Hating the Haters is... So Cool!

Was somebody on the Internet mean to Stephen Marche?

The Internet has reached peak hate. It had to. At every other moment in history when there has been an explosion of text — whether through social change, like the birth of a religious movement, or technological change, like the advent of print — a period of nasty struggle ensued before the forces of civility reined it in. In the past few months alone, we've seen the catfishing of Manti Te'o, a professional tennis player quit because of trolling, and a rash of teenage suicides from cyberbullying alongside the by-now-standard Twitter hatestorms of various strengths and durations. The sheer bulk of the rage at the moment can seem overwhelming. But the fact that we recognize it and have acknowledged its unacceptability is a sign of the ancient process reasserting itself yet again. The Internet is in the process of being civilized.

Peak hate? Is that like "peak oil" - you think you've reached it, and then somebody finds a new source or finds a way to dig a deeper well?

Hate is a source of acknowledged pleasure. Hate-watching. Hate-listening. Hate-reading. These are all things that you, your friends, and your neighbors, not monsters, likely do. We deliberately expose ourselves to objects of contempt to stoke inner outrage in order to enjoy the release of fury. It's not just online, though the Internet is the most obvious theater of cruelty.

The Internet is "the most obvious theater of cruelty"? Seriously? I guess, perhaps, if the most dangerous thing you do is interview models and send tweets from your home office. But... seriously?

Marche then proceeds to imply that every mean thing said on the Internet is a form of cyberbullying, admits that he takes personal thrill in it, and suggests that we're headed down a road toward having anonymity legislated out of the Internet. He's a reporter, but I think he missed some foundational lessons on the First Amendment. Also, I don't think it's helpful to define bullying so broadly to encompass every mean thing posted on the Internet. Marche should take personal note here, given that when he argues that "Twitter and Web comments are really just new expressions of that oldest of monsters: the crowd", that "these hatestorms" against individuals on the Internet are a form of bullying, and "bullies and their victims both have a higher rate of mental illness for decades afterward", it's difficult to avoid the fact that he's describing his own conduct. I'll grant, he uses the term "we" a lot, but that seems largely to be a matter of projection.

Wildness is always followed by civilization, the root of civilization is civility, and the rules of civility have not meaningfully changed in two thousand years. Cicero outlined them in "On Duties": Speak clearly. Don't speak too much. Make sure everybody has a chance. Don't interrupt. Alternate topics so that everybody can talk about something of interest to them. Don't criticize people behind their backs. Don't be angry or lazy. These are the rules. You already know them. They've always been the rules. People are just going to start following them again.

Except the thing is, it's not as if human nature has changed over the past 2,000 years, and Marche himself admits that what he's describing is simply a manifestation of human nature, at times magnified by technology. Were Marche to look at the past 2,000 years of human history, he would quickly find that Cicero's rules are most often honored in the breach. That's not going to change, and the Internet is not going to be tamed by (imagined) legislation that requires you sign your real name to everything you post. If Marche wants to transform himself into a champion of online civility, a role model for us all, that would be great. If he thinks he can change others, or transform human nature through legislation, though, he has quite a bit to learn about the limits of his capacity.

Résumés? What's a Résumé?

Touching on the job-seeking post from a couple of days ago...

We've learned more details about Apple's new 'GPU Design Center' in Orlando, Florida, following our reporting from earlier this week.

Sources told MacRumors that the engineers Apple hired recently were not laid off from AMD, but were instead actively recruited -- largely via their LinkedIn profiles. Apple is said to have learned that many of AMD's 3D graphics patents were issued from its Orlando offices and targeted this area specifically. AMD has job listings for its Orlando offices to fill several of these recently vacated positions.

They probably didn't even know they were looking for jobs before the recruiter called.

The End of Job Applications As We Know Them

First, a word in defense of Thomas Friedman (and his taxi drivers). Although he has the human tendency to seek points of view that reaffirm his own, at least he's sticking his head outside of the bubble and listening to somebody other than like-minded talking heads or agenda-driven "confidential sources". I also agree with Friedman's general conception that the job market is changing, as are the means by which people will find jobs and maintain their positions (or should I say, salaries) over their working lives. That said, in his column about a new website that tests the skills of job applicants... I think he's a bit too credulous toward the creators of the site he touts in his zeal to endorse a new era of employment.

The way HireArt works, explained Sharef (who was my daughter’s college roommate), is that clients — from big companies, like Cisco, Safeway and Airbnb, to small family firms — come with a job description and then HireArt designs online written and video tests relevant for that job. Then HireArt culls through the results and offers up the most promising applicants to the company, which chooses among them.

The problem I see with that is that designing tests isn't a one-off. If you want tests that are measurably effective at assessing worker's skills, you have to do a lot more than create a test for a given job. You need to test the test. Further, let's say you create a test with "the right questions" - how do you grade the answers? If we were talking about tests of math skills, that could be automated. But we're not - at least as highlighted in the column, these are subjective tests:

HireArt asks candidates to do tasks that mimic the work they would do on the job. If it is for a Web analytics job, HireArt might ask: “You are hired as the marketing manager at an e-commerce company and asked to set up a Web site analytics system. What are the key performance indicators you would measure? How would you measure them?”...

Sample question: “Kanye West just released a new fashion collection. You can see it here. Imagine you had to write a tweet promoting this collection. What would your tweet be?” Someone applying for a sales job would have to record a sales pitch over video.

Really, more than a test, that's more like creating a standardized set of interview questions and giving applicants time to think through the answers. In essence, rather than just submitting résumés, the applicants would be interviewing in writing. But who would review the answers, and based upon what criteria? Enter the human element. Or perhaps even the computer element - if you get 500 people applying for each job, odds are that the initial "scoring" is going to be a computerized process, or performed by somebody associated with the website as opposed to a person who would actually be making a hiring decision. If you were hiring a salesperson, how valuable would the pre-recorded pitch be, as opposed to tasking a candidate to make a pitch during the interview and seeing how they respond to you in the role of customer? How much time would you save, reviewing perhaps hundreds of videos from applicants as opposed to interviewing leading prospects?

