*michael parekh on IT*

ON MYSPACE MAKING THE COVER OF BUSINESSWEEK

HERE WE GO AGAIN

Well, MySpace made the cover of BusinessWeek (via memeorandum), a publication that I generally like, respect, and read. 

However, everal questions raced through my mind as I saw this:

1. "MySpace Generation??" Do the editor realize how corny and trite that title really sounds?
2. When the sub-title says "They live online. They buy online. They play online. Their power is growing", does this mean that anyone outside that "young, Generation @ or X" demographic is NOT doing any of those things in large and significant numbers?
3. Does this mean the beginning of the end for MySpace and Rupert Murdoch's $680 million big bet?
4. Does this mean social networking is REALLY over?
5. Does this mean Web 2.0 is over?
6. Do the BusinessWeek editors realize how off-the-mark  a cover story like this usually comes across, especially in hindsight?
7. Did BusinessWeek not learn it's lessons from running and hyping similar glowing cover stories about the "Information SuperHighway", Netscape, and other Web 1.0 related hoopla a decade ago?
8. How long before BusinessWeek's competitors here and overseas feel compelled to run similar stories?
9. Do  cover stories like this REALLY help circulation in the short run? In the long run?
10. How long before BusinessWeek runs a cover story on how hyped the social networking/Web 2.0 space became and/or refer negatively to the MySpace acquisition by News Corp.?

Any more questions come up your end?

ON GOING FROM THE BIG "GYM" THREE TO THE BIG SEVEN

PICK SOME LETTERS OUT OF THE BAG

OK, so Om Malik wants to abstain from the Big Three Internet companies for a week, a la Seinfeld in the famous "Master of my Domain" episode.  He says:

"...lets admit it, whether we hate them, or we love them, we do love to talk about them. Them being Google, Yahoo and Microsoft aka GYM. What would happen if the blogosphere decided that we would not talk about the Big Three for a whole week? Instead we shifted our focus on the little guys, interesting technologies, and some other important stuff. Can the blogs exist without talking about the GYM?"

To which Dave Winer offers his own game:

"Richard MacManus talks about The Big 3, and there is a trend to think about three companies -- Google, Microsoft and Yahoo -- as the leaders in online.

But I don't think that really works, because well, there are three more that are probably just as powerful as the others, but in different ways. Who are are they? Why don't we make this a game. For 15 points each, which three companies are also leading?"

So of course he's adding three out of four biggies that I think could be added to GYM:

1. AOL:  You could go with either A or T (Time Warner for a little while anyway) as the letter to add to GYM.
2. eBay:  So we get an E, lower case as it is.
3. Amazon:  Another vowel, yeaA!
4. Apple:  regular readers know I've certainly talked about them as a biggie...so another A.

That gives us seven letters...which gives me the idea to propose my own game:  SCRABBLE.
Out of either:

1. GYMAAAE or
2. GYMAATE,

What's the longest word you can make?

I'll start off with a word that probably represents how some brand-spanking new Web 2.0 start-ups might think of our list of SEVEN Web 1.0 biggies:

GAMEY

Any other words that come to mind?  You can use either of the two "bags" of tiles above.

ON PAYMENT FOR PEER PRODUCTION

PAYMENT IN KIND

UPDATED BELOW*

A subject discussed at the Union Square Ventures' event (see earlier post) was the issue of who gets paid what and how for "peer production" in a web 2.0 world.  It's a subject worth some exploration.

Most of the discussion to date focuses on how the web services themselves can make money from peer production. 

But the broader question for me is how users are eventually compensated for their "peer production" today and over time.

Payment for our peer participation and production to date on services like Wikipedia, Flickr, blogs and the like are primarily in non-cash terms.

Specifically they can be classified in the following categories:

1. Convenient functionality for all (e.g., Flickr, Del.icio.us, Wikipedia and  of course, Google).
2. Reputation as in the case of bloggers, reviewers and commentators on the web (aka vanity).
3. Generosity, as highlighted by Tom Evslin in the discussion at the USV session.  Good example here are the mostly anonymous contributions by countless folks to entries in Wikipedia.
4. Monetary compensation direct and indirect, as in the case of eBay sellers who get direct cash from sales and Google advertisers, who presumably get transactions from the leads they pay for through Adsense and Adwords on the service and affiliates.

