Posts tagged ‘Google’

Pay Attention

Today it was announced in the Wall Street Journal (among other places) that Mozilla, the makers of the popular Firefox browser, were planning to add an opt out function to give users a “do not track” option on their personal data.

[In my view, Firefox is the iPhone of browsers, with the most extensive number of apps that can be added on to customize and increase its usefulness.]

Even though this addition by Mozilla will require the cooperation of advertisers and ad networks–which may be meager at best–it is a welcome step in the right direction.  Anything that gives more control to users over information that is important to them is an improvement.

True, people are often far too cavalier about how they share personal information on the web.  See Facebook or MySpace for examples.  On the other hand, some companies continue to skirt the edge of ethics in capturing and using this information.   See Facebook again, which frequently changes its privacy features in such a way that personal information is shared unless users opt out.  Then it conveniently (and intentionally) “forgets” to inform them clearly about the implication of such changes and how to reverse them.

Other companies simply capture site visit and click information to build de facto profiles of users, and then sell this to ad networks.  While this information is arguably less critical (we’re not talking phone numbers, a child’s school address,  or the hair color of old girlfriends here), the gathering of it is totally under the radar–most users are completely unaware it’s even going on.

In any event, I’m an avid Firefox user, so I’m happy to see them taking this step.  But it doesn’t go far enough.  Through online tacking, companies are continually pursuing that advertising holy grail–a “demographic of one” that lets them perfectly target ads to individuals based on their unique interests and tastes.  If this is truly valuable to advertisers, and really helps them save money in the process, then I say let them pay for it.

I propose to “opt in” to personal tracking if ad networks will pay me for it.  Why should they get info on my habits for free?  If nobody is willing to pay me, I’ll opt out of tracking altogether and they get nothing.

This is just a precursor to an idea I’ve floated before:  Pay for Attention.  Why should Google (NASDAQ: GOOG) and other middlemen make all the money for “delivering” me to advertisers?

It’s my attention that advertisers want.  Let them pay me for it directly.  Disintermediation is a time-honored web practice, after all.

If you want your banner add to show up next to my Facebook feed, pay me.  If  you want your ads to show up in my search results, pay me.  My attention is worth a lot, and in today’s environment of continual distractions I have no intention of simply giving it away.

You think this power doesn’t already exist?  Try this

  • Clear your browser cookies daily
  • Clear your browser cache every time you close the browser
  • Install an add-in such as Adblock Plus to your Firefox browser.

You’ll be amazed at how bad the “targeting” becomes, and in fact how few advertisements you see at all.  Some months ago a friend commented to me that he loved Facebook but hated the ads.  I realized I had never seen an ad on Facebook before.  I fired up Internet Explorer (not equipped with my ad blocker) and was appalled at all the banner ads being thrown at me.

So take control of your profile until such time as ad networks are willing to pay you for it.  And if you are a startup looking to commercialize this idea of Pay for Attention, contact me, I’d love to help you get it off the ground.  I think the concept has commercial legs.

Disclosure: I hold no position, either long or short, in any stocks mentioned here.

January 24, 2011 at 11:05 am Leave a comment

Escape from Alcatraz

prison-escapeIn a recent Wall Street Journal there was an interesting article on jailbreaking iPhones.  It seems many people–more than I originally thought–may be using software to “break” the restrictions on an iPhone, allowing the installation of applications that have not been purchased through the App Store, or certified by Apple (NASDAQ: AAPL).

The article quoted Jay Freeman, developer of Cydia, as saying 1.7M have downloaded it–implying a like number of jailbroken iPhones.  Even if he’s exaggerating, it’s probably fair to say the total worldwide number of jailbroken iPhones could be in the millions now.

In terms of sheer volume, this doesn’t present much of a threat to App Store revenue.  Though certainly the availability of applications that are not blessed by closed Apple ecosystem will appeal to many.

apple-iphone-firmware-20-jailbreakAwhile back, I suggested that the most widespread app for the iPhone in 2009 would be a virus.  Subsequently, I was roundly flamed by the ever-sensitive Apple fanboys, who claimed that the App Store system is practically (if not completely) virus-proof.