So what does she advise? Sharef pointed to one applicant, a Detroit woman who had worked as a cashier at Borders. She realized that that had no future, so she taught herself Excel. “We gave her a very rigorous test, and she outscored people who had gone to Stanford and Harvard. She ended up as a top applicant for a job that, on paper, she was completely unqualified for.”

From which I infer, she didn't get the job.

For some of us, the idea of somehow being tested before applying for a job is old hat. I can't recall the last job I applied for that did not want multiple writing samples, a sample document of some sort relating to the work I would be doing, or something else that would suggest qualification (or lack thereof) before I was selected for an interview. And I haven't applied for a job in a very long time. Perhaps outsourcing that sort of pre-screening will work for some employers.

However, I think the future lies in a somewhat different direction. While large employers may well continue to reach out to new college grads through sites like the one Friedman describes, more and more jobs are going to be filled through personal connections and networking. A commonly recited statistic is that 80% of job openings are never advertised. I see a future in which that rises well over 90%, as people rely more and more on sites like LinkedIn to find and check references on people who may not even be aware that they're being considered for a job offer. The test will in no small part be your actual accomplishments, as documented on your profile and as verified by trusted people in your extended network.

The Problem With the Paywall

CJR offers the case in favor of newspaper paywalls. But as the article indicates, " A paywall is not a magic solution". Newspapers have experienced a drastic change in the way news is distributed and consumed, and although a well-designed paywall may help make up some of the lost revenue there's no going back to the way things were.

The problem is, people don't have unlimited time, attention and money. If you put content behind a paywall you reduce your audience, and if you don't get enough people to subscribe you can reduce or lose your relevance. With free online news, many people have become accustomed to obtaining information from sources they would not have consulted prior to the rise of the Internet, and many of the local sources of news coverage have crumbled or collapsed. But the person who might have once purchased a newspaper subscription may think twice about buying subscriptions to multiple online news sources, even if the net cost is lower. It's not just that the nature of the expenditure is different, and irrational though it may be it can feel different to have somebody deliver a tangible newspaper to your doorstep as opposed to browsing a newspaper website. It's that people can only process so much information.

Also, once behind a paywall the experience of reading news online is changed. If you use news aggregator sites, you are apt to favor the sources that are free or to which you already subscribe. If you try to change reader behavior - "Start at our site", or "Get your news through our app" - you're likely to trigger more frustration than satisfaction.

I have a ridiculous number of channels available as part of my cable subscription, most of which I never watch, don't care about, and wouldn't miss. If cable subscribers had to subscribe to them individually, many would go out of business. But the companies that sponsor those channels get a small fee each month, so that I can read their content. That seems like a sensible model for media companies - work through internet service providers, or perhaps through operating system developers, and work out a licensing scheme. Let people pick the media packages they want, paying a single fee to the provider, and thereby get access to "behind the paywall" content for the news companies in their package.

When I look at the few successful paywalls at large media companies, I can't help but think of the handful of cable channels that were once able to profit from individual subscriptions. I suspect that the future lies in packages.

Well, That Was Useful....

According to this infographic, based upon the relatively modest percentage of the described websites I use, I am a lowly-highly politically engaged likely Rombama voter.

Angry birds are lowly engaged swing voters? And here I was, thinking that the game was a visualization of Tea Party anger at politicians. ("Get your grubby pig hooves off of my nest egg!")

Seriously, half the time I wonder if there's any actual data behind these things - make stuff up, put it in graphic form, and post it as link bait?

What if the New Apple TV Is...

The Apple TV? Seriously, it makes more sense to me that Apple would be improving their device that can be added to any TV set than it would be for them to be attempting to enter the consumer market and trying to compete with products that have established distribution networks and, in most cases, razor-thin margins.

But could it be more than that? Certainly. What if the new Apple TV is... the next generation iMac. Put it in any room as a computer that can substitute as a second TV and use it as a media server to the rest of the home, just as you can through your existing desktop Mac and Apple TV, with the exception being that you can feed your cable through the iMac or through a simple add-on device that allows you to distribute all of your media to other sets in your household via your wireless hub, whether or not they're connected to cable, as long as they're connected to the current Apple TV box or its successor product. Get people used to accessing their program through the Apple TV with the Apple remote (or iPhone and iPad apps), serving audio and video from a central (Apple) computer, renting movies from Apple instead of their cable provider.... (A quick check suggests that I'm far from the only person thinking like this.)

As we can expect to see the next version of the Apple TV unveiled shortly after noon tomorrow, and may see the next iMac at the same time, you'll probably soon know if I'm maintaining my long history of bad predictions about Apple. I'll add to that list, if a new iMac isn't unveiled tomorrow I suspect that they're planning a significant upgrade, not just the incremental updates we've seen over the past few years.

The End of Google Shopping as a Price Comparison Service

Back in the earlier days of the Internet, a clever guy came up with an idea for a directory made up of nothing but ads, based up a pay-per-click model with advertisers bidding against each other for prime placement. The website and associated patents were acquired by Yahoo!, and were licensed by Google shortly before its IPO for... a ton of money. Google's subsequent history suggests that, as much as it paid, it got the better half of the bargain.

Now it seems that history is coming full circle, with Google transforming its frequently renamed and reinvented price comparison service into what amounts to a directory or search service for ads (and nothing but ads). I have to say... I'm a bit disappointed. Not because I don't see Google as having a right to charge merchants to promote themselves through a shopping service, or that I think such a service is free or easy to run - in fact, I can see how paid inclusion could help ensure that merchants keep their listings current and accurate, diminish the number of fraudulent and misleading entries, and make the service much easier to manage. My disappointment is that I use the product to comparison shop, and if merchants choose not to participate or those offering better deals don't have the budget to compete with better capitalized but more expensive competitors, the service won't fill my needs. Not even close. Not even in the same ballpark.

