Archive for January, 2007|Monthly archive page
Markets, markets, everywhere…
Comments (1)In the last 2 weeks or so, there has been a flurry of interesting niche sites on TechCrunch that have piqued my interest.
- Farecast: Airline price insurance
- Price Protector: Price protection alerts
- PicksPop: Pop culture betting
- PicksPal: Sports betting
- SocialPicks: Stock picking
- Gottabet: Bet on anything
- Weatherbill: Bet on the weather
- My Currency: Crowd home & property valuations
- SccopLive: Paparazzi photos
These sites let users either cash in on what they know, or protect themselves from what they don’t. They allow bets and hedges to be placed on outcomes that are difficult to predict and inherently create markets for information.
I have been thinking a great deal recently on the commoditization of information in the Google age. Information that is in the public domain is extremely useful, but also “worthless” in the sense that doesn’t really generate alpha. Roger Ehrenberg of Monitor110 and Information Arbitrage has had quite a few interesting posts on the value of unique information and the commoditization of information within the public domain. He has also based his business around harvesting and, in a sense creating, unique information.
As more and more information becomes free and accessible, more and more value will be placed on information that remains unknown. The sites above create a marketplace for slices of the 99% of the world’s information that is not searchable via Google. Some of these sites may face some rough sledding because their business models require volume and liquid markets to generate accurate and efficient prices. That said, the market value of anything is whatever someone else is willing to pay for it. Services that link parties that have placed disparate values on the same item (a la eBay) are the ones that create effective markets and generate real value for end users.
Poll testing…
I need to do some market research so I have been checking out the various online poll options. I would like something a bit slicker than surveymonkey. We’ll see if I can find it! My search for “web 2.0 polls” brought me to polldaddy.com. It is definitely slick, but I’m not sure I can ask more than one question, which would be a bummer.
Religion and Terrorism in Second Life
Apparently it’s not just the whackos and PR/marketing folks that are involved in second life these days, the economy of which has recently been likened to a pyramid scheme. There are also growing populations of religious groups in Second Life (Muslim, LDS, Catholic, etc.), and not surprisingly there has been a recent flurry of virtual terrorist attacks. I will join SL once Posner is elected its president.
the show with zefrank
zefrank is getting a good amount of press these days. While I think his show today could have been better, you can’t blame the guy for running out of steam. A show a day has got to be tough to keep up. This is one of my favorites (careful, he swears twice):
Another good one in Flash:
Google: Organizing .0034% of the world’s information.
I have been doing some research on information, specifically, how much information there is in general, and how much of that information is searchable and indexable online. This is not an easy number to come up with, and is very dependent on what you choose your definition of “information” to be in the first place. Phone calls, IMs, and emails are produced in huge volume, but only certain portions of that data is actually interesting (e.g.: Presidential phone calls v. my personal email). It seems that questions about the size of the web and the information universe were asked fairly often 4, 5, or 6 years ago when people were still getting comfortable with the net. They would ask AOL “how big is the internet?” and some folks at the time tried to figure it out.
The favored unit of measure for massive amounts of data is the terabyte (this is actually a pretty funny wikipedia entry). A terabyte is the equivalent of 1000 gigabytes, or 1 trillion bytes (10^12). I spent a fair chunk of yesterday afternoon trying to find some sort of reliable source that had researched this in the last few years. I used an interesting service – www.chacha.com – in my search. They have been getting a good amount of press recently, so I thought I would give it a try. You go to the site and are linked with a “search consultant” via IM who helps run your search for you. It seems like they screen Google results and give you what they think is best. They make $0.83 a search but only get paid for the first ten minutes (unclear how that meshes, but whatever). Chacha turned up nothing I hadn’t seen already, but it was cool to try it out. This is what I found:
- Alexa (owned by Amazon): 100 terabyte index
- AT&T: 300 terabyte “Daytona” index of customer data (that they apparently share with the NSA)
- Library of Congress: 136 terabytes
- The “Surface Web” in 2003: 167 terabytes
The most interesting thing I found was a transcript of a speech given by Google CEO Eric Schmidt to the Association of National Advertisers on October 8, 2005. Mr. Schmidt said:
…how much information is there in the world? A study that was done last year indicated roughly five million terabytes. How much is indexable, searchable today? Current estimate: about 170 terabytes. So again we’re back in that two or three percent of the indexed and searchable world.
Takeaways:
1. Google had access to 170 terabytes of data in 2005 surmised there to be 5 million terabytes available. That is not a whole lot of coverage.
2. Eric Schmidt and his speechwriters need to check their math. 170 of 5 million is .0034%, not 2 or 3%.
EDIT: To be clear, I love Google and used it for all the research in this. However, I think the volume of actual information out there vs. the volume accessible via the web is difficult to comprehend and if Google’s numbers are right, they are very surprising.
