasello, abuse operations manager at Cloudmark, a major antispam firm. “We will see the end of spam when people stop responding to it.”

That’s the demand part of the equation; the supply side is equally daunting. “It costs $3,000 to rent a botnet and send out 100 million messages,” Gmail spam czar Brad Taylor says. “It takes only 30 Viagra orders to pay for that.”

And since there will always be suckers out there, the spam invasion will never stop—no matter what protective measures you take. Spammers will get your inbox’s coordinates if your email appears anywhere on the Web. If you don’t lock down your social network’s privacy settings, they’ll find you.

And history shows that these email hooligans are smart enough to evade even the most advanced defenses: When text filters started weeding out wordy solicitations, spammers switched to images. When Gmail employed optical character recognition to catch those messages, the spammers just broke up their pictographs into several blurry segments and foiled Skynet again. They take over abandoned and formerly reliable blocks of IP addresses to bypass blacklists. They use clever Javascript tricks to hide a message’s real content from patrolling algorithms.

Fortunately, the blockers are sophisticated, too, and have come up with new countermeasures to combat evil email missiles. But since you want to make sure legitimate messages don’t become collateral damage, filters have to stay a little bit loose. After all, your wife might actually be emailing you about working from home with Viagra. So if you have zero tolerance for false positives, some spam will inevitably sneak through.

Why buy a Kindle in the iPad era?

2010-11-15T11:06:00.000-08:00

In my 2008 book, The Future of Less, I was critical of the Kindle and Amazon's business model for it. Why buy multiple devices when one device can do multiple things, I asked. Below offers an answer to that question. And the falling price of the Kindle improves the business case from the user's perspective.

http://www.wired.com/magazine/2010/09/pr_burningquestion_spam/

We can read books on our phones, laptops, and tablets. So why would we throw in a dedicated e-reader like the Kindle when packing our already cramped carry-on bags? As you might expect, Amazon.com CEO Jeff Bezos is happy to supply an answer: angry birds.

Let him explain. “The number one app for the iPad when I checked a couple of days ago was called Angry Birds—a game where you throw birds at pigs and they blow up,” Bezos says. “The number one thing on the Kindle is Stieg Larsson. It’s a different audience. We’re designing for people who want to read.”

Bezos was showing me the new third-generation Kindle, which features a thinner profile and longer battery life, as well as an entry-level price ($139 for Wi-Fi only) that he hopes is low enough to turn the device into a mass-market product.

When the Kindle was introduced in November 2007, Bezos wasn’t making a stand for a gadget or for technology. He was making a stand for reading. He acknowledged the excellence of the traditional book but claimed that the Kindle fulfilled a book’s purpose as well as its printed and bound cousin did. When you get past the pulp and glue, a book is a delivery system for an author’s vision. The Kindle’s stately monochrome e-ink screen and lack of distractions were a fair emulation of a book and helped Amazon cultivate an audience of readers, leveraging its community of bookcentric users who swap reviews and receive recommendations for the next tome to purchase.

If a successful reading device is one that “falls away” and lets the author take center stage, then it doesn’t necessarily need to be a single-purpose gadget. At least not for short bursts. I’ve found that a tablet or even a smartphone can present the pages clearly and easily enough for a narrative to consume me. Amazon tacitly acknowledges this by providing Kindle apps for the iPhone, iPad, and Android in addition to PCs and Macs. Better yet, each of these syncs with the others, so they always know how far into a book you are.

But longer, deeper plunges into literature—what the critic Victor Nell calls “ludic reading”—are a different matter. After 20 minutes or so, the 1.6-pound iPad starts to feel pretty heavy. (The new Kindle is 8.7 ounces; Gravity’s Rainbow, about 2 pounds.) The backlit screen tires your eyes and is lousy in sunlight. As for smartphones, have you ever tried to hold one in a reading position for two hours? And then there are the distractions: It’s tougher to concentrate when email, box scores, and addictive games are a click away. Why struggle through a difficult passage of prose when you can play with … angry birds?

On the other hand, when it comes to newspapers and magazines—again, shorter bursts—the iPad is clearly superior to the Kindle. Bezos says he reads three papers a day in less than half an hour, but I find my daily Kindle consumption of The New York Times and The Wall Street Journal to be awkward. Without the iPad’s rich LCD, vivid graphics, and navigational swipes, taps, and pinches, the experience is simply unsatisfying.

Nonetheless, if you’re serious about books, you’ll need an e-reader. “You’re going to want to go on vacation and read by the pool,” Bezos says. “And guess what—many people pay more than $139 for their sunglasses. So these are not expensive devices.”

Damn, I forgot. In addition to the laptop, the iPad, and the Kindle, I’ve got to pack my sunglasses, too

The Big Business of Sifting Through Social Media Data

2010-10-31T18:28:00.000-07:00

http://www.businessweek.com/magazine/content/10_44/b4201020317862.htm

Wanted: Social Media Sifters
Companies are increasing spending for the collection and analysis of online chatter—and social media monitoring outfits are being snapped up by larger software and market-research firms
By Ryan Flinn

Jonathan Spier, chief executive officer of social media analytics company NetBase, had the chance in early 2009 to win a multimillion-dollar contract for his 25-person firm if he could answer one question: Why do men sport stubble?

The query, posed by a consumer-products company to more than 100 research firms, had to be answered by mining millions of postings by men on social media sites. NetBase's software, which reads and analyzes 50,000 sentences a minute, found 77,000 mentions of stubble online in less than six seconds. Its researchers isolated all the positive comments, categorized them into themes, and built a chart in less than an hour ranking all the reasons. While the answer—most men wear stubble because they perceive it to be sexy—isn't that eye-opening, the ability to quickly collect and analyze all that Web data is. The process provides something marketers have long wanted: a way to pick up intelligence and trends from among all that chatter floating across the Net.

"It's all oriented around what businesses need and want from information," said Spier, whose Mountain View (Calif.)-based company now employs 50 people and works with Coca-Cola (KO), Kraft Foods (KFT), and Procter & Gamble (PG). "That's our selling point."

Companies are expected to more than double the amount they're spending for online data, to $840 million in 2012 from last year, according to marketing consultant Winterberry Group. The prospect of such fast-growing revenue is one reason social media monitoring outfits are being snapped up by larger software and market-research firms intent on improving their ability to use Twitter, Facebook, and blog postings as windows into the thinking of consumers.

"For years advertising was one-to-many, and then there was all this big hoopla about how to do one-to-one advertising, with the advent of the Web and Web metrics," said Debbie DeGabrielle, chief marketing officer of Visible Technologies, a social media analytics company that has grown 18-fold since 2006. "Social intelligence is the iteration beyond that—it is not mass personalization, it is personalization one-to-one."

Advertisers in the U.S. are getting the message. They will increase their spending on social media sites by 24 percent next year, to $2.09 billion, according to researcher eMarketer in New York.

Using the Web to collect information more quickly can help companies avoid product disasters. When Coca-Cola released New Coke in 1985, it committed one of the biggest blunders in marketing history, "spawning consumer angst the likes of which no business has ever seen," the company says on its website. Three months later, Coke returned its original soda to the market. Stan Sthanunathan, Coke's vice-president of marketing strategy and insights, doubts it would have taken that long to react in today's Web-connected world. "Back then, people had to write letters and send it to us, saying 'please bring back old Coke,' " Sthanunathan said. "It came out in large numbers, but it came after a few days. Right now, people will tell you that in a matter of two minutes on their Facebook page."

Gap (GPS) experienced such a reaction earlier this month when it briefly replaced its iconic blue box with a new logo. The design was widely panned online, and the retailer yanked it a week later. "We did not go about this in the right way," said Marka Hansen, the Gap president for North America. "We recognize that we missed the opportunity to engage with the online community."

That realization is fueling a buying spree of companies specializing in Web analysis. Nielsen acquired BuzzMetrics in 2006. TNS Media Intelligence, which bought Cymfony in 2007, was subsequently purchased by the Kantar Media unit of WPP Group. The McGraw-Hill Companies' (MHP) J.D. Power & Associates acquired Umbria in 2008. But it was Adobe Systems' (ADBE) purchase of Omniture for $1.8 billion last year that really put social media analytics in the spotlight, said John Lovett, a senior partner at Web Analytics Demystified. "That helped to a great extent to put our industry on the map," he said. Total acquisitions in the industry have since reached $2.5 billion, Lovett said. Last month comScore (SCOR) bought Amsterdam-based Nedstat for $36.7 million.

"A big part of this is large research companies, the billion-dollar players, realizing they need to fill out their portfolios," said Joel Rubinson, president of Rubinson Partners, a research consulting firm. "You want to have a complete offering for a global client."

Traditional market research, which involves surveys or focus groups, can be backward-looking or shaped by the questions asked, instead of tapping into what consumers themselves want to discuss or comment about online, Rubinson said. Explains Visible Technologies' DeGabrielle: "Companies need to acknowledge that this social dialogue will occur whether they like it or not, without their ability to control it. But they can choose to participate in it."

Still, monitoring social media for insights doesn't always uncover the next big thing. NetBase, for example, said it discovered a large online community of long-distance bikers and other endurance athletes purposely drinking Coke that had gone flat—giving them the caffeine and sugar to boost stamina but none of the carbonation, which can lead to cramps. NetBase researchers thought it was a cool Web-generated insight into an unusual use for the ubiquitous cola. The only problem: Coke managers had figured that out on their own.

The bottom line: The business of collecting and decoding online chatter at social networking sites is growing fast—and attracting buyout offers.

Allen H. Kupetz on TrendPOV's show on the Cashless Revolution

2010-10-29T14:13:00.000-07:00

Governments in the Middle East are cracking down on bloggers

2010-10-23T07:52:00.001-07:00

http://www.economist.com/research/articlesBySubject/displayStory.cfm?story_id=17312290&subjectID=348963

A month ago a court in Iran sentenced Hossein Derakhshan, an Iranian-Canadian, to almost 20 years in jail, the longest sentence ever handed down to a blogger. The charges were murky. He was convicted of co-operating with hostile states and insulting Islam. Often hailed as Iran’s “blogfather”, he published a do-it-yourself guide to blogging in Persian earlier this decade that helped to prompt an explosion of activity. Today there may be as many as 75,000 Persian blogs.

A harsh critic of Iran’s rulers for many years, Mr Derakhshan boasted on his blog of making a trip to Israel, probably the source of the charge of collaborating with Iran’s enemies. But more recently he had begun to defend the government of President Mahmoud Ahmadinejad. He brushed off concerns that he could be arrested because of his earlier views. But on his return to Iran in November 2008 the authorities nabbed him.

Iran is far from alone in locking up bloggers. Governments across the Middle East are increasingly twitchy about their citizens’ online activities. As internet use in the region has soared—up 19-fold since 2000, compared with a fivefold rise in the rest of the world, according to Internet World Stats, which monitors global internet usage—so the number jailed for what they do on the web has shot up too.

According to Reporters Without Borders, a Paris-based watchdog, at least 17 “netizens” are in jail across the Middle East: eight in Iran and the rest in Bahrain, Egypt, Morocco, Saudi Arabia, Syria and the United Arab Emirates. China may be the biggest online represser, but the Middle East is not far behind.

Earlier this month, Syrian officials confirmed that in December 2009 Tal al-Mallohi, a 19-year-old student, was arrested, accused of spying. She has been held without charge for nine months. Many believe her blog is to blame. Earlier this year a Lebanese blogger, Khodor Salameh, was interrogated after writing a post lampooning Michel Suleiman, the country’s president.

Egypt is little better. Two of its policemen are accused of beating to death a young man, Muhammad Khaled Said, outside an internet café in Alexandria in June after he posted an online video incriminating the police in a drug deal. The incident provoked angry protests online and in the streets. Another Egyptian blogger, Abdel Kareem Nabil Suleiman, was arrested in November 2006 for blog posts criticising senior clerics and the government. He has been in detention ever since. Bahrain is getting edgy too. Ali Abdulemam, the monarchy’s best-known blogger, was jailed last month, accused of disseminating false information on his internet forum.

Governments are not only applying existing laws fiercely but also trying to come up with new ones. A new electronic media law in Saudi Arabia will require all online news sites to register. Bloggers will be encouraged to do so as well. A rare bit of good news for bloggers is that Jordan’s government has withdrawn some repressive elements of a proposed temporary law on cyber crimes that would have allowed the government to punish those whose posts upset the authorities. The change of stance came after a flurry of online protests.

The authorities are getting better at exploiting the internet themselves. After the big demonstrations in Iran last year, they circulated pictures of protesters online for members of the public to identify. In May this year, Ebrahim Jabari, a Revolutionary Guard commander, confirmed that the regime had set up a “cyber-army” to crack down on “destructive” online networks. His unit has since hacked into dozens of sites and is thought to be responsible for the arrests of hundreds of Iranians.

Western governments as well as human-rights campaigners are watching the fate of bloggers closely. In January Hillary Clinton, the American secretary of state, expressed support for internet freedom. More recently Bernard Kouchner, France’s foreign minister, said: “We must support cyber-dissidents in the same way that we supported political dissidents.”

All Together Now, to Each His Own Sync

2010-10-15T11:23:00.001-07:00

http://www.nytimes.com/2010/09/18/us/18iht-currents.html

By ANAND GIRIDHARADAS

Like many a self-respecting millennial, I am thoroughly synced.