I don't mind paying a premium for a better product or service, but I don't want to have the good deals hidden behind mediocre vendors with large advertising budgets. I hope that Google's reinvented service turns out to be a lot more sophisticated, and useful, than the announcement and present commentary suggest.

Mobility vs. Portability

A CNET column, speculating on the future of Facebook and its theoretical successors, comments,

The company doesn't get mobile -- never has. Young as he is, Mark Zuckerberg was raised on the Web, on computers. Remember him saying in 2010 that the company didn't have an iPad app because the iPad "isn't mobile, it's a computer"? Facebook just plain missed it.

I think there's a language disconnect here. A notebook computer is "mobile" in the sense that you can take it with you and use it from remote locations. Zuckerberg wouldn't argue with that - he just might use a different word, like "portable". While it's fair to point out that an iPad uses iOS, an operating system designed for mobile devices, due to the much larger screen size the experience of using apps on an iPad can be quite different than the experience on an iPhone. Facebook's platform and profits come from the browser, not the app. If Facebook produces a half-hearted app, inspiring people to use their browser to get a full or even adequate experience, Facebook makes more money both through advertising and by the advancement of its platform. If it allows you to take full advantage of the social world of Facebook via an app, but cannot effectively monetize the app or support social gaming through the app, it's harming itself.

That is to say, Zuckerberg is correct to be concerned about Facebook's becoming "just another app", when he needs to to be a platform.

Recent rumors of Facebook's interest in acquiring Opera may relate to its difficulty gaining traction on tablets and mobile devices. Opera doesn't have much traction on the desktop, but it might be feasible to create a heavily Facebook-flavored browser that would take the place of a hobbled Facebook app on mobile devices, including tablets. If you get people to spend 20% of their online time in your proprietary browser looking at your own content, and get them used to accessing the rest of the Internet through your browser instead of the default browser that comes with the device, you are much better positioned to monetize mobile traffic than if you're "just another app".

Meanwhile, a generation of kids my son's age and older are living their lives solely on mobile devices -- tablets and phones and whatever iterations the future holds. For them, Facebook will be something their parents do, and it's still fundamentally a Web-based experience. It's likely to hold little appeal to them -- and somewhere out there, entrepreneurs thinking along the lines of, say, Dave Morin at Path (ironically, a former Facebooker) are working on products that are born mobile, that skip the Web entirely, that live in the world the next generation lives in.

It makes no more sense to pretend that the entire world is mobile than it does to pretend that the entire world is sitting at a desk in front of a traditional, desktop computer. A big part of Facebook's success has been its ability to be inclusive - getting people who barely even use a computer to sign up in order to see photos of distant friends and relatives. No doubt, being the next, big, hot idea among the younger generation or on the mobile platform can translate into profit and success. We've all heard about Instagram. But a future with a hundred "Instagrams" vying for your attention on mobile devices is one of fragmented social media, something quite different than what Facebook offers.

I expect that the actual business plan behind apps "that skip the Web entirely" is to go the way of Instagram, to get snapped up by one of the giant players for a quick, significant profit, not to reinvent the online social world as a mobile-only environment. My guess is that no small number of them will let you register and log in through your Facebook account - in no small part because they're apps and Facebook is a platform.

One last thing,

Simply put: the world is going mobile, it's hard to make money on mobile, and no one is feeling that more painfully than Facebook.

But someone will figure it out. Someone always does, and there's always money to be made where the people are. It just won't be Facebook.

Am I the only person who has a problem with the conceit that someone "always" figures out how to monetize online information? If an edition of a newspaper is worth $2 in print, 5 cents when read via a browser, and a cent when read via a mobile device, is the proper conclusion that the newspaper "figured out" how to monetize its online and mobile content, or would it be more accurate to say that some types of content cannot be monetized in the online world at a level that sustains their historic business model? The reality is this: when faced with new business realities some businesses and industries find ways to evolve and make money, others go the way of the stagecoach company and village blacksmith.

How Facebook Might (or Might Not) Life Up to the Hype

Once upon a time there was a company called AOL that had a proprietary platform, something of a walled garden, and had many thousands of paid subscribers. It took down the walls, introduced its subscribers to the larger Internet, went public, got an insanely high stock valuation, merged with Time Warner and... the rest is history.

Once upon a time there was a company called Facebook that created a walled garden, invited many thousands of free subscribers to join, played games with the height of its walls - low enough to get search engine traffic, high enough to keep members from exporting their data to use on competitors' sites - but was primarily interested in pulling its members away from the larger Internet in favor of devoting most or all of their attention to its proprietary platform, went public, got an insanely high stock valuation (and yes, despite it's being a "flop" that valuation remains insanely high) and....

Will history repeat itself?

Today, with his portrait on the opposite side of the electronic page from a box that encourages his readers to log into the site using Facebook, and which touts content that is popular on Facebook, Ross Douthat complains that Facebook is an "illusion". He makes some good points about Facebook and the illusion of online community, although he often does so in a way that's reminiscent of my personal feelings somebody who doesn't "get" the appeal of constantly reviewing a Facebook wall for updates. Douthat seems to have forgotten his own personal history as a blogger. The best inference is that Douthat understands the Internet as a vehicle for the exchange and discussion of ideas, and even for self-promotion (as long as there's a quid pro quo), but doesn't "get" the frivolous side.

Douthat focuses on companies that bring the old world into the electronic age,

It’s telling, in this regard, that the companies most often cited as digital-era successes, Apple and Amazon, both have business models that are firmly rooted in the production and delivery of nonvirtual goods. Apple’s core competency is building better and more beautiful appliances; Amazon’s is delivering everything from appliances to DVDs to diapers more swiftly and cheaply to your door.

