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Pandora Close to Death, Fans Willing to Let It Die For Their Cause

clock August 17, 2008 06:06 by author Tom

The Washington Post has an article on Pandora yesterday in which they say the company is close to going out of business...

Pandora is one of the nation's most popular Web radio services, with about 1 million listeners daily. Its Music Genome Project allows customers to create stations tailored to their own tastes. It is one of the 10 most popular applications for Apple's iPhone and attracts 40,000 new customers a day.

Yet the burgeoning company may be on the verge of collapse, according to its founder, and so may be others like it.

They go on to lay the blame on higher fees imposed on Internet Radio by the record labels...

Traditional radio pays nothing in performance royalties, though SoundExchange is pressing to change that. Satellite radio pays 6 or 7 percent of revenue. And then there are webcasters, which pay per song, per listener.

Using listener figures from Arbitron for XM Satellite Radio, it is possible to estimate that the company will pay about 1.6 cents per hour per listener when the new rates are fully adapted in 2010. By contrast, Web radio outlets will pay 2.91 cents per hour per listener.

I've talked about Pandora before (just this week in fact) and admitted I'm a huge fan of the service.  Beyond that, as a purchaser of digital music I have to say Pandora drives more of my music purchases than anything else. 

Bottom line: I think this is short sighted on the Record Label's part. 

That said, the Internet reaction to this news gives some important insight to why the labels have become so stubborn in regards to the net and I wanted to give a few examples to make that point.  First from Warner Crocker of Life on the Wicked Stage...

Well, call off the negotiating. I think Pandora should just pull the plug. Take $17 million off the table. Others should follow suit. Let the Sound Exchange explain that to its clients.

OK, let's look at this realistically.  The music business makes about $12 billion per year meaning the $17 million Pandora is paying is the equivalent of pocket change.  I can almost guarantee you they spend more on private jets in a year. 

I'm not endorsing the behavior but truthfully Internet Radio doesn't mean anything to the labels.  It's a situation where they have virtually nothing to lose and are empowered by that to squeeze as much profit out of the Internet as possible.  The question is, why are they squeezing so hard?

Which brings me to Michael Arrington of Techcrunch...

For now the labels want to squeeze more revenue out of Pandora and others. But when these companies start to go under and the bird in the hand disappears, they may regret their overly aggressive negotiating stance. It’s time for the labels to die, and anything that cuts off another revenue stream is at least partially good. I’m reluctantly willing to sacrifice Pandora if it quickens the inevitable march of recorded music towards free. Let’s just hope it doesn’t come to that.

Beyond the point above regarding how little Pandora means to the labels the truth of the matter is that record labels are seeing improved profits.  In particular, EMI is seeing great success since becoming privately held and making some much needed management cuts.

I've said this several times before but I'll happily repeat it: Record Labels make good money.  When they report losses it's almost always because of bad business decisions and poor expense management. 

So there's no way Pandora's death is going to bring about a revolution.  Which brings me to Steve Hodson of WinExtra...

The problem is that unless there are some late ditch efforts on behalf of webcasters like Pandora and even smaller providers they will find themselves being driven out of business. In the end though we are going to be the losers because as more and more legitimate ways to discover new music and easy ways to purchase that music in ways that doesn’t include the record label. What will happen is that there will be more and more piracy of music regardless of the efforts of crooked organizations like the RIAA – and that you can take to the bank.

The position Mr Hodson is taking basically says "Take Pandora away because I don't believe in any compromise".  The reason that's true is because the record labels can't divorce themselves from the process.  So when you say "easy ways to purchase that music in ways that doesn’t include the record label" you're saying there's no point in trying to reach a reasonable compromise on their end.

So this has been a long post but I wanted to lay these out for an important reason.   I think the record labels are being unreasonable here largely because of the public sentiment shown above.  If I'm a record label exec looking at those posts I'd certainly be tempted to write off the Internet market all together. 

Unreasonable behavior begets Unreasonable behavior.  Take the position of "all we want from you is to die" when talking about the record labels and you take away any incentive for them to compromise.  That in turn leads to a no mercy attitude towards the Internet which is exactly what we're seeing right now.

Bottom line, your contempt for them breeds their contempt for you and they have all the power which makes that situation bad for you.