When an e-mail invites me somewhere, my calendar is automatically informed; my phone finds out soon enough and alerts me before the event. When I call someone new from that phone, a listing for the person sprouts in my Gmail address book. When I star songs that entrance me on my iPod, my tastes appear on my laptop. I take for granted that the many pieces of my world march in lock step.

But it can feel at times that I am synced only with myself.

I read the same newspapers as many of my friends and acquaintances, but rarely have we read and been struck by the same article on the same day. Rarely have we all seen the same movie. Rarely does a musician have all of us simultaneously in thrall, the way Elvis or the Rolling Stones or Michael Jackson seemed to unite the world. My friends may all belong to Facebook and Twitter, but in these arenas, with our own settings and sets of friends, we each have a unique experience. Even when we are hooked on the same TV program, we are almost never watching the same episode of “Mad Men,” thanks to Netflix, Hulu and their less legal alternatives.

And we are not alone. As the very idea of mass culture erodes, so many of us are synced with ourselves but unsynced with those around us.

“Mass is definitely dead,” Faith Popcorn, a prominent futurist and trend consultant, said in an e-mail. “Every one of us,” she added, “is creating our own version of culture.”

The digitizing, globalizing world is changing the working of culture. As some see it, cities and nations and continents are losing their common culture, their shared reference points, their zeitgeist: People can no longer count on those around them knowing or cherishing any of the same music or art or films. Others argue that a common culture is not dying so much as changing form: that it is less and less attached to particular terrain and ever more linked to dispersed global networks of anime lovers and Chatroulette addicts and Nintendo Wii players.

“Most of the historical sources of zeitgeist were national in scope and brokered by traditional media, and there are indeed fewer such national touchstones,” Clay Shirky, a scholar of new media at New York University, said in an e-mail. But, he added, “rather than conclude that zeitgeist is a fixed category that we used to have more of and now we have less of, I’d say that the zeitgeist of zeitgeist is changing.”

The shift is propelled by the facts that anyone can become a cultural producer today, that the culture of anywhere is increasingly available everywhere, and that it is available whenever you want it, not just in the two months after the movie or book came out. Cultural possibilities have multiplied as a result, but the change also means fewer cultural moments, as traditionally defined — moments in which a large community undergoes a formative simultaneous experience.

Elisabeth von Thadden calls it the “eroding commons.” By day, she is an editor of Die Zeit, a venerable German weekly newspaper, and there she lives out the old dream of the newspaper as fostering “public political deliberation in order to establish and debate the common issues of its readers on a level which most readers share,” as she put it in an e-mail.

Then she returns home each night to her teenagers, “who live in their separate digital communities and rarely ever come across the books I try to define as inevitable. They pretend that there is hardly anything like shared knowledge any longer.”

What Ms. von Thadden mourns, Dana Al Salem celebrates. She is Kuwaiti, lives between London and Paris and is the founder of FanShake.com, a company that allows virtual communities of fans to combine forces to organize concerts and interact with their favorite musicians.

“In my youth, culture was primarily determined by national or social boundaries,” she said in an e-mail. “Today’s youth chooses their own. While we may lament an apparent loss of our culture, driven by technology’s pervasive leveling power, should we also reject the notion that a Kuwaiti teen plays online games with another in Tel Aviv?”

For the enthusiasts of these changes, culture is not about particular artists or particular books or particular films, but centers on content-agnostic platforms like Google and YouTube and Wikipedia, where every variety of culture finds expression and where people can collaborate across boundaries.

“The Internet and globalization are building shared cultural experiences worldwide in a way that was previously impossible,” Jimmy Wales, the co-founder of Wikipedia, said in an e-mail. Citing the hundreds of millions of Facebook and Wikipedia users, he added: “I dare you to find anything before the Internet that captured a mass public on even a fraction of that scale.”

It is perhaps debatable whether two people who have participated in such sites, but in totally different corners of them, have had a cultural experience in common. But these neutral platforms thrive with multitudes of cultures-within-a-culture: communities of like-minded people who build things together, share information, forward articles back and forth.

Chris Anderson, the editor in chief of Wired magazine, calls it a shift from “mass culture” to “massively parallel culture.”

Questions linger. What does it mean for the future of countries that culture now transcends the nation instead of binding it together? Will the digital sphere ever produce culture as sublime and enduring as the operas of Wagner or the qawwalis of Nusrat? Is there anything to defend and preserve in the passing cultural world, or is that merely to favor pen over printing press, horse over automobile?

A growing quantity of culture now is globally dispersed, user-generated, open-source, multiplatform, available on demand — jargon that, taken together, speaks of a gradual untethering from the particular slivers of earth and particular moments in time in which culture was traditionally imagined to sprout. More people than ever, perhaps, have the opportunity to be makers of culture, even if that means more to choose from and, consequently, fewer standards and blockbusters shared in common.

What it means, too, is this paradoxical feeling: that of being more connected than ever, with one-click access to so much of the world’s cultural harvest, and yet, with the fragmentation and constant whirl of these times, of being starved for like-mindedness, synced only with ourselves.

Sorkin vs. Zuckerberg - What "The Social Network" Should Teach Us

2010-10-11T12:34:00.000-07:00

Lawrence Lessig
http://www.tnr.com/print/article/books-and-arts/78081/sorkin-zuckerberg-the-social-network

In 2004, a Harvard undergraduate got an idea (yes, that is ambiguous) for a new kind of social network. Here’s the important point: He built it. He had a bunch of extremely clever clues for opening up a social space that every kid (anyone younger than I am) would love. He architected that social space around the social life of the kids he knew. And he worked ferociously hard to make sure the system was stable and functioning at all times. The undergraduate then spread it to other schools, then other communities, and now to anyone. Today, with more than 500,000,000 users, it is one of the fastest growing networks in the history of man. That undergraduate is now a billionaire, multiple times over. He is the youngest billionaire in the world.

In 2009, Aaron Sorkin (“Sports Night,” “The West Wing”) got (yes, the same word) the idea to write a script for a movie about this new social network. Here’s the important point: He made it. As with every one of his extraordinary works, Sorkin crafted dialogue for an as-yet-not-evolved species of humans—ordinary people, here students, who talk perpetually with the wit and brilliance of George Bernard Shaw or Bertrand Russell. (I’m a Harvard professor. Trust me: The students don’t speak this language.) With that script, and with a massive hand from the film’s director, David Fincher, he helped steer an intelligent, beautiful, and compelling film through to completion. You will see this movie, and you should. As a film, visually and rhythmically, and as a story, dramatically, the work earns its place in the history of the field.

But as a story about Facebook, it is deeply, deeply flawed. As I watched the film, and considered what it missed, it struck me that there was more than a hint of self-congratulatory contempt in the motives behind how this story was told. Imagine a jester from King George III’s court, charged in 1790 with writing a comedy about the new American Republic. That comedy would show the new Republic through the eyes of the old. It would dress up the story with familiar figures—an aristocracy, or a wannabe aristocracy, with grand estates, but none remotely as grand as in England. The message would be, “Fear not, there’s no reason to go. The new world is silly at best, deeply degenerate, at worst.”

Not every account of a new world suffers like this. Alexis de Tocqueville showed the old world there was more here than there. But Sorkin is no Tocqueville. Indeed, he simply hasn’t a clue to the real secret sauce in the story he is trying to tell. And the ramifications of this misunderstanding go well beyond the multiplex.

Two lawsuits provide the frame for The Social Network. One was brought by Cameron and Tyler Winklevoss, twins at Harvard who thought they had hired Zuckerberg to build for them what Facebook would become. The other was brought by Eduardo Saverin, Zuckerberg’s “one friend” and partner, and Facebook’s initial CFO, who was eventually pushed out of the company by Silicon Valley venture capitalists. These cases function as a kind of Greek chorus, setting the standards of right, throughout the film. It is against the high ideals they represent that everything else gets judged. And indeed, the lawyers are the only truly respectable or honorable characters in the film. When they’re ridiculed or insulted by Zuckerberg, their responses are more mature, and better, than Zuckerberg’s. (If you remember the scene in “The Wire” where Omar uses his wit to cut the lawyer to bits, that’s not this film.) The lawyers here rise above the pokes, regardless of the brilliance in Zuckerberg’s charge. This is kindergarten. They are the teachers. We’re all meant to share a knowing wink, or smirk, as we watch the silliness of children at play.

In Sorkin’s world—which is to say Hollywood, where lawyers attempt to control every last scrap of culture—this framing makes sense. But as I watched this film, as a law professor, and someone who has tried as best I can to understand the new world now living in Silicon Valley, the only people that I felt embarrassed for were the lawyers. The total and absolute absurdity of the world where the engines of a federal lawsuit get cranked up to adjudicate the hurt feelings (because “our idea was stolen!”) of entitled Harvard undergraduates is completely missed by Sorkin. We can’t know enough from the film to know whether there was actually any substantial legal claim here. Sorkin has been upfront about the fact that there are fabrications aplenty lacing the story. But from the story as told, we certainly know enough to know that any legal system that would allow these kids to extort $65 million from the most successful business this century should be ashamed of itself. Did Zuckerberg breach his contract? Maybe, for which the damages are more like $650, not $65 million. Did he steal a trade secret? Absolutely not. Did he steal any other “property”? Absolutely not—the code for Facebook was his, and the “idea” of a social network is not a patent. It wasn’t justice that gave the twins $65 million; it was the fear of a random and inefficient system of law. That system is a tax on innovation and creativity. That tax is the real villain here, not the innovator it burdened.

The case for Zuckerberg’s former partner is stronger, and more sensible and sad. But here again, the villains are not even named. Sorkin makes the autodidact Sean Parker, co-founder of Napster, the evil one. (No copyright-industry bad blood there.) I know Parker. This is not him. The nastiest people in this story (at least if Sorkin tells this part accurately) were the Facebook lawyers who show up in poorly fitting suits and let Saverin believe that they were in this, as in everything else they had done, representing Saverin as well. If that’s what actually happened, it was plainly unethical. No doubt, Saverin was stupid to trust them, but the absurdity here is a world where it is stupid to trust members of an elite and regulated profession. Again, an absurdity one could well miss in this film between all the cocaine and practically naked twentysomethings.

But the most frustrating bit of The Social Network is not its obliviousness to the silliness of modern American law. It is its failure to even mention the real magic behind the Facebook story. In interviews given after making the film, Sorkin boasts about his ignorance of the Internet. That ignorance shows. This is like a film about the atomic bomb which never even introduces the idea that an explosion produced through atomic fission is importantly different from an explosion produced by dynamite. Instead, we’re just shown a big explosion ($25 billion in market capitalization—that’s a lot of dynamite!) and expected to grok (the word us geek-wannabes use to show you we know of what we speak) the world of difference this innovation in bombs entails.

What is important in Zuckerberg’s story is not that he’s a boy genius. He plainly is, but many are. It’s not that he’s a socially clumsy (relative to the Harvard elite) boy genius. Every one of them is. And it’s not that he invented an amazing product through hard work and insight that millions love. The history of American entrepreneurism is just that history, told with different technologies at different times and places.

Instead, what’s important here is that Zuckerberg’s genius could be embraced by half-a-billion people within six years of its first being launched, without (and here is the critical bit) asking permission of anyone. The real story is not the invention. It is the platform that makes the invention sing. Zuckerberg didn’t invent that platform. He was a hacker (a term of praise) who built for it. And as much as Zuckerberg deserves endless respect from every decent soul for his success, the real hero in this story doesn’t even get a credit. It’s something Sorkin doesn’t even notice.

For comparison’s sake, consider another pair of Massachusetts entrepreneurs, Tom First and Tom Scott. After graduating from Brown in 1989, they started a delivery service to boats on Nantucket Sound. During their first winter, they invented a juice drink. People liked their juice. Slowly, it dawned on First and Scott that maybe there was a business here. Nantucket Nectars was born. The two Toms started the long slog of getting distribution. Ocean Spray bought the company. It later sold the business to Cadbury Schweppes.

At each step after the first, along the way to giving their customers what they wanted, the two Toms had to ask permission from someone. They needed permission from a manufacturer to get into his plant. Permission from a distributor to get into her network. And permission from stores to get before the customer. Each step between the idea and the customer was a slog. They made the slog, and succeeded. But many try to make that slog and fail. Sometimes for good reasons. Sometimes not.

Zuckerberg faced no such barrier. For less than $1,000, he could get his idea onto the Internet. He needed no permission from the network provider. He needed no clearance from Harvard to offer it to Harvard students. Neither with Yale, or Princeton, or Stanford. Nor with every other community he invited in. Because the platform of the Internet is open and free, or in the language of the day, because it is a “neutral network,” a billion Mark Zuckerbergs have the opportunity to invent for the platform. And though there are crucial partners who are essential to bring the product to market, the cost of proving viability on this platform has dropped dramatically. You don’t even have to possess Zuckerberg’s technical genius to develop your own idea for the Internet today. Websites across the developing world deliver high quality coding to complement the very best ideas from anywhere. This is a platform that has made democratic innovation possible—and it was on the Facebook platform resting on that Internet platform that another Facebook co-founder, Chris Hughes, organized the most important digital movement for Obama, and that the film’s petty villain, Sean Parker, organized Causes, one of the most important tools to support nonprofit social missions.

The tragedy—small in the scale of things, no doubt—of this film is that practically everyone watching it will miss this point. Practically everyone walking out will think they understand genius on the Internet. But almost none will have seen the real genius here. And that is tragedy because just at the moment when we celebrate the product of these two wonders—Zuckerberg and the Internet—working together, policymakers are conspiring ferociously with old world powers to remove the conditions for this success. As “network neutrality” gets bargained away—to add insult to injury, by an administration that was elected with the promise to defend it—the opportunities for the Zuckerbergs of tomorrow will shrink. And as they do, we will return more to the world where success depends upon permission. And privilege. And insiders. And where fewer turn their souls to inventing the next great idea.