He's derisive of companies, no matter how successful, that are largely or purely electronic:

Twitter is not the Ford Motor Company; Google is not General Electric. And except when he sells our eyeballs to advertisers for a pittance, we won’t all be working for Mark Zuckerberg someday.

Never mind that one of the companies that is most often cited as digital-era success is Google. Were Douthat to spend a bit of time wondering what it is that Amazon, Apple and Google have in common, and what Facebook hopes to achieve, a concept mentioned above, the platform, might come to mind. Google, Apple and Amazon are engaged in a pretty intense battle to capture the mobile and tablet market, to push their own interfaces for the rental and purchase of electronic entertainment, and to grab as much market share as they can. The goal is not to sell "our eyeballs to advertisers for a pittance" - it's to dominate the future market for the rental and sale of electronic information, entertainment and software, and to get a healthy cut from each sale.

Why does Amazon offer Prime content on its Kindle and not on its competitors' devices? Because it wants you to buy the Kindle. It wants to own the platform, not be an app on somebody else's platform. And that makes sense: why would you buy an app that you can only use through the interface of another app, when you can get the same app, optimized for the hardware you're using, for the same price through the OS-manufacturer's platform? When Facebook admits that it cannot get traction in the mobile market it's, in essence, admitting its failure (to date) as a platform. People will play Farmville, and the like, in their browsers and Facebook gets a cut of the virtual sales, but on a competitor's mobile device Facebook is "just an app" the use to check up on their friends.

A company that Douthat forgot to mention, once the giant of the computer world, is Microsoft. Another company that is struggling to capture a significant foothold in the mobile platform market, and pouring an incredible amount of money into entering that space. The "failed" IPO generated many billions of dollars for Facebook that can be used to help it try to better establish itself as a platform and to compete with the established platforms. But it's facing an incredibly tough environment in which its competitors have established products and track records, and in which despite many billions of dollars invested in software, search platforms, operating systems and the like, Microsoft continues to flounder.

New Spam Filter Needed: Anti Click-Baiting

Ever since a set of low-quality (yes, I'm talking about you, Arianna) and financially troubled online news enterprises decided that the best way to generate traffic was not by generating good content, but by generating catchy, often misleading, sometimes completely irrelevant headlines, the quality of news available through news aggregation sites has diminished. If news sites want to transform themselves into low-quality gossip columns, that's their business, but I hope the search engines find a way to filter for click-baiting headlines that, truly, are just another form of spam.

War of the Platforms

How quickly we forget Microsoft (not that we should).... From an interview of Larry Page,

We are in an interesting place in tech where almost none of the big companies—Apple (AAPL), Facebook, Amazon.com (AMZN)—are working together. Why is that?

Big companies have always needed and cooperated in areas where it made sense. I don’t know that I believe there is some huge, strange change in that.

We were real interested in getting instant messaging to work across networks back in the day, and we worked really hard with AOL (AOL) to do that. You know, integration between Google Talk and AOL Instant Messaging. It ended up being a tremendous amount of technical effort. There were some user benefits generated by it, but I’m not sure it was ultimately worth the effort. I would say that my experience with these things is that they have been somewhat difficult.

As I interpret the first part of the answer, that's the important part: "We (Apple, Facebook, Amazon and Google) don't see cooperation as being in our self-interest." The second part, about technical difficulties, is peripherally relevant - if you are trying to merge multiple platforms into a single interface you will encounter technical issues. But we're really talking VHS / Betamax here - the parties aren't interested in merging their platforms because they all want to win.

A number of years ago, Netscape created an Internet browser. After a sluggish start, Microsoft started listening to concerns that the browser might be the platform of the future, displacing or marginalizing the operating system, and used its massive market power to make Internet Explorer the dominant browser. Judging from their subsequent treatment of Explorer, they apparently then decided that they had killed the threat and went back to sleep.

Also, for pretty much as long as there has been an Internet, there have been efforts to bring the Internet to television. Microsoft was an early competitor for Internet TV, but between poor resolution, a poor interface and a difference in how people traditionally interact with their televisions as opposed to their computers, that didn't work out so well. Which isn't to say that Microsoft has given up - it is trying to turn the Xbox into an interface to television and movie programming.

There was a lot of hype a few months back about the possibility of an Apple television, with a lot of talk about interface. I would not be surprised if Apple is devoting considerable resources to researching television technology, how to improve displays, how to improve streaming, how to improve interface. But I'm increasingly skeptical that they are going to become so territorial about the television space that they attempt to enter the commoditized space of high definition televisions.

If television and movie producers were as eager to sign on to distribution through iTunes in the same manner as the music industry, perhaps there would be a greater opportunity for a premium-priced Apple branded television with an impeccable interface to their store, a brilliant screen, a wonderful interface, and packages of content that would allow owners to avoid subscribing to Cable (although they would have to get high speed Internet access somewhere). But the stars aren't aligning in that manner, so I expect Apple will continue to emphasize its products as an interface to Television. In friendly to not-so-friendly competition with Google, Microsoft and Netflix, with Amazon's recent Playstation deal suggesting that it, also, is entering the game.

Fundamentally, this appears to be a platform war. Microsoft is reportedly fashioning its next OS to integrate well with its relatively unsuccessful smartphone OS and its upcoming tablet OS. Amazon is happy to build its Kindle OS on Android, but strips out the parts of Android that most benefit Google. Google is pushing television integration and Google Play. Facebook is... I'm not sure, but as long as a huge percentage of social network traffic and gaming occurs through their platform, they're a possible contender. And all of them want you to buy entertainment products and software through their proprietary stores, taking a commission on the sale of each new song, TV show, movie or application you purchase.