In most cases, we get convenient functionality as the top form of compensation in web 2.0 services, by being able to share in the efforts of many around a subject of interest to one. 

As pointed out aptly by Tim O'Reilly in the session, this is particularly true in the case of Google, where every user's search fuels the efficacy of the search for all. 

Google's shareholders of course benefit here, particularly when the company reports a seven-fold increase in profits for the third quarter of over $380 million on revenues of a little over a billion dollars. 

Not bad for a seven year old company monetizing very well the 5% of time and attention that users worldwide spend on search on the Internet.

In a world where the "peers" in peer production are paid mostly in convenience or reputation (aka vanity) in the case of blogs, user comments and the like, one wonders how far we are from a time when a search engine and other web 2.0 businesses offer a piece of the cash to users for their attention and loyalty in any form.

It's been tried before of course in Web 1.0 days...the notion of paying money to search users.  iWon.com is the poster child here, which continues to pay users in cash prizes to this day (over $64 million to date according to their website).

Of course back in the web 1.0 days, the prize money was a customer acquisition expense.  Today in the world of paid-search, there is real revenue that can be split with users.

Alternatively, search engines could offer a loyalty program a la the airlines that offers specific awards and benefits for sustained usage and loyalty.

In a trillion dollar plus world of global advertising, direct marketing and promotion, it's not unreasonable for peers to collectively ask for a piece of the pie.  Especially when there's SO MUCH of it to go around.

Whatever form it takes, at some point in the evolution of the web, consumers and users may ask for and get more tangible compensation beyond functionality, reputation and feelgood generosity, in exchange for their attention to all things on the web.

Why, we may even call it web 3.0.

After all it is VERY personal and it is BIG business.

The next Google wannabes of course will keep this in mind.

UPDATES:

*David Gibbons of Poductivity has an interesting comment below applying some of Umair Haque's thinking on microchunking to the eBay-Skype acquistion, that happens to be relevant to the paying for peer production thesis above.  For reader convenience, here are the live links to the slide and his original post.  My own post on the eBay-Skype acquisition can be found here.

ON CHINA REAL ESTATE BOOM

UP, UP AND AWAY...

Great article in the New York Times (registration required) on the real estate boom in China...it starts with this gangbuster opening:

"China Builds Its Dreams, and Some Fear a Bubble

 

By DAVID BARBOZA

   

SHANGHAI, Oct. 16 - Move over, New York. This year alone, Shanghai will complete towers with more space for living and working than there is in all the office buildings in New York City.

That is in a city that already has 4,000 skyscrapers, almost double the number in New York. And there are designs to build 1,000 more by the end of this decade.

China's real estate market is so hot that miniature cities are being created with artificial lakes, and the country's nouveau riche suddenly seem eager to put down as much as $5.3 million for a luxury apartment in skyscrapers with names like the Skyline Mansion."

Another eye-opener midway through the article:

"It is not surprising that in a country where 170 metropolitan areas have more than a million people, according to government figures, everyone seems to want to be a developer.

State-owned oil and steel giants, automobile companies, shipbuilders and even Communist Party newspapers are creating real estate subsidiaries."

The economic circumstances and pricing are different, but some of these anecdotes are reminiscent of the property boom in Japan in the eighties, when land in Tokyo was valued higher than all of the property in the US.

China no doubt has great economic and investment potential over the next few decades, but it's important to keep reminding ourselves that it'll be a really bumpy road.

 

ON GLOBAL PORTAL ANIMATION DIVIDE

BLINKETY BLINK

It hit me as I was surfing the Indian portal for the Times of India.  There were a lot of flashing, animated, blinking, things on the home page.  They were flashing both on the editorial and advertising segments of the page.  Mini-phrases like "click me" and "click here" were flashing away reminding me of neon signs in Times Square. 

Not to mention the half a dozen or so pop-ups that were blocked by my built-in browser defenses.