Addendum: Based on a few e-mails I've gotten I wanted to post this link to a post I wrote about 6 months ago entitled "Why Record Labels aren't going anywhere".  If you think I'm wrong because the Record Labels are close to death I'd ask you to give me one more minute of your time to read it.



Android vs iPhone: Can Google Be The Microsoft of the New Millennium?

clock August 16, 2008 04:16 by author Tom

As a general rule I try to avoid historical comparisons until they become blindingly obvious.  The reason is I find it too easy to draw inappropriate conclusions from just a few similarities. 

That's my mind set when reading this quote from Silicon Alley Insider regarding Google's Cell Phone platform Android...

But someone who's actually seen the gadget -- similar, if not identical to the one in the photo -- tells us that both the hardware (from handset-maker HTC) and Google's Android software suffer from a similar problem: They're technically powerful but not as elegant as Apple's (AAPL) iPhone and OS X.

Anyone who remembers back to the mid-to-late 90s will remember that exact same phrase being attributed to Microsoft Windows.  Time after time Windows was derided as an inelegant solution and time after time it managed to best the Macintosh in sales. 

So the question is: Will Android Manage To Do The Same Thing To The iPhone?

There are a lot of factors that point to that being the case.  Google has managed to co-opt several of Microsoft's best tricks including licensing their OS, embracing Developers and inserting Apple's features into a less elegant package.  It would seem to be PC vs Mac all over again.

But at this point, I still don't think so.

Google's sort of like a little league baseball player.  They've got the right moves but they still need to be able to execute on them effectively.  Google has, as of right now, not managed to effectively execute on any of it's goals beyond its initial victory in Search.  An especially sad record when you consider they give everything away for free.  So while they can mimic Microsoft they haven't shown they can turn that into the same success record.

Beyond that they're lacking a few key advantages that Microsoft had in the PC wars.  First, Microsoft started with the support of all the major players while Google lacks support from all but the small, no name providers.  The "license the OS" strategy only works if you can achieve critical mass.  In addition, Android doesn't have price to fall back on.  Though the iPhone is still far more expensive than Android phones are expected to be AT&T has stepped in with a contract to remedy that situation. 

That means consumers will see roughly the same price when they go to buy. 

So while Google might seem to be employing a historically successful strategy that isn't necessarily the case.  It just looks that way because of a few well placed similarities.  Android could still defy the odds and become a hit but only if Google quickly manages to become a lot more like Microsoft of old.



Web 2.0 Proves Its Worth Through Conjecture

clock August 15, 2008 19:19 by author Tom

Read/Write Web has an article about a recent follow up study done by the University of Massachusetts Dartmouth Center for Market Research.  In this study  they sent a questionnaire to 500 companies that were defined as "fastest growing" by Inc. Magazine surveying how much they use various technologies (Social Networking, Wikis, Podcasting, etc...)

My favorite quote of the whole article was this one...

According to the study's authors, "26% of respondents in 2007 felt that social media is "very important" to their business and marketing strategy. That figure rose to 44% in approximately one year. It is clear that this group of fast-growing companies considers the use of social media as a central part of its strategic plan."

Social networking is the most familiar of the technologies. In 2007, wikis were the least familiar but they have since leapfrogged over podcasting.

Honestly this paragraph alone is a big reason why I chose to make this post.

The folks who go around parroting buzz words like "Social Networking" and saying how "important" they are to the future of the company are the exact wrong audience to be cultivating.  All this proves is that the term has been bandied about enough for the most useless of marketers to know it and then use it in casual conversation to make themselves look "hip". 

It doesn't mean they are actually using the technology, it certainly doesn't mean they understand the technology and quite frankly it doesn't even mean they're discussing the technology (since "buzzword" laden conversations are usually the ones people have at parties not boardrooms)

This is sort of a follow up to my last post in that the point I'm trying to make is that a lot of what is offered as "proof" by the Web 2.0 crowd is anything but.  This survey, like most questionnaires, doesn't provide a single verified conclusion.  Yet the people offering the study are leading the reader to a conclusion by tying it to "the 500 fastest growing companies"

(they actually only had 290 respondents by the way so even that's a bit of a fib)

This isn't a rant against the technology itself but against the pundits who hold it up as a way to turn a profit.  Show me even one company that has actually managed to show a correlation between marketing to places like Facebook and seeing an actual return on that investment and I'll be impressed (again, results I've seen seem to contradict the possibility of that). 

