Limits of Peer Production

Nicholas Carr writes: “Peer production works well for manifold, time-consuming tasks that don’t require a lot of coordination among workers but that it’s not going to help you come up with a great new idea or give a product the kind of polish that often creates a hit in the market.”

Evolution of Advertising

HipMojo writes:

eBay and Amazon were masters of transactional commerce, and this helped paved their way to rich market caps in the late 1990s. Yahoo! followed suit as the portal to the Web, garnering ad revenue. As the ad market changed, Google pioneered clicks better than anyone.

Whats next? Well, while many are quick to call for the demise of the pageview, the truth is that the pageview is still king with media planners and buyers. Pageviews, in fact, drive ad impressions and as F500 advertisers and global ad agencies spend more money online, they wont be giving up the impression metric.

Clearly, Facebook is becoming king of the impression, and user time spent on a site.

Lastly, it could be argued that the next holy trail in online advertising is average time spent on a site per visit. If that pans out to be true, then there is a lot of upside for Facebook.

Search Market Analysis

Don Dodge concludes that 1% of the search market share is worth over $1 Billion.

Each 1% of search market share is worth over $100M in revenues – Here is the math. There were 7.3 billion searches performed in March of 2007. One percent of that is 73 million searches times $0.12 revenue per search or $8.76M per month. That translates to $105.1M in annualized revenue.

The stock market values 1% market share at over $1 Billion.

Phones as Computers

WSJ writes about the Nokia N95:

Phones are adapting to the changing way that we interact — with each other, and with the Web. Smart phones used to be all about productivity, just as the Web was — handling emails, recording appointments, juggling administrative tasks while on the move. But most gadgets these days are about multimedia. You can take photos. You can listen to music. You can send email. I think what is happening, and what Nokia has realized, is that this stuff has now gotten to the point where we can nearly all do it, and want to do it. The connections are getting faster — most 3G connections can handle uploading a photo without too much effort (or expense). We’ve gotten used to sharing our photos on sites like Flickr.com, and many of us keep blogs. So the software that makes this happen now comes as standard on phones like the Nokia range.

There’s no denying a phone like the N95 makes doing all this, if not a pleasure, then at least less of a frustrating chore than it would otherwise be.

TECH TALK: Black Swan: Book Excerpt

Here is an excerpt from Nassim Talebs The BlackSwan (via 800-CEO-Read):

Just imagine how little your understanding of the world on the eve of the events of 1914 would have helped you guess what was to happen next. (Dont cheat by using the explanations drilled into your cranium by your dull high school teacher). How about the rise of Hitler and the subsequent war? How about the precipitous demise of the Soviet bloc? How about the rise of Islamic fundamentalism? How about the spread of the Internet? How about the market crash of 1987 (and the more unexpected recovery)? Fads, epidemics, fashion, ideas, the emergence of art genres and schools. All follow these Black Swan dynamics. Literally, just about everything of significance around you might qualify.

This combination of low predictability and large impact makes the Black Swan a great puzzle; but that is not yet the core concern of this bookThe central idea of this book concerns our blindness with respect to randomness, particularly the large deviations: Why do we, scientists or nonscientists, hotshots or regular Joes, tend to see the pennies instead of the dollars? Why do we keep focusing on the minutiae, not the possible significant large events, in spite of the obvious evidence of their huge influence? And, if you follow my argument, why does reading the newspaper actually decrease your knowledge of the world?

It is easy to see that life is the cumulative effect of a handful of significant shocks. It is not so hard to identify the role of Black Swans, from your armchair (or bar stool). Go through the following exercise. Look into your own existence. Count the significant events, the technological changes, and the inventions that have taken place in our environment since you were born and compare them to what was expected before their advent. How many of them came on a schedule? Look into your own personal life, to your choice of profession, say, or meeting your mate, your exile from your country of origin, the betrayals you faced, your sudden enrichment or impoverishment. How often did these things occur according to plan?

Black Swan logic makes what you dont know far more relevant than what you do know. Consider that many Black Swans can be caused and exacerbated by their being unexpected.

Our world is dominated by the extreme, the unknown, and the very improbable (improbable according our current knowledge)and all the while we spend our time engaged in small talk, focusing on the known, and the repeated. This implies the need to use the extreme event as a starting point and not treat it as an exception to be pushed under the rug. I also make the bolder (and more annoying) claim that in spite of our progress and the growth in knowledge, or perhaps because of such progress and growth, the future will be increasingly less predictable, while both human nature and social science seem to conspire to hide the idea from us.

Tomorrow: Reviews

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