The iPad has turned out to be an amazing platform. Although people talk about Facebook as a potential advertising company, it is only profitable by virtue of the commission it charges to third parties for the use of its platform. Microsoft understands that Windows for PC is eroding as a platform, and is hoping to reestablish itself through the Xbox and various Windows 8 products. Google is taking a gamble with Android as a platform, with Amazon demonstrating how a third party can take full advantage of its work in developing a fully featured, stable mobile operating system and swap in its own web store, but they'll keep pushing it as a platform and will probably try to come up with a revenue sharing model to keep other smartphone and tablet manufacturers from following Amazon's suit or switching to Windows.

And yes, those platform wars are going to creep into your living room. If you have a gaming system, Apple TV or iPad, arguably even a smart phone, they're already in your living room looking for opportunities to expand their reach. Huge numbers of TV viewers already have a second device running while they watch TV - how do you bring the two (or more) screens together? How do you make your smart device the default interface or control for the television and, from there, perhaps the default source for premium, purchased or rented video content? And as server-based games get more powerful, can even the promised exceptional graphics performance of the next generation of game stations continue to hold n advantage over app-based purchased, subscription or freemium gaming? Take your game from tablet to TV, back to tablet, to smartphone, to car, to friend's house, to friend's TV.... It's going to be interesting.

The Lifespan of Dot Coms

A while back I read an editorial that argued,

It appears to take about 10 to 15 years for technology to improve enough to make a new idea powerful enough to dislodge the incumbent money maker on the Web. To date, no one has been successful at turning around an Internet company that is past its peak.

I agree with that in part - it has proved to be very difficult to turn around a failing Internet company. But I disagree with the author's concept of the 10-15 year lifespan, or her reasoning behind asserting such a lifespan.

Consumer-oriented Internet companies are brought to life through the application of a new technology and then unseated about 10 years later by a newer technology. Yahoo had an incumbent advertising platform (display ads) that couldn't do advertising as well as Google search. Google today has an incumbent platform that can't do better than Facebook because Facebook began with a clean sheet of paper and an extra 10 years of technology.

But take a look at MySpace, "unable to turn itself around despite its first-mover advantage", and ask yourself whether that had more to do with outdated technology, or its acquisition by a company that didn't know what to do with it. For an example from much earlier in the life of the Internet, Yahoo! and Excite ran neck-in-neck until Excite was acquired by @Home Networks, and its subsequent tanking seemed to have a lot more to do with post-acquisition management decisions than with technology. I similarly find no merit in the notion that Facebook has an a technological advantage over Google - I suspect the opposite, particularly in relation to its core service of social networking - or that it's nascent advertising platform is going to be Google's undoing.

But as I see another dot com bubble emerge, with our being urged to believe that perennial money-losers like Angie's List, companies with no clear path to significant earnings like LinkedIn, or companies like Groupon and Facebook that respectively claim that their brand is so powerful that we can ignore their unprofitability or that their valuation is justified by their potential to develop new revenue streams from a large user base, I can't help but be reminded of the first dot com bubble.

First, the thing that makes Internet companies so attractive to investors or buyers (and here I'm speaking of VC's, angels and corporate acquisitions, not ordinary investors) seems to be the same thing that makes them vulnerable to collapse. You can start a dot com with a good idea, a tiny core staff, and a seven figure investment. You can create a company ostensibly worth billions that has (or rents) a server farm, and has a few hundred to a couple of thousand employees. But if what the company does is not special, or does not remain special, a competitor will have the opportunity to take most of its market share. When a genuine competitor is available, minor missteps by management can have serious consequences for the company's long-term viability.

Although it's an imperfect test, one interesting thing about companies like LinkedIn, Groupon, Facebook, Twitter and the like is how little disruption there would be if they dropped off the face of the planet. If you woke up tomorrow morning and you weren't an employee of Zynga, how much would your life change if you found that Facebook was gone? Minutes? Hours? If it would take you days, odds are you're either a major online marketer or you simply aren't invested enough in Facebook to take the time to set up, say, a Google Plus account.

Second, no company can survive in the long-term unless it has a path to profitability. If you want to roll the dice on the IPO of an unprofitable or barely profitable Internet company and you're not an insider, recent IPO's confirm that you should wait for the dust to settle as the share price is likely to drop significantly within days to weeks. Even then, you're evoking the expectations of the first dot com bubble - that "eyeballs" will translate to massive profits before the company burns through its cash and investor confidence wanes.

If an Internet company brings nothing special to the table, and barriers to entry remain low, and they lack either the vision or the capital to preempt a "new kid in town," it's reasonable to expect that they will eventually be replaced by a "cool new" alternative. And once your popularity tanks, no matter how cool you were the first time around, if you want to pull off a comeback you will probably need to rebrand.

Attention Job Seekers - Here's Some Advice You Can't Use

This has been making the rounds due to its comical allusion to The Grapes of Wrath as a path to prosperity. But really?

There are phases to the building of the business that works today.

1. Come up with the idea
2. Flesh out the idea quickly
3. If it involves computer programming, find someone to program it. You may even be able to use something like WordPress to launch your business with a blogging platform and the correct plug ins
4. Find a paying customer.

The new path to prosperity is to start a blog? Oh, wait, I guess the answer is in choosing "the correct plug ins". Right....

If my idea is more complex than one that can be launched through a blog, where can I find cheap, competent programmers who will transform my "idea" into "paying customer(s)"? Most really good programmers are employed, doing their own thing, or charge a premium price per hour. And the bad ones? They'll take your money, give you an unusable product, and call it a day. Assuming they don't try to steal your idea.

This guy's other business idea is to gamble on hiring the candidate who "feels right" regardless of qualification - so maybe he thinks the path to prosperity is to team up with an untested, uncredentialed programmer and "take a chance".... (Or perhaps he means that you should bluster your way through interviews for jobs you're not qualified to get, because between offering to work for reduced pay and "incentives" and being "risky", eventually an employer is going to see you as the best long-term bet?)