That evoked a sense of deja vu.  I'd seen this before...racked my brain, and of course...I've seen this on a number of Asian portal home pages. 

Quickly opened firefox tabs for Chinese portals Sina.com, Sohu.com, 163.com, china.com, along with South Korean Daum.net, and then to double-check another Indian portal rediff.com.

ALL OF THEM had blinking, flashing, animated elements beckoning you to pay attention and click.

Why did this strike me as unusual?

Of course!  Most of the time, I'm on US portals like Yahoo!, MSN, AOL and the newly out of the closet, protean-portal, Google.  And most of them may have the occasional banner ad with some mild Flash animation.

And NONE of them have anywhere near the blinking animations of their Asian counterparts.  Well, occasionally, you'll see an animated banner ad or two, but nothing like the Times Square bling of an Asian portal on an average night or day.

Why is that?  Do Asian users prefer the animated stuff more than US users?  Do they click on the ads more? Do advertisers demand animated inventory in these countries, more so than here? Are the click-through rates higher for editorial and the advertising content?  I don't have the answers, but they struck me as relevant questions.

Is it because the broadband penetration has been higher earlier in Asia than in the US?  Well, that doesn't apply to China and India, who are behind US broadband deployment rates.

What about the Asian versions of the US portals?  What does their bling factor look like?

I checked it out the grand-daddy of expatriate US portals, Yahoo! Japan...and sure enough, it looked like the static, buttoned down Japanese twin version of its US namesake.  But the local, Japanese portal Goo, did have some animated ads going, although not as many as its Asian counterparts.

What about Europe I thought?  Where do they stand on hyper-active portals?
Sure enough, both Free and Wanadoo in France were distinctly animated, imagine that.

The German T-Online portal was static and sedate, and properly behaved.

Not sure where all this anecdotal, non-scientific comparative global discussion is going, but I daresay, US portals will likely follow the lead of their Asian peers, as broadband penetration in the US goes higher from the 55% of households today.

Mind you, I'm just talking about portals and not search engines here.  There Google remains the spartan example to copy world-wide, whether its emulators here like Icerocket, or overseas like Baidu in China. 

You don't mess with super-success...unless of course the next Google shows us the new way.

ON OPPORTUNITIES FOR SECONDARY SCREENS ON PHONES, PDAs AND LAPTOPS

THE THIRD EYE

VC David Beisel of Genuine VC has an interesting post titled "Opportunities for the Third
Screen", on how increasing number of cell phones have second and third screens and how they're potentially prime real estate for monetization by ads and offers.  Specifically, David says:

"Motorola was talking about its plan to release new dynamic idle-screen technology, called Screen3, by year’s end. The technology, “essentially pushes Internet information to a mobile phone's main screen. Thus, users can get news updates or the latest weather forecasts with just a glance at their phones, without having to open sluggish WAP browsers or other applications.”

The challenge is not how to exploit the opportunity when it presents itself, but how to make sure consumers are not alienated by an overwhelming amount of "buy me"/"click here" type of offers.

Incidentally, this is something that may be an opportunity and issue soon for laptops and PDAs as well.  Microsoft next version of its flagship OS, Windows Vista will support secondary screens, envisioned mostly to be on the outside of a laptop to provide say information from Outlook at a quick glance, without having to fire up the laptop (picture via Gizmodo).

This feature has already been envisioned for the budding handtop PC category, typified by Paul Allen's FlipstartPC.

It's external screen resembles something you'd seen on a cell phone today.

All these pieces of real estate will be prime for additional monetization if consumers seem to tolerate and like it. 

Obviously, the volumes are going to much more economically interesting on cell phones than laptops and PDAs.  But they're all places we're likely to see second and third screens.

Indian Hindu mythology speaks of the third eye being the "eye of higher perception", originating with Lord Shiva.  Hopefully we're wise enough to use our artificial third screens for similar higher purposes.

ON THE OTHER SIDES OF INDIA

BOTH SIDES OF THE SAME COIN

Two stories from India of note this week, illustrating some of the best aspects of India's astonishing growth and how much the glass is still empty.

