The Week in Geek – Oct. 29, 2008
Facebook’s Roar Becomes a Meow
By most measures Facebook’s in a better place now than a year ago. It’s the biggest social network on the planet and the average user spends 100 minutes a month online, vs. just 60 minutes a year ago (among the college demographic, averge use time is much higher – over 30 minute a day is the most common figure cited). But Facebook revenues this year will likely come in at about $265 million, well below what Zuckerberg was predicting just 8 months back. The world is realizing that most ads – whether they be banners; or key-word targeted, Google-style pitches; just aren’t getting the hoped-for response on social networks (see Facebook Case). Consider that while the online ad agency Avenue A/Razorfish bought $735 million in ads last year, it spent only $55 million, about 7%, on social networking sites. So how will Facebook make money? Perhaps engagement ads are the key. New Line Cinema turned to Facebook to promote a recent summer movie that I’m loath to mention, lest the e-mail version of the Week in Geek get caught in a spam filter. Suffice it to say that some 500,000 digital Manolo Blahniks were virtually ‘gifted’, accounting for more than 220 million viewings on Facebook the first day of the promo. Those are big, brand-reinforcing numbers, and they can be fun ways for fans to get behind a product. But the durable appeal of these techniques is unknown. Few of my students will fess up to gifting or receiving virtual goods, and none of the hundreds of students I’ve taught has ever admitted to paying for one. While the Manolos were offered free (paid for by New Line), BusinessWeek claims that consumers now spend more than $1 billion a year on the sorts of virtual goods you’d find in online worlds like Gaia, Second Life, and World of Warcraft. Is this a path for Facebook? So far there’s little evidence the firm can bring in big bucks from these efforts. BTW: if anyone has any numbers on the amount New Line or other firms pay Facebook for engagement ads, please share. I’ve not yet run across numbers that shed light on how lucrative these early experiments can be.
With Smartphones, Cher Wang Made her Fortune
She regularly meets with Gates & Balmer, she’s worth over $3 billion, and if you’re like most Americans, you’ve probably never heard of her. But Cher Wang, CEO of Taiwan-based HTC, has built a titan. HTC products now makeup one in every six smart phones sold in the US, including the new Google-powered G1 by T-Mobile (which Android co-founder Rich Miner showed at Boston College the week of it’s launch). The New York Times offers a profile so you can get acquainted with the unsung heroine of mobile.
Betting on Android
Speaking of Android’s co-captain, Technology Review offers coverage of Rich’s recent talk at Boston’s Mobile Internet World 2008, for those who missed Miner on campus. And for those looking for info on Android’s first-round of app offerings, TechCrunch has summarized a first and second pass of video reviews from appvee.
And speaking of Google on mobile devices – have you seen the super-cool Google Earth for iPhone with multi-touch support? CNet offers a review, complete with screen shots. Tilt the iPhone up and Google Earth picks up the accelerometer and will show an image of the sky. Your location is picked up by GPS or wireless network triangulation. Hand gestures allow for easier cruising than the desktop app. Icons indicate geotagged photos and Wikipedia entries. Very cool!
Using the mobile phone as a credit card
Actually, just about anything turns into a credit card once a sticker from Inside Contactless has been attached to it (see photo). The San Francisco-based firm is backed by Nokia, Motorola and Samsung and uses a microprocessor-based system, which is different from technology in the NXP Mifare Classic RFID chip, that was shown to have security flaws. Now it’s up to banks, retailers, and phone companies to agree on standards for the firm’s MicroPass technology. If this combination of Moore’s Law + Network Effects hits, you’ll soon be able to leave your wallet at home.
Microsoft Goes Black, Chinese Users See Red
In China, Microsoft is stuck between a rock and a hard place. Redmond’s products are, by far, the most popular in the Middle Kingdom. But that’s largely because its wares are pirated at rates above 80%. Push anti piracy efforts too hard and users may run to Linux or other rivals – a dangerous thing to do when over half a billion Chinese have yet to chose an operating system. Allow piracy, and Microsoft builds network effects & switching costs that will give it a monopoly for years – but at the sacrifice of near-term profits. A recent attempt by Microsoft to confront pirates shows how sensitive its position is, particularly when icons of American capitalism aren’t particularly popular. Microsoft leveraged a recent online software update to detect illegal versions of Windows. Chinese users with illegal Windows copies flagged by Microsoft saw their desktop go black. A piracy warning appeared in the corner of the screen, and a pop-up message warned that the machine was sporting an illegal copy of Windows. The user could override the blackout, but it reappears every 60 minutes.
In an August presentation at AMCIS (slides available upon request), my colleague YuMing Wang & I pointed out FLOSS data suggesting that by some measures the avg. price of Windows represents over 7 months of labor for the avg. Chinese, vs. only 0.19 months for the avg. US citizen. While Microsoft has repeatedly lowered the cost of Windows through various Chinese programs, consumers still view the cost as too high. The problem is critical for Microsoft to address. Steve Ballmer has said that within two years, China will pass the US to become the world’s largest PC market. The Times points out that a recent online poll taken by popular Chinese IM firm Tencent QQ claimed 84% of 90,000 respondents were using pirated software – and 60% said they’d stick with illegal wares. One Beijing Lawyer filed a complaint with China’s Ministry of Public Security, calling Microsoft “the biggest hacker in China” and claiming the anti-hacking provision was performed in violation of Chinese law.