I had always hoped (naively, no doubt) that this point would be obvious to the creators of film. No field of innovation is more burdened by the judgments of idiots in the middle than film. Scores of directors have watched in horror as their creativity gets maimed by suits-carrying-focus-groups. I had thought that if only these creators would let themselves understand the ethic of Internet creativity—where the creator gets to speak directly to an audience, where an audience is brought on stage, and talks back—they would get it. And if they did, that there might actually be a chance for this understanding to be shown in one of the only ways this culture understands anymore—through film. Indeed, as I walked into this film unprimed by early reviews, I had hoped, “West Wing” fan-boy that I am, that of all the storytellers in Hollywood, Sorkin was most likely to get it.

He didn’t. His film doesn’t show it. What it shows is worth watching. But what it doesn’t show is an understanding of the most important social and economic platform for innovation in our history.

Zuckerberg is a rightful hero of our time. I want my kids to admire him. To his credit, Sorkin gives him the only lines of true insight in the film: In response to the twins’ lawsuit, he asks, does “a guy who makes a really good chair owe money to anyone who ever made a chair?” And to his partner who signed away his ownership in Facebook: “You’re gonna blame me because you were the business head of the company and you made a bad business deal with your own company?” Friends who know Zuckerberg say such insight is common. No doubt his handlers are panicked that the film will tarnish the brand. He should listen less to these handlers. As I looked around at the packed theater of teens and twenty-somethings, there was no doubt who was in the right, however geeky and clumsy and sad. That generation will judge this new world. If, that is, we allow that new world to continue to flourish.

Lawrence Lessig is a professor at Harvard Law School and the director of the Edmond J. Safra Foundation Center for Ethics.

The next billion geeks: How the mobile internet will transform the BRICI countries

2010-09-06T17:38:00.000-07:00

http://www.economist.com/node/16944020?story_id=16944020&CFID=146890671

Buying a mobile phone was the wisest $20 Ranvir Singh ever spent. Mr Singh, a farmer in the north Indian state of Uttar Pradesh, used to make appointments in person, in advance, to deliver fresh buffalo milk to his 40-odd neighbours. Now his customers just call when they want some. Mr Singh’s income has risen by 25%, to 7,000 rupees ($149) a month. And he hears rumours of an even more bountiful technology. He has heard that “something on mobile phones” can tell him the current market price of his wheat. Mr Singh does not know that that “something” is the internet, because, like most Indians, he has never seen or used it. But the phone in his calloused hand hints at how hundreds of millions of people in emerging markets—perhaps even billions—will one day log on.

Only 81m Indians (7% of the population) regularly use the internet. But brutal price wars mean that 507m own mobile phones. Calls cost as little as $0.006 per minute. Indian operators such as Bharti Airtel and Reliance Communications sign up 20m new subscribers a month.

.In other developing countries, too, there are many more mobile phones than internet connections. In Brazil, Russia, India, China and Indonesia (the so-called BRICI countries), there are 610m regular internet users but a staggering 1.8 billion mobile-phone connections, according to the Boston Consulting Group (BCG). In a report called “The Internet’s New Billion”, BCG predicts that by 2015 there will be 1.2 billion internet users in these countries—dwarfing the total in America and Japan (see chart).

These new internet users will mostly log on via their mobile phones. This tends to be cheaper and easier than any other option. In Brazil, fixed-line broadband is often prohibitively expensive; in Russia, where it can be much cheaper, it is often unavailable. In India, where infrastructure is always a headache, it is hard to get a good basic landline, let alone broadband.

Poor people seldom have personal computers. In the BRICI countries, whose combined population is more than 3 billion, there are only 440m PCs. Many people use internet cafés, but these are inaccessible to rural folk. A connection in your pocket is far more convenient.

Hordes of Indians will start using their mobiles to access the internet early next year when third-generation (3G) services, which allow subscribers to access the web, arrive. Kunal Bajaj, India director of Analysys Mason, a British consultancy, expects the take-up to be as fast—and as revolutionary—as it has been for mobile phones. “The telecoms companies have seen what happens when they drop prices. They’ve already tasted blood. The price wars will be just as aggressive,” he says.

The stakes are high. In developing countries, every 10 percentage-point increase in mobile-phone penetration yields an extra 0.81 percentage points of annual economic growth, according to a 2009 World Bank study. The mobile internet could be even more powerful. The unemployed will search for jobs online. Farmers in remote areas will find customised advice on crop planting.

The drawback of the internet is that you have to be literate to use it. That is a huge problem in India, where the literacy rate is only 60% (in China and Russia, it is over 90%). Mr Singh, the farmer, cannot read, so he cannot send text messages. He says he often needs help dialling numbers correctly, too.

Cult of less: Living out of a hard drive

2010-08-16T16:11:00.000-07:00

BBC News
By Matthew Danzico
http://www.bbc.co.uk/news/world-us-canada-10928032

Many have begun trading in CD, DVD, and book collections for digital music, movies, and e-books. But this trend in digital technology is now influencing some to get rid of nearly all of their physical possessions - from photographs to furniture to homes altogether.

Let's face it - digital files, applications and web services are replacing the need for many of the physical goods that pepper our homes, crowd our desks and fill our closets.

From online photo albums to virtual filing cabinets to digital musical instruments, hi-tech replacements are becoming ubiquitous.

But as goods continue to make the leap from the bookshelf to the hard drive, some individuals are taking the opportunity to radically change their lifestyles.

'21st-Century minimalist'

Meet Kelly Sutton, a spiky-haired 22-year-old software engineer with thick-rimmed glasses and an empty apartment in Brooklyn's Williamsburg neighbourhood - a hotbed for New York's young, early adopters of new technology.

Mr Sutton is the founder of CultofLess.com, a website which has helped him sell or give away his possessions - apart from his laptop, an iPad, an Amazon Kindle, two external hard drives, a "few" articles of clothing and bed sheets for a mattress that was left in his newly rented apartment.

This 21st-Century minimalist says he got rid of much of his clutter because he felt the ever-increasing number of available digital goods have provided adequate replacements for his former physical possessions.

"I think cutting down on physical commodities in general might be a trend of my generation - cutting down on physical commodities that can be replaced by digital counterparts will be a fact," said Mr Sutton.

Mr Sutton sold or gave away most of his assets, apart from his iPad, Kindle, laptop and a few other items
The tech-savvy Los Angeles "transplant" credits his external hard drives and online services like iTunes, Hulu, Flickr, Facebook, Skype and Google Maps for allowing him to lead a minimalist life.

"I think the shift to all digital formats in all methods and forms of media consumption is inevitable and coming very quickly," said Mr Sutton.

And Mr Sutton may be right.

Consumer electronic book sales tripled between 2008 and 2009, while the growth of physical book sales slowed, according to the Association of American Publishers.

Meanwhile, compact disc sales have declined by roughly 50% from their 2005 levels worldwide, while global revenue from digital music has nearly quadrupled in the same period, according to the International Federation of the Phonographic Industry.

Virtual homelessness

Chris Yurista, a DJ from Washington, DC, cites this trend in digital music as one reason he was able to hand over the keys to his basement apartment over a year ago.

"It's always nice to have a personal sense of home, but that aside - the internet has replaced my need for an address," the 27-year-old said.

Since boxing up his physical possessions and getting rid of his home, Mr Yurista has taken to the streets with a backpack full of designer clothing, a laptop, an external hard drive, a small piano keyboard and a bicycle - an armful of goods that totals over $3,000 (£1,890) in value.

The American University graduate, who spends much of his time basking in the glow emanating from his Macbook, earns a significant income at his full-time job as a travel agent and believes his new life on the digital grid is less cluttered than his old life on the physical one.

"I don't feel a void living the way I'm living because I've figured out a way to use digital technology to my advantage," Mr Yurista explained.

Mr Yurista feels by digitising his life, he no longer has to worry about dusting, organising and cleaning his possessions. And he says his new intangible goods can continue to live on indefinitely with little maintenance.

"Things like records snap and wear down over time. It's upsetting. MP3s don't," he said.

Mr Yurista feels his digital possessions can now live on indefinitely with little maintenance
The DJ has now substituted his bed for friends' couches, paper bills for online banking, and a record collection containing nearly 2,000 albums for an external hard drive with DJ software and nearly 13,000 MP3s.

But Mr Yurista is not the only digital vagabond.

Joshua Klein, a New York City-based technology innovation consultant, also set out on the road with his hard drive.

He and his wife digitised their possessions, got rid of two-thirds of what they owned and headed to the streets of New York for nine months with their laptops.

But Mr Klein and Mr Yurista both admit there are risks involved.

Mr Klein says the lifestyle can become loathsome because "you never know where you will sleep". And Mr Yurista says he frequently worries he may lose his new digital life to a hard drive crash or downed server.

"You have to really make sure you have back-ups of your digital goods everywhere," he said.

Data crisis counsellor

Data recovery engineer Chris Bross agrees and says if individuals backed up their digital lives "they wouldn't need us when a failure occurs, and they wouldn't be in crisis".

As digital possessions shrink the need for physical property, data recovery companies like Drive Savers, DTI Recovery and Eco Data Recovery may become the emergency response teams of the future.

Mr Bross, a Drive Savers employee, believes as individuals grow increasingly dependent on "digital storage technology for holding all these assets that they used to hold more tangibly", data recovery services will become rather like the firefighters of the 21st Century - responders who save your valuables.

And like a house fire that rips through a family's prized possessions, when someone loses their digital goods to a computer crash, they can be devastated.

Kelly Chessen, a 36-year-old former suicide hotline counsellor with a soothing voice and reassuring personality, is Drive Savers official "data crisis counsellor".

Part-psychiatrist and part-tech enthusiast, Ms Chessen's role is to try to calm people down when they lose their digital possessions to failed drives.

Ms Chessen says some people have gone as far as to threaten suicide over their lost digital possessions and data.

"It's usually indirect threats like, 'I'm not sure what I'm going to do if I can't get the data back,' but sometimes it will be a direct threat such as, 'I may just have to end it if I can't get to the information'," said Ms Chessen.

"Start QuoteIt's the idea that we can copy or transfer the information inside the brain into a computer into a form that can be run on the computer”

And Ms Chessen says she is receiving an increasing number of calls as the shelf life of our physical possessions draws to a close.

The 'ultimate replacement'

Research Fellow Anders Sandberg, at the Future of Humanity Institute at Oxford University, warns Ms Chessen may soon be dealing with larger problems than lost photos and video footage.

He says our hard drives may one day contain the most important digital replacement of all - digitised replicas of our own brains.

Dr Sandberg believes we could be living on hard drives along with our digital possessions in the not too distant future, which would allow us to shed the trouble of owning a body.

The concept is called "mind uploading", and it suggests that when our bodies age and begin to fail like a worn or snapped record, we may be able to continue living consciously inside a computer as our own virtual substitutes.

"It's the idea that we can copy or transfer the information inside the brain into a form that can be run on the computer," said Dr Sandberg.

He added: "That would mean that your consciousness or a combination of that would continue in the computer."

Dr Sandberg says although it's just a theory now, researchers and engineers are working on super computers that could one day handle a map of all the networks of neurons and synapses in our brains - and that map could produce human consciousness outside of the body.

He says if a complete map of our brains was uploaded to a computer and a conscious, digital replica of ourselves was created, we could, in theory, continue to live forever on a hard drive along with our MP3s and e-books.

Why Your Phone Can't Really Replace Your Credit Card

2010-08-04T17:32:00.000-07:00

From Wired
by Eliot Van Buskirk
http://www.wired.com/epicenter/2010/08/phone-credit-card/all/1

You may very well wave your cellphone over a retail console to buy just about anything within a couple of years, obviating the need to carry around much of what’s in your wallet.

That might sound super cool, but aside from learning a new swipe, not much else will change from the way we use credit cards today.

“Visa and MasterCard are so universal at this point that the barriers to entry for any new payment system are almost insurmountable,” said IDC Financial Insights practice director for payments and security Aaron MacPherson.

As a result of that and other factors mentioned below, the fees, interest charges and markups that plague credit card customers on both sides of the customer/merchant equation will undoubtedly persist on smartphones.

Credit card companies typically charge merchants around three percent of the purchase price when a customer pays by card. That drives up the price of all goods, regardless of how you, personally, pay, because merchants have to pass those extra costs to consumers somehow.

And unfortunately, the credit card industry appears to be an example of the rare market that cannot be disrupted by new technology — for now, anyway.

To the optimist, the anticipated switch from cards to phones looks like a golden opportunity for enterprising, agile startups to swoop in and undercut that three-percent rate. After all, how can delivering a bunch of ones and zeros — something that’s essentially free in most other cases — end up costing three percent of the price of something tangible like groceries or a shirt?

In these dis-intermediated times, it seems laughable that moving a small amount of data around would be worth so much.

There are fundamental costs of doing business, to be sure. Just as we all pay a credit card “tax” even if we do leave home with just cash, cardholders also pay for their deadbeat cohorts. Those unpaid bills are one of the big reasons issuers say they need to keep the interest on unpaid balances as high as it is. And then there’s the problem of “chargebacks,” wherein money is refunded by a bank to a consumer following a fraudulent transaction, representing a massive expense for credit card companies and PayPal (Google Books link).

