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January 31st, 2007, 04:05pm
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Chad Hurley states (appropriately captured in a YouTube clip here) that YouTube intends to start paying users for videos. “In terms of paying users revenue against the content that they are uploading, we are definitely going to move in that direction”. He goes on to state that when they set out to create YouTube they “didn’t want to design a system that was based around monetary rewards, but a true community around video”. The logic being that creating a community where contributions are driven by monetary incentives leaves you susceptible to another higher paying offering popping up and stealing your user base. Hurley feels that YouTube now has the appropriate size and community to make the transition.
I believe the real factor may well be that Google is now in the mix. YouTube will now be able to take advantage of the complex engines that Google has created to monitor its ad business. Google AdSense Director of Product Managment Brian Axe was recently on Showmoney (listen to the podcast here) and one of the things he was discussing was the involvement of the AdSense engine in monetizing video content. The idea is that video creators on YouTube will be paid for uploading useful content and compensation will most likely take place using the AdSense model and existing account system. Brian remarket that the synergies between Adsense and YouTube make sense and “there is still a bit to build out, but video will likely be another media type in AdSense.”
The major issue that I feel is being glossed over is fraud the potential for “video fraud”. If Google and YouTube can somehow solve the enforcement of digital copyright (so that you can’t make money by posting/reposting others content for your own gain) they might just be on to something. YouTube has talked about new “media fingerprinting” technology that will enable original artists to profit when their intellectual property is being used or repurposed. Now I am not sure whether or not that this is feasible (and if it works it’s not easy to hack), but if anyone can pull it off its Google.
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January 31st, 2007, 09:58am
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If you want want to see an example about how powerful customer co-creation can be, I encourage you to enter the Second Life virtual community. Here some two million residents (of which about 100,000 are regularly active) engage with each other in a variety of ways - playing, talking, trading, etc. But what really distinguishes the place is that the residents of Second Life create almost all the content, rather than owner and initial developer Linden Lab. Key to this is the 3D modelling tool that allows skilled residents to build virtual buildings, machines, clothing, and a variety of other things to trade and sell in Linden dollars. Linden dollars, by the way, are pegged to the $US dollar and some of the most successful residents are now very, very real millionaires, tapping into the 140,000+ people (according to Second Life records) that spent money in Second Life during December alone.
A variety of companies have been engaging in and with this community over the years, but just yesterday Sweden announced they will be become the first country to actually set up an embassy on the site, run by the Swedish institute, which will be primarily an information portal for the country. Could your company, government agency, or simply you benefit from a similar presence in this ever-changing world?
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January 30th, 2007, 09:06am
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How big is today’s “machine audience” for content?
That’s the question that came to mind when I stumbled accross an interesting article about writing for search engines this morning. It’s one of a growing number of examples I’ve seen lately of content tailored to “machine” audiences. People are not only writing content for search engine spiders, but microformats embed information (like machine-readable calendar entries) into the web, and printable 2-D barcodes called QR Codes that are popular in Japan give machines the ability to read data in the real world using a cameraphone (see pictures of a sample QR code below). Bluetooth is yet another example.
That one was for wikipedia. Here’s another that points to a mobile version of the wikinomics blog I just created using Kaywa (thanks for the comment to this post Roger):
This strikes me as interesting, because we’re not used to thinking of non-human “audiences,” but that’s already changing. The “machine audience” for your web page (search engine crawlers) already decides whether your site goes to the bottom or the top of the search engine listings - ignore that audience at your peril. Web writing itself has taken on new and peculiar quality as a result - the focus on keyword density just reads slightly odd to us humans. Machine intelligence still has a long way to go before it’s capable of things humans do effortlessly on a daily basis. But the fact that we’re already catering to this audience at its current level of sophistication suggests that 15-20 years from now, the machine audience could be the one that matters most.
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January 28th, 2007, 09:45pm
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Wikinomics readers in Toronto may be interested in the following BarCamp get together this coming Sunday February 4, 2007. It’s organized by a network of Toronto bloggers who are keen to help the local transit authority improve many aspects of its operations, starting with its dismal web site. If you’ve lived in Toronto most of your life (like I have) and depended on the TTC to get around (like I have), you’ll probably appreciate what this is all about.
