Ed Koch is gone. Enjoy Steve Ballmer
February 3, 2013News
|Ed Koch, the late mayor of New York, was loud, garish, outspoken, and in love with his own opinion. He considered it the truth, even when it was patently self-serving, which it often was. And he patted his own back for telling it. In short, he was insufferable--but more authentic in his own way than the great majority of fellow politicians.
In the realm of CEOs, you can say many of the same things about Microsoft's Steve Ballmer. He's loud and way out there. He's often wrong, whether he's dissing the iPhone or hyping the Zune. By most measures, he has failed spectacularly in his job. He took over a dominant (though, to be fair, declining) tech franchise and has ridden it south. Most CEOs in his position would duck interviews. But Ballmer, like Koch, is a talker. He rolls right on.
In the latest interview with Bloomberg BusinessWeek
, he dismisses competition from Dropbox
. He refers to the company as a "fine little start-up" and says that 100 million users "sounds like a pretty small number to me." Apparently he thinks that a start-up with that many users is powerless to disrupt the nature of a business software market that is his cash cow. Or more likely he believes that the new cloud-based Microsoft Office responds effectively to that disruption.
It doesn't matter. We don't have too many CEOs who speak with the candor (and apparent job security) of Steve Ballmer). He reminds me of Ed Koch. If I held Microsoft stock I'd be apoplectic. But as an observer, I enjoy having him around.
IBM's Watson trundles off to college
January 30, 2013News
|IBM will be sending a version of its Watson computing system to RPI (Rensselaer Polytechnic), the company announced today. It's part of IBM's ongoing effort to work with universities to train data scientists. (An earlier one, which I wrote about for BusinessWeek, was a co-production with Google.) It's little surprise that Renssalaer gets the first Watson: RPI is where David Ferrucci, the head of the Watson team, got his doctorate. And RPI computer scientists collaborated with IBM on the Jeopardy project.
This work with universities is central to IBM's Big Data strategy. As researchers use Watson for their projects, they're bound to develop applications for the system, broadening into medicine, finance, corporate governance, and scientific discovery. As they do this, the Watson technologies could evolve into a platform. It's by distributing the technology this way that IBM can hope to gain a lead over its most likely competitors in extracting learnings from Big Data. They would include Google and HP, among others.
The Numerati I've never seen
|This is the Croatian version. I'd like to have a copy for my shelves, but am still waiting for the publisher to send one. It reminded me of a record from the '60, King Crimson. (Though now that I reacquaint myself with the original, the Croatian Numerati looks a little less energetic. Might be depressed, or perhaps just resigned.)
What Symbian's fall says for Apple
January 27, 2013News
There was a time, at the turn of the century, when Nokia resembled today's Apple. The company dominated the cell phone market. It ran its factories flat out and could negotiate the best terms and prices from suppliers. For a few years, Nokia made all of the profits in the industry. Everyone else, from Motorola to Sony, was losing money in cell phones.
But to extend its dominance into the smart phone era, Nokia needed to adjust. As cell phones evolved, many expected the industry to follow the pattern established with PCs: In this scenario, the companies making the innards--the software and chips--would run off with the profits, leaving manufacturers as little more than glorified assembly shops. This was the dynamic that propelled Microsoft and Intel skyward, while pushing IBM out of the PC business and relegating Apple to a struggling niche role.
The key was to develop a software platform under the control of the phone-makers. So Nokia invited its competitors to join a consortium, and together they launched Symbian. I covered the launch, in 1999, for BusinessWeek. Researching the story, I met the key strategist for the company, an articulate Dane named Juha Christensen. As Juha described it, Symbian was the hope Europe's tech economy. Europeans, who were more advanced in cell phones, were positioned to lead the wireless stage of the Internet. This would be bigger and more transformative than the desktop version. But the phonemakers had to keep the computer companies at bay. The biggest threat was Microsoft.
A year later, Juha left Symbian… for Microsoft. I wrote that story, too. He said Symbian was a mess. What he and I didn't know at the time was that Microsoft was also destined to flounder in mobile, and that a gadget that seemed to have nothing to do with cell phones--Apple's iPod--would eventually evolve from a music machine, to a touch-screen browser, to the world's leading smart phone. We also never could have guessed that struggling Nokia would eventually hire a Microsoft executive, Stephen Elop, as CEO, and that he would lead the two former titans into an alliance of underdogs. Today, Nokia's Lumia, with Windows 8, appears a last-chance bid for both companies to rescue their future in the mobile Internet.