More Middlemen, Not Fewer
So, the same middlemen will take their cuts for all the same reasons when we switch from credit cards to credit phones – and, likely, there will be even more middlemen, who will add to the rake. The two main reasons for this are the big players’ massive network-effect advantages, and that the internet cannot match the reliability, speed and security afforded by credit card company’s private networks, according to MacPherson.

“People tend to underestimate the network effect: A payment system is exponentially more valuable the more people participate in it,” said MacPherson, adding that competing with Visa and MasterCard is nearly impossible, “unless you can find a niche that the card companies are not serving, like PayPal did with eBay. Even PayPal, now, is usually just a conduit for a card or a checking account.”

Bloomberg reported earlier this week that according to anonymous industry sources, three of the nation’s largest cellular networks — AT&T, Verizon Wireless and T-Mobile – “target[ted] Visa and Mastercard” using smartphones with a secure near-field communication (NFC) chip embedded in them at a cost of $10 to $15 for each phone, to facilitate secure payments at retail locations.

Targeting Visa and MasterCard? That can only increase competition, right?

Wrong.

The carriers aren’t going it alone. They partnered with a third credit-card company, Discover -– possibly because MasterCard and Visa each already have their own cellphone payment operations (MasterCard’s MoneySend and Visa’s DeviceFidelity partnership, among others). Discover hadn’t previously announced any move into the mobile payment space. In addition, the carriers partnered with Barclays, a major issuer of MasterCard and Visa credit cards in this country, which should enable them to offer the service to those card holders.

So, why don’t the carriers circumvent the credit card networks via the internet — or even better, using their own 3G networks? And what’s to stop a new company from linking mobile payment chips to a payment system over the net rather than trying to duplicate Visa and MasterCard’s massive private networks?

“One reason Visa is reliable is that it relies on leased lines and a lot of dedicated trunks,” said MacPherson. “If you’re going to try to do something on the public internet, your reliability and availability goes down dramatically. Even if you’re using a mobile phone network, you do not want to be in a situation where you can’t pay because there’s no 3G signal … and the internet is susceptible to brownouts and denial-of-service attacks. It’s notoriously insecure. I don’t think either of them can substitute for the card networks.”

People conduct billions of secure transactions online every day, but if hackers and snoops knew that purchasing transactions were originating at certain spots on the internet, they’d have a large incentive to target those spots, either through remote or local attacks.

In addition, even a slightly slower internet connection at a retail counter could affect a store’s profitability by creating longer lines and frustrating customers. And we’ve all seen our internet connections flicker and fade from time to time.

The more things change…
So, why do credit card companies need the telcos, when they could just release payment apps for the various smartphone platforms? For one, apps require 3G connectivity in order to verify a transaction. But a mobile chip works even when there’s no connection, by locally storing the information “this person has permission to spend X dollars.”

A retail app might work perfectly well in a WiFi-enabled Starbucks that also accepts other forms of payment, but nobody wants to be stuck on a desolate stretch of highway with no cellphone service and only a cellphone app with which to pay for gas. Credit card companies might be able to work with manufacturers to install those crucial chips, but it will be way easier with the carriers’ full cooperation.

Perhaps most importantly, credit card companies need mobile carriers for distribution. The same way Visa and MasterCard partner with banks, airlines and so on to distribute their cards, they need the carriers’ help to put this technology in people’s hands, and to help customers understand that it’s there.

Meanwhile, the likelihood of an upstart disrupting the existing credit card industry is virtually nil, regardless of any switch to pay-by-phone. Instead, MacPherson says, start-ups should continue focusing on areas where they can gain ground — municipal parking systems, public transportation, vending machines and the like — because all other attempts to disrupt the credit card status quo have failed miserably.

“A lot of people from outside the payments industry have seriously underestimated how durable Visa and MasterCard’s franchise is. [America Online co-founder] Steve Case is one of them. [His] RevolutionMoney was … to be a new card network that would underprice the associations, and it totally cratered and was sold to American Express. Then you have DebitMan [a debit card network backed by merchants, rather than banks, which DebitMan's COO accused of raising rates unfairly and keeping 80-90 percent of resulting revenue]. It totally failed to take off — now, they’re Tempo Payments, and they’re selling to banks.”

“Some very smart, very well-funded people have attacked this thing, so far without any success at all,” he added. “Even the competing card networks, Discover and American Express, have been hammering at this for decades and have not put a serious dent.”

To date, the biggest problem for companies trying to make pay-by-phone a reality has been how they should split up the loot, which is a good problem to have. This joint venture between AT&T, Verizon, T-Mobile, Discover and Barclays solves it, because profit will be split between the parties based on their ownership of the joint venture (T-Mobile owns a smaller slice than AT&T and Verizon, according to Bloomberg’s sources).

None of the old players are leaving the table, while a new one has arrived in the form of cellphone carriers.

If it’s possible for a new technology to be reverse disruptive, in the sense that it reinforces the old way of doing things and adds another expensive layer to transactions, pay-by-phone will likely be it.

How Google Works

2010-07-27T09:52:00.001-07:00

Infographic by Pay Per Click Blog

Dilbert on iPhone Apps

2010-06-15T15:13:00.001-07:00

Kno dual screen tablet to compete in textbook market

2010-06-06T05:01:00.000-07:00

http://www.wired.com/gadgetlab/2010/06/kno-textbook-tablet/

The Best Social Media Video Ever – Now Refreshed

2010-05-14T10:18:00.000-07:00

Telecom in Emerging Markets

2010-04-14T11:29:00.000-07:00

Video: The Future of Publishing

2010-03-30T14:48:00.000-07:00

Video: The Future of Paper

2010-03-26T06:55:00.001-07:00

Watch CBS News Videos Online

Video: The Internet of Things

2010-03-26T06:42:00.001-07:00

Video: Ray Kurzweil: A university for the coming singularity

2010-03-21T15:38:00.000-07:00

Video: 10 Reasons Why Social Media Matters

2010-03-18T07:39:00.001-07:00

The data deluge

2010-03-15T16:54:00.001-07:00

Businesses, governments and society are only starting to tap its vast potential

EIGHTEEN months ago, Li & Fung, a firm that manages supply chains for retailers, saw 100 gigabytes of information flow through its network each day. Now the amount has increased tenfold. During 2009, American drone aircraft flying over Iraq and Afghanistan sent back around 24 years’ worth of video footage. New models being deployed this year will produce ten times as many data streams as their predecessors, and those in 2011 will produce 30 times as many.

Everywhere you look, the quantity of information in the world is soaring. According to one estimate, mankind created 150 exabytes (billion gigabytes) of data in 2005. This year, it will create 1,200 exabytes. Merely keeping up with this flood, and storing the bits that might be useful, is difficult enough. Analysing it, to spot patterns and extract useful information, is harder still. Even so, the data deluge is already starting to transform business, government, science and everyday life (see our special report in this issue). It has great potential for good—as long as consumers, companies and governments make the right choices about when to restrict the flow of data, and when to encourage it.

A few industries have led the way in their ability to gather and exploit data. Credit-card companies monitor every purchase and can identify fraudulent ones with a high degree of accuracy, using rules derived by crunching through billions of transactions. Stolen credit cards are more likely to be used to buy hard liquor than wine, for example, because it is easier to fence. Insurance firms are also good at combining clues to spot suspicious claims: fraudulent claims are more likely to be made on a Monday than a Tuesday, since policyholders who stage accidents tend to assemble friends as false witnesses over the weekend. By combining many such rules, it is possible to work out which cards are likeliest to have been stolen, and which claims are dodgy.

Mobile-phone operators, meanwhile, analyse subscribers’ calling patterns to determine, for example, whether most of their frequent contacts are on a rival network. If that rival network is offering an attractive promotion that might cause the subscriber to defect, he or she can then be offered an incentive to stay. Older industries crunch data with just as much enthusiasm as new ones these days. Retailers, offline as well as online, are masters of data mining (or “business intelligence”, as it is now known). By analysing “basket data”, supermarkets can tailor promotions to particular customers’ preferences. The oil industry uses supercomputers to trawl seismic data before drilling wells. And astronomers are just as likely to point a software query-tool at a digital sky survey as to point a telescope at the stars.

There’s much further to go. Despite years of effort, law-enforcement and intelligence agencies’ databases are not, by and large, linked. In health care, the digitisation of records would make it much easier to spot and monitor health trends and evaluate the effectiveness of different treatments. But large-scale efforts to computerise health records tend to run into bureaucratic, technical and ethical problems. Online advertising is already far more accurately targeted than the offline sort, but there is scope for even greater personalisation. Advertisers would then be willing to pay more, which would in turn mean that consumers prepared to opt into such things could be offered a richer and broader range of free online services. And governments are belatedly coming around to the idea of putting more information—such as crime figures, maps, details of government contracts or statistics about the performance of public services—into the public domain. People can then reuse this information in novel ways to build businesses and hold elected officials to account. Companies that grasp these new opportunities, or provide the tools for others to do so, will prosper. Business intelligence is one of the fastest-growing parts of the software industry.

But the data deluge also poses risks. Examples abound of databases being stolen: disks full of social-security data go missing, laptops loaded with tax records are left in taxis, credit-card numbers are stolen from online retailers. The result is privacy breaches, identity theft and fraud. Privacy infringements are also possible even without such foul play: witness the periodic fusses when Facebook or Google unexpectedly change the privacy settings on their online social networks, causing members to reveal personal information unwittingly. A more sinister threat comes from Big Brotherishness of various kinds, particularly when governments compel companies to hand over personal information about their customers. Rather than owning and controlling their own personal data, people very often find that they have lost control of it.

The best way to deal with these drawbacks of the data deluge is, paradoxically, to make more data available in the right way, by requiring greater transparency in several areas. First, users should be given greater access to and control over the information held about them, including whom it is shared with. Google allows users to see what information it holds about them, and lets them delete their search histories or modify the targeting of advertising, for example. Second, organisations should be required to disclose details of security breaches, as is already the case in some parts of the world, to encourage bosses to take information security more seriously. Third, organisations should be subject to an annual security audit, with the resulting grade made public (though details of any problems exposed would not be). This would encourage companies to keep their security measures up to date.

Market incentives will then come into play as organisations that manage data well are favoured over those that do not. Greater transparency in these three areas would improve security and give people more control over their data without the need for intricate regulation that could stifle innovation. After all, the process of learning to cope with the data deluge, and working out how best to tap it, has only just begun

http://www.economist.com/opinion/displaystory.cfm?story_id=15579717

Location-based services on mobile phones

2010-03-06T14:00:00.001-08:00

Adverts that know where you are could be lucrative—not to mention controversial

THE initiative was designed to draw attention to a serious issue and it achieved its goal. Pleaserobme.com is a simple website that publishes a live feed of posts that appear on Twitter, a microblogging service, showing that the authors are somewhere other than their home. Many of the tweets come from users of Foursquare, a service that lets people publicise their location so their friends can see where they are—and businesses can aim advertising at them. Pleaserobme.com’s creators, who also alert the potential victims, say they simply wanted to highlight the fact that users of so-called location-based services often give away information a burglar would love to have.

Although the site is a salutary reminder of the perils of “oversharing”, it is unlikely to deter people from signing up to location-tracking sites. These are still dwarfed by the likes of Twitter and Facebook, but networks such as Foursquare, which has 500,000 users, and Loopt, which boasts over 3m, have been growing fast. They have also attracted cash from venture capitalists who reckon they could become money-spinners. A recent forecast by Juniper Research predicts that global revenues from location-based services could soar to $12.7 billion by 2014, up from $3 billion last year.

Given that the market is in its infancy, such estimates should be treated with caution. Some veterans of the tech industry note that real-time location-based services have been talked up several times in the past decade, only to disappoint. But there are some good reasons to think that they may fare better this time around.

One is that smart-phones with satellite-positioning baked into them are now widely available, making it very easy for people to broadcast their whereabouts. The rise of online stores with easily downloadable applications, or “apps”, for these phones is also encouraging users to experiment with new services, including location-based ones. And millions of people have become comfortable using smart-phones to share information about themselves, via mobile apps that access social networks such as Facebook and Twitter.

All this has helped give birth to a number of location-based start-ups. Some use marketing techniques borrowed from the world of gaming to encourage people to tap into their services often. Foursquare, which celebrates its first birthday on March 13th and now covers most big cities around the world, rewards people who register their presence at (or “check in” to) a particular café or restaurant most often with the title of “Mayor”. That, in turn, can sometimes entitle them to, say, a free coffee or pizza. On Gowalla, another start-up, users are encouraged to collect as many “digital souvenirs” as possible by visiting various venues in a city.

Corporate behemoths also have designs on the location-based market. Last year Google launched a service called Latitude that allows friends to track one another’s movements. The search giant’s recently unveiled (and much-criticised) social-networking service, Buzz, also allows users to tag messages with information about their location. Nokia has bought online-mapping and mobile-networking businesses in recent years to reinforce its offerings. Many observers think Apple has plans to offer geo-targeted advertising on its iPhone. In January the firm snapped up Quattro Wireless, which specialises in advertising on mobile handsets.

The opportunity to offer targeted advertising based on a user’s location should help these and other firms win a slice (or in Google’s case, expand its slice) of the huge market for local advertising. But it may be quite some time before marketers become comfortable with the notion of pushing out ads on phones—and consumers get used to receiving them. Jeremiah Owyang of the Altimeter Group, a consultancy, points out that many marketing executives are still trying to get to grips with advertising on social networks, even though these have been around much longer than the new location-based services and have huge audiences already.