First, this story from the Financial Times on the record New York-based sales of Indian art at both Christie's and Sotheby's, with the first Indian painting ("Mahisasura" by Tyeb Mehta) selling for over a million dollars ($1.6 million in this case). 

There's a lengthier post here in the Indianartnews blog, which also had the adjacent picture.

It represents a milestone in the nascent market for Indian art worldwide, and symbolizes how far the country has come over the last decade.

On the flip side, is this unrelated story from BBC News (via Anna of SepiaMutiny), reminds us of the other reality of India beyond the now generally well-known and understood "Flat World"-Biggest-Rising-Global-Economic-Power-After-China story. An excerpt:

"A 12-year-old Indian girl committed suicide after her mother told her she could not afford one rupee - two US cents - for a school meal."

As someone who was born in India, but spent most of his life abroad, the poverty visible in India today continues to be as heart-wrenching as I remember it from years past.  It's the one thing most first time visitors to India are the least prepared to witness, despite all the stories they may have heard from folks beforehand.

As this unrelated article from the ScienceBlog (Lancet) shows, the suicide rate for India's young (ages 10-19), already ranks amongst the highest rates of in the world.  The study from last year indicates 148 out of 100,000 young women and 54 per 100,000 young men, compared to 14.5 per 100,000 for the rest of the world on average.

Besides abject poverty as in the case above, other related causes tend to be related to stress related to a very competitive education system, and social/cultural forces.

As the BBC article suggests, India's got a long way to go before the current economic growth materially changes the lives of the majority of India's billion plus people.  But things are moving in the right general direction.

ON THE MYOPIA OF TV EVENING NEWS

NO NEWS BEFORE IT'S TIME

This is anecdotal I admit, but scanning through the evening news shows on TV tonight, from 6 to around 8 pm, I'm struck again by how the national TV news shows (ABC, CBS, NBC), along with the cable news channels (CNN, FoxNews, MSNBC et al), are captivated only by the big news story of the moment, to the detriment of all else. 

It's about nothing but Katrina (the politics thereof and the regurgitation of the same old "recovery" news), and the upcoming Hurricane Rita.

No mention of Iraq (I guess the number of dead were way below a handful, which is what it seems to take to get even 15 seconds or so on the subject).

Nothing on the post-election standoff in Germany, only the third largest economy that mainstream US audiences should know something about.

I know that this near-sightedness is nothing new, but it never fails to bug me, every time.

As someone once said, the TV news folks are like 9-year olds playing soccer...everyone gleefully piles onto the soccer ball whichever new direction it's kicked in, with no thought to strategy and perspective.

Just had to vent a bit...thanks for being there.

ON SUPREME COURT LIFE-TIME TERMS

SERVING ONE'S TIME

The sad passing of Chief Justice Rehnquist has prompted me to re-learn some aspects of our Judiciary Branch that I'd forgotten or perhaps never learned.

The first question that came to my mind upon President Bush's re-appointment of Judge Roberts for Chief Justice Rehnquist's position was how unusual is it for a Chief Justice to come from outside the current court?

Turns out, not unusual at all (courtesy Wikipedia).  Apparently only 3 of the 16 Chief Justices that the United States has had to date were appointed from within the bench.  This of course includes Chief Justice Rehnquist himself, who was elevated to the top slot by President Reagan in 1986.  Contrast that to the fact that 9 of our 43 Presidents to date have ascended from the Vice Presidency to the Presidency.

The thing that stopped me in my tracks though was the number of Supreme Court Chief Justices that we've had in 229 years (16), compared with the number of Presidents (43).

This of course may partly due to the fact that our Presidents, since 1951, courtesy of the 22nd amendment, have been limited limited to serving two terms only, whereas Congress (both House and Senate), have no term limits, and Supreme Court Justices serve for life. 

The Executive branch is the only one with term limits compared to the other two branches.

I then decided to do some back of the envelope calculations. 

The average tenure of a President comes to 5.3 years vs. 14.3 years for a Chief Justice since the birth of the nation.  And that's with having NO TERM LIMITS on the Presidency for the first 175 years of the nation's history.