I'm also wondering what ideas we're talking about? Come up with the idea for the next Facebook or Groupon, then build it using WordPress plugins? Make and sell crafts? (If so, a better approach may be to sell through auction sites or Etsy.) Seriously, what does this guy think he's talking about?

Eventually you may be on to something big. Or, at the least, you will have a nice lifestyle business you can operate. Plus, if you run your own show you don’t have to worry about big corporations or Wall Street. Get big enough and they’ll be your client you won’t be theirs.

You may be onto something big, or not. (I would love to hear this guy's examples, and surely he must have dozens, of this model in action.) And then you can have a nice "lifestyle business" (whatever that is... perhaps beer money) that you can transform into something so big that big corporations and Wall Street will become your clients! "And all I have to do is... act naturally."

Look, I'm all for entrepreneurship and self-employment. But let's approach it from a real world perspective.

The Dummies Are Real People!

I guess that's sort of a vindication for Newt.

Building an Economy of Bubbles

Thomas Friedman offers some good general ideas on the future of the job market and information economy, but at the same time he appears to be a poor student of history:

Look at the news these days from the most dynamic sector of the U.S. economy — Silicon Valley. Facebook is now valued near $100 billion, Twitter at $8 billion, Groupon at $30 billion, Zynga at $20 billion and LinkedIn at $8 billion. These are the fastest-growing Internet/social networking companies in the world, and here’s what’s scary: You could easily fit all their employees together into the 20,000 seats in Madison Square Garden, and still have room for grandma. They just don’t employ a lot of people, relative to their valuations, and while they’re all hiring today, they are largely looking for talented engineers.

Friedman could have written the same column back in the 1990's, and he would have been talking about Yahoo!, HotWire, AltaVista, Inktomi, Lycos, AskJeeves.... Or he might have focused on shopping, and lectured us about how Amazon, Pets.com, Boo, Webvan, Kozmo and eToys were going to transform retail - but would have completely missed the boat if he had focused on the market valuation of those companies. Valuation can also be remarkably subjective and unstable. "LinkedIn at $8 billion" - that was "so five minutes ago" - this week it's $10 billlion. In a few months... $20 billion? $2 billion? Time will tell.

Were he to look at that history, Friedman might also notice some serious clustering - companies that are in some senses stepping on each other's toes, copying each other's information, and fighting not necessarily to be the best on the market but to become sufficiently popular that the market consolidates behind them. Facebook has been trying to eat Twitter's lunch ever since the latter service became popular. Google is trying to eat everybody's lunch - and is in the process of rolling out serious competition to Facebook, LinkedIn and Groupon. It's quite possible that a few years from now Google will be the last man standing, and (as with Bing) it's biggest competition in those markets will be from a company that has not yet even entered the market.

Here's another dirty secret: A big part of what these companies is emulation, not innovation - copying the features of their competitors or buying smaller competitors or innovators. Twitter has been on an acquisition spree, consolidating under its roof any number of services that used to be available only as third party add-ons. Facebook was far from the first social network. Like Google with other search engines, they were the late arrival that took down the pioneers, SixDegrees, Friendster, MySpace, Google's own Orkut.... The tech side can actually lag. Facebook would benefit in a serious way from migrating off of MySQL, but they grew so large, so quickly that the technical hurdles to a smooth migration are enormous, so they keep putting it off.

I was joking with a Google employee that they've hired all of the good programmers. I have had nothing but bad luck hiring programmers who prove less than competent, or less than honest about their abilities, in relation to my own web properties, despite paying out quite a lot of money. Those at the top of their game who don't want to work for a company like Google can often make a ton of money developing their own projects, and thus see little need to freelance. Yes, all tech companies are looking for talented engineers, and some of the salary wars between Google and Facebook could make anybody jealous, but part of the issue is that there are relatively few engineers who can compete at that level. They, perhaps more than any other group, do need to stay on top of their fields lest they find themselves able to support only yesterdays' technology, but they're far from a majority of the 20,000 employees that Friedman attributes to his short list of websites. Groupon, for one, employs a great many copywriters and salespeople.

Something else that is interesting about Friedman's list is that the companies he lists are principally about connections - connecting people to people, or helping businesses reach and market to consumers. Friedman later writes that employers want employees who can "adapt with all the change, so my company can adapt and export more into the fastest-growing global markets" - but none of the companies he lists actually produces a tangible product. Ironically, in this "great recession", businesses that actually produce goods often have excess capacity and are thus not hiring or expanding, and depressed consumer demand reduces the export markets. So you have a lot of wealthy people and institutions who have no place to put their money in a conventional economy - so they either sit on their money waiting for the economy to improve, or they help drive up the value of companies like the ones Friedman lists in the hope that the latest group of Internet "rising stars" will fare better than their historic predecessors. History tells us that five years from now there will be two or three social networks, one of which will likely have at least 60% of the market, and one of which will likely be desperately trying to reinvent itself in order to remain relevant. Facebook may be the one on top, or it may look more like MySpace, or it may look more like SixDegrees. When you look at a $100 million valuation, you need to at least consider the following thoughts: "high stakes gambling" and "Pets.com".

At the end of the day, there's a reason that Friedman is only able to identify a small number of highly valued companies with small numbers of employees: even in a bubble the economy can only sustain so many companies that are trying to sell us social games, social networks or social marketing. Were Friedman to expand his list to include established companies with proven revenue streams, or high tech companies that produce and export tangible goods, he would need a much larger stadium. You don't build a sustainable economy by pointing to a bubble and saying, "Everybody should do that," or by pointing to a small industry that employs only 20,000 people (probably no more than 20% of whom are the type of innovator Friedman describes) and arguing that everybody should try to develop the skills necessary to compete for those jobs.