An ad-hoc gathering at the Gladstone Hotel of designers, transit geeks, bloggers, visual artists, tech geeks and cultural creators passionate about transit in Toronto and the TTC. It is a platform for Toronto’s talented design community and enthusiastic transit users and fans to demonstrate their creativity and contribute to a better way for Toronto’s transit system. The content and ideas generated in this open unconference will be delivered to the TTC for their consideration in their work.
Also note what the event is not about:
We will not be changing bus schedules, talking about stop locations, complaining about creaky infrastructure or otherwise telling the TTC how to do its core business. The organizers respect that there are many hard-working, dedicated and experienced professionals in the TTC who have been able to accomplish remarkable things for this city’s transit infrastructure over the years under very difficult resource constraints.
Thanks Mark!
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January 26th, 2007, 05:14pm
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But on Amie Street (a new music service) you won’t find business men in suits setting prices, instead you’ll find hundreds of musician’s songs for sale for a price the user dictates. The popularity of a song determines the tracks value. When a song is first posted on the site it’s free, that right FREE. The first couple people to download the song get it free of charge so they can sample the song and recommend it to others. The more people who download a song the more expensive it gets, with tracks maxing out at $0.98.
Amie Street thinks of it self more as a social networking site that enables music discover than a digital music store. Recommending or ‘REC’ing a song, as it’s called on Amie Street is how the site encourages users to discover music. If you REC a song you’ve downloaded and the song goes up Amie Street will put the difference into your account. For example if you REC a new song when its at lets say 10 cents and it goes up to 70 cents you get the difference (60 cents) put back into your account.
Aside from the pricing and discovery system there are two other aspects to their approach that make the site fundamentally different from most other offerings. First they don’t use any DRM (digital rights management) which means when you buy the song you can use it however you choose (what a novel idea). Second, they feel that artists should get their fair share, so they give them 70% of the proceeds from each sale (Amie Street does keep the first 5 dollars to cover costs after which the 70% rule applies). The site is still very young and the music selection is not great, but the collaborative user centric approach Amie Street has taken alone makes it something worth following.
The only thing that is missing is a song IPO, but perhaps that is in the works if the site wants to start integrating established artists into the mix?
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January 26th, 2007, 03:06pm
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The lessons of Wikinomics apply not just to corporations but to every institution in society. Arguably, those most in need of the approach we advocate are the institutions of democratic government.
The Web 2.0 provides myriad ways for people to interact and collaborate, and yet the vast majority of our political systems still revolve around a one-way, broadcast model. Every four years, candidates tell you something (and often that something is simply an attack on their opponent), you vote, they go do stuff, tell you about it, and then come back in four years to tell you why they should stay. I for one think that this process does not live up to the intentions or fulfill the potential of democracy.
People often wonder why today’s kids aren’t engaged in politics. Most people assume that today’s youth are apathetic. I’d argue that today’s kids actually care deeply about the world; it’s just that politicians don’t know how to engage young people in a dialogue about the issues that matter to them. State legislator for Utah, Steve Urquhart, is an exception. Through his new site Politicopia.com, people can post and edit information about legislation under consideration in Senate. When colleagues complain about not liking what people have said about their bills, his response is simple - “that’s not my problem.” As he says on the site, this is an experiment in open democracy, and one that’s’ been a long time coming.
The truth is this hardly a new idea. When Bill Clinton was still in the Whitehouse, my company New Paradigm discussed the idea of creating an “open forum for America” where every citizen could engage in a meaningful conversation a key issue (the digital divide) online. Clinton was going to say something to the effect: “we’re not sure what’s going to happen here, and we’re not sure where it’s going to go, but we’re going to engage in a democratic process of consensus building like never before.” Unfortunately Clinton got tied up in the Middle East and he never got to execute his plan before leaving office, but it was a great idea then and it remains a great idea today.
While there may be some hiccups along the way (any open forum is subject to risk of people abusing it), this is an interesting and natural evolution for democracy. In fact, using wikis to formulate policy is just one of many options. Blogs, jams, citizen juries, and digital brainstorms are ripe for the picking. We just need more politicians like Steven Urquhart to sit up and take notice.
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January 25th, 2007, 04:52pm
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Here’s an interesting article about how a computer simulation run 10,000 times has determined that while Peyton Manning and the Colts will win Superbowl XLI, they will not cover the spread. For those scoring (betting) at home, Accuscore predicts that the game will come down to the wire with Indianopolis prevailing by about a field goal.