That explains why some start-ups are trying to make money by getting firms to partner with them on direct promotions that reward users for specific actions, such as presenting them with a discount coupon via their phone screen if they check in to a specific location. Sam Altman, the boss of Loopt, says there is “a little bit of an arms race going on right now” between firms vying to become the location-based service provider of choice for America’s largest retailers.

Both entrepreneurs looking to profit from location data and the venture firms (such as Sequoia Capital and Greylock Partners) that have bankrolled their efforts are unsurprisingly bullish about their prospects. But if they are to succeed, companies both big and small will first have to assuage growing concern over the privacy issues associated with collecting information about people’s movements.

This question is starting to attract the attention of politicians as well as that of concerned individuals. Last month a congressional subcommittee held a hearing into the implications of commercial location-based services’ growth. Among the submissions it received was one from the Centre for Democracy & Technology, a privacy group, which argued that the privacy policies of companies collecting location-based data “are uneven at best and inadequate at worst”.

Some companies have done more than others to institute safeguards against abuse. Loopt, which is rumoured to be a potential takeover target of Facebook, has added software that automatically monitors its service for suspicious patterns of behaviour. It also sends reminders to users that their location is being shared and allows them to post “fake” locations if they need to. Such efforts are admirable, but not sufficiently widespread to allay the fears of concerned folk such as the creators of pleaserobme.com. Burglars using location-based services to choose their victims, however, may still want to think twice.

http://www.economist.com/displayStory.cfm?story_id=15612291

The Future of Money

2010-02-23T01:07:00.001-08:00

By Daniel Roth

A simple typo gave Michael Ivey the idea for his company. One day in the fall of 2008, Ivey’s wife, using her pink RAZR phone, sent him a note via Twitter. But instead of typing the letter d at the beginning of the tweet — which would have sent the note as a direct message, a private note just for Ivey — she hit p. It could have been an embarrassing snafu, but instead it sparked a brainstorm. That’s how you should pay people, Ivey publicly replied. Ivey’s friends quickly jumped into the conversation, enthusiastically endorsing the idea. Ivey, a computer programmer based in Alabama, began wondering if he and his wife hadn’t hit on something: What if people could transfer money over Twitter for next to nothing, simply by typing a username and a dollar amount?

The rise of agriculture made commodities like cattle and grain ideal proto-currencies: Since everyone knew what a heifer or a bushel was worth, the system was more efficient than barter.

Just a decade ago, the idea of moving money that quickly and cheaply would have been ridiculous. Checks took ages to clear. Transferring money from one bank account to another could take days, as banks leisurely handed off funds, levying fees nearly every step of the way. Credit cards made it a little easier to pass money to a friend — provided that friend owned a credit card reader and didn’t mind paying a few percentage points in fees or waiting a couple of days for the payment to process.

Ivey got around that problem by using PayPal. Since 1998, PayPal had enabled people to transfer money to each other instantly. For the most part, its powers were confined to eBay, the online auction company that purchased PayPal in 2002. But last summer, PayPal began giving a small group of developers access to its code, allowing them to work with its super-sophisticated transaction framework. Ivey immediately used it to link users’ Twitter accounts to their PayPal accounts, and his new company, Twitpay, took off. Today, the service has almost 15,000 users.

That may not sound like much, but it sends a message: Moving money, once a function managed only by the biggest companies in the world, is now a feature available to any code jockey. Ivey is just one of hundreds of engineers and entrepreneurs who are attacking the payment ecosystem, seeking out ways small and large to tear down the stronghold the banks and credit card companies have built. Square, a new company founded by Twitter cocreator Jack Dorsey, lets anyone accept physical credit card payments through a smartphone or computer by plugging in a free sugar-cube-sized device — no expensive card reader required. A startup called Obopay, which has received funding from Nokia, allows phone owners to transfer money to one another with nothing more than a PIN. Amazon.com and Google are both distributing their shopping cart technologies across the Internet, letting even the lowliest etailers process credit cards for less than the old price, cutting out middlemen, and figuring out ways to bundle payments to sidestep the credit card companies’ constant nickel-and-diming. Facebook appears to be building its own payment system for virtual goods purchased on its social network and on external sites. And last March, Apple gave iTunes developers the ability to charge subscription fees through their applications, making iTunes the gateway for an entirely new breed of transaction. When Research in Motion announced a similar initiative last fall at a session of the BlackBerry Developer Conference in San Francisco, programmers crowded the room, spilling out into the hallway. About 20 percent of all online transactions now take place over so-called alternative payment systems, according to consulting firm Javelin Strategy and Research. It expects that number to grow to nearly 30 percent in just three years.

But perhaps nobody is as ambitious as PayPal. In November, it further opened up its code, giving anyone with rudimentary programming skills access to the kind of technology and payment-industry experience that Ivey used to build Twitpay. The move could unleash a wave of innovation unlike any we’ve seen since self-publishing came to the Web. Two months after PayPal opened its platform, 15,000 developers had used it to create new payment services, sending $15 million through the company’s pipes. Software developer Big in Japan, whose ShopSavvy program lets people find an item’s cheapest price by scanning its barcode, used PayPal to add a “quick pay” button to its app. LiveOps, a call-center outsourcing firm, built a tool that streamlined payments to its operators, turning what had been a nightmare of invoicing and time-tracking into an automated process. Previously, anybody who wanted to create a service like this would have had to navigate a morass of state and federal regulations and licensing bodies. But now engineers can focus on building applications, while leaving the regulatory and risk-management issues to PayPal. “I can focus on the social side of the business and not on touching money,” as Ivey puts it.

PayPal is just the latest company to try to harness the creative powers of the open Internet. Google created a platform that lets anyone buy or display online advertisements. Facebook allows any developer to write applications for its social network, and Apple does the same with its iTunes App Store. Amazon’s Web Services provides developers the cloud-based processing power and storage space they need to build applications and services. Now PayPal has brought this same spirit of innovation and experimentation to the world of payments. Your wallet may never be the same.

http://www.wired.com/magazine/2010/02/ff_futureofmoney

Related: Our Cashless Future
http://beta.wfs.org/index.php?q=node/68

In Praise of Online Obscurity

2010-02-15T21:31:00.000-08:00

By Clive Thompson

When it comes to your social network, bigger is better. Or so we’re told. The more followers and friends you have, the more awesome and important you are. That’s why you see so much oohing and aahing over people with a million Twitter followers. But lately I’ve been thinking about the downside of having a huge online audience. When you go from having a few hundred Twitter followers to ten thousand, something unexpected happens: Social networking starts to break down.

Consider the case of Maureen Evans. A grad student and poet, Evans got into Twitter at the very beginning — back in 2006 — and soon built up almost 100 followers. Like many users, she enjoyed the conversational nature of the medium. A follower would respond to one of her posts, other followers would chime in, and she’d respond back.

Then, in 2007, she began a nifty project: tweeting recipes, each condensed to 140 characters. She soon amassed 3,000 followers, but her online life still felt like a small town: Among the regulars, people knew each other and enjoyed conversing. But as her audience grew and grew, eventually cracking 13,000, the sense of community evaporated. People stopped talking to one another or even talking to her. “It became dead silence,” she marvels.

Why? Because socializing doesn’t scale. Once a group reaches a certain size, each participant starts to feel anonymous again, and the person they’re following — who once seemed proximal, like a friend — now seems larger than life and remote. “They feel they can’t possibly be the person who’s going to make the useful contribution,” Evans says. So the conversation stops. Evans isn’t alone. I’ve heard this story again and again from those who’ve risen into the lower ranks of microfame. At a few hundred or a few thousand followers, they’re having fun — but any bigger and it falls apart. Social media stops being social. It’s no longer a bantering process of thinking and living out loud. It becomes old-fashioned broadcasting.

The lesson? There’s value in obscurity.

After all, the world’s bravest and most important ideas are often forged away from the spotlight — in small, obscure groups of people who are passionately interested in a subject and like arguing about it. They’re willing to experiment with risky or dumb concepts because they’re among intimates. (It was, after all, small groups of marginal weirdos that brought us the computer, democracy, and the novel.)

Technically speaking, online social-networking tools ought to be great at fostering these sorts of clusters. Blogs and Twitter and Facebook are, as Internet guru John Battelle puts it, “conversational media.” But when the conversation gets big enough, it shuts down. Not only do audiences feel estranged, the participants also start self-censoring. People who suddenly find themselves with really huge audiences often start writing more cautiously, like politicians.

When it comes to microfame, the worst place to be is in the middle of the pack. If someone’s got 1.5 million followers on Twitter, they’re one of the rare and straightforwardly famous folks online. Like a digital Oprah, they enjoy a massive audience that might even generate revenue. There’s no pretense of intimacy with their audience, so there’s no conversation to spoil. Meanwhile, if you have a hundred followers, you’re clearly just chatting with pals. It’s the middle ground — when someone amasses, say, tens of thousands of followers — where the social contract of social media becomes murky.

Maybe we should be designing tools that reward obscurity — that encourage us to remain in the shadows. Or what if they warned us when our social circles became unsustainably large? Sure, we’d be connected with fewer people, but we’d be communicating with them, and not just talking at them.

http://www.wired.com/magazine/2010/01/st_thompson_obscurity

The joy of unlimited communication

2010-01-29T11:14:00.000-08:00

WHAT will the future of social networking look like? Imagine this: your digital video recorder automatically copies a television show that several of your friends were talking about on a social network before the show went on air. Or this: you get into your car, switch on its navigation system and ask it to guide you to a friend’s house. As you pull out of the driveway, the network to which you both belong automatically alerts her that you are on your way. And this: as you are buying a pair of running shoes that you think one of your friends might be interested in, you can send a picture to their network page with a couple of clicks on a keypad next to the checkout counter.

Networking types like to talk about the idea that there is a pervasive social element in all of the things people interact with. Listen to them long enough and you come away with the impression that your teapot will soon be twittering about what you had for breakfast. Some of the ideas outlined above may sound far-fetched, but a service such as Facebook Connect, which already lets people export their social graph of online relationships to other web-enabled gizmos, suggests they are not completely outlandish. Everything from cars to cookers could ultimately have social connectivity embedded in it.

But when it comes to helping social networks achieve ubiquity, none of these things will be remotely as important as the mobile phone. Using a web-enabled phone to post status updates and send messages is still a niche activity in many countries, but it will rapidly become a mainstream one as mobile-broadband services overtake fixed-line ones in a few years’ time. One estimate by eMarketer suggests that just over 600m people will use their phones to tap into social networks by 2013, a more-than-fourfold increase on last year’s 140m.

This shift has big implications. For a start, mobile phones in emerging markets—or devices such as cheap netbooks linked to the internet via mobile networks—will open up a brand new audience whose use of social sites has so far been hampered by a frustrating lack of fast, PC-based internet connections. Companies such as Sembuse in Kenya, which bills itself as east Africa’s first mobile social network, and South Africa’s Mxit are already gearing up to connect millions more people to one another through their mobile phones, providing a big fillip to the amount of information-sharing going on around the world.

The rise of mobile-phone-based networking will have an impact on rich-world markets too. Thanks to fast and relatively cheap mobile broadband services, phones have already become the device of choice for accessing some sites in Asia. Shigeya Kawagishi, an executive at Mixi, one of Japan’s largest social networks with 18m members, says the vast majority of its traffic now comes from phone-toting customers who check in to get updates four or five times a day (see chart 7). Facebook, which has some 65m mobile users, says they are almost half as active again on the site as other folk.

This trend towards mobile usage is fuelling speculation that the next big thing will be geo-networking apps, which use virtual data to broker real-world encounters. These apps encourage the serendipity that Twitter’s Mr Stone talks about by allowing people to use their mobiles to signal where they are to friends who may be nearby. Several start-ups such as Foursquare and Gowalla are building businesses around this idea and Twitter plans to do so too. Asking people to add their whereabouts to their tweets, the firm hopes, will enable it to use these data to direct advertising and other services at people as they move from place to place.

To some, the idea of a technology that can arrange chance meetings with their friends will seem like a dream come true. To others, the thought of being tracked from place to place is a nightmarish prospect that has a Big Brother feel about it. To people who run social networks, location-based networking is a logical extension of their efforts to humanise technology and harness it to the cause of greater global openness.

The networks’ founders seem to have an almost Utopian belief in the benefits that their creations will deliver. Facebook’s Mr Zuckerberg, for example, describes the greater openness he believes his firm and others like it are bringing to human interactions as “probably the greatest transformative force in our generation, absent a major war.” Mr Stone, for his part, reckons Twitter “is something important that has the potential to change the world, though we have a long way to go.”

Much the same sort of thing was said about the internet when it first emerged. But it was also met with a great deal of scepticism by those who thought the web could never be used to make money, and from bosses who assumed that workers would use it simply to watch pornography and play online poker. The sceptics were astonished when it went on to produce corporate powerhouses such as Amazon and Google, and provided businesses with remarkable new tools for boosting productivity and generating fresh ideas.

The parallels with social networks are striking. That should come as no surprise, because those networks too are creatures of the internet and the ultimate expression of what its founding father, Sir Tim Berners-Lee, wanted it to be. In his book “Weaving the Web” Sir Tim explained that the internet was always meant to be more of a social creation than a technical one. The ultimate goal, he wrote, was to come up with something that, first and foremost, would make it easier for people to collaborate with one another.