But don't treat empty buzz words or the people who use them as proof of anything because I personally just don't buy it. 



A long overdue offensive against Web 2.0 Hype

clock August 14, 2008 07:11 by author Tom

A while back Jeff Jarvis made a post on Pandora, a music service that uses song classification to select and stream songs to its users.  The topic of the post was the new iPhone application that the service offers and its relative success at that point in time. 

I'd wanted to respond at the time but other issues seemed more pressing. 

But the point is important in my opinion so I'm dusting off this old, half-written post to make it.  Here's a quote from the original Jeff Jarvis post (which was posted almost a month ago at this point)...

TechCrunch says that Pandora is the killer app of the iPhone and I ag-ree. It’s the fourth most popular free app (behind obvious choices: Apple’s remote, AIM, and weather). It’s adding a new listener every two seconds. That’s the killer stat that raises the key question:

How could others use apps like this to grow?

Two things here.  First, this isn't an attack on Pandora.  I love Pandora, I use it regularly, I love having it on my iPhone, and I'm actually listening to it right now. 

That said, "a new listener every two seconds" is a good example of phrasing something to make it sound impressive.  Apple claims to have sold around 7 million or so of the first generation iPhones (who got the iPhone app upgrade for free).  Plus you have about half a million consumers buying the 3g version in the first 3 days.  That puts the total iPhone market at about 7.5 Million available buyers.  Pandora, a free program that leads to a free service, is claiming about 46,000 new users per day which means about .5% of the available market and that's at launch.  Those numbers will plummet after the initial rush for Apps. 

Again, I don't mean to lessen the accomplishment of Pandora.  Its a great product and it deserves success.  My point is only to draw attention to the excessive hype given to some products by the Web 2.0 crowd.  This is an important point.  Here's why (again from Mr. Jarvis' post)...

How could others use apps like this to grow? Simply putting content up — a la the New York Times fine but not revolutionary app — is not enough.

I think winning apps for mobile will be, like Pandora, completely personal; my Pandora is nothing like yours. They will feel live and constantly connected — I can satisfy as much musical restlessness as I can imagine without having to download.

and...

I believe some apps will have link to the real world: leave a review about where you are right now (I’ll write more about this annotation later soon). Some winners will be two-way; I’ll be connected with a live world at other edges of the cloud.

Now the whole "just add Web 2.0" mentality is more than I have time to address here but what I want people to notice is the pattern. 

Ignore Facts > Brand what you like a success regardless of whether it actually is > take the traits you like about that product and give them credit for its supposed success > Suggest/Demand every product implement those features. 

The dirty little secret of Web 2.0 is that most of the flagship products aren't that successful.  At least not in the areas that we gauge success (number of users, profits, etc...).  Yet even after being around for years they are still trumpeted by many bloggers as the way of the future. 

This isn't a statement on the merits of any of the programs/sites themselves its just an example of how the supporters of Web 2.0 have no criteria other than personal preference by which they judge success.  Yet they refer to these companies as successful and then encourage others to follow that lead.  But often times that lead isn't a path to creating a profitable business.

It's something to seriously consider when you're starting a company and trying to decide how much of your resources you'll devote to so-called "social features"



Research & Development Without a Product is Pointless

clock August 13, 2008 13:52 by author Tom

Read This.  I'll Wait. 

Good Yes?  I really did love this blog post.  So much so that I'm not even going to quote it as one last attempt to get you to read the whole thing. 

If you still didn't read it (what is wrong with you?) I'll summarize really quickly.  Basically the author makes the point that concept designs (a.k.a. those product designs that are shown off as "products of the future" during tech presentations) are pointless.  They never come to anything and are almost always leap frogged by people designing actual products (Tivo, iPod, etc...)

I could not agree with this sentiment more.  Research and Development that isn't attached to an actual product doesn't work because you have no idea if the average consumer will have any interest in what you're developing.  TV Executives, for example, spend millions of dollars a year to gauge how the public will react to certain shows and still fail more than they succeed when it comes to actually making successful shows. 

Yet we're supposed to be believe a researcher inside a company like Microsoft is going to be keyed into the wants and needs of the average person?  Doubtful.

Consider this, Microsoft spends more on R&D than any other company on Earth.  So why is the crown jewel of their next OS something they had to steal from an Apple product?  More importantly, what of value has Microsoft R&D ever managed to produce? 

I can't think of anything.

