Internet Connected Components

Robert Scoble writes:

What do you call things like Flickr, Microsoft Gadgets, Google Maps, Amazon Affiliate parts?

Ive been struggling to communicate with others what the new Internet ecosystem is made up of and it hit me a few minutes ago.

They are Internet Connected Components.

When you go to Kayak Buzz or ZVents, what do you see? Two ICCs. One is a Google Map. Another is a AdSense bar.

When you go to Dave Winers blog, what do you see? One ICC. Its the Community Directory on the right side that points to an OPML file somewhere else on the Internet.

When you go to Gabe Riveras blog, what do you see? One ICC. Its the Memeorandum box that you can put on your own site.

When you go to Caterina Fakes blog, what do you see? One ICC. Its the Flickr bar to the right side of her blog.

When you go to Naked Conversations, our book blog, what do you see? Two ICCs. One from Amazon and one from Google.

Price as Signal

Joel Spolsky writes:

People have come to believe that you get what you pay for. If you lowered the price of a movie, people would immediately infer from the low price that it’s a crappy movie and they wouldn’t go see it. If you had different prices for movies, the $4 movies would have a lot less customers than they get anyway. The entertainment industry has to maintain a straight face and tell you that Gigli or Battlefield Earth are every bit as valuable as Wedding Crashers or Star Wars or nobody will go see them.

Now, the reason the music recording industry wants different prices has nothing to do with making a premium on the best songs. What they really want is a system they can manipulate to send signals about what songs are worth, and thus what songs you should buy. I assure you that when really bad songs come out, as long as they’re new and the recording industry wants to promote those songs, they’ll charge the full $2.49 or whatever it is to send a fake signal that the songs are better than they really are. It’s the same reason we’ve had to put up with crappy radio for the last few decades: the music industry promotes what they want to promote, whether it’s good or bad, and the main reason they want to promote something is because that’s a bargaining chip they can use in their negotiations with artists.

SaaS Business Models

Amy Wohl offers ideas on how to make money through software-as-a-service:

Advertising: Consumer-oriented SaaS generally is given free to customers. The idea is to build huge volumes of users and then to make money by directing paid advertising to them as the “fee” for using the “free” software. This model has already been perfected by Google and Yahoo and Microsoft is eager (might we say anxious) to join them. While some would call Microsoft late to the market, others, such as tech writer David Coursey thinks the market is so nascent that Microsoft could still come in (as it did with the Internet Browser market) and take over. You can read his thoughts here,1895,1885565,00.asp

A Two-tier Model : ISVs who are offering consumer or small business software for free against an advertising model often hope to convert some of their users to a premium SaaS. This could be as low-key as a small monthly fee for an advertising-free version of the software. But it might be a much more feature-rich version of the product, with lots of goodies,as well as better support reserved for paying customers.

Subscription Models: ISVs who offer sophisticated software to larger businesses are generally not interested in advertising models. They expect to charge for their software on a subscription basis. There are, however, so many varieties of subscriptions that choosing the right one(s) to offer is quite a trick.

eCommerce 3.0

InternetRetailer writes:

Now that it has taken the Internet search market by storm, Google is heading toward capturing the next e-commerce paradigmusing search to buy anything from anyone, anywhere, Safa Rashtchy, senior research analyst at investment firm Piper Jaffray & Co., tells Google will be a Craigslist on steroidsa very potent and dangerous challenge to where eBay wants to go, Rashtchy says.

While eBay has brought millions into online commerce, it is still too complicated for sellers who balk at the listing process and for buyers who dont want purchase from someone located far away, he adds.

Craigslist Inc.s has pioneered a new form of e-commerce, which Rashtchy and others call e-commerce 3.0, that connects consumers with sellers of products and services in local communities.

E-commerce 1.0 was defined by early efforts by dot-coms at excessive branding and advertising, but without a sustainable platform or customer base, Rashtchy says. E-commerce 2.0 debuted with the advent of Internet search, which provided the necessary connection between e-retailers and large volumes of consumers, and 3.0 will take that to a local level.

RSS is Web 2.0 Pipe

Dion Hinchcliffe writes:

Here are some clear, canonical examples that I think convey the full scope of what RSS does for us in a Web 2.0 world:

Notification: Need to inform a lot of people about changes to information? Don’t want central control? Want to enable self-service? Use RSS.

Syndication: Publishing new information regularly? Put it into an RSS feed. This flows out to the world your blog entries, news articles, podcasts, videos, job posts, weather reports, financial updates, bug reports, etc. The software you use should be able to take your information and make it into an RSS feed.