Above all, there’s the dreaded “Kill Switch”, which lets Apple disable an application on every iPhone in the world, once its discovered to be malicious or defective in a way that allows the spread of a virus.

[The presence of that kill switch has become a lightning rod for those critical of the amount of control Apple has retained over its ecosystem.  Google’s (NASDAQ: GOOG) Android OS for mobile phones promises a great deal of freedom and diversity.  Apple provides a more limited functionality, but users get stability,  increased virus security, and a world-class user experience.  The liberty vs. security trade-off seems universal.]

I’ll admit to a bit of hyperbole in my original post.  And I certainly got more of an education in iPhone security than I ever wanted.  So perhaps a virus won’t be the MOST downloaded app.  Or happen this year.  But I stand by my original sentiment.

Imagine the following:  One day, some unexpected data finds its way into your computer.  Some time later, tens or even hundreds of copies of the data leave your machine and end up on the hard drives of other people’s PCs.  And the process repeats until hundreds of thousands of computers have been infiltrated by copies of this data.

A virus, you say?  No, just a joke email.  But I think you get my point.

get_out_of_jail

The problem with those who defend Apple is they have far too limited a definition of a virus.  No one says it has to be malicious, or take control of your hardware.  Hackers are first and foremost pranksters, who often spread mayhem but are also driven by the challenge–seeking recognition in their own way and in their own circles.

And people make mistakes.  That includes both the developers of legitimate iPhone applications, as well as Apple itself.  Perhaps an innocent error could sneak through the certification process and be exploited by a creative youth with time on his hands.  It needn’t be a malicious attack that takes over peoples’ iPhones.

On the other hand, imagine if you could claim bragging rights by forcing Steve Jobs to actually use that kill switch, disabling a popular application on every iPhone in the world.

That would make a hell of a “virus”, wouldn’t it?

Disclosure: I hold no position, either long or short, in any stocks mentioned here.

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March 16, 2009 at 9:47 am 2 comments

Viral Marketing

appstore_hero20081217Smartphone applications are one of the biggest trends going, one that will only get bigger in 2009.  Not exactly unexpected, especially for anyone who’s followed Salesforce.com’s  (NYSE: CRM)  AppExchange model.  But despite how Google’s Android (NASDAQ: GOOG) foreshadowed the market, it’s taken the brilliance of Steve Jobs to get the ball rolling.

On the one hand, the dynamics are similar to ring tones

  1. Cheap.   A few bucks each; some are free
  2. Easy.   Apple (NASDAQ: AAPL) sets the standard for ease-of-use, though with the usual drawbacks that come from its closed system.  Android’s market will be a little more “wild west”, but probably more innovative for it.
  3. Not originated by the service provider.   The best services never are, telcos are about as innovative as rocks.
  4. Customizable.   Make your phone personal, whether it’s playing apps or having different ring tones for each caller.
  5. Cachet.   Everyone wants the latest “cool” app, just like they wanted the most popular songs to sound out whenever their phone rings.

On the other hand, the mobile phone app phenomenon is also evolving  into an analogue for the gaming industry, with developers writing apps for one of only a few “platforms” (e.g. iPhone, Windows Mobile, Android, etc.).  I expect to see developers selling versions of their apps onto multiple platforms, especially for the more popular ones, just as happens with game consoles.

The last, and most ominous similarity, is with Windows.  Despite the existence of Android, there’s a chance the iPhone could become the uber platform, with most apps being written for it (at least first), creating a Microsoft-like dominance of phone applications.  All of which leads to the following prediction for the New Year:

The most widespread iPhone application in 2009 will be a virus.