Until 1951, we'd had 33 Presidents, (Harry S. Truman being the 33rd), and 13 Chief Justices (Frederick Moore Vinson being the 13th).  It you take the averages up until that  point, they come out the roughly the same as after the Presidential term limits, 5.3 years for Presidents vs. 14.4 years for Chief Justices. 

That's a bit surprising, indicating perhaps that the effect of the term limits has yet to kick in.  Or maybe it's just tough for Presidents to get re-elected more than a couple of times given the national focus on this very important election every four years.  A bit tough to hide under that kind of scrutiny. 

After all, President Franklin D. Roosevelt was the only one who managed to get elected four times, but obviously under the extraordinary conditions of World War II.

Obviously as average life expectancies go up over the next few decades, the Chief Justices, indeed all Supreme Court Justices likely will serve even longer average terms.

Intuitively I'd have expected the average term of 14ish years to have been longer, but it is a long time by any measure.

Judge Roberts will likely go way past the average, assuming his confirmation, given that at 50, he'll be the second youngest Chief Justice after John Marshall, in 1801, who was appointed at the age of 45.

Watching a four year old interview of Chief Justice Rehnquist on C-Span recently, I remember his answer to a question on age and tenure.  Asked what if he thought if being appointed even an Associate Justice to the Supreme Court at 32 (Joseph Story in 1811), the youngest on record was too young, he said he did think it was...not because of the presumed relative inexperience of the candidate, but that potentially serving for decades in any capacity may be too much to ask of an individual.

I guess it's alright do something for a long time as long as your heart is truly in it...I had a two decade plus career with one firm, which is thought somewhat unusual on Wall Street, but I got to do things that I really enjoyed and believed in, with some terrific people.

Another long-standing institution that also has life-time terms is of course the Vatican Papacy.  According to Popechart.com, we've had 265 popes since the inception of the institution 2005 years ago...which gives us an average tenure of...7.5 years.

Now that's curious...that the average tenure of a Pope is about half that of a US Supreme Court Chief Justice, despite having almost a 10x advantage in time span, with the same life-time service opportunities.  Perhaps it has something to do with the much lower average life expectancies through the ages.

So, as the nation girds itself for a Fall full of legislators debating the pros and cons of Supreme Court appointments, we should remind ourselves that these individuals do have a unique responsibility, obligation and opportunity. 

To truly serve the WHOLE nation as it stands now and as it will be in the future, regardless of party affiliations, special interest pressures, and any implied obligations, presumed or real.  And to do it consistently well for a really long time.

Obviously, only after the appointment and confirmation circuses are done with of course.

Postscript:  By the by, President Bush getting the opportunity to appoint two judges to the Supreme Court so far is not unusual at all, when you consider each of his predecessors had the opportunity to do the same, although none a Chief Justice of course.  President Reagan got to appoint three.  (From Infoplease:  Reagan (O'Connor, Scalia, Kennedy); G.H.W. Bush (Souter, Thomas); Clinton (Ginsburg, Breyer)

ON TEN QUESTIONS REGARDING NEW ORLEANS

ASK AND YOU SHALL RECEIVE (NOT?)...

(Updates Below)

Fourth day after Hurricane Katrina passed through and it's hard not be affected by the personal stories of human suffering coming through the TV news.  It got so bad yesterday, that I turned off the TV to just focus on print reports of the news, so that I might get a broader perspective on what's happening.

It didn't help.  The print media was also for the most part focused on the personal anecdotes that make you shake your head that this is occurring within the United States.

And then another shock.  Regardless of political party affiliation, it was very surprising to hear President Bush refer to the situation as "unacceptable".  It's good to see the administration getting off the one key that has been the primary focus for modus operandi since 9/11.

And speaking of 9/11, one can't but help and compare & contrast (my favorite exercise in high school), the first few days of this disaster vs. the first few days of the last one, Rudi Guiliani notwithstanding (as Jason Calacanis wonders here).

Maybe whichever philospher who said it, got it right:  human beings do need an external enemy to motivate them to get off their duff. 

Which is why politicians throughout the ages have used that basic tool of governance.  And which is why they continue to invent external enemies when there are none, or exaggerate the ones that may exist in the far distance.