Glue: Need to connect any service to another service on the Web (or anywhere else)? Trying to mash together data? Building supply chains? There is generally no need to ever ask anyone to stand up a new web service. Pull everything you need via its RSS feed.

RSS creates the Web 2.0 information ecosystem by enabling interconnectedness, network effects, emergent behavior, and much more as well. And RSS doesn’t demand control of the other end of the conversation. This is a big enabler all by itself and is a classic Web 2.0 force. By letting consumers of RSS use any tool or service they want on their side, barriers are eliminated and connectivity is encouraged.

On-Demand Update

Irving Wladawsky-Berger of IBM provides an update three years after its launch:

When we announced On Demand, we were convinced that one of the biggest changes coming to computing was in how customers acquired and paid for IT and IT-enabled business processes. This was the logical outgrowth of several widespread changes: an increasingly powerful and reliable IT infrastructure; the continuing acceptance of open standards all the way to the business process level; and the growing economic and competitive pressures faced by every business. In the previously referenced Information Week article Sam Palmisano said: “If businesses are going to become more flexible and variable, they’re going to need more flexible and variable ways to acquire and pay for information technology. A pay-as-you-go delivery model lets [customers] concentrate on their core business and tap into computing resources far beyond what they could reasonably own or manage.”

People initially seized on this concept of “pay-as-you-go” and equated it with On Demand. In the last three years, however, we have gotten past having to defend On Demand as being more than just “utility computing.” There is wide acceptance of On Demand as a state in which every company focuses on what it does best and partners for the rest, in order to remain flexible and to keep adapting to changing market conditions. This major trend has been very well captured in a recent paper from IBM’s Institute for Business Value which said, “In this environment, only specialization – a laser-like focus on the few activities that confer real advantage and profit – will enable firms to deliver full value to their key stakeholder groups of customers, employees and shareholders.”

Network or Content?

Oliver Starr writes: “No one wants a network! (except maybe the network engineers) What they want are clear calls, excellent multi-media, richer applications, faster downloads, quicker online gaming reactivity, better streaming video, crystal clear audio and anything else that a really robust, high bandwidth, flawlessly engineered network can deliver – oh yeah, and REALLY COOL PHONES. People don’t want a network, but they DEMAND the benefits a great network delivers.”

As a consumer that loves mobile phones and the media that makes them so special, I only want a few basic things:

* I want a variety of phones that allow me to do anything the network can support
* I want fair pricing with plans that let me use the system the way I want to without going bankrupt
* I want to be reachable whenever I want to be reached
* I want to be connected anywhere I want to connect
* When something breaks, gets lost or stolen or I need help using it I want to reach help on the first try, quickly, and I want a solution without waiting for a week to get a package in the mail.

Changing Prime Time

Robin Good writes:

Consumers become producers of content, and niche content surpasses by orders of magnitude the value of traditionally labelled commercial television and film.

The value is not anymore in the best seller or in the blockbuster.

The value is in infinite choice of content and in the opportunity for the consumer to see content when she wants it:
prime time is anytime, and anytime is prime time.

TECH TALK: Good Books: Raising Alex

The last book I want to discuss in this series was one given to me by Dr. Aniruddha Malpani. It is Raising Alex: Teaching a Child to Make Smart Choices by Steve Reilly. It is a slim book (100-odd pages) but the messages runs deep. As one who became a father recently, I found it a fascinating read with also the hope that I can use the advice in raising Abhishek.

Reilly writes the book as a parent raising his daughter Alexis. As he mentions in the book, he is not a trained child psychologist he is just Alexs dad. His learnings come from his own mistakes. As he puts it: I have taken the time, however, to think long and hard about the this topic, because I care more about being a father to Alex than anything else I do.

The book is peppered with incidents most parents will be relate to. Reillys handling of these situations is very instructive. Here is one where Reilly and Alex are outside a video arcade (not for the first time).

Again I gave Alex five dollars and reminded her we would leave when she’d used up her money. She ran into the arcade. I watched her from a distance. She was walking around with her bulging pocketful of quarters trying to decide which games to play. (She was trying to determine which game would give her the most tickets – she loved getting those tickets.) The closer she got to using up her quarters, the more intensely she looked around at the games. She was trying to decide. Finally she was down to her last two quarters.

“Which one do you think I should play, Dad?” she asked in frustration.
“I don’t know, Alex. Which game is the most fun and gives you the most tickets?”

