August 19th, 2008
Corporate Innovation . . .
Late last week I caught part of SDForum’s SDForum’s first “Corporate Innovation and Research Fair.” Here is an edited video of the lunchtime panel:
From left to right:
Roger Meike, Sun Microsystems
Harold Yu, Orrick
David SMith, Tynax
Deborah Magid, IBM
Roy Levin, Microsoft
Dr. Ike Nassi, SAP
I ask a question about the term innovation and if it has been over-used. Dr. Nassi agrees, and says it has lost all meaning.
August 12th, 2008
Is Google a media company?
The New York Times recently wrote an article headlined: “Is Google a media company?”
The article was mostly about Knol, Google’s Wikipedia-like service, but it wondered if this meant Google was a media company because it owns content sites such as Knol, Blogger, and Youtube.
A Google spokesperson was quoted saying: “We are not interested in owning or creating content.” That statement is not true and it seemed to be designed to say that Google is not a media company.
But whether Google owns content or scrapes its content off of the Internet, is a red herring, imho. The facts are that Google publishes pages of content with advertising around it. That’s what a media company would do. How is Google not a media company?
GOOG thinks of itself as a technology company and not a media company, and that is how it wants to appear to the world. But what technology can you buy from Google?
I can buy microprocessors from Intel–that’s a technology company. I can buy operating systems from Microsoft–that’s a technology company. What technology can I buy from Google?
It is vital to Google that is not be viewed as a media company because it could jeopardize billions of dollars in revenues. Large media companies such as the New York Times outsource their online advertising to Google. Would the New York Times outsource its advertising to a media giant such as Tribune or Gannet? No, it wouldn’t. But Google is a technology company therefore it’s OK to do that.
But Google is a media company and in many ways, a competitor to the New York Times and many other large media companies.
Why are large media companies partnering with a competitor, and a competitor that has a far more efficient business model–it gets its content virtually for free. The New York Times and other content producers can’t compete against that business model.
That’s why online advertising is so cheap–it’s value is largely set by the business model of Google and other companies with similar business models–publishing pages of nearly-free content with advertising around it.
The New York Times and other traditional media companies create content using legions of people. Google plugs in another bank of servers, and scrapes the content off of the Internet or harvests it from users of Youtube, Blogger, etc. That’s a much more efficient media business model.
That’s why Silicon Valley’s media industry is thriving and New York’s is in the dumpster.
Is Google deliberately mischaracterizing itself as a technology company? It seems that way.
August 7th, 2008
The government has an “iPatriot Act” ready for Internet control
My video of Lawrence Lessig, a law professor at Stanford University talking about an “iPatriot Act” has received a lot of views thanks to a post on the top blog site Boing Boing. Lawrence Lessig on the coming “i-Patriot Act” - Boing Boing
I’ve taken out an extract of the relevant part of the video, here is a 3 minute section:
http://video.google.com/videoplay?docid=-4928340447880758524&hl=en
This is the relevant section where Mr Lessig talks about having dinner with Richard Clark, the government Counter terrorism Czar.
Lessig: “I had dinner once with Richard Clark at the table and I said ‘is there an equivalent to the Patriot Act — an iPatriot Act — just sitting waiting for some substantial event just waiting for them to come have the excuse for radically changing the way the Internet works?’ And he said, ‘Of course there is’ — and I swear this is what he said, and quote — ‘and Vint Cerf is not going to like it very much.’”
This is from Fortune Brainstorm conference “2018: Life on the Net.” It was moderated by Quincy Smith, CEO of CBS Interactive. On the podium was Lawrence Lessig, professor of Law at Stanford Law School, Joichi Ito, CEO of Creative Commons and Chairman of Six Apart Japan, and Philip Rosedale, founder and chairman of Linden Lab, (Second Life.
The full video is here:
http://video.google.com/videoplay?docid=-4631871144083884704&hl=en
August 4th, 2008
Are we seeing a disturbing trend in “blackmail” innovation…?
I’ve been thinking about the acquisition of a Silicon Valley startup, Ribbit, by BT, the giant British telecoms firm.
Ribbit started out in classic form as the vendor of disruptive telecom technologies.
Ribbit declared itself “Silicon Valley’s First Phone Company” - a bold statement but that’s because it was taking on the telcos. And I liked that about Ribbit, that made them interesting.
Now, Ribbit has sold out to a telco.
I supported its mission against the telcos because I believe that the telcos are keeping us, as a society, in the dark ages. And Vint Cerf, the Father of the Internet, agrees, he told me that their behavior is “against the national interest:” here.
So, did Ribbit talk a good talk to acquire the attention of BT? Yes, it did.
More importantly, is this Silicon Valley’s future? Create a disruptive technology so that you get acquired (and closed down?).
That’s not innovation, that’s more like blackmail. Innovation has to be disruptive therefore as an incumbent you can survive anything that threatens you, you just need to identify disruptive technologies early and buy them. That’s a valid business strategy.
Is this a business model for Silicon Valley startups: blackmail innovation along with VC blackmail investing? Yes, it is, it is one of the faster growing trends.
The losers are the market, if this indeed, is Silicon Valley’s future trend.