Would You Buy a Domain on a New TLD

If you purchase a new TLD (top-level domain) from ICANN, you have the potential to make a lot of money. You also have the potential to lose a lot of money.

Speaking of fees, if you want one of the new domain suffixes and are not a wealthy individual or company, get ready to put a major dent in your bank balance. The Icann application alone will be $185,000, with an annual fee of $25,000. Who sets this fee? Why, Icann, of course. Is it reasonable? Icann says it is. Why is it reasonable? Because Icann says, based on evidence that is less than persuasive, that it needs the money for things like legal costs.

So if you're not able to buy example.com, would you buy example.example? Domain owners have on occasion experienced difficulties when existing registrars have gone out of business, but they've largely been able to get past the problem by virtue of the fact that the TLD's are not owned by the registrar. If you pay somebody $6 for your example.example domain, though, and they decide they're not making enough money to justify the continued registration of the TLD, your domain name vanishes - and even if it's worth it to you to try to acquire the TLD I'm expecting that ICANN wouldn't only want you to increase your annual registration cost by $25,000 to keep your domain going, it would want a new application fee - and would reserve the right to reject your application.

Particularly during the early years of the Internet there were a number of efforts to create alternatives to domain names, usually by allowing people to buy keywords and key phrases that would cause people using the sponsor's service, or perhaps a browser plugin, to navigate to the registrant's (ostensibly relevant) website. None ever acquired the volume of users necessary to succeed.

A partial bypass already exists for end users. It's called Google – though this also applies to Bing and other search engines. Internet users are learning that it's easier, almost always with better results, to type the name of the enterprise they're searching for into the browser's search bar than to guess at a domain name and type that guess into the address bar. Google isn't the DNS, but its method suggests new approaches. To that end, some technologists have suggested creating a DNS overlay, operated in a peer-to-peer way that incorporates modern search techniques and other tools. Making this workable and secure would be far from trivial, but it's worth the effort

If you can come up with a viable, superior alternative to the URL and get a sufficient volume of users to adopt to your system, you will become very rich.

A Domain Name Free-For-All

With ICANN announcing that, with the cost of application starting at a mere $185,000.00, you can purchase your own top-level domain (TLD), we will soon experience a dizzying array of alternatives to the traditional TLD's (principally .com, .net, .org, .gov, .edu, .mil, and country domain names). I heard an ICANN representative declaring that soon we'll have .pizza and .movie TLD's, and I suspect he's correct, but... to what end? For example, will a single pizza company acquire the .pizza TLD, or will a third party acquire it and try to convince all of the world's pizza shops that listing their store as .pizza is a business necessity? Companies that presently attempt to manage trademark and reputation issues by purchasing domain names on the most common TLD's will... realistically speaking, have to throw up their hands in despair.

ICANN is promising to police new TLD's for name confusion, and promises also to try to keep past domain squatters and typosquatters from obtaining TLD's. Beyond obvious typos, good luck with that. If I want a TLD for nefarious purposes and fear that ICANN is going to deny my application due to my identity, I'll obtain it through a proxy. Some TLD's will be worth millions from day one - abuse is inevitable.

I do suspect that the new rules will have an impact on domainers who sit on single or double keyword domain names, as I expect that the changes will accelerate the use of "OneBox"-style navigation on browsers. Unless you type in an exact domain name the text you enter will be treated as a search instead of defaulting to (keywords . com) as was once the case. But beyond that, I expect that it will improve the value of established sites on .com domain names - because with few exceptions I think that a proliferation of TLD's will serve primarily to confuse consumers and that, just as they did when .com, .net, .org, .info and the like became competitors to .com, they'll either default toward .com or defer to a search engine. (When was the last time you intentionally browsed to, or even notices that you were using, a ".info" domain? How about ".aero"? Did you even know those TLD's exist?)

Why, you ask, wouldn't it make sense for people to type in a new TLD associated with a particular business or profession? Let's say a new ".law" TLD is created - why wouldn't people looking for lawyers or legal information gravitate to that TLD? Well, what if there's also ".legal", ".lawyer", ".attorney", ".lex", ".atty", ".lawhelp", ".lawinfo", etc.? What if the owner of .law charges an exorbitant rate for registrations, to recover the six to seven figures invested in acquiring that TLD? (Similarly, I'm not sure if ICANN's rules would deem ".car" and ".cars" too similar, but what about ".auto", ".vehicle," ".suv", ".truck", ".automobile", ".wheels", ".motorcar", etc. - the "non-confusing" variations quickly become overwhelming.)

The biggest winners here, I suspect, will be ICANN and the search engines. ICANN will take in millions in fees to review applications, and each approval will make ordinary people more dependent upon search engines to guide them to valuable online information. Second, unless the OneBox solutions are implemented across the major browsers, typosquatters will likely fare well. Third, people who have not been able to get memorable domain names should be able to obtain better names, but subject to TLD confusion - they will get better domains, but may lose some traffic to the ".com" variation. (Sites that used TLD's in a clever way, such as del.icio.us, still typically found it beneficial to acquire the .com variant once funds were available to do so.)

The biggest losers, I expect, will be people who have been sitting on "high value" domain names without developing them, in anticipation that their value will only rise with time. People who rely upon generic keyword traffic based upon their domain name as opposed to their site content will likely see that traffic siphoned away by an increased number of low-content sites competing for the same keywords. And the average person hoping to make some sense of the web behind, "if the business I'm looking for is truly important it probably owns the .com".

Sales Taxes and Interstate Sales

Nathan Newman argues that Internet sales should be taxed, arguing that the right-wing politicians and commentators who argue against taxation are hypocrites on the issue of federalism. Newman suggests,

In an age of databases, calculating the taxes for different jurisdictions is as easy as, well, dealing with the logistics of shipping goods all over the country -- a challenge these online and catalog retailers already have mastered.