That's $6 BILLION dollars per year being flushed down the toilet (that's average, it was actually $7 billion in 2007).  Think much you could do if you spread that money around to various startups.  Sure many of them would fail but a few wouldn't and at least then you would have produced SOMETHING with your $7 BILLION dollars that year. 

Which brings me to my point: Corporate R&D should focus on actual products, albeit high priced ones. 

There are always going to be very rich people in the world which means there's always going to be a market for products that push the boundaries of what we can do.  Given that there's no reason for any person at Microsoft to be working on something that can't be turned into a product of some kind. 

It doesn't have to be profitable it just has to be something usable.  Something that someone will want to buy.  That way you can determine if the thing you are working on is something no one wants to buy and change gears if there's no interest. 

By doing this companies like Microsoft could actually manage to produce revolutionary consumer devices.  It's been my observation that the world follows a pretty simple cycle in this area...

  • Products are made that cost too much for anyone but the richest of people
  • The richest of people buy those products which increases production
  • Prices fall
  • Those ultra expensive innovations reach the public at large

This isn't rocket science.  It's been happening since the beginning of time.  Long before "smart" people conceived of spending monstrous amounts of money on ventures that never produce a working product. 



In Defense of Jakob Nielsen (or Usability Vs Graphic Design)

clock August 12, 2008 13:38 by author Tom

Jakob Nielsen is a renowned usability expert who has written several books on the subject.  In his most recent post Hank Williams calls that expertise into question due to the unattractiveness of Mr. Nielsen's website

Unfortunately, I have to say, Jakob has perhaps the worst site design I have ever seen. It is as if, while he is handing out the Oscars, he is wearing a plaid polyester suit. In truth his site is fine from an information architecture perspective. But from an aesthetics perspective it is awful. And aesthetics is important in UI. If you begin to look at something and want to avert your eyes, the site has failed.
In truth, Jakob's site has always been ugly. But this time it felt, to me, beyond ugly. I looked at the bulleted list of the top sites, and the bold cramped disorganized looking type starting each bullet, and I could not bear it.

...

I am sure some, and perhaps many of you will not think it is as bad as I think it is, but I defy any of you to say it is good. And so I ask the question. Do you judge a hair stylist or barber by his or her hair? Do you judge a cobbler poorly if he (or his kids - thanks Jeneane Sessum) has old beat up shoes, or none at all? (Ok so we don't have cobbler's any more but the cliche still works.) Do we judge Dr. Phil poorly if he gets a divorce?
And do we think less of Jakob Nielsen as an interface consultant if he seems to have no taste?

Two things here...

First, Usability experts aren't Graphics Designers and anyone in software should know that the two are different beasts.  So while I think Mr. Nielsen's site could look a little better I don't think it calls his expertise into question when some people find it ugly.

Some people being the operative phrase there. 

The big thing that Mr. Williams misses and why aesthetics really aren't part of UI design is because appearance is largely personal preference.  One man's gawdy can easily be another man's beautiful.  As one example take Mr Nielsen's own site.  People generally don't put up sites that they think are ugly so I have to assume Mr. Nielsen likes the appearance of his site as much as Mr. Williams hates it.  Because aesthetics are all in the eye of the beholder.

Which brings me to my second point...In Software Design Usability should have as little to do with appearance as possible.

We are in the middle of a transition in software design from a strategy that highlights appearance to one that highlights functionality.  Technology like CSS and ASP.NET's Themes allow the developer to empower the user to customize an application's appearance which is good for everyone involved.

Again, one man's ugly is another's beautiful.

In this sense Mr. Nielsen's site proves to be an even more effective teaching tool for developers in that it eschews fancy icons and pretty fonts in order to demonstrate basic usability principles.  Given developers are Mr. Nielsen's primary audience I'd say that makes his site's appearance a plus more than a minus.

I'm all for developers working on having an attractive default appearance for their application.  It never hurts to make a good first impression and statistics show that many users will stay with the default appearance long term.  But it's important that they remember graphic design work is separate from designing the program functionality itself.  That way they'll have applications that can give the user power over his or her visual environment and in doing so appeal to even users whose visual tastes are dramatically different from their own.



Rarely Am I Actually Angered by Something I Read, But This Piece of Drek Managed To Do It

clock August 11, 2008 14:36 by author Tom

I've been critical of the OLPC project in the past but in the end I've tried to keep an open mind.  But this article just set me off to the point where I had to call them on the sheer dishonesty of it all.