What struck me as interesting was the methodology: they don’t just base their simulations on player statistics, but consider many different factors. From the article…
”We don’t input any stats into our engine,” [COO Gibby] McCaleb said. ”I can’t go into too much detail because of our intellectual property, but we actually play the game one play at a time.
”Stats are completely misleading. Weather, field position, score, time on the clock, coaching tendencies — you name it, it’s in there. This is why our simulation engine is so complex and takes days to run a full NFL season.”
It’s a far cry from how the engine originally was conceived.
”In studying evolution, I worked on … simulations where a population’s segment of DNA was modeled one generation at a time,” Oh said. ”Each generation [featured] things like mortality rates, birth rates, mutation rates and population movement rates, which were used to simulate how each generation ‘lived.’
”To determine what these rates are, we reviewed extensive research by geneticists, mathematicians, archeologists and anthropologists. The evolutionary program would use the average rates and variability to simulate a single generation. It would then simulate the same sample for a predetermined number of generations and output how this population looks ‘genetically.”’
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January 24th, 2007, 11:39pm
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Great article in Slate magazine about evidence that the NHL rigged the scoring system to over-ride the grass-roots campaign to elect journeyman defenseman Rory Fitzpatrick.
The article describes that after dismissing the fans as “computer geeks”, the NHL.com site set up security systems to block automatic voting. The problem is there is many flaws and using obvious tags like 1.gif as a visual marker is an insulting “challenge” to a tenacious hacker.
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January 24th, 2007, 09:37am
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Today Yahoo just emailed its keyword advertisers to tell them about some changes in the structure of its auctions and how ads will be displayed. Also briefly mentioned here and here. Specifically:
“we are introducing a new ranking model in the U.S. that considers an ad’s quality and bid amount. …Both bid amount and ad quality will determine an ad’s rank in search results”
While that sounds pretty low-key, it’s a hugely significant move. Yahoo is moving its auction much closer to Google’s model, a very tough but necessary decision that’ll have a major impact on their entire ad network and potentially cure some of their woes. While it may upset a few of the advertisers who like Yahoo’s current model, it’s a good decision that should’ve been made a long time ago.
Here’s what it’ll probably mean:
- More revenue for Yahoo (and affliates) from its traffic. High bids that don’t result in clicks are a waste of traffic, this new model will help weed them out.
- Improved ad quality. Individual advertisers aren’t always rewarded for high ad quality. This new model helps ensure that good quality ads are rewarded, so the quality of Yahoo’s ad network overall should improve.
- New business model opportunities. Auctions based on BOTH price and click-thru rates mean that there’s an equivalent CPM value for every keyword term. This might be worth exploring in a separate post, but if you have a $/click and a click-thru percentage - then you can calculate Cost Per thousand impressions. Up to now, only Google could do this, and it meant they were the only ones who had a keyword auction that could price ads using CPM. It was a strategic advantage, and now Yahoo has closed the gap.
- Less differentiation. Now that Google and Yahoo’s auctions are more similar, there’s fewer reasons to choose one over the other. On one hand, that probably means there will be less arbitrage on ads between Google and Yahoo (e.g. paying for advertising on one ad network to bring traffic to a landing page on the other), but it might also cause some advertisers to pick a single network. It would have been better if Yahoo not only took the best features of Google’s network but added important new innovations to put them a step ahead.
Other things it’d be nice to see from Yahoo in the future (forgive me if they already have some of them, I haven’t followed all changes):
- Remove minimum bids on all keyword terms. That’ll create more “ad innovations”.
- Remove some of the aggregation that occurs between keyword terms (e.g singluar and plural forms of a keyword). While aggregation creates stronger bidding and higher prices (because it increases demand for those keywords), it decreases precision - that precision is critical to higher ad quality and long term advertising innovations.
- Focus on conversions/ROI. Why not leapfrog Google by auctioning based, not just on quality and click-thru rates, but on actual conversions and sales figures to help determine ad ranking and placement.
So short term, the changes Yahoo made might create turbulence among existing advertisers, but in the long term they were very necessary decisions to maintain the health of Yahoo’s ad network. It’s a good time to launch something new since, as John Battelle said, the bar for Yahoo already has been lowered.