Nothing is clear, though, because the forces that bring dramatic change do not progress from the story lines we know, but instead hatch from ideas that we don't yet see, or even imagine. If you ask analysts about the smart-phone market five years from now, they're likely to feature today's dominent players, led by Apple, Google, and Samsung, just as an entire industry once saw a future defined by Nokia and Microsoft. Things change, often dramatically.
For example, when I was interviewing Juha back in London, it didn't occur to me that 13 years later we would be friends on a social network, that I would see his update pop up (on my phone) about the extinction of Symbian. His update was followed by reminiscences from his old colleagues. I added a memory of my own, and asked him if his departure marked the beginning of the end. He responded (and told me I could post it.)
The beginning of the end occurred half a year before, when Nokia went from supporting Symbian as an independent venture, driven by the usual entrepreneurship, opportunism, paranoia and fear that propel start-ups forward, to treating the company as a buyers cooperative, restricting its ability to control the user experience and programmability.
The seeds to what became Nokia Series 60 were sown then, and eventually led to the trouble which Nokia now, fortunately, is well into recovering from, ironically as a beneficiary of the Windows Phone platform we pioneered at Microsoft.
I love this industry. Never a dull moment.
Incidentally, I just came across this excellent post by Eugene Wei about Apple, Amazon and the Beauty of Low Margins. If you have 10 minutes and want to explore the strategies of these companies, it's worth a read. (hat tip @timoreilly) Also, Henry Blodget analyzes Apple's fallen stock, and says it could be a bargain. He does caution that Apple could follow the route of other humbled giants, such as Nokia. But he says that Apple could also settle into a prosperous slower-growth mode, in which it rewards investors with dividends. In other words, he is seeing a transition for Apple from a growth to a value stock.
What children might be thinking
|What might this boy be thinking? He's standing in the bombed-out ruins of Essen, Germany, in 1947, and is caught on film by Chim, the photographer also known as David Seymour. Writing about an exhibit of Chim's photos in the New York Times, Ken Johnson ends his short article by focusing on the boy: "Like an angel descended from heaven, he bears witness to humanity's murderous and suicidal idiocy. He might be wondering: When will they ever learn?"
He might also be spotting a cool place to play hide and seek. I'm reminded of an interview in which filmmaker Werner Herzog
recalled his childhood in post-war Germany. Here's a snippet
He noted ... that while growing up in the ruins of a city was hard on adults, it was satisfying for a child. "Kids in the cities took over whole bombed - out blocks and would declare the remnants of buildings their own to play in where great adventures were acted out. . . . Everyone I know who spent their early childhood in the ruins of post - war Germany raves about that time. It was anarchy in the best sense of the word. There were no ruling fathers around and no rules to follow. We had to invent everything from scratch."
Facebook's use of "dirty data"
|Here's an interesting experiment (that I don't have time to do). Go into your Facebook page and add up all of your "likes," and then imagine the portrait of yourself that they create. I'm guessing the result won't look much like you. This is because "likes" are about as meaningful as the word "like" in modern American English. I'm, like, not sure they mean much.
An excellent post by Steve Cheney
(hat tip: danah boyd
) delves into the issues raised by this so-called dirty data. The nut of his argument:
In computer architecture they call an out of date piece of data “dirty”. Accessing dirty data is bad, wasting time and causing more harm than good. And in this context, much of the structured data that makes up Graph Search is just that: totally irrelevant and dirty.
It turns out as much as half of the links between objects and interests contained in FB are dirty—i.e. there is no true affinity between the like and the object or it’s stale. Never mind does the data not really represent user intent... but the user did not even ‘like’ what she was liking.
He continues the post by explaining how this fits--or doesn't--into Facebook's advertising strategy. This documents the point I was making in my Times piece earlier this month: that advertisers struggle to figure out what to count in social media.
The rise of corporate media
|Try putting yourself in the mind of a chief marketing officer for one of the car companies. The Super Bowl is coming up, the biggest advertising event of the year. You can reach more than 100 million people for 30 seconds for about $4 million. Of course some of them will be grabbing a beer, and others will be flipping past your ad with the DVR, but still, tens of millions of people.
Now imagine launching an editorial operation, an online newsroom with maybe 6 people, including a seasoned professional or two. You could do that (and even pay their health care) for $1 million. That's 7.5 seconds of a Superbowl ad. This news staff could produce great stories and videos, and some of them will go viral, perhaps reaching millions (if not a Superbowl-sized crowd) on Facebook or Twitter. Is it any wonder, as Tom Foremski
writes in Silicon Valley Watcher, that corporate-generated media is booming?