From the very first sentence the sheer hero worship that the author was piling on the OLPC project was almost hard to believe...

At the World Economic Forum in Davos in January 2005, Nicholas Negroponte, supreme prophet of digital connectivity, revealed a strange tent-like object.

Clearly someone had been drinking the Kool-Aide.  Lets take another quote from a few paragraphs down...

One Laptop Per Child (OLPC), the company formed to run the project, is still driven by the same old idealism, geekery and technical brilliance. But Negroponte and his young staff are older and wiser.

But I was still willing to give this the benefit of the doubt.  But when I got to the following excerpt I really started getting angry...

Microsoft’s Gates said, “Jeez, get a decent computer…” and then went around trashing Negroponte’s earnestly well-meaning machine.

“He said that sort of thing privately to people I knew,” says Negroponte. “There was a fair amount of that. I was annoyed enough to say so, and he apologised for it – a lot of good that did

Gates’s reaction was especially tasteless. Apart from being – like, apparently, everybody else rich, powerful or famous – an old friend of Negroponte, he is the greatest philanthropist in the world. But even though he’s stepped down as the head of Microsoft, he remains almost paranoiacally defensive of Windows.

My feeling of anger intensified once I got to here...

Negroponte then went out to sell the machine. Connected as he is, he decided to use a top-down approach. He sold straight to governments and heads of state. It seemed to work like a charm. As if by magic, he conjured up promises to buy millions of laptops from Argentina, Brazil, Nigeria, Thailand, Pakistan and Libya. It was, in publicity terms, a brilliant coup. From nowhere this not-yet-existing machine seemed to be conquering the world. The press lapped it up. Negroponte was on a roll.

Unfortunately, none of the orders materialised. “He would go from prime-minister meeting to president-of-country meeting and that was his sales model,” says Rebecca Gonzales of AMD, who now advises OLPC. “And it didn’t work, absolutely not. As we have learnt in the business world, just because you have a handshake from the president or the prime minister, it doesn’t mean you have an order.”

...

“There’s nothing I regret about this strategy,” he says. “It created enough hype and pictures of Nicholas shaking hands with heads of state that, back in Taiwan where 250 engineers were working on it, people felt part of something.”

OK, that's all for the quotes and at this point some of you are probably wondering "Tom, why does this make you angry?"  sugar-olpc

I'm angry because It's easy to look like you're doing good.  Make a cheap laptop and then negotiate with heads of Government who are largely looking for statistics to placate their constituency ("We bought 5,000 new laptops for the kids of our country") and you look like a saint even if you aren't actually doing any good for the kids themselves (look at the last quote where he actually boasts about accomplishing nothing because it got his project attention). 

It is hard to actually do good.  To actually do good you have to look at the needs of the kids you are trying to help and build a project based on those needs, not on an ideal and a price point.

The Gates quote above is absolutely right,  the OLPC is a poor excuse for a computer and it was absolutely not tasteless for him to point that out.  The OLPC project is trying to foist second olpcGmrate computers that look like they came out of the 1980s onto kids in poor countries so they can make themselves feel good. 

I've posted screen shots of the OLPC's actual interface throughout my entry so you can get an idea of the "technical marvel" that is the OLPC (whose official name is XO-1 just for the record). 

The truth is that the OLPC is filthy with the attitude of ideas over substance.  Stick the poor kids with anything that looks like a PC and then pat yourself on the back and go on your way.  olpcGm2

Just because kids are poor does not give you the right to use them as your guinea pig for a pet project.  It certainly doesn't give you the right to do so and then pat yourself on the back for having done it.

If you really want to bring the third world into the computer age you need to do it with PCs that resemble the ones that everyone else in the world is using.  I'm not saying Windows and Intel but certainly something that resembles it like KDE or GNome and AMD. 

(For the record, Microsoft donates millions of dollars worth of software to these types of projects so they could use Windows if they wanted I'm just making the point that they don't have to abandon Linux and their Open Source Principles to make a decent PC)

This all is an embarrassment in my opinion and a good example of how we don't hold non-profits accountable for their actions.  Beyond that It makes my job and the jobs of everyone trying to make a legitimate difference for kids all the harder by creating a false expectation that there's a usable PC out there for $100 which there simply isn't. 