It is disheartening if we, as journalists, pick up interesting companies to write about only to see them being acquired by the very companies they are supposed to be disrupting.
July 31st, 2008
First Data Could Allow User Generated Financial Credit Reports
At the recent Fortune Brainstorm conference I spoke with Michael Capellas, CEO of First Data, which processes about one-half of all US credit card transactions.
He said that the company collects massive amounts of financial data and that this part of the business is just ten percent of revenues–he wants it to be one half of total revenues within the next two years. First Data revenues were $8 billion in 2007.
He said:”I probably know more about what you are likely to do next than you do.”
One of the financial data services First Data is considering offering is to allow consumers to control their own financial reports–these are used to determine credit ratings–which determine interest rates. Those interest rates can vary dramatically based on the financial history of a consumer.
There are three major companies collecting financial data on consumers, these are: Experian, Equifax and TransUnion.
However, many financial records contain many inaccuracies and consumers face large obstacles in clearing misinformation.
Mr Capellas said that he would allow consumers to control the content of their financial data provided that First Data is allowed to verify that information.
Such a product would provide consumers with controls over who they share financial information with, and also it would ensure more accurate financial information backed up with First Data’s verification service. Currently consumers have no control over who accesses their credit reports. Inaccuracies can cost them their jobs and lead to higher credit costs.
However, First Data will have to decide on whether it wants to focus on empowering consumers with greater control over their own financial data and access to that data, or if it wants to sell its data to third parties in a similar business to that of Experian, Equifax and TransUnion.
July 30th, 2008
A glimpse into the future of the Internet
The best panel I saw at the recent Fortune Brainstorm conference was “2018: Life on the net.” The moderator was Quincy Smith, CEO of CBS Interactive. On the podium was Lawrence Lessig, professor of Law at Stanford Law School, Joichi Ito, CEO of Creative Commons and Chairman of Six Apart Japan, and Philip Rosedale, founder and chairman of Linden Lab, (Second Life.)
Here is my video of that panel, I’ve edited it down to save you some time.
July 23rd, 2008
Joichi Ito - from venture capitalist to venture communist?
I’ve become a big fan of Joichi Ito CEO Creative Commons, Chairman of Six Apart after seeing him speak on a panel at the recent Fortune Brainstorm conference. In a room full of many smart people, Mr Ito is one of the smartest.
Here is a clip of Mr Ito talking about the venture capital community. At one point, Vint Cerf, who is sitting in the front rows calls him a “venture communist,” tongue-in-cheek, of course.
He is on a panel that is very well moderated by Quincy Smith, CEO of CBS Interactive. Also on the podium was Lawrence Lessig, professor of Law at Stanford Law School, and Philip Rosedale, founder and chairman of Linden Lab, (Second Life.) I’m editing the video of the full panel discussion and will post it later.
http://www.youtube.com/watch?v=-Ox02qM_yuc
July 23rd, 2008
Intuit cut 575 jobs - is this “user generated unemployment?”
The other day I reported that Brad Smith, the CEO of Intuit, had asked his managers to see which jobs could be cut because there were volunteers among Intuit’s 50m users that were doing a better job — and for free. These seem to be the emerging business benefits from social media - user generated unemployment.
Please see: Will social media lead to user generated unemployment?
Just a few weeks ago Intuit cut 7 per cent of its workforce representing 575 employees. I wonder how much of that was “user generated.” Probably not much, which means more cuts are likely to follow.
Here is an excerpt from Intuit’s press release:
The company plans to focus on both traditional and new markets across the globe, while embracing social networking and mobile technology trends.
[Hat tip Elliott Ng]
July 22nd, 2008
Telcos hurting national interest says Vint Cerf - Father of Internet
I spoke with Vint Cerf at the Fortune Brainstorm conference in Half Moon Bay. I asked him about net neutrality and the problems created by Telcos in trying to own the gateways to the Internet.
Here is the video, the quality is very high contrast because of the lighting but the content is fascinating. Mr Cerf talks about how he was misquoted on the subject of net neutrality and offers a solution to the current issues around broadband Internet.
[Vint Cerf, is currently chief Internet evangelist for Google.]
July 21st, 2008
Updated:Will social media lead to user generated unemployment?
[Updated with video.]
I’m spending a few days at Fortune Magazine’s invite-only Brainstorm conference. It’s an excellent lineup of speakers and the audience is full of top tech industry luminaries.
Brad Smith, CEO of Intuit, was just on stage and he spoke about trying to harness the web and the tremendous number of users, around 50 million.
He said he had asked his managers to figure out what salaries can be cut because users are volunteering to do those jobs for free. Why should Intuit pay salaries when users are doing a far better job than Intuit staff?
Mr Smith said that users are providing better answers to key questions than Intuit staff. He is looking to try to harness that resource in many ways.
Will we start to see user generated unemployment? Is this one of the rewards of social media? Is this a good thing?
Will users stop volunteering their time and knowledge if their work will cause job losses? Especially during a time of recession.
Will Intuit pass on savings in labor costs to users?
What do you think?
http://www.youtube.com/watch?v=graJpc-Bea0
Tom Foremski reports on the business and culture of Silicon Valley and beyond. And also blogs at SiliconValleyWatcher.com See his full profile and disclosure of his industry affiliations.
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