Think about it.  All the elements are already there:

  • rocketing platform/device popularity with a growing market share
  • viral growth in application number and complexity, providing plenty of ready vectors for the introduction of malicious code
  • existence of a large, dedicated, developer base
  • a ready black market for both hardware and software–which means plenty of hackers.

virus_alertsDespite assurances to the contrary from its PR department, Apple software is not virus proof.  It’s largely benefited from a lack of attention given its small (though growing) share of the desktop/laptop market.  But the success of the iPhone changes those dynamics.  Already, iphone dev team has unlocked the iPhone 3G, and is even now delivering its yellowsn0w software to the masses.

True, Android will undoubtedly be more vulnerable, given its marketplace model and the lack of a central control.  But betting against hackers has always been a sucker play, and it will remain so even for the iPhone.  Just ask the Blu-ray folks.

The predators are circling.  And it’s only a matter of time.

Disclosure: The author holds no position in any of the stocks mentioned here.

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January 5, 2009 at 12:34 pm 4 comments

Up And Down Vote

backpedaling3The Wall Street Journal had an article out yesterday that has created a real firestorm of controversy. It’s about how some of the large Internet players (such as GOOG, MSFT, and AMZN) are backpedaling on their previous Net Neutrality stances.

Moreover, they’re variously negotiating with telecablecos to gain “favored nation” or preferred treatment status on their networks.

Holy Turnaround, Batman!

Some writers quickly noted–here, and here–that Google at least is simply caching content closer to customers, just like Akamai (NASDAQ: AKAM) and other CDNs do. And that much of the Journal article reflects the kind of sensationalism many feared would appear once Rupert Murdoch (NYSE: NWS) bought the paper.

[As an aside, when I was doing research a year or two ago on Akamai, top management there vehemently denied my suggestions that they would ever be in competition with Google. Heh.]

If any of this is true, it’s a sad development, but hardly unexpected. As competition heats up for everything from ad serving to video downloads to cloud computing, everybody wants an edge. And they’re willing to pay for it.

Those that can afford to will get better services, better access, better distribution. Which means the little guys get shafted again. If you want to buy from Amazon, you get speedy page refreshes (not to mention faster access to things like S3). Google apps will work faster than, say, Zoho.

The rich do, indeed, get richer.arrow

This plays right into telecableco hands. It’s what they’ve been lobbying for, after all. (I can almost see the big, fat, spider sitting there in the middle of its web inviting them all in. ) The result will be a vertical model, with only a few players controlling the entire value chain, up and down.

If this was just about commerce, I’d be less concerned. But it’s also about access to information. And about control of content. Ultimately, it’s about exclusion and higher costs for everyone. As well as a loss of the kind of innovation that has made this country successful.

Imagine if TV stations were free to broadcast good signals from those advertisers (or news programs) that spent more. Everyone else, they deliver fuzzy pictures with the sound continually dropping out. Pay to play. Eventually, everyone gets their news and entertainment from a few large companies. Welcome to the 50’s. There’s progress for you.

Critics argue: “But as businesses they should be allowed to offer different levels of service”. If there was true competition at the last mile level, I’d be inclined to agree. However, most of the large telecablecos built their networks–and their competitive advantage–on the revenue streams from exclusive franchises and government mandated monopolies.

You and I paid for their broadband networks through our monthly TV and telephone bills, mostly at a time where we had no choices. Or they used the proceeds from bonds whose attractive terms were based on the existence of those same “guaranteed” payment streams, which is basically the same.

Now that the moats around them have been fortified, we shouldn’t think that they’re entitled to operate as normal businesses. Monopolies (or even duopolies) don’t get the same rights as firms in a free marketplace. It’s not that I believe Network Neutrality should be regulated. (I agree about the principle but not the solution.) It’s last mile competition where the natural monopoly lies, and that’s what should be regulated. Until it’s no longer a monopoly, or until the telecablecos no longer have insurmountable market power.

Or until there’s structural separation.