Addendum: I didn't push this point in the main post because I didn't want people to accuse me of being a "Microsoft Sycophant" but I feel the need to defend the company against one other attack in the article...

“And, finally, however ‘impure’ it may be to the open sourcers, putting Windows on the XO was a huge breakthrough in the computing industry because Microsoft has let them have Windows XP for $3 per computer. One of the previous industry certainties was that Microsoft never ever sells anything cheap.

Look, I'm not going to defend the many, many things wrong with Microsoft but the truth is they donate more software to charity than any other company on earth.  The only reason I could afford a modern infrastructure at my current job is because Microsoft (via Techsoup.org) donated all of the server software which would have been completely out of our pricerange otherwise and provided support that the Open Source alternatives didn't. 

There are many things to bash Microsoft on but their commitment to helping charities isn't one of them. 



Alexa's Inaccuracy and Observations on Web Authority

clock August 11, 2008 02:12 by author Tom

Allen Stern of Center Networks asks the question "Who will be the first to sue Alexa?"

Alexa, oh Alexa, how you kill thee. I've written and spoken about Alexa since they began operations nearly a decade ago. I've watched agencies pitch advertising based on Alexa charts. There are still ad networks that use Alexa rankings as a baseline for pricing Web site advertising.

Considering how wrong Alexa is, I've wondered for a long time who would be the first one to sue Alexa for an incorrect ranking. For sites that drive revenue from advertising, an incorrect ranking can impact their direct ability to generate revenue.

He goes on to cite Compete.com and Google Trends as more accurate alternatives. 

A couple things here.  First I don't think Alexa is in danger of being sued because they are open about their process which means people know what they are getting in to when they check the site.  Beyond that I'd have to challenge his support of the other traffic measurement sites in that I've found them all to be pretty unreliable.

For those who don't know, I make a point of not checking statistics on my site so they won't skew what I post.  But every 6 months or so I take one day and pour over all the stats from the last 6 months just for curiosity's sake.

The last time I did I was downright shocked at just how inaccurate both Alexa and Compete.com were.  They seemed to pick up on very broad trends but other than that they were next to useless. 

Since then I've talked to other web masters who have confirmed those observations.  It seems everyone knows these sites don't work.

Yet what's amazing to me is that we continue to cite them.  Even though we all know the numbers are completely inaccurate.  I'm not playing holier than thou here, I've done it too. 

It seems we have such a human need to rank things in relation to each other that we're willing to treat any measure as authoritative even when we know those numbers are wrong.

If you think about it you'll realize we see this a lot on the web.  Sites like Rottentomatoes.com make a business out of creating pseudo authoritative rankings based on skewed information (rottentomatoes is a site that surveys movie reviewers to rank their approval of new films but being included seems to require little more than having a web site).

We're not talking about wisdom of the crowds here we're talking about wisdom of the randomly selected elite (be it random movie reviewers or an unknown algorithm).  Not surprisingly this method doesn't seem all that wise. 

But that brings us back to Alexa, a site that is known to be bogus but which people continue to cite.  It seems to me the problem isn't with Alexa it's with all of us who continue to fixate on comparison even though it holds little bearing.  Advertisers, readers, and others of importance don't really care how your blog ranks in comparison to those around you so maybe it's time we all followed their lead and put all these sites aside. 

Addendum: Todd Cochrane of GeekCentralNews points out an unintended side effect of this faulty data that I'd never considered before.



Facebook Connect: The Follow Up That I Didn't Think Was Necessary

clock August 10, 2008 15:53 by author Tom

Here's a tip.  If you really want to annoy me.  I mean REALLY get under my skin.  Leave a comment or send an e-mail that says something like this...

"You totally missed the point"

Now, I've been known to miss a point or two in my day, I won't deny that.  But nothing is more obnoxious than someone leaving a message saying "you missed the point" and then not explaining what the point was that I missed.

It's just rude.

I've gotten a few such messages in regards to my post on Facebook connect so I thought I should address what I think the issue is.  Though I want to point out that any ignorance in the following text is not my fault but the fault of those who didn't see fit to explain exactly what they meant in their e-mails.

(OK, maybe a little my fault for not wanting to dignify their rude e-mails with a reply, but mostly their fault)

That said, I think the point they refer to is that Facebook Connect is more than an authentication system in that it's also what some would call a "revolutionary ad platform."  To quote Om Malick...