This special report has argued that social networks have already done much to achieve that goal. They have created trusted online venues where people can meet up using their real identities. They have provided firms with new ways to reach their customers and those who influence them. They have reduced friction in the labour market by allowing employers and prospective employees to connect more easily than ever before. And they have speeded up the flow of information within companies.

All of these are impressive achievements. But arguably the most important contribution that the sites have made is to offer a free and immensely powerful set of communication and collaboration tools to everyone on Earth who has access to a broadband internet connection. This democratisation of technology is driving the socialisation of the web and fundamentally changing the way that people interact with one another, as well as with businesses and governments.

It has also made it easy for anyone to form a globe-spanning discussion group of their own with just a few clicks of a mouse. Not so long ago that would have been the preserve of an elite group of companies and institutions which had the necessary financial and technical clout to perform such feats. Now, thanks to the technology created by Facebook and its peers, millions of these conversations can take place simultaneously with the greatest of ease. The world is better off for it.

http://www.economist.com/displayStory.cfm?story_id=15350960

My Paperless Life (by Nicholas Ciarelli)

2010-01-27T03:18:00.000-08:00

When Daily Beast product team member Nicholas Ciarelli gave up books, magazines, bank statements, office memos, and even mail, he learned the freedom of living digitally. And the unexpected price.

Eighteen months ago I decided to opt out of the oppressive world of books, magazines, newspapers, business cards, store receipts, and old toaster instruction manuals, and have been almost entirely paperless ever since.

In 2010, adopting a paperless lifestyle is not an especially rare feat. It’s not even that difficult. After all, most people have already accomplished this in one aspect or another without even trying hard, whether they receive their credit card bills electronically or find their news online. If anything, my paperless life is distinctive only in its breadth: My once sprawling bookshelves have been wholly replaced by an overstuffed Kindle, and I now only consume magazines from the Kindle Store (except, ironically, Wired, which is not available in this format). I also use an indispensable tool called Instapaper to maintain a queue of other unread articles and Web pages that I read on my Kindle or iPhone.

Any paper documents that enter my home—receipts, invoices, letters—are quickly scanned and shredded. (My weapon of choice is a sheet-fed document scanner called the Fujitsu ScanSnap, which can scan both sides of a stack of paper at about 20 pages per minute.) Some paperless mavens then store these scanned documents on sites like Evernote, so that they can be retrieved anywhere. And services like Earth Class Mail will—for a fee—receive and scan your mail so that you can view (and discard) it from the comfort of your Web browser.

In the next few years, the paperless lifestyle will only get easier and more prevalent. It is estimated that more than six million e-book readers will be sold in the U.S. this year. And worldwide shipments of touchscreen tablets will skyrocket from a niche market of two million to eight million annually, according to forecasts from Morgan Stanley. (Apple has scheduled a media event for Wednesday morning, inviting the press to "Come see our latest creation.")

Fifteen years ago, Nicholas Negroponte predicted in Wired that companies would shift their business from distributing atoms (physical products) to distributing bits (digital products). Witness that shift at Amazon.com, which sells more atoms than any other company on the Internet. On Christmas Day 2009, the retailer sold more e-books than printed books. (Granted, Amazon wasn't exactly shipping physical books on December 25, but it's still a milestone for digital content.)

Over the past 18 months I have come to believe that the most significant advantage of the paperless lifestyle is that of control: a greatly heightened ability to harness media and information more purposefully. When you're paperless, you can store and retrieve your media at will, conjuring a book when you're waiting in line at the grocery store, or finding a receipt with the ease of a few clicks instead of dumping out a wallet.

There's another important aspect of control: With a paperless life, you have a greater ability to measure how you consume media, such as in these charts, which depict the pace at which different readers enjoyed a short story. Most people do not imagine ever wanting to chronicle something like this—after all, none of this measurement is possible with printed material. But just as services like Mint.com have enabled us to measure and derive new insights from our personal finances, I predict that we will soon demand the same data from the books we read.

This control cuts both ways of course: If you can control your media more easily, then others can as well. Companies can restrict how you store and retrieve your e-books in entirely new and perhaps unsavory ways, such as prohibiting you from lending an e-book to a friend's device, or by reclaiming a book that you've already purchased, as occurred last summer when Amazon remotely deleted two books by George Orwell from users' Kindles. (The company has since apologized.)

By the same token, if you can more easily measure your media consumption, then others can as well. Consider the possibilities: Novelists could identify the point at which people are most likely to abandon their books, and could then release modified versions with those parts re-written. Authors could even release different versions of their books to different customers and conduct experiments to see which editions are the most effective, testing out different plotlines, characters, or endings.

It's also easy to conceive of a future where this type of measurement is used for profit. Data on how we consume media—what we read, how we read it, and when we read it—could be exploited by content owners to create detailed profiles of consumers; those profiles could then be used to market products to them with alarmingly high degrees of accuracy.

This possibility should not be surprising given the advances in data mining that we have seen in recent years—according to Yale Law School professor Ian Ayres, for instance, Visa can predict with a fair amount of precision whether one of its cardholders is going to get a divorce.

And perhaps that’s one of the biggest ironies of living a paperless life—we leave more of a paper trail, electronically speaking. Activities that were once relatively anonymous—say, buying a magazine at a newsstand with cash—now leave digital footprints. As we transition to paperless living it remains to be seen whether consumers will seek to cover their tracks.

http://www.thedailybeast.com/blogs-and-stories/2010-01-25/my-paperless-life/full/

Culture and Mobile Phones

2010-01-20T17:07:00.000-08:00

How you use your mobile phone has long reflected where you live. But the spirit of the machines may be wiping away cultural differences

Technologies tend to be global, both by nature and by name.

Say “television”, “computer” or “internet” anywhere and chances are you will be understood. But hand-held phones? For this ubiquitous technology, mankind suffers from a Tower of Babel syndrome. Under millions of Christmas trees North and South Americans have been unwrapping cell phones or celulares. Yet to Britons and Spaniards they are mobiles or móviles. Germans and Finns refer to them as Handys and kännykät, respectively, because they fit in your hand. The Chinese, too, make calls on a sho ji, or “hand machine”. And in Japan the term of art is keitai, which roughly means “something you can carry with you”.

This disjunction is revealing for an object that, in the space of a decade, has become as essential to human functioning as a pair of shoes. Mobile phones do not share a single global moniker because the origins of their names are deeply cultural. “Cellular” refers to how modern wireless networks are built, pointing to a technological worldview in America. “Mobile” emphasises that the device is untethered, which fits the roaming, once-imperial British style. Handy highlights the importance of functionality, much appreciated in Germany. But are such differences more than cosmetic? And will they persist or give way to a global mobile culture?

Such questions bear asking. It is easy to forget how rapidly mobile phones have taken over. A decade ago, there were fewer than 500m mobile subscriptions, according to the International Telecommunication Union (ITU). Now there are about 4.6 billion (see chart). Penetration rates have risen steeply everywhere. In rich countries subscriptions outnumber the population. Even in poor countries more than half the inhabitants have gone mobile. Dial a number and the odds are three to one that it will cause a mobile phone, rather than a fixed-line one, to ring somewhere on the planet.

As airtime gets cheaper, the untethered masses tend to use their mobiles more. In early 2000 an average user spoke for 174 minutes a month, according to the GSM Association (GSMA), an industry group. By early 2009 that had risen to 261 minutes, which suggests that humanity spends over 1 trillion minutes a month on mobiles, or nearly 2m years. Nobody can keep track of the flood of text messages. One estimate suggests that American subscribers alone sent over 1 trillion texts in 2008, almost treble the number sent the previous year.

Now a further mobile-phone revolution is under way, driven by the iPhone and other “smart” handsets which let users gain access to the internet and download mobile applications, including games, social-networking programs, productivity tools and much else besides. Smart-phones accounted for over 13% of the 309m handsets shipped in the third quarter of 2009. Some analysts estimate that by 2015 almost all shipped handsets will be smart. Mobile operators have started building networks which will allow for faster connection speeds for an even wider variety of applications and services.

Yet these global trends hide starkly different national and regional stories. Vittorio Colao, the boss of Vodafone, which operates or partially owns networks in 31 countries, argues that the farther south you go, the more people use their phones, even past the equator: where life is less organised people need a tool, for example to rejig appointments. “Culture influences the lifestyle, and the lifestyle influences the way we communicate,” he says. “If you don’t leave your phone on in a meeting in Italy, you are likely to miss the next one.”

Other mundane factors also affect how phones are used. For instance, in countries where many people have holiday homes they are more likely to give out a mobile number, which then becomes the default where they can be reached, thus undermining the use of fixed-line phones. Technologies are always “both constructive and constructed by historical, social, and cultural contexts,” writes Mizuko Ito, an anthropologist at the University of California in Irvine, who has co-edited a book on Japan’s mobile-phone subculture.

Indeed, Japan is good example of how such subcultures come about. In the 1990s Americans and Scandinavians were early adopters of mobile phones. But in the next decade Japan was widely seen as the model for the mobile future, given its early embrace of the mobile internet. For some time Wired, a magazine for technology lovers, ran a column called “Japanese schoolgirl watch”, serving readers with a stream of keitai oddities. The implication was that what Japanese schoolgirls did one day, everyone else would do the next.

The country’s mobile boom was arguably encouraged by underlying social conditions. Most teenagers had long used pagers to keep in touch. In 1999 NTT, Japan’s dominant operator, launched i-mode, a platform for mobile-internet services. It allowed cheap e-mails between networks and the Japanese promptly signed up in droves for mobile internet. Ms Ito also points out that Japan is a crowded place with lots of rules. Harried teenagers, in particular, have few chances for private conversations and talking on the phone in public is frowned upon, if not outlawed. Hence the appeal of mobile data services.

The best way to grasp Japan’s mobile culture is to take a crowded commuter train. There are plenty of signs advising you not to use your phone. Every few minutes announcements are made to the same effect. If you do take a call, you risk more than disapproving gazes. Passengers may appeal to a guard who will quietly but firmly explain: “dame desu”—it’s not allowed. Some studies suggest that talking on a mobile phone on a train is seen as worse than in a theatre. Instead, hushed passengers type away on their handsets or read mobile-phone novels (written Japanese allows more information to be displayed on a small screen than languages that use the Roman alphabet).

Might the Japanese stop talking entirely on their mobiles? They seem less and less keen on the phone’s original purpose. In 2002 the average Japanese mobile user spoke on it for 181 minutes each month, about the global norm. By early 2009 that had fallen to 133 minutes, then only half the world average. Nobody knows how many e-mails are sent, but the Japanese are probably even more prolific than text-crazy Indonesians, who average more than 1,000 messages per month on some operators. No wonder that Tokyo’s teenagers have been called the “thumb generation”.

Others are quiet, too. On average Germans—who are fond of saying that “talk is silver, silence is golden”—spend only 89 minutes each month calling others for Handy-based conversation. This may be a result of national telephone companies on both sides of the Berlin Wall having exhorted subscribers for years to “keep it short” because of underinvestment in the East and rapid economic growth that overtaxed the network in the West. Germans are also thrifty, suggests Anastassia Lauterbach of Deutsche Telekom. For longer calls, she says, consumers resort to much cheaper landlines.

In contrast, Americans won’t shut up. Their average monthly talk-time is a whopping 788 minutes, though some of this is a statistical illusion because subscribers also pay for incoming calls. Yet talk is cheap: there is no roaming charge within the United States. Americans are often in their cars, an ideal spot for phone calls, especially in the many states where driving and talking without headsets is still legal.

The chattiest of all are Puerto Ricans, who have by far the highest monthly average in the world of 1,875 minutes, probably because operators on the American island offer all-you-can-talk plans for only $40, which include calls to the mainland. This allows Puerto Ricans to chat endlessly with their friends in New York, but may also have arbitrageurs routing cheap international phone calls through the island.

Just how people behave when talking on a mobile phone is a question of culture, at least at first, according to Amapro Lasén, a sociologist at Universidad Complutense in Madrid. In the early 2000s she studied phone users in the Spanish capital, in Paris and in London. Mobiles were a common sight, but Parisians and Madrileniens felt freer to talk in the street, even in the middle of the pavement. Londoners, by contrast, tended to gather in certain zones, for instance at the entrances of tube stations—the sort of place Ms Lasén calls an “improvised open-air wireless phone booth”.

In Paris people openly complained when bothered by others talking loudly about intimate matters, but complaints were rare in London. In both places, people tended to separate phone and face-to-face conversations, for instance by retreating to a quiet corner. But subscribers in Madrid often mixed them and even allowed others to take part in their phone conversations. The Spanish almost always take a call and most turn off voicemail.

For Ms Lasén, who has lived in all three cities, such variations reflect how people traditionally use urban space. In London, she says, the streets are mainly for walking, “like the bed where the river flows”. Paris, however, is a place to stroll, the home of the flâneur. In Madrid people inhabit the streets to talk together. As for their aversion to voicemail, the Spanish consider it rude to leave a call unanswered, even if it is inconvenient. This may be the result of a strong sense of social obligation towards friends and family.

Elsewhere, too, culture and history may help determine whether people talk in public or take a call. The Chinese often let themselves be interrupted, fearing that otherwise they could miss a business opportunity. Uzbeks use their mobiles only rarely in public, because the police might be listening. And Germans can get quite aggressive if people disobey the rules, even unwritten ones. In 1999 a German man died in a fight triggered by his ill-mannered Handy use.