Lots of factors contribute to this boom. The traditional media model is collapsing, sending thousands of journalists into the job market. At the same time, big advertisers can't count on those understaffed and cash-poor publications to send reporters to interview their execs and write stories about them. What's more, as their advertising crashes and staffs shrink, they have fewer pages to fill. (Magazine advertising, I read in the WSJ, is down by 32% since '08. I'm surprised the number isn't higher.) As corporations see it, the best way to get their story out is to produce it themselves.
You'd think that their stuff would be crap. A decade or two ago, it would have been. But they see themselves as media companies now, at least in part. Their reputation is at stake. Equally important, if they produce propaganda, it won't go viral--and denunciations of it just might. That doesn't mean they don't push their point of view. But they've always done that, under every business model.
Ira Glass's career advice: Amuse yourself
|Ira Glass, producer of This American Life, describes a very bright colleague he had early in his radio career, in Chicago. She would come back from assignments and tell the funniest stories, he says. Everyone would love listening to her. Then she would go on radio, cut out all of the funny and quirky stuff, and produce a responsible piece of journalism. In Glass's words, she "deprived her audience of the chance to be amused."
This is what I've never liked about practicing or, for that matter, consuming most journalism. Journalists often take themselves too seriously and edit out the fun. I have a feeling that I've blogged about this at one point, but when I was at BusinessWeek I would call my wife on a Wednesday morning and tell her how many of my "jokes" had been squeezed out of a story. In each article, I'd generally have three or four little turns of phrase, allusions or funny quotes that amused me. I called them jokes. And as far as I was concerned, they were the reason I bothered to write the thing. Most of them died in editing. ("We need to get the earnings projection in here... Do we really need this reference to Positively 4th Street?")
This was a big reason I got into blogging and writing books. I could have more fun. And sometimes when I read comments reviews of Numerati and Final Jeopardy, it strikes me that even some of those who appreciate them didn't get the jokes.
Glass's point is much bigger than just having fun. His idea is that journalism used to command our attention by default. If you wanted to hear what was happening in London during the Blitz, you listened to Edward Murrow on CBS. He had great responsibility, and tried his best to be authoritative. And there was nothing wrong with that.
But today we can get our news from thousands of different sources, most of them free and few of them thriving. There's an industry-wide battle for our attention. Naturally, we turn to the stuff that amuses us. It doesn't have to be funny. It can be beautiful, poignent, brilliantly argued, but it has to offer something special to claim control over us for a few minutes--and lead us to share it with others. Journalists who figure out how to create such work will thrive in the coming years. Glass argues that they'll do it by following their own tastes and interests.
Filling the ignorance market in social media
|I've been knee-deep in social media ever since the New York Times article popped up on the Web site Saturday evening. It's been fun.
Some people, I see, read the article and consider me a social media skeptic. Just to clarity, I'm a big believer in the power of social media. My only point is that it's so vast and complex that it's hard to harness--to measure, predict and monetize. But I would have a hard time taking seriously any marketer today, or advertiser, who isn't intensely focused on social media. It might not be a huge dollar focus. But it has to studied. Businesses have to grapple with it. That's where the customers are, and increasingly, the data that defines their markets and generates opportunities.
I've received quite a few emails from companies specializing in measuring social media behavior, and optimizing campaigns for it. (A post from Bottom-line Analytics
, another from BPI Media
.) Naturally, some are a bit offended by the angle of the article, which focuses on how hard that job is. But the reason their industry is growing so rapidly, attracting both hucksters and serious data scientists, is that there's so much mystery, and so much to learn. Social media is an enormous ignorance market. In the Information Age, after all, each question is a market opportunity. And the answers to the questions, instead of resolving the issue, simply create cascades of more valuable questions. The process never stops, just as in neuroscience and genetics.
|I was on a conference call yesterday afternoon. And when I walked into the kitchen, the last ray of sunlight was hitting the fruit.
Maybe Mark Zuckerberg is in the wrong business
| As I researched the social media story that ran in today’s Times, I kept wondering whether Facebook is really made for the advertising business. Could Mark Zuckerberg be in the wrong line of work?
Facebook of course has enough going for it, including a billion
networked members, to make a good business in advertising. Revenues top
$4 billion. But despite its towering strengths and limitless potential,
the company struggles to please traditional advertisers and investors.