Good for you Yahoo, it was about time! Hopefully this is a sign of other great things to come.
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January 23rd, 2007, 09:59am
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NOTE: Whoops, I take it back. Please read update at bottom
Ginko Financial just hit its first 100 million in deposits. While the money is in Second Life’s digital currency (Linden $), at today’s exchange rates those deposits are worth $372,500 in real USD currency. While $300k is chump change for any real bank, it’s a surprisingly large amount to put into an entity that includes the following warning on every page of their site, “Ginko Financial and its affiliated businesses are not registered in any way with any governmental organization. Not warrented[sic], guarenteed[sic], or insured.”
The fact that even a modest number of people have chosen Ginko Financial’s buyer-beware virtual bank over a government-insured physical insitution is incredibly interesting. Something unusual is afoot here. Banks might take interest in this development, not because of the miniscule $ amount, but because this unusual home-grown bank illuminates entirely new markets and service possibilities.
UPDATE: Looks like I should’ve read this article by Reuters Second Life first. Sounds like Ginko Financial could be just a Ponzi scheme (a charge denied by the owner). Certainly, claims of 44% annual interest, and the owner being unwilling to disclose his real name, should arouse more than casual suspicion. If this is just another pyramid scheme, the inevitable collapse won’t bode well for future financial experiments in Second Life. Disappointing to say the least. Hopefully banks will NOT pay attention to this particular example/system, but I’d still like to see more exploration of financial service possibilities in SL.
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January 23rd, 2007, 09:13am
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Google just filed a patent in Dec 2006 for a system and method of “Allocating advertising space in a network of displays”. It’s a compelling idea given the $US 7.4 billion spent on outdoor advertising in the US. This latest move is one of a series of events that suggests Google has its sights set on real-world advertising. Not only does Google Maps/Earth pave the way for location based advertising, but in 2004 Google was also one of the first keyword search companies to partner with a local telephone directory.
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January 22nd, 2007, 05:42pm
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One of the great things about the new business environment is that we’re starting to see a lot of experimentation with different models for organizing creative/commercial endeavors that rest on various degrees of openness, peering, and sharing. The really interesting models are the hybrid ones where project/business leaders manage to blend mass collaboration with a viable revenue model (of course things will get even more interesting when business leaders learn how to share revenue with contributors!). Last week, our colleague Lawrence Lessig took a step forward in categorizing these various hybrid models/approaches with an analytical model of his own.
The model is simple 2X2 matrix that identifies four distinct models for organizing creative endeavors based on whether or not the project invites external participation and whether project is a non-profit or commercial venture. He’s looking for help finding examples that fit into the four quadrants, and having taken a quick look at the matrix myself it looks like there’s a healthy list of examples. The matrix is on a wiki, so you can add to it if you’re inclined. For more info, see Lessig’s blog.
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January 22nd, 2007, 02:44pm
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Interesting article in the Wall St. Journal today…
Will the Digital Era Change Writing?
…that discusses whether the trend towards releasing single songs rather than albums will manifest itself in the publishing industry. After all, why buy an entire book if you are interested only in one chapter? Personally, as an avid non-fiction reader, I’ve found that many times I would have preferred a 30 page version of a 200 page book. With fiction, it become a bit trickier. An author (as artist) may resent having his or her work not being presented in its pure form just as AC/DC and Led Zepplin have resisted iTunes because they want their music enjoyed only in the context of the entire album. But perhaps, a reader is only interested in combat scenes, love scenes or the passages where Holmes explains his conclusions to Watson.
Sounds odd? With the power of the long tail, we might be suprised with how people consume content given options and flexibility.
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January 22nd, 2007, 01:39pm
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The teams for Super Bowl XLI have been decided, and whether or not your team is playing or not you will no doubt be watching. Watching the commercials that is, and whether you catch them live, or like most Canadians have to clamor to find a complete compilation on the net the following day, they are 9 out of 10 times more interesting than the game itself.
This year there are some interesting things going on surronding Super Bowl ads. Doritos for example has invited users to ‘Crash the Super Bowl’ by creating their own Doritos commercial. The winner of the contest will have their 30 sec spot aired during the game. Rather than creating the commercial themselves Doritos has decided that perhaps their customers might just be a little more in tune with what other Doritos lovers might enjoy watching. The contest has just closed voting, but you can go and view all of the commercials here. My personal favourite out of the finalists is ‘Mouse Trap’.