Economics and other hard factors also shape habits. Olaf Swantee, the head of Orange’s mobile business, notes that pricey handsets are less popular in Belgium than in Britain because Belgian operators have long been barred from subsidising phones, a strategy widely used on the other side of the Channel. Italy, however, exhibits both low subsidies and many high-end handsets. Subscribers there do not want to spend much on airtime, but are keen to buy a flashy phone.

China is distinct because of economics and relatively lax regulation. Many consumers use shanzhai (“bandit”) phones, produced by hundreds of small handset-makers based on chips and software from Mediatek, a Taiwanese firm. Knock-offs are common, with labels such as “Nckia” and “Sumsung”. Other innovative manufacturers have developed specialised phones, for instance handsets that can respond to two phone numbers, or models with giant speakers for farmers on noisy tractors.

Elsewhere the physical environment determines which kinds of handsets prevail, says Younghee Jung, a design expert at Nokia, the world’s largest maker of handsets. In hot India, for instance, men rarely wear jackets, but their shirts have pockets to hold phones—which therefore cannot be large. Indian women keep phones in colourful pouches, less as a fashion statement than as a way to protect the devices and preserve their resale value. It also makes for a noteworthy contrast with Japan, says Ms Jung. If women there keep phones in a pouch and decorate them with stickers and straps, that has nothing to do with economics, but reflects the urge to personalise the handset. Phones are highly subsidised in Japan and the resale value is essentially nil, so it is not unusual to see lost units lying in the gutter.

In some countries it is a common habit to carry around more than one phone. Japanese workers often have two: a private one and a work one (which they often turn off so bosses cannot get them at any hour). “I have one phone for work, one for family, one for pleasure and one for the car,” says a Middle Eastern salesman quoted in a study for Motorola, a handset-maker. Having several phones is often meant to signal importance. Latin American managers, for instance, like to show how well connected they are: some even have a dedicated one for the boss.

As this example suggests, softer factors may influence the choice and design of hardware, even for networks. If coverage in America tends to be patchy, it is not least because consumers seem willing to endure a lot and changing operators is a hassle. Elsewhere the reverse is true. Italians demand good reception on the ski slopes, the Greeks on their many islands and Finns in road tunnels, however remote. If coverage is poor, subscribers will switch.

Paradoxically, however, it is in Italy and Greece that people are especially worried about the supposed health risks of electromagnetic fields. A 2007 survey commissioned by the European Commission found that 86% of Greeks and 69% of Italians were “very” or “fairly” concerned about them, compared with 51% in Britain, 35% in Germany and only 27% in Sweden. It may be that people fret when they lack reliable information—or that in some countries local politicians stir up fears.

Whatever the reasons, the public reaction explains why phone masts in Italy are often disguised, for instance as the arches of a hamburger restaurant, as a palm tree or even as the cross on a famous cathedral. In Moldova, by contrast, such masts are monuments to prosperity. “Every time we put up a mast, they had a party. It connected them,” says Orange’s Mr Swantee.

Yet digital technologies change quickly, and so do attitudes towards them. Will such differences between cultures persist and grow larger, or will they diminish over time? Companies would like to know, because it costs more to provide different handsets and services in different parts of the world than it would do to offer the same things everywhere.

A few years ago such questions provoked academic controversy. Not everybody agrees with Ms Ito’s argument that technology is always socially constructed. James Katz, a professor of communication at Rutgers University in New Jersey, argues that there is an Apparatgeist (German for “spirit of the machine”). For personal communication technologies, he argues, people react in pretty much the same way, a few national variations notwithstanding. “Regardless of culture,” he suggests, “when people interact with personal communication technologies, they tend to standardise infrastructure and gravitate towards consistent tastes and universal features.”

Recent developments seem to support him. When Ms Lasén went back to London, Paris and Madrid a few years later, phone behaviour had, by and large, become the same in the different cities (although Spaniards still rejected voicemail). Yet it is not just the Apparatgeist that explains this, argues Ms Lasén. In all three cities, she says, people lead increasingly complex lives and need their mobiles to manage them. Ms Ito agrees. American teenagers now also text madly, in part because their lives are becoming almost as regulated as those of the Japanese.

This convergence is likely to continue, not least because it is in the interest of the industry’s heavyweights. Handsets increasingly come with all kinds of sensors. Nokia’s Ms Jung, for instance, is working on a project to develop an “Esperanto of gestures” to control such environmentally aware devices. Her team is trying to find an internationally acceptable gesture to quieten a ringing phone. This is tricky: giving the device the evil eye or shushing it, for instance, will not work. Treating objects as living things might work in East Asia, where almost everything has a soul, but not in the Middle East, where religious tenets make this unacceptable.
In the long run most national differences will disappear, predicts Scott Campbell of the University of Michigan, author of several papers on mobile-phone usage. But he expects some persistence of variations that go back to economics. In poorer countries subscribers will handle their mobile phones differently simply because they lack money. Nearly all airtime in Africa is pre-paid. Practices such as “beeping” are likely to continue for quite a while: when callers lack credit, they hang up after just one ring, a signal that they want to be called back.

A few differences may remain within borders, suggests Kathryn Archibald, who works at Nokia and tries to understand consumers in different parts of the world. Only a few countries, mainly in Africa and Asia, still need special cultural attention when designing a phone (which is why some models in India double as torches). “We see more differences within countries than between them,” she says.

Nokia breaks down phone users into various categories, rather than by geography. “Simplicity seekers” barely know how to turn on their phones and use them only in case of trouble. At the other end of the spectrum, “technology leaders” always want the latest devices and feel crippled without their phones. “Life jugglers” need their handsets to co-ordinate the many parts of their lives. Ms Archibald says Nokia’s aim is to offer the right handset to each such group.

But when it comes to content—the services offered via the phones and the applications installed on them—Nokia pays considerable attention to local culture. In India and other developing countries the firm has launched a set of services called “Life Tools”, which ranges from agricultural information for farmers to educational services such as language tuition. In many rich countries, by contrast, handsets come bundled with a subscription to download music. “We need to operate globally, but be relevant locally,” concludes Ms Archibald.

All this raises a question: as differences fade, are people becoming slaves to the Apparatgeist? “Because of our evolutionary heritage, we want to be in perpetual contact with others,” argues Mr Katz. Just as technology allows people to overeat, it now lets them overcommunicate. If this is a problem now, imagine what would happen if telepathy become possible. The thought is not entirely far-fetched: researchers at Intel, a chipmaker, are devising ways to use brain waves to control computers. A phone that can be implanted in your head may be just a few years away—at which point the Germans will no longer be able to call it a Handy.

http://www.economist.com/sciencetechnology/displaystory.cfm?story_id=15172850

Five Ways Apple's Tablet May Change the World

2010-01-12T10:00:00.000-08:00

The iPad is on the way, and it just might reduce calling costs, cut your commute, and, to the delight of journalists everywhere, pull print media back from the brink

Business writers love hyperbole. The ground will swell. The paradigm will shift. But what if occasionally a new tech gadget comes along that really does shake up society? Apple's (AAPL) planned tablet may just be such a device.

Speculation about Apple's one-device-to-rule-them-all iPad reached fever pitch this month when Yair Reiner, an analyst at Oppenheimer (OPY), dug through Steve Jobs' production pipeline and found evidence that the tablet was being readied for an April 2010 launch.

The timing makes sense. The iPhone is three years old, the U.S. economy is rebounding, and gadget demand is pent up among Americans who held off on toy upgrades during the recession. By spring we'll no doubt be past the holiday sales of the black-and-white e-readers that still look vaguely like medical prostate screening devices.

The world is recovering from its Wall Street hangover, and it's looking for a new tech party invitation. An Apple tablet would be the guest of honor. Laura DiDio, an analyst at Information Technology Intelligence, has predicted the Apple tablet will be "the next big thing," complete with 10- to 12-inch high-res screen, Web connection, and a video cam. Other manufacturers such as Dell (DELL) are preparing tablets, too, but Apple is the one to watch—because Apple is best at making radical new hardware formats undeniably cool.

Print Media Comeback
So yes, the Jesus Tablet will appear. And yes, you'll buy one with an artificially high price of, say, $800 as penance for being an early adopter. Within two years the price will fall to $199 until everyone including your 6-year-old has a gleaming, do-anything, interactive pane of glass on his or her desk.

As that happens, the iPad will change the world in at least five ways.

• Magazine and newspaper publishing will bounce back as consumers rediscover paid subscriptions. Sorry, Chris Anderson, but not everything will revert to free. It's no mistake Time Inc.'s (TWX) Sports Illustrated invested in a sexy tablet magazine demo that's also due to hit the market next year.

Publishers realize they have a very narrow window to recapture the paid subscribers they lost to the Web, and they'll do anything to grab you with the Apple gizmo. Expect to see publishers launch visually stunning versions of their magazines with swooping typography, video insets, CNN iReporter-style news uploads, social media overlays—whatever it takes to make you think you're seeing a magazine or newspaper like never before, so much so you'll even want to pay for it.

• Television and radio ratings will continue to fall. Unlike print, TV and radio won't fit easily into the Apple tablet's format. Sure, U.S. consumers still watch 5 hours and 9 minutes of live television a day, but the problem is ratings don't hold when commercials actually air. Certainly, Apple will try to push TV shows and movies through the tablet via iTunes, but we're betting they don't sit well in your hand. Rather than being a device to watch television, the Apple tablet is more likely to be an interactive distraction when real TV ads come on your basement set.

Nielsen noted this trend of "concurrent media usage" this spring, in a $3.5 million study that recorded what hundreds of people actually do when commercials air. When TV spots came on, people picked up laptops, magazines, or cell phones and did something other than watch the screen. Expect that trend to accelerate when you have an Apple tablet in your lap.

• Augmented-reality views of the world will increase. If you missed this trend, it's simple: Augmented reality puts computer graphics on top of live video feeds, similar to the yellow line you see on the field in NFL games.IPhone users now can download applications that overlay a video feed from their iPhone camera—providing floating arrows on the screen showing you, say, the distance to the nearest New York City subway station.

With a larger tablet, such video overlays on reality will become even more compelling. Expect app makers to leap ahead by giving construction workers 3D instructions at a job site, providing consumers with product reviews that float over items on sale at the mall, or serving daters a visual display of the job history, FICO score, and criminal record of that cute guy or gal they meet at a bar.

• Two-way video on tablets will push communication costs even lower. Yes, technically you can do portable video today, if you're willing to walk around town with a laptop flipped open near a Wi-Fi zone. But by and large, our infrastructure still can't accommodate simple two-way video on the go. Add a tablet with built-in Webcam, and suddenly video calls are as easy as holding up a mirror. You better believe AT&T (T) and Verizon Wireless (VZ) are sweating about the advent of Skype video in subway trains or on Hawaiian beaches. (Perhaps Apple will throw its partner AT&T a bone by holding off on tablet Webcams for a few generations. Or it will throw AT&T under the bus by cutting a tablet deal with Verizon Wireless, a scenario at least under consideration earlier this year.

• Telecommuting may finally take off. If you hate your commute and care remotely about the environment, then why do you still sit in traffic for two hours each day? Because society has decreed face time is better than phone time. But when Apple tablets make portable video truly accessible, plane tickets and poor coffee in cars may become things of the past.

We could be wrong. Perhaps it's too much to hope for: a world where Apple provides low-cost, two-way video anywhere that saves print journalism while reducing phone costs, augments reality while cutting your commute, heck, even brings humanity closer together while stopping traffic jams and pollution.

But heck, Apple. Even if you can't solve the world's problems, we'll buy one anyway.

http://www.businessweek.com/technology/content/dec2009/tc20091229_795528.htm

Ray Kurzweil Reinvents the Book, Again

2009-12-29T14:26:00.000-08:00

(Some good graphics are available from the original source @wired @gadgetlab:
http://www.wired.com/gadgetlab/2009/12/blio-ray-kurzweil-book/)

Ray Kurzweil, a prolific inventor who is best known for his prediction that machine intelligence will surpass that of humans around 2045, still has a few things to offer carbon-based life forms. Kurzweil has introduced new e-reader software, called Blio, that approaches e-reading from a completely different angle than the current E Ink-based devices like the Amazon Kindle, Barnes & Noble Nook and Sony Reader.

Blio is not a device. Rather, it is a “platform” that could run on any device, but would be most obviously at home on a tablet. The software is free and available currently for PCs, iPod Touch and iPhone.

“Everyone who has seen it acknowledges that it is head and shoulders above others,” says Kurzweil. “We have high-quality graphics and animated features. Other e-readers are very primitive.”

Blio is set to debut at the Consumer Electronics Show in Las Vegas next week.

E-readers have become a hot consumer electronics product. About 5 million e-reader devices are expected to be sold by the end of the year. Meanwhile, electronic books for the Kindle outsold physical books on Amazon for the first time this Christmas, said Amazon, one of the largest online book retailers.

Kurzweil — who is better known for his 2005 book The Singularity Is Near — has worked extensively in areas such as optical character recognition, speech recognition and text-to-speech synthesis. His company Kurzweil Technologies has a joint venture with the National Federation of the Blind called knfb Reading Technology to create reading products for people with disabilities. knfb Reading is the company that has created Blio.

One of Blio’s major advantages over current e-book readers is that the software offers a full color experience. E Ink, which is the black-and-white display used currently in almost all e-readers, works best for text, and even then most e-books still look ugly, thanks to design limitations in the readers.