Microsoft Goes Far Afield to Study Emerging Markets
Redmond’s getting a bum rap as an exploiter of poor markets. In fact, the firm is a hero in India. In four months, the firm will spin off Digital Green as an independent nongovernmental organization focused on, of all things, improving agricultural practices. DVDs on high-yield farming techniques have been widely distributed, each featuring local farmers who become a TV star, a sort of “Agricultural Idol”. One set of videos centers on azolla, which can cover the top of a water tank in about a week and contributes to much higher milk production from cows. In another initiative, Featherweight Computing, electronic posters and cards are sent to farmers that include pictures and audio to remind farmers about techniques learned through the videos. Yet another effort, Warana Unwired, uses mobile phones to provide farming cooperatives members with fast, simple updates on crop pricing, weather, and other important data. It’s worth noting that these solutions are coming largely from Microsoft India, underscoring the critical need to have researchers exploring markets and opportunities within developing nations, rather than trying to brainstorm from the comfort of efforts comfortably nestled in a high GDP zone.
Wikipedia and the Meaning of Truth
After his Wikipedia entry had been regularly changed by outsiders to incorrectly label him as a Director, futurist Jaron Lanier of Edge.org called Wikipedia “digital Maoism” – the closest humanity has come to a functioning mob rule”. I use Wikipedia regularly, and remain awed by its power and influence. Wikipedia entries are often in the top three search results returned when searching a particular topic, and no organization can ignore a site has become the go-to, first-choice place to learn. The more popular a topic, the more likely it is to be vetted both for accuracy and vandalism (a recent CACM paper found 11% of Wikipedia entries were vandalized at least once, although most entries are corrected in minutes if not seconds). But what does it take for a fact to appear in Wikipedia? In most cases, just a fact verifiable by a citation to another source. Wikipedia is based on three core content policies: “Verifiability” (e.g. is there a link citing the claim in question), “no original research” (Wikipedia isn’t in the business of vetting new ideas), and “neutral point of view”. Simson Garfinkle suggests in Technology Review that if contributor vetting doesn’t dive deeper into examining the truth and accuracy of cited works, then this increasingly first-choice alternative may propagate weak or false data.
Why Netflix May Be the Online Video Leader
Netflix (see case) is adding about a million customers a year – a figure that continues to clean Blockbuster’s clock. And in a recent deal, it’ll expand its online streaming catalog by another 2,500 movies courtesy of the Starz cable network. With a Mac client pending, XBox streaming launched, a $99 slick streaming alternative courtesy of Roku, and Blu-Ray DVD Player manufacturers invited to incorporate the company’s streaming technology into their otherwise commodity-bound products, Netflix is becoming a real player not just in shipping atoms, but in streaming bits. The Starz deal is interesting in that it shows how tough it can be for a newcomer to break into the market. Liberty Media (which controls Starz) spent serious coin buying the Internet rights to movies shown over its cable channels, but almost no one signed up for the $9.99 Starz Vongo service. While it’s not clear what Netflix will fork over for the Starz content, it provides the firm with a 25% boost in answers to the question ‘what can I watch tonight’, even if the little red envelope sitting on your DVD player isn’t immediately appealing. While Netflix cuts deals to offer even more programming on-demand for its subscribers (including a recent deal for Disney’s Hannah Montana), the little $99 Roku box will begin streaming content beyond Netflix, making it even more appealing. Streaming is currently free to customers who buy even a minimum plan, and I imagine in tight economic times many households will increasingly make the decision ours made – unplug premium cable & stick with the increasingly varied buffet presented by Netflix.
New Data Privacy Laws Set for Firms
When corporations fail to get out in front of hot button issues that impact the public, they can expect a confusing patchwork of regulations. That’s exactly what’s happening in the digital privacy space, thanks to the rising number of high-profile data breaches. More than 500 organizations have publicly disclosed a data breach, up from 446 disclosed in all of 2007. While notification laws have been put in place to warn consumer when data has been compromised so that they can watch out for identity theft, this is clearly not enough. Now states are mandating that consumer data be encrypted, and in many cases lawas apply not just for businesses in their state, but to any business that crosses lines to sell to in-state customers. In January, Massachusetts will require businesses to encrypt sensitive data stored on laptop computers and other portable devices. Nevada has a similar law, while Michigan and Washington are among the states considering similar regulations. Planning ahead to meet the provision, Dedham-based pizza chain, Papa Gino’s began purchasing Dell laptops with encrypted hard drives last year. Partners HealthCare (which includes the highly-regarded Mass General and Brigham & Women’s hospitals) will spend more than $100,000 to comply with the new regulations.
The Metal MacBook
Here’s a stunning stat: Apple says its computers account for 17.6 percent of the American retail market by volume and 31.3 percent by revenue. And the new line is getting rave reviews. The 13” MacBook will start at $1299, sports a backlit LED display, and has a body tooled from a single block of aluminum. The 15.4” MacBook Pro starts at $1,999. Apple has moved to a no button trackpad – the pad itself is tapped for clicks. The glass-topped, larger pad also accepts a host of gestures (including some involving 4 fingers). The $1799 MacBook Air now offers 50% more storage (120GB). The white plastic MacBook now sells for $999. During the unveiling of the MacBook pros last month, Jobs displayed a slide of his blood pressure (110 over 70) and said questions about his health would cause his blood pressure to rise, poking more fun at continued, temporarily stock-influencing bogus reports of health issues, including the death announcement released by Bloomberg, and a CNN-affiliated post falsely claiming he had a heart attack. See the Wikipedia article above for cautions regarding believing everything you see online 🙂
Oh yeah – and I’m now on Twitter. I’ll likely use this for announcements of campus speakers, new cases & chapters, and updates on teaching material. My students might also get reminders of important things to remember for class. Feel free to follow the Tweets. Although I can’t promise they’ll be very regular, I’ll try to avoid the “I’m eating a sandwich” updates and stick to stuff that I hope will be valuable to WiG readers.