She finally decided on Skiball and won a few tickets. Turning to me she pleaded, “One more dollar? Dad, can I have one more dollar? I promise I won’t ask for any more.” “No, Alex. Like I said, when you’re done, you’re done. Let’s go for our walk now … ”

Children need adults to tell them “No.” I believe they often want us to say it as well. When Alex stood outside the arcade pestering me for quarters, tears streaking her face, I think on some level she appreciated my not giving in to her. Those tears might have given Alex more control over her dad, but not over her life.

I admit it was difficult saying no to her and it was tough to watch her struggle with the choices she was trying to make. But that is the dilemma we all face as parents. I love Alex so much it is painful to watch her struggle with her choices. But I would rather help Alex grapple with the choices she makes while she is still young. After all, how many years can we “control” our children? I expect I’ll have Alex’s attention until she is, oh, perhaps twelve years old. After that (maybe even earlier), other influences – her peer group, television, and (God forbid) boyfriends – will begin to outweigh mine. So I figure I had better teach Alex to make good decisions before she turns twelve. Attempting it later on would only frustrate us both.

Reillys discussion in the book focuses around three themes: boundaries, encouragement and consequences. [In fact, as I read the book, I couldnt help thinking that much of what Reilly says also applies in the workplace when we have to manage people.]

Reillys advice is very practical and easy to understand. As he puts it: As parents we want our kids to grow up safe; and yet, we want them to feel loved. But more than that, our children need to develop judgment their own judgment so they can take care of themselves when we arent around. We need to teach our children to get along without us.

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Xbox 360

Fortune writes:

Despite a relatively steep pricetag of $400 for the complete hardware package, an initially sparse selection of new games at a typical hit of $50 each, requirement of a broadband Internet connection, and online fees that can be as much as $8 a month, we expect the Xbox 360 to be the techie toy of choice for gamers this holiday season.

The $400 Xbox 360 “premium” bundle includes the completely redesigned game console; a wireless controller; cables for attaching the Xbox 360 to a TV set; a removable 20GB hard disk; a headset; customized face plates; a monster-size AC power adapter; and a free pass for a basic subscription to Xbox Live, the online gaming network that is rapidly setting Xbox apart from its main rival and the market leader, the Sony PlayStation 2.

To recoup its investment$4 billion is a big ante even for a company with $40 billion in cashMicrosoft has to sell its Xbox 360 as not just a hard-core gaming machine for testosterone-addled men 18 to 34 years old but also as a family entertainment and communications center for boomers, soccer moms, and casual gamers.


The New York Times writes about Shawn Fanning (ex-Napster):

His new company, called Snocap, has produced software that can enable music services to fulfill the original promise of Napster – a community of dedicated fans exchanging a wide selection of music – while monitoring the file-trading for copyrighted works. The new Grokster will still use peer-to-peer technology, which lets users download songs directly to one another’s computers. But when a user tries to get a copyrighted file, Snocap can block the download or force the user to pay for it, depending on what the artist and label want.

IF Snocap catches on – still a very big “if” because only one file-sharing service has signed up to use the software – it will vindicate Mr. Fanning’s passionately held belief that if Napster had been allowed to live, it would have become a legitimate and profitable sales outlet for artists and music companies. After the original Napster closed, the name was sold to a new company that sells licensed music under paid subscriptions and does not use peer-to-peer technology.

“Nobody has ever built a reliable peer-to-peer service, where people can really access all the music they want in one location,” Mr. Fanning said. “Once I got it into my head, I couldn’t imagine the media space without one.”

Laptops for Children

David Kirkpatrick asks: “Nick Negroponte wants to give $100 laptops to poor kids around the globe. It’s a noble goal, but is it feasible?”

Negroponte’s team is seeking not only a technological breakthrough but also a teaching breakthrough. They believe that illiterate kids can, with a little instruction, learn to use computers on their own and then use the laptops to teach themselves to read. After that comes math, historyyou name it. Alan Kay, a Xerox Parc veteran, is working with MIT mathematician and educational theorist Seymour Papert to build software that “watches” each student and makes suggestions. Papert’s “constructionist learning” approach encourages children to reach conclusions through trial and error.

The impediments, needless to say, are numerous and daunting. “Most schools in the developing world don’t even have textbooks,” says Allen Hammond of the World Resources Institute. “How the heck are they going to pay for Internet access?” Even Hector Ruiz, CEO of AMD, which gave $2 million to OLPC, says success will require “developing larger ecosystems around … tech support, application development, training, and business models for the Internet service providers.” Those elements aren’t close to being in place, and Ruiz thinks the laptop’s price won’t drop to $100 for two to three years. Yet even skeptics are loath to pooh-pooh Negroponte’s activism: “If he can pull it off,” Hammond says, “my hat’s off to him.”