Blio actually lays out the “pages” as they would be seen on paper, with typography and illustrations copied across. It also supports video and animation. In some ways, it’s reminiscent of the interactive magazine applications (also meant for upcoming tablet devices) shown off by the likes of Time Warner, Popular Science publisher Bonnier and Wired’s parent company Conde Nast.

Add to that some nifty features such as text-to-speech and the ability to synchronize things (like bookmarks, highlights and the page you last read) across multiple devices, and it makes for an interesting e-reader.

“We can take a PDF and an audio book and merge the two to get a combination such that you can hear the audio book and see the words highlighted on the PDF at the same time,” says Peter Chapman, an executive at Kurzweil Technologies.

For publishers, says Kurzweil the advantage is that Blio preserves the original book’s format, including typsetting, layout, fonts and pagination.

Though it sounds nifty, Blio is up against some stiff competition. Kurzweil and his team are betting against the trend of dedicated e-reader devices such as Kindle, Nook and Sony Reader.

“People don’t want an extra piece of hardware,” says Kurzweil. “They want to take one device and do everything with it and they want color screens.”

Instead, Kurzweil is betting that tablets that are scheduled to be launched next year — including the much speculated Apple tablet — will be used by consumers instead for reading digital books. Blio could fit well on those tablets.

Blio will also go up against existing e-reader software such as Stanza for the desktop. Amazon acquired Stanza earlier this year, and its Kindle for PC and Kindle for iPhone apps also sync with the Kindle device. Barnes and Noble also plans to offer desktop and smartphone-based e-reader software that will work with its Nook. But Kurzweil says they can’t support multimedia and text-to-speech like Blio does.

Blio creators are also working with major book publishers to port their e-books from the Adobe PDF format to Blio for free. They are trying to partner with Google to make its massive library of free book titles available in Blio.

On its own, Blio looks solid, but it signifies something much bigger: the end of the paper book. Right now, e-books are poor copies of paper books, with a single advantage: convenience. A book is just a container for text, not its natural home.

The upcoming rash of tablets could provide a better place for reading words than these old wads of paper, usurping print the way Gutenberg usurped hand-copied manuscripts.

Dilbert suggests e-money gift exchange

2009-12-25T09:28:00.000-08:00

Social Media mentioned in a mainstream Coke commercial

2009-12-24T19:25:00.000-08:00

50 Social Media Tactics for Nonprofits

2009-12-18T19:28:00.000-08:00

50 Social Media Tactics for Nonprofits

View more presentations from Chad Norman.

Fax Machines and Dilbert

2009-12-10T05:32:00.000-08:00

Can You E-Mail Me 100 Bucks? (mobile person-to-person money transfers)

2009-11-22T12:51:00.000-08:00

Buddy, Can You E-Mail Me 100 Bucks?
The Next Big Thing in U.S. banking may be mobile person-to-person money transfers
By Amy Feldman

What if you could send money to that friend who loaned you $20 last week by using your mobile phone rather than having to go through the trouble of trekking to the ATM or mailing a check? All you'd need would be your buddy's e-mail address or cell number—and presto.

Folks in Japan and Europe can already do that. Soon Americans will, too. Studies show that U.S. consumers, particularly the younger set, have embraced the convenience of online shopping and e-banking and are now ready to move to the next frontier: person-to-person mobile payments. A recent poll by Mercatus, a financial consulting firm, showed that the proportion of people ages 26 to 34 who had used a cell phone to buy goods or pay for a product or service had doubled, to 14%, in the past year. "We are at the tipping point," says Mercatus managing partner Robert Hedges.

That's why a host of banks and financial companies are gearing up to add person-to-person payments to their existing mobile and online banking platforms. PNC Financial Services (PNC), Bank of the West, and the Boeing Employees' Credit Union have teamed up with CashEdge, an outfit that already processes more than $50 billion a year in transactions among financial institutions, with plans to launch services in early 2010. Fiserv (FISV), a technology company that handles bill payments for 3,100 financial institutions, is marketing a similar service. MasterCard (MA) is working with Obopay, a mobile payment startup with funding from Nokia (NOK), while Visa (V) has been testing a service with U.S. Bancorp (USB). "Payment habits change pretty slowly, but Generation Y expects this," says Thomas S. Kunz, director of payments and e-business at PNC Financial.

While the banks are only now waking to the potential of person-to-person payments, PayPal (EBAY) has built its business on them. The company, acquired by eBay in 2002, boasts more than 78 million active account holders worldwide and introduced a service earlier this year that allows users to make transfers over a cell phone. Now it is teaming up with banks to offer the same service. FIS (FIS), a tech outfit that counts 14,000 financial institutions as clients, announced on Nov. 3 that it plans to integrate PayPal's technology into its online banking platform. "We found out that [banks] want to collaborate more than ever," says PayPal President Scott Thompson.

HACKER HEAVEN?
Here's how these digital cash transfers work. Sign up for a service through your bank or another provider. Enter an e-mail address or phone number to send money to anyone you know. Your bank's person-to-person payment system will be integrated with your regular online banking, and the funds will be debited from your account. At the other end, the recipient may get the cash deposited directly into an account or have it posted to an existing credit card or a prepaid card. Mostly likely, banks will make money by charging senders a nominal fee (25 cents, say, for a domestic transfer).

What about security, you ask? "Banking on the mobile phone is relatively safe," says Robert Vamosi, an analyst on security, risk, and fraud at Javelin Strategy & Research. In fact, says Vamosi, mobile banking is currently more secure than online banking because cellular networks are tough to hack into.

With many of these new offers set to launch next year, the big question is who will gain critical mass quickly. Says Jim Bruene, editor of trade publication Online Banking Report: "Whoever can make mobile payments as simple as sending a text message is going to win."

http://www.businessweek.com/magazine/content/09_47/b4156068763985.htm

WSJ: Why Email No Longer Rules (and what that means for the way we communicate)

2009-10-12T14:59:00.000-07:00

By JESSICA E. VASCELLARO

Services like Twitter, Facebook and Google Wave create a constant stream of interaction among users—for better or worse.
Email has had a good run as king of communications. But its reign is over.

In its place, a new generation of services is starting to take hold—services like Twitter and Facebook and countless others vying for a piece of the new world. And just as email did more than a decade ago, this shift promises to profoundly rewrite the way we communicate—in ways we can only begin to imagine.

We all still use email, of course. But email was better suited to the way we used to use the Internet—logging off and on, checking our messages in bursts. Now, we are always connected, whether we are sitting at a desk or on a mobile phone. The always-on connection, in turn, has created a host of new ways to communicate that are much faster than email, and more fun.

Why wait for a response to an email when you get a quicker answer over instant messaging? Thanks to Facebook, some questions can be answered without asking them. You don't need to ask a friend whether she has left work, if she has updated her public "status" on the site telling the world so. Email, stuck in the era of attachments, seems boring compared to services like Google Wave, currently in test phase, which allows users to share photos by dragging and dropping them from a desktop into a Wave, and to enter comments in near real time.

Little wonder that while email continues to grow, other types of communication services are growing far faster. In August 2009, 276.9 million people used email across the U.S., several European countries, Australia and Brazil, according to Nielsen Co., up 21% from 229.2 million in August 2008. But the number of users on social-networking and other community sites jumped 31% to 301.5 million people.

"The whole idea of this email service isn't really quite as significant anymore when you can have many, many different types of messages and files and when you have this all on the same type of networks," says Alex Bochannek, curator at the Computer History Museum in Mountain View, Calif.

So, how will these new tools change the way we communicate? Let's start with the most obvious: They make our interactions that much faster.

Into the River
Years ago, we were frustrated if it took a few days for a letter to arrive. A couple of years ago, we'd complain about a half-hour delay in getting an email. Today, we gripe about it taking an extra few seconds for a text message to go through. In a few months, we may be complaining that our cellphones aren't automatically able to send messages to friends within a certain distance, letting them know we're nearby. (A number of services already do this.)

These new services also make communicating more frequent and informal—more like a blog comment or a throwaway aside, rather than a crafted email sent to one person. No need to spend time writing a long email to your half-dozen closest friends about how your vacation went. Now those friends, if they're interested, can watch it unfold in real time online. Instead of sending a few emails a week to a handful of friends, you can send dozens of messages a day to hundreds of people who know you, or just barely do.

Consider Twitter. The service allows users to send 140-character messages to people who have subscribed to see them, called followers. So instead of sending an email to friends announcing that you just got a new job, you can just tweet it for all the people who have chosen to "follow" you to see. You can create links to particular users in messages by entering @ followed by their user name or send private "direct messages" through the system by typing d and the user name.

Facebook is part of the trend, too. Users post status updates that show up in their friends' "streams." They can also post links to content and comment on it. No in-box required.

Dozens of other companies, from AOL and Yahoo Inc. to start-ups like Yammer Inc., are building products based on the same theme.

David Liu, an executive at AOL, calls it replacing the in-box with "a river that continues to flow as you dip into it."

But the speed and ease of communication cut both ways. While making communication more frequent, they can also make it less personal and intimate. Communicating is becoming so easy that the recipient knows how little time and thought was required of the sender. Yes, your half-dozen closest friends can read your vacation updates. But so can your 500 other "friends." And if you know all these people are reading your updates, you might say a lot less than you would otherwise.

Too Much Information
Another obvious downside to the constant stream: It's a constant stream.

That can make it harder to determine the importance of various messages. When people can more easily fire off all sorts of messages—from updates about their breakfast to questions about the evening's plans—being able to figure out which messages are truly important, or even which warrant a response, can be difficult. Information overload can lead some people to tune out messages altogether.

Such noise makes us even more dependent on technology to help us communicate. Without software to help filter and organize based on factors we deem relevant, we'd drown in the deluge.

Enter filtering. In email land, consumers can often get by with a few folders, if that. But in the land of the stream, some sort of more sophisticated filtering is a must.

On Facebook, you can choose to see updates only from certain people you add to certain lists. Twitter users have adopted the trend of "tagging" their tweets by topic. So people tweeting about a company may follow their tweet with the # symbol and the company name. A number of software programs filter Tweets by these tags, making it easier to follow a topic.

The combination of more public messages and tagging has cool search and discovery implications. In the old days, people shared photos over email. Now, they post them to Flickr and tag them with their location. That means users can, with little effort, search for an area, down to a street corner, and see photos of the place.

Tagging also is creating the potential for new social movements. Instead of trying to organize people over email, protesters can tweet their messages, tag them with the topic and have them discovered by others interested in the cause. Iranians used that technique to galvanize public opinion during their election protests earlier this year. It was a powerful example of what can happen when messages get unleashed.

Who Are You?
Perhaps the biggest change that these email successors bring is more of a public profile for users. In the email world, you are your name followed by a "dot-com." That's it. In the new messaging world, you have a higher profile, packed with data you want to share and possibly some you don't.

Such a public profile has its pluses and minuses. It can draw the people communicating closer, allowing them to exchange not only text but also all sorts of personal information, even facial cues. You know a lot about the person you are talking to, even before you've ever exchanged a single word.

Take, for example, Facebook. Message someone over the site and, depending on your privacy settings, he may be a click away from your photos and your entire profile, including news articles you have shared and pictures of that party you were at last night. The extra details can help you cut to the chase. If you see that I am in London, you don't need to ask me where I am. They can also make communication feel more personal, restoring some of the intimacy that social-network sites—and email, for that matter—have stripped away. If I have posted to the world that I am in a bad mood, you might try to cheer me up, or at least think twice about bothering me.

Email is trying to compete by helping users roll in more signals about themselves. Yahoo and Google Inc. have launched new profile services that connect to mail accounts. That means just by clicking on a contact, one can see whatever information she has chosen to share through her profile, from her hobbies to her high school.

But a dump of personal data can also turn off the people you are trying to communicate with. If I really just want to know what time the meeting is, I may not care that you have updated your status message to point people to photos of your kids.

Having your identity pegged to communication creates more data to manage and some blurry lines. What's fine for one sort of recipient to know about you may not be acceptable for another. While our growing digital footprints have made it easier for anyone to find personal information about anyone online if they go search for it, new communications tools are marrying that trail of information with the message, making it easier than ever for the recipient to uncover more details.

A Question of Time
Meanwhile, one more big question remains: Will the new services save time, or eat up even more of it?

Many of the companies pitching the services insist they will free up people.

Jeff Teper, vice president of Microsoft Corp.'s SharePoint division, which makes software that businesses use to collaborate, says in the past, employees received an email every time the status changed on a project they were working on, which led to hundreds of unnecessary emails a day. Now, thanks to SharePoint and other software that allows companies to direct those updates to flow through centralized sites that employees can check when they need to, those unnecessary emails are out of users' in-boxes.

"People were very dependent on email. They overused it," he says. "Now, people can use the right tool for the right task."

Perhaps. But there's another way to think about all this. You can argue that because we have more ways to send more messages, we spend more time doing it. That may make us more productive, but it may not. We get lured into wasting time, telling our bosses we are looking into something, instead of just doing it, for example. And we will no doubt waste time communicating stuff that isn't meaningful, maybe at the expense of more meaningful communication. Such as, say, talking to somebody in person.

http://online.wsj.com/article/SB10001424052970203803904574431151489408372.html

Video: Google's Matt Cutts Discusses "How to Get Better Visibility on Google"

2009-10-12T08:16:00.000-07:00

What is a Vook?

2009-10-01T03:45:00.000-07:00

http://www.vook.com/

Cover of The Economist (26 Sep 09)

2009-09-28T16:16:00.001-07:00

http://www.economist.com/printedition/index.cfm?d=20090926