It's easy enough for a company like Amazon to deal with tax collection for fifty states, and even for states (or is it just California) that have local sales taxes to collect and distribute. But there are a lot of small businesses that operate online, and it's simply not the case that it's as easy for them. Are small companies expected to obtain sales tax licenses for every state, then calculate and remit sales taxes on a periodic basis to each state? The amount of work involved for a company that has four, five, or even six figure annual sales could be quite onerous, even with a good database of local tax rates.

If states choose to open a national clearinghouse to assist with the collection of sales taxes, such that small vendors could verify tax rates with and forward collected taxes to a single entity, I would not have much concern. But I am not in favor of a proposal that will unduly burden small businesses, and likely cause many to stop selling across state lines, creating yet another barrier to competition between small businesses and start-ups and massive companies like Amazon and Walmart.

Facebook Wants to Eat Everybody's Lunch... And Vice Versa

Apparently we're verging on a world in which everybody is on AOL and, as websites are difficult to make, everybody is making free pages on Geocities. Or something like that.

My nephew’s wife was frustrated. The “easy-to-use” site-builder software she was using to make the church camp website with was any but. To make matters worse, their “free” hosting service came with a price—banner ads that randomly appeared on the site....

So in desperation, she turned to her Facebook friends to ask if anyone knew of a free and easy-to-use website builder—one without ads. A well-meaning friend [suggested Facebook and] even offered to set the page up for her.

The author perceives a battle for the future between Facebook and Google, with Facebook trying to bring everybody onto its servers, using its platform and programs for most or all of their online needs, and that they will leverage the information they glean about their users to offer a network of targeted ads that will compete with Google's AdWords and AdSense.

Is Google nervous? You bet they are. And here’s why. When you search using Google, all they know about you is your IP address, so all Google can tell that website owner is: “The seven people who visited your website were from Ohio.”

But Facebook can say: “Here are the names of the people that ‘liked’ your content, how old they are, what college they went to, what music they listen to, what books they read, how many children they have, who their other friends are …” It’s a marketer’s dream! Think Google isn’t nervous? Think again.

In reality, Google has a lot more information than that to work with - thanks to cookies and web beacons in its ads, unless you've opted out, it knows many of the sites you've visited. If you use Gmail it knows your contacts (and is pretty capable at figuring out which are important). If you surf while logged into your Google account, it knows even more. Google's efforts at social networking have faltered, but they're not about to give up. If they can't find a way to take the traffic away from Facebook, expect them to focus on ways to take the profit out of Facebook. Seriously. And while Facebook has a lot of members, let's not pretend that it has current or meaningful information about the majority of them that would allow the type of granularity and accuracy in ad targeting that this type of article suggests.

And speaking of those profits, there are a couple of huge companies that deserve mention. The Gates Foundation is developing mini social networks for college communities - via a Facebook app that presumably will ultimately work on competitors' social networks, or perhaps as a stand-alone on your (Microsoft OS-powered) cell phone or tablet.

And while Apple's logo may have a bite out of it, don't get the wrong idea. It would just as soon reduce Facebook to app status - and take a 30% cut of any Facebook dollars you buy through the app. That may sound a lot like the 30% Facebook wants to take from companies that use its platform, and in many ways it is - except Apple is happy to let you pay in cash. You don't have to buy "Apple dollars" to get what you want through an App, although you can bank credit in your iTunes account, and can send your friends iTunes gift certificates. And with its push toward licensing software by the user instead of by the Machine, Apple is paving the way toward your being able to have your favorite app at your fingertips, no matter what device you're on, and if that app would benefit from having some files stored on your device that's easily (and invisibly) achieved. Facebook has lots of eyeballs, but if they can distribute it as widely Apple has a better platform. Apple also has lots of verified, individualized information about its customers, and already owns an ad platform and network.

Then, of course, there's "the next big thing". The company you presently underestimate or haven't yet heard of, or which may not even exist, that could be "the next big thing" a few years from now.

Yes, web apps are going to significantly transform the world wide web as we know it, and a lot of content that is presently available for free will be shifted into web apps. A lot of information that is presently difficult to monetize is also likely to end up incorporated into web apps with some form of fee or advertising attached. And you'll probably need a web app to determine what web apps you need - and that a handful of web apps become dominant, even if they're simply containers that help you manage and use other web apps. That won't kill off the web - it's likely to transform the web, and make some parts of it better and other parts of it worse (or should I say "less useful").

At this point I'm still not willing to jump on the "Facebook will rule the world" bandwagon, despite its potential (and the descriptions of various vaporware projects that could help it become dominant), nor am I willing to write off its potential. To the extent that Google is "nervous", it should be - and not just because of Facebook - but Google's a lot like Microsoft, and it can survive decades of (at this point imagined) bad business decisions, emergence of fierce competitors, and (again, imagined) decline.

Frankly, given how the Internet is transforming our lives and jobs, you and I should probably be a lot more nervous about the future than Google. There are lots of powerful interests that will be happy to eat our lunch, and individual people are not well-positioned to push back.

A Craigslist Version of Groupon?

One of the interesting things about the battle to "take on Groupon" is how much money is being thrown at LivingSocial and at any number of competing concepts. People see the amount of money being tossed as Groupon and projected valuations and all they see are dollar signs.

But then I think, what was it that sucked billions of dollars out of the newspaper classified ad business? Was it another multi-billion dollar venture, or was it a plucky little start-up that (while now worth a lot of money) killed a newspaper industry cash cow while operating on a relative shoestring?

The difficult part of creating such a competitor to sites like Groupon would be to find an inexpensive way to verify the deals posted - pranking would quickly undermine such a service - but if you can find a cheap way to verify deals you would be in a good spot to knock out the multi-billion dollar "deal of the day" sites with your inexpensive, more inclusive alternative.