Cingular’s Live Ticker

Investor’s Business Daily writes about a new service:

The Live Ticker feature is seen as the latest incarnation of push technology, which was developed by PointCast in the 1990s for desktop computers. Though PointCast’s technology fell out of favor, the idea could work well on cell phones, analysts say.

“Live Ticker fits in well with how people use mobile phones,” said Mark Donovan, analyst at research firm M-Metrics. “The PointCast-type model makes a lot more sense on a mobile phone than it does on a (desktop) computer.”

Cingular’s goal: getting more of its 52 million wireless subscribers to access the Web via their phones.

Blodget on What Microsoft Should Do

Henry Blodget writes:

1) Merge MSN with AOL in the complex transaction described below. Do NOT enter into a “partnership” with Time Warner.

2) Eliminate duplication: development teams, VOIP efforts, content platforms, network operation centers, bandwidth deals, sales forces, call centers, etc.

3) Spin the combined entity off as a separately traded public company, with Microsoft and Time Warner together owning about 70%-80% (but neither having a controlling interest) and the public and other strategic partners owning the rest.

4) Cut broadband distribution deals with cable companies, telecom companies, and wireless companies.

5) Combine the portal infrastructures of AOL and MSN and gradually migrate toward a single brand in each geography in which one is weak.

TECH TALK: Good Books: Big Bang

The last two book recommendations in this series are quite different. The first is the story of how our universe came to be. Simon Singhs Big Bang: The Origin of the Universe. Here is what the Publishers Weekly has to say (in a review on Amazons site):

It was cosmologist Fred Hoyle who coined the term “big bang” to describe the notion that the universe exploded out of nothing to kick-start space and time. Ironically, Hoyle himself espoused the steady state theory, positing that the universe is eternal and never really changes. Former BBC producer and science writer Singh (Fermat’s Enigma) recounts in his inimitable down-to-earth style how the big bang theory triumphed. Readers will find here one of the best explanations available of how Cepheid stars are used to estimate the distance of other galaxies. Singh highlights some of the lesser-known figures in the development of the big bang theory, like Henrietta Leavitt, a volunteer “computer” at the Harvard College Observatory who in 1912 discovered how Cepheid stars can be used to measure galactic distances. Singh shows how the creation of the heavier elements was a major stumbling block to widespread adoption of the big bang until Hoyle (once again boosting the theory that he so fervently opposed) proved that they were created in stars’ nuclear furnaces and strewn throughout the universe via supernova explosions. Readers who don’t need a review of the early development of cosmology may wish that Singh had adopted a somewhat less leisurely pace. But his introductory chapters hold a lot of worthwhile material, clearly presented for the science buff and lay reader. There’s no better account of the big bang theory than this.

On his personal website, Simon Singh writes: I decided to write a book about the Big Bang theory of the universe because it is one of the pinnacles of human achievement. I wanted people to understand the theory and to appreciate why cosmologists are confident that it is an accurate description of the origin and history of the universe. The book is essentially the story of the Big Bang theory. Like any good tale, the discovery and proof of the Big Bang theory has more than its fair share of curious incidents and peculiar characters. The stage was set for a major battle between the two camps Bang Bang versus Steady State. It would take the rest of the twentieth century to resolve the conflict, with both sides desperately searching for evidence to shore up their own theory and crush the opposition. The battle for cosmic truth would involve politics, religion, bitter disputes, nuclear physics, satellites, telescopes, a supposed echo from the Big Bang, and remarkable serendipity, resulting in one of the greatest adventures in the history of science.

Many of us are broadly aware of the Big Bang. Simon Singh takes us into a fascinating journey through the theory and the people who put it to together. ReviewsOfBooks quotes Scientific American: Singh spins out the drama with verve and wit. We meet scientists who are shy and retiring and others with a flair for contention, epic discoveries made serendipitously and beautiful theories shot down by intractable facts, a pooch named Kepler and a persistent pigeon that made its home in the Bell Labs telescope. This is a perfect book for anyone who wants to know what science is all about.”