Many thinkers (at least the ones whose salaries don’t depend on the success of telecablecos), have long recognized the most efficient market structure is to go horizontal–one company does the infrastructure, one does the content. Each competes within its own level, but not up and down the stack.

horizontal-model

The PC industry helped this country thrive with the same model. Some companies built chips, some sold computers, some provided software. This drove innovation and helped keep costs low and falling. (Even the emergence of intra-level monopolies like Microsoft couldn’t halt the effect–some argue the standardization even helped.)

But now the big players are changing the game, in order to become even bigger. The Internet guys want to differentiate on performance, because they’re finally getting into each others businesses, and have to compete–some for the first time. The pipes guys want a piece of the content pie, because as network usage grows their costs go up, and they face resistance in trying to charge consumers more money for Internet access, especially as they’ve been billing flat rates for so long. But we will pay, one way or another.

Not everywhere, thankfully. Much of the rest of the world actually has competition in the last mile. They’ve created a more horizontal model, with providers competing “across” levels. If we fail to adopt this kind of structural separation in the U.S., we can watch our innovative spark and competitive advantages slowly drain away.

And just as many around the world laughed at us for voting to re-elect George Bush, they’ll laugh at us again, for voting to go “up and down”.

Disclosure: I hold no position in any of the stocks mentioned here.

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December 16, 2008 at 10:22 am Leave a comment

Alias Mr. Moneybags

Who benefits the most from the recently announced Sprint/Clearwire deal? It may not be who you think.

This massive ($3.2B) infusion of money seems like a lot, but it’s just the beginning for this boondoggle. WiMax is a nice technology that works in some circumstances, with the right business model. But then so will WiFi, and it’s much cheaper. Besides, the mobile providers have a huge head start. Why buy new cards and sign a new contract when I already have what I need from my cell phone (or hotspot) provider?

In terms of becoming a successful business, WiMax is vying for the “most hyped” award with social networks. Expect more bags of money to be tossed into the trough before long.

So who gets what?

Sprint (S) – Removes one monkey from the back of CEO Dan Hesse as he is now free to focus on why Sprint has been shedding customers for so long. Also distracts everyone from noticing the delays in its own WiMax buildout.

Intel (INTC) – Intel has been peddling WiMax like a desperate streetwalker to anyone with an open car window. And its been seen hanging around the Clearwire convertible before. Intel wants to be the undisputed standard for WiMax chips, a role it failed to capture in WiFi. Not to mention selling lots of new processors for next generation laptops and smart phones.

Google (GOOG) – Yes, critical mass for Android will help extend its search and advertising dominance into mobile. And this network might turn out to be actually open. Despite Google’s game playing at the FCC auction, the “open” spectrum Verizon won will–in practice–be anything but. Fundamentally, Google has become a VC firm. A billion here, a billion there, something just might stick. All it takes is one 10-bagger to make it work. This ain’t it.

Time Warner Cable (TWC), Comcast (CMCSA) – the Rosencrantz and Guildenstern of mobile will be exactly as successful here as they were with Pilot, the failed MVNO venture with Sprint. And for the same reasons.

Clearwire (CLWR) – Now we’re getting somewhere. Big cash infusion, lots of media attention. The rights to resell Sprint 3G will allow it to grow its top line, giving it time to progress on the buildout. In the end, though, even with a working network it won’t be enough to either satisfy consumers or to make it a viable competitor to the telecableco ISPs. ( And I’m not alone in my thinking, here.)

But you see, by then Craig McCaw will have made his money.

McCaw has a history of promote, build, and sell. Usually at the top. And always with someone else’s money. He’s going to extract himself from this before long, and come out smelling like a rose.

Or a crisp thousand-dollar bill.

Regardless of what happens, whether the network succeeds, whether or not anyone else makes any money, you can be sure of one thing: McCaw has this all mapped out. There’s your winner.

Disclosure: I hold no position in any of the stocks mentioned here.

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May 9, 2008 at 12:17 pm 10 comments


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