In addition to offering a simple authentication method, FC allows granular social interactions to be embedded in non-Facebook services. If Facebook can work with its partners to build interesting use-case scenarios that go beyond simple sign-on, it is quite feasible that Facebook can out-execute Google, MySpace and everyone else with its ID ambitions.

Why? Because this is their one chance of building a monetization engine. The company makes no bones about trying to build a platform that allows it to offer branded advertising in a manner akin to Google’s Adsense. A simpler person (like yours truly) would call this a platform that serves ads for all occasions, reasons and seasons.

In response to that I have a couple points...

1.  Read My Original Post.  The point I made there is that no one is going to use the authentication features of Facebook Connect.  If no one uses the authentication than the ad platform is useless because it can only collect info from users it can identify.  As for "granular social interactions" I said it before and I'll say it again, I don't think there's that much valuable information contained in a Facebook profile and I think the company's failures in the ad space so far verify that skepticism.  

2.  This isn't revolutionary, Amazon's been doing it for years and it really doesn't seem to work.  This is one of those ideas that seems really smart in theory but anyone who has watched their Amazon home page knows it isn't because information without context is useless. 

In other words, Amazon doesn't know that I bought lingerie for my girlfriend last month and not myself.  So now I'm getting solicited for Women's magazines and cosmetic products on my Amazon page that I have no interest in. 

Anyway, those two reasons are why I didn't address the issue earlier.  I wasn't missing the point I just didn't think this particular point was relevant given my feelings toward the authentication scheme and the system's potential in general.



Not Everyone Needs To Compete Online

clock August 8, 2008 08:56 by author Tom

Well, since I can't sleep and I already had a whole "bash Jeff Jarvis" theme going tonight I thought I'd tackle this post he made a couple hours ago entitled "A stake through the heart of the has-been Inquirer"

Here's the quote...

What the hell are they thinking in Philadelphia? Inquirer ME Mike Leary just sent a memo saying they are going to hold all but breaking news for the paper and even restrict bloggers from using their blogs to work on stories in progress.

Mr. Jarvis goes on to say...

You are killing the paper. You might as well just burn the place down. You’re setting a match to it. This is insane. Even the slowest, most curmudgeonly, most backward in your dying, suffering industry would not be this stupid anymore. They know that the internet is the present and the future and the paper is the past. Protecting the past is no strategy for the future. It is suicide. It is murder. You should be ashamed of yourselves.

The problem with Mr. Jarvis' logic (if it can be called that) is that it makes no business sense.  Basically he's saying "do exactly what all your competitors are doing and you'll be successful" but if you are doing exactly what your competitors are doing than you have no competitive advantage. 

Worse, if your competitors are better positioned you actually set yourself up for a battle you can't win.

To really determine whether this is a smart move for the Philadelphia Inquirer you have to look at the relevant business factors.  For example, I suspect part of the Inquirer's problem is that people who prefer to get their news online generally turn to major networks.  Meaning TV stations which cover local news but have the vast resources of a network behind their web sites for national news would make it impossible for the Inquirer to compete in that market (they are independently owned by a local media holdings company).

So the question becomes, is the online edition pouching the people who would generally get their news via the paper edition (yes there are still people out there that prefer a paper news paper).  Because that is the area where the Inquirer is most equipped to compete and the online battle is one they can not win.

In that context the Inquirer's decision makes perfect sense.

The irony here is that Mr. Jarvis last post championed the idea of niche markets but because the market for physical newspapers doesn't fit his world view he can't see how that too could be a profitable niche market for the Inquirer.  Not everyone has to be online to succeed and there is no stock formula that creates business success in every scenario. 

You can't just say "Blog and they will Come" 

If there's a market to be served by focusing on a paper edition than the Inquirer isn't wrong to focus on that market provided they can support themselves doing so.

Addendum: This is worth a read



About Me

Not really relevant right now. This blog is on hiatus. I really haven't decided if it is an indefinite hiatus yet

For the record if you've tried to e-mail me over the last 4 to 6 months I didn't mean to ignore you. The e-mail forwarding isn't working and I didn't realize that until months worth of e-mails had been deleted on forward. The tom@tomstechblog.com address still won't forward to the postmaster account and I don't know why because it's provided by the webhost. But if you're one of my old blog pen pals I would always welcome an e-mail from you at the postmaster@tomstechblog.com address

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