Switching gears from open and collaborative to closed and hierarchical we can talk about the NFLs commercial selection. After the infamous wardrobe malfunction aka Nipplegate, the NFL has been absolutely paranoid that the content played during the Super Bowl is above board. GoDaddy.com who first gained recognition for their rather provocative ads during previous Super Bowls are now posting ads which have been deemed inappropriate to be aired during the Super Bowl on their site. The have already had two ads shot down by the NFL and are currently cooking up a third. For those interested you can view their latest failure ‘I own you’.
It would be interesting to see if the NFL would deem a consumer generated and selected ad like the Doritos ‘Check out Girl’ commercial inappropriate for airing during the Super Bowl. However, I imagine the NFL would tread more lightly with the Doritos consumer base than that of a domain name registration company. Correct or not, I assume the NFL feels they have more synergies with the first group of customers.
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January 19th, 2007, 05:30pm
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Having worked with some of the strategy and intellectual property folks at IBM over the past few years I’ve come to regard them as some of the most progressive and thoughtful people on the planet when it comes to rethinking the nature of intellectual property system and fixing the ailing patent system. IBM recently launched a site called Reinventing the Invention System that collects some of their latest thinking on intellectual property. It’s well worth taking a look at if you care about the future of invention and innovation.
Among other things, look out for the “peer to patent” initiative that was developed an external collaborator Beth Noveck. In a nutshell, Noveck’s thought up a way to apply the “wisdom of crowds” to the patent review process in a bid to boost patent quality. You may also want to check out IBM’s IP manifesto, Building a New IP Marketplace. This document was developed in collaboration with 50 world leading IP experts who spent a few days sharing ideas on a wiki. The manifesto brings together many thoughtful recommendations that, if implemented, would go a long way toward fixing some of the perversities of the patent system.
Here’s an excerpt:
A knowledge-based economy depends upon innovation around products of the mind or intellect. Thus, capturing value from intellectual capital and knowledge-based assets is critical to success. Competition is not for control of raw materials, but for the most dynamic strategic asset:“productive knowledge.” Finding ways to help innovators with this increasingly important practice has become an explicit agenda for many governments.
Historically, the economic activity generated by the exchange and valuation of physical goods has been supported by functioning marketplaces that provide transparency of ownership, integrity that creates a stable environment, and mechanisms that enable valuation based on the principles of an open market.
As economic focus shifts from physical goods to intangible assets in the 21st century, many agree an analogous supporting marketplace needs to be developed. This new system must abide by the same principles of certainty and trust that are found in any flourishing marketplace, while accommodating the unique attributes of knowledge-based assets and dynamics of the intellectual property market.
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January 19th, 2007, 04:24pm
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We often talk about how the internet has lower transaction costs and become a key enabler in globalization. Unfortunately, there are other aspects of the web that make it the ideal breading ground for organized crime. Marcus Sachs, a researcher at SANS Internet Storm Watch tells us how the web provides elements important to next generation criminals “Near-total anonymity, multiple ways to launder money, enormous amounts of value and wealth, extreme complexity, few laws and fewer law enforcement experts, and millions of users who have no concept of what is going on inside their shiny new computer.”
Savvy Internet users are familiar with phishing scams and botnets but to the casual web browsers are far to often fooled. As this type of activity is becoming increasingly coordinated and well funded, it is only going to become harder to distinguish what’s safe. The most recent example is the arrest of those running a 1.5 million node botnet by Dutch Police. While only three men were arrested for their involvement maintaining the system, officials say “They have followed the money, and concluded that the trio worked with the Russian Internet mafia.” The mafia was using the passwords and banking information discovered by the botnet to steal from users online bank accounts.
Organized crime has gone so far as to start using ‘digital cash’. The RCMP, FBI and DEA have “identified gift cards and prepaid debit cards as one of the tools in the financial-crime kit of organized crime.” Criminals see it as a stealthy cash equivalent. The average police officer won’t suspect that a half dozen prepaid credit cards in your wallet are holding 25,000 dollars tonight’s drug deal.