Tomorrow: Raising Alex

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Media Futures

Seth Goldstein writes about his new venture built around attention:

The emergence of pay-for-performance advertising online has effectively transferred the risk away from the medium. With PPC, Internet media no longer has to convince advertisers to trust its ability to perform as effectively as other media (Cable, TV, Radio, Print). The quality of the commercial transaction is self-evident to the online advertiser, who now inherits all the risk from the publishers.

Just to be clear, the fact that the risk now resides with the advertiser and not the publisher does not a pure market make. Advertisers are companies in the business of selling things to consumers and other companies. Their business is not buying advertising space. And so this remains the final obstacle to a liquid, efficient Media Futures market; namely that advertisers and their agencies continue to look for customers online when in fact they have no pure business doing so.

So if advertisers dont advertise online, how will the market survive, much less prosper? In the same way that the mortgage security market transferred credit risk away from the balance sheet of operators and into the portfolios of professional investors, a media futures market will enable non-advertisers (aka speculators) to take on the risk from the balance sheets of publishers. Publishers will be happy to hedge out their inventory, limit earnings volatility, and focus entirely on creating value-added programming; rather than spending their time speculating whether CPMs are going up or down.

Similarly, companies (ie the buy-side) can concentrate entirely on developing better products and service. Their marketing groups can focus on creating and communicating their brand images, while their sales organizations can simply specify the kinds of customers they are looking for and the prices they are willing to pay; the Media Futures market will take care of the rest.

Mobiles in Africa

[via Textually] Financial Times writes about the revolution that’s happening:

ll across Africa people are investing in mobiles, from slum-dwellers and shoeshine boys to nomadic tribesmen and politicians running election campaigns. A communications revolution is sweeping across the impoverished continent, now enjoying the fastest cell-phone growth in the world.

Yet while the mobile industry has so far enjoyed success on the continent, the revolution is still not complete. Network coverage is often erratic and in some areas it requires a hike up a thorny hillside to ensure a decent signal…Another problem is keeping batteries topped up when many Africans have no access to electricity.

Nokia Symbian Numbers

Roland Tanglao points to a post on Entertainment Evolution:

The numbers below are part of a monthly Forum Nokia report that does a good job of quantifying the opportunity.

* 300 million devices based on the Nokia platform shipped by the end of 2005
* 110 devices
* 50 Java MIDP 2.x enabled devices
(Source: Nokia, November 2005)

* 190 operators worldwide have deployed Java services (Nokia : 2005)
* 708 million mobile Java devices shipped by the end of 2005 (Ovum, June 2005)
* 635 mobile Java device models (Sun Microsystems, June 2005)
* 32 mobile device vendors using Java (Sun Microsystems, June 2005)
* 45,000 mobile Java applications (Informa Telecoms & Media, June 2005)
* Approximately 23 million mobile Java downloads globally per month in 2005 (Nokia, November 2005)

* 25 million S60 smartphones by the end of 2005 * 100 million S60 smartphones by the end of 2006
* 30 S60 devices
* 5 S60 licensees
(Source: Nokia November 2005)

* 200 operators selling Symbian devices
* 39 million Symbian OS devices on the market by the end of 2005
* 54 Symbian OS device models shipping by the end of of June 2005
* 11 Symbian OS licensees have Symbian OS phones under development
* 5000 applications available for Symbian OS devices
(Source: Symbian Aug and Oct 2005)

Companies want to buy Business Process

Tom Foremski talks to IBM chief strategist Irving Wladawsky-Berger:

“Companies want to buy a business process, they don’t want to buy applications,” Irving explains.

This is also the reason why IBM is not in the applications business and has no plans to acquire a big apps company such as SAP, as some of the leading Silicon Valley analysts (Ray Lane) seem to think it should.

“We don’t need to be in the apps business because we can get the apps from others. We pull together the right apps, and the other software and hardware components to create automated, highly optimized business process modules.”

But to become a business process vendor requires the adoption of many industry standards within many different industries–a long, slow process. “Once we have the standards in place, such as agreement on document formats and many other categories, we will then have the building blocks that we can use to build the business process modules.”

Lessons from the Web

[via Dare Obasanjo] ACM Queue has an article by Adam Bosworth:

1. Simple, relaxed, sloppily extensible text formats and protocols often work better than complex and efficient binary ones.
2. It is worth making things simple enough that one can harness Moores law in parallel.
3. It is acceptable to be stale much of the time.
4. The wisdom of crowds works amazingly well.
5. People understand a graph composed of tree-like documents (HTML) related by links (URLs).
6. Pay attention to physics.
7. Be as loosely coupled as possible.
8. KISS. Keep it (the design) simple and stupid.