It's tough to make political hay out of mother nature as an enemy.

Here, there is no external enemy other than Hurricane Katrina, and of course the levees.  As an aside, the last time I thought of the word levee was whenever I heard Don McLean's "Bye, Bye American Pie" on the radio...remember?:

So bye-bye, miss American pie.
Drove my chevy to the levee,
But the levee was dry.

Now, the whole nation is going to become expert on levees and how they work, and of course what happens when they don't.  Already there's talk in southern California of re-examining the levees in the area which are prone to earthquakes, which occur at a greater frequency and far less warning than hurricanes.

So, coming to the point of this post (finally), all this for me anyway, generated far more questions than answers. 

I thought I'd share them with everybody, and see if people have thoughts/comments on them, or if they have more questions they'd like to add.  These are in no particular order or priority.  For ones that I have some partial, half-baked answers and/or assumptions of answers, I've added them in parentheses:

1.  When will the people, especially around the Superdome, finally be evacuated?
    (A:  Probably in the next week, especially given the intense public, media and now political focus on the situation).

2.  When will the looting and lawlessness be brought under control?
    (A: Same as for the question above, especially with thousands of National Guards troops moving in...but important questions and issues around "Grand Theft Auto: The Big Easy" will remain.  Tom Evslin has some good thoughts on the crime spree here and comparisons to 9/11 here).

3.  When will the levee breaches be temporarily staunched?
    (A: In the next two weeks or so?)

4.  When will the city be totally evacuated?
    (A: Next 2-3 weeks, but with thousands of troops, volunteers and other organizations doing clean-up in the city, the issues of property protection remain...
RELATED QUESTION:  What are the legal precedents if any, around authorities going through hundreds of thousands of homes searching for bodies, WITHOUT the owners present?  Who's responsible if owners find things missing?  What if evidence of other crimes are found on the premises during these body searches?)

5.  When will we see all the bodies collected, identified and returned to families, along with a total death toll?)
    (A:  Likely 2-3 months, so by the end of the year?)

6.  When will the first memorial services be held for the victims, locally, regionally and nationally a la post 9/11?)
    (A:  This is a great opportunity for politicians go get airtime, so this will likely happen much sooner than later, possibly by the end of September?
RELATED QUESTION:  When will all the Senatorial and Presidential aspirants for 2006 and 2008 respectively start showing up regularly on TV for the next few months on Hurricane Katrina related issues?)

7.  When will the first looter and other related criminal trials be held?
    (A:  Again, given the political dividends, this will likely occur sooner than later, so likely in the next 3-6 months...nationally televised of course, with books to follow).

8.  When will see the first books, mini-series, movie of the week, and possible feature films based on these events?
    (A:  The writers are probably being engaged as we speak...so probably in 9-12 months?
RELATED QUESTION:  When will start seeing the first celebrity fund-a-thons and concert drives?)

9.  When does the "blame game" start, especially at the national level?
    (A:  Some would say it's already starting, but full-fledged Congressional hearings and the like are probably 2-3 months away...again, there's political capital to be accrued here
RELATED QUESTION:  When will see the first law-suits around the blame, crime and insurance issues?  The issues on the latter item are already murky given that about half of the home owners do not have flood insurance and the insurance industry is going to use that to limit coverage, as in "hurricane and winds are covered, but floods are not"...how do you delineate which damage is caused by which event?  Good day for lawyers coming, not to mention constructions folks from all around the country).

10.  When will policies be put in place so that something like this does not happen again, and we learn from history and our mistakes?
    (A:  You want fairy tales, go read a book).

I'm more of a natural optimist than a cynic, so even I'm surprised as to where I'm coming out on some of these answers...maybe I'll be positively surprised...to be continued...

UPDATES:

1.  September 3rd, Saturday, 1pm EST:   It's truly difficult to find the words to describe one's feelings as this story continues to unfold.  Both Fred Wilson and Brad Feld express their feelings in thoughtful ways...recommended. 

Also worth reading is Nick Bradbury's post, which emphasizes why this is so beyond regular party politics.

2.