While interconnected criminals leverage web 2.0 and increasingly push technological boundaries in an effort to evade authorities, law enforcement officials, for the most part, remain tied to hierarchical and bureaucratic systems. The use of YouTube by Hamilton Police to investigate and make an arrest in a murder case is a step in the right direction, it’s just a start. The officers involved stated “they believe it’s the first time law enforcement has used YouTube as a direct investigative tool.” Sophisticated criminals organizing million node botnets to steal banking information is hardly comparably to police posting a video of a crime on YouTube, one has to hope that good will triumph in the end …
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January 19th, 2007, 03:05pm
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Many people wonder if you can use wikis for serious business. Well, you can’t get much more serious than the United States Intelligence Agency, and through Intellipedia - a closed wiki community for the 16 agencies that comprise the U.S. intelligence community - they have done just that.
As of October last year, the Intellipedia site (which is obviously closed to the public) had 3,600 users and 28,000 pages. The hope for the wiki is to “revolutionize the prevailing culture” of the community, where a lack of collaboration prevented them from “connecting the dots” on serious issues in the past. It’s also been described as a way to “move (them) away from homogenized intelligence.” I would argue that there are a lot of companies that could break out of their own internal silos by doing a similar thing.
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January 17th, 2007, 06:12pm
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A few weeks ago I blogged about the fact that too few government agencies were leveraging their enormous stores of data in ways that could contribute directly to the public good. While leaders in the non-profit community are coming up with brilliant data-based Web applications such as scorecard.org and NKCA, the vast majority of government data sits behind impenetrable bureaucratic silos where only a select group of policy analysts can access it.
In part, the lack of initiative may be attributable to a failure of imagination. It most certainly has something to do with the fact that governmental data is scattered across many different agencies in irreconcilable formats and databases, making it hard to extract and combine in useful ways. Of course, there are also legitimate concerns about privacy and security. Above all, making good use of data is hard to do. It takes great creativity and skill to put data into graphical formats that non-experts can readily understand.
One person who is well ahead of the curve is Hans Rosling, a Swedish professor who runs a non-profit called Gapminder that specializes in using public data to expose global inequalities. His website is loaded with interacive flash applications that illustrate a wide range of human development issues. I also recommend you take a look at his talk last year to the TED forum.
In a world of Web services, we should really be following Rosling’s lead: let’s open up public databases and make them searchable and “mashable” so that more people can participate in creating Web-based applications that demonstrate how the world is changing around us. I predict that the pay-offs measured in terms of knowledge-creation and advocacy would be enormous. Whether politicians will be eager to support this is questionable, after all they would no longer be able to hide behind a veil of obfuscation!
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January 17th, 2007, 05:23pm
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Google has recently unveiled a suite of new services called Google Apps for your Domain. Google Apps allows a web domain owner to provide email, IM, calendar services as well as build websites and start pages. The beta service is free and is hosted on Google’s hardware and software.
As the first market, Google chose to targeted educational institutions with their large and computer savvy Net Gen user groups. Arizona State University was one of the first to sign up. Students kept their “asu.edu” e-mail addresses, received 2G of space and are able to tag and search their email as well as organize and share events in their calendars. It has allowed the university to shift their IT resources to other projects. Other universities and small businesses have signed up to the service since.
Google Apps looks like a disruptive strategy to enter the enterprise computing market. Google can test and refine the product on a less demanding yet sophisticated user group (such as students) allowing the company to later expand into mainstream corporate computing. Although, software as a service is far from a new concept, Google’s experiments should have the types of Microsoft, Oracle and SAP worried.
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January 16th, 2007, 04:27pm
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If you visit blogmaverick.com, where outspoken owner Mark Cuban is prone to rant on any number of given subjects from the state of the NBA to Donald Trump, you probably know by now he’s not all that enthused about Google’s acquisition of YouTube - something about never ending lawsuits, and a pile of fake porn and commercials. But it appears he is all over the wiki movement, as Mavswiki.com has just been launched as a place where, to paraphrase Cuban himself, “… fans (have) a great way to share their Mavs experiences with us and other fans.”
Given Mark was not only a successful entreprenuer before the dot com era, and then sold the company he developed (broadcast.com) during it for about $5 billion in stock in the dot com bubble, and was smart enough to diversify out and retain $1.8 billion in wealth after the dot com crash, and has a variety of other successful ventures… lets just say it’s well worth paying attention to what he does.
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