The company reminds me of a brilliant student who's following the path
his parents have mapped through med school, even though he'd rather be
building skyscrapers or writing songs.
The difference, though, is that Facebook is capable of transforming the
very industry it's trying to fit into. You could argue that that's
already happening, as I'll detail below.
Clearly, in the short and medium term, Facebook has little choice but to
pursue a career in advertising. At the moment, no other business model
can raise billions, which the company needs to build a global enterprise
with huge data centers, employing thousands of brainy engineers and
scientists. Still, there a sense that Facebook's mission is bigger, and perhaps more transformative, than advertising. “If Mark Zuckerberg didn’t have to pay back the venture
run the risk of losing his talent, he would have taken a different
route,” says Rishad Tabaccowala, chief innovation officer at VivaKi, a
digital arm of Groupe Publicis.
In fact, Facebook's very strengths lead the company along a
different path. The ads that work best on social networks represent a
new model, a blend of advertising, word of mouth and viral connections.
These defy traditional definitions and measurements. One example. If
you're an American woman over the age of 45, you might have seen cute
photos of kittens and puppies pop up next to your news feed. Those are
ads. Click one, Facebook gets around 25 cents, and at least in this case
you subscribe to updates from Petflow, an e-marketer. The company has 620,000 followers now.
In the news streams that carry updates about their neighbor's pork
roasts and cousin's birthday parties, those people also receive several
updates from Petflow. And if they click "like" on one of them, Petflow's
news flows out to all of their friends. It goes viral. Should Petflow
want the update to linger longer in news feeds, reaching more of its
followers, it pays $500 to $2,000 for a promoted post. Petflow's
co-founder, Alex Zhardanovsky, says the company generates more than 30%
of its sales from Facebook.
Nonetheless, success that justifies a $100 billion market cap will come only
when the big traditional advertisers, like Proctor & Gamble, Apple
and the car companies, move from social media toe-dipping and
take the plunge. To satisfy them, Facebook has taken extraordinary
measures. The company has teamed up with Datalogix,
which has a vast database of customer loyalty cards. The two companies
have matched the ads people see on Facebook with the purchases they
register with customer loyalty cards in the physical world.
The link is the common e-mail address. Many of them show up on both
Facebook and the supermarket lists. To shield identities, the two
companies have devised a convoluted process, hiding both the consumers
and their loyalty cards behind numbers known as hash tags. (More details
from TechCrunch and Facebook itself.) The point is not to track the individuals (nor to find
themselves in another bruising privacy battle), but simply to
demonstrate that anonymous beings are more likely to buy certain soaps
or cereals after seeing ads on Facebook. So far, according to Sean Bruich,
Facebook's head of Measurement Platforms and Standards, the response
more than justifies the ad spend. They have carried out 50 studies for
big advertisers, he says. In 70% of them, the return on investment
reached at least three times the ad spend. On 49% of them, it was 5X or
Still, the numbers-driven ad market will press relentlessly for more
data. That's the nature of the Numerati world. It never stops. The goal
is to monitor and measure all of the stimuli that lead us make a
decision, such as whether to buy a certain bar of soap. The way it is now, a
person sees different ads on TV, billboards, in newspapers, and a
sponsored post on Facebook, and each one of those media players claims a
portion of the credit--probably more than its share. Now, Facebook and
others developing a complex analysis called "multi-touch." The idea is
that it will divvy up the credit for each interaction, and each media
player will be able claim its share.
We've already seen how this ends. The more data that arrives, tracing
our movements and activities, the more analysis it generates and
questions it raises. Arguments are inevitable. The losers will hunt down
more data of their own launch their own studies, challenging the status
quo. As a result, we're be scrutinized in remorseless detail. The
market would have it no other way. The process is barely begun. And no
matter how much they know, advertisers, on Facebook and elsewhere, will
always come up with reasons to dig deeper and a little more. In the
process, they learn more about us--and perhaps that process, or insights
derived from it, will lead them into entirely new businesses.
Below, today's Times story. A few minutes ago I saw a bit of blue reflected in the front door. I ran out to the driveway and grabbed the analog version of the paper, which resonates for me emotionally. (I broke into journalism writing on manual typewriters, after all.) But then I promptly get to work with my camera and computer to render it back to digital.
RT @marthagabriel: "It is possible to store the mind with a million facts and still be entirely uneducated."
-- Alec Bourne #quote #goodmor…
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