Also, one could argue that Google might have organized the .0034% of the world’s information that is interesting and applicable…
Use Taxes and the Digital Divide
A commonplace analysis of e-commerce is that shipping costs are often more than made up for by the lack of sales tax. Shippers need not include sales tax within the prices paid for items shipped over state lines, even if the shipper is located in a state that charges sales tax. However, purchasers are generally required (depending on the state in which they reside) to pay “use taxes” which equate to what the sales tax would have been on the items purchased had they been bought in-state.
The truth of use taxes is that they are extremely difficult to enforce and rarely paid. especially for small ticket items. It is very difficult for state officials to determine where a good was purchased without being privy to the actual transaction. The end result of this scenario in the e-commerce world is that sales taxes are dodged and use taxes are not paid.
An ugly question remains: since e-commerce inherently requires a credit card, computer, and shipping address, are tax burdens unfairly passed on to those on the short end of the digital divide? I would be far more concerned about this phenomenon if there were not a bevy of other taxes that can be jiggered to balance the burden. However, this question has become more interesting as people grow more comfortable with e-commerce. I personally know several people that did not set foot in a store this past holiday season…and I doubt they are keeping tabs of the use tax they owe.
Regardless, this is clearly my most boring post to date.
Costa Rica
Just got back from a 5 day trip down to Costa Rica with a bunch of friends from college. Two of them are getting married (not to each other), so we decided to all head down there to hang out. It was amazing! Playa Grande, just north of Tamarindo, is one of the coolest places I have ever been. My legs hurt from surfing…not my arms, my legs. That has never happened to me before. Too many waves! The picture below shows the extent of the crowds the whole time we were there…Not to shabby 
The trick was to bail over the top before you got munched. Do this 80-ish times and I guess your legs get sore. I’m OK with it! Now I’m back in Chicago limping around with a big smile on my face.
weatherbill
TechCrunch had a post on an interesting company a while back. Weatherbill will apparently let people bet on the weather. I guess this will give the online gambling community something to do when the gambling execs come back to the US from the Bahamas to visit their moms and they get arrested.
iPhone suit follow-up
Here’s an IP attorney that thinks iPhone is too commonly used to be held by anyone. That is a possible outcome, although if Apple makes that argument and they really did try repeatedly to buy it from Cisco, they will have significantly undermined their position. This will be interesting. If I were Cisco I would be pretty pissed right now.
Cisco sues Apple over use of "iPhone"
This is pretty interesting. Cisco holds the tradmark “iPhone”, which they acquired when they bought Infogear a while back. There is actually already an iPhone and according to Cisco, Apple knew about it and repeatedly asked them if they could buy it. It will be extremely interesting to see what comes of this. Either Apple will try to say that “iPhone” is too much like “iPod”, etc. and Cisco is ripping them off by selling something that consumers could perceive to be an Apple product, or they will settle. Since “iPhone” isn’t an actual word in the english language, it is a strong trademark, “i” aside.
Edit: Apple told MarketWatch that they think the Cisco suit is “silly”. They contend that lots of companies have used the “iPhone” name for VOIP phones and that Apple is the first to use it for cell phones. It seems possible that the mark has been used widely enough that it is not protectable…it seems very unlikely that the distinction between a VOIP handheld phone and a cell phone are great enough such that consumers would not be confused between them and the USPTO would see a valid difference.
Technorati, Google Blog Search & DMOZ
Technorati has this thing to put into your blog so it shows up on Technorati. So I’m putting it below. Good times.
I think Google blog search works way better, btw. but to register with Google. I’m pretty sure to “claim” your site with Google you have to submit to DMOZ (the open directory project), which has been down recently.
Edit: Ha! Once I registered I got this awesome stat from Technorati: Rank: 2,445,365 (0 links from 0 sites)
Lawyer CEOs
There is an interesting read in today’s Journal on lawyer CEOs (sub. required). It seems like every time a lawyer ends up in a prominent CEO position, these articles pop up in various places. My take on it is that lawyers are just like every other type of professional: some make good CEOs and some don’t.
A good lawyer, engineer, accountant, or salesman that ends up in a CEO position should to be self-aware enough to realize what their inclinations are and how they can rationally correct for whatever sub-optimal tendencies they have. It is easy to concoct a mental image of a stereotypical lawyer-CEO whose concern with contractual details, potential liability, privacy policies, etc. drowns out any entrepreneurial spark they had going for them. However, it just as easy to think of similar scenarios for engineer-CEOs (hung up on features, no business sense, etc.), accountant-CEOs (overly concerned with receivables, terms of financing, etc.), and sales-CEOs (focused on selling the product, not developing or financing, etc.).
My guess is the reason there is so much “Lawyer CEO!” press is that lawyers are far more maligned than accountants, engineers, and salesmen.
When Firms Turn to Lawyers
WSJ; January 10, 2007; Page A11
When people get in trouble, they often turn to lawyers. So I guess it’s no surprise that companies do the same.
The latest examples: Home Depot and Pfizer.
The two companies share top billing in the CEO pay-without-performance Hall of Shame. Their former chief executives, Bob Nardelli and Hank McKinnell, each walked away with roughly $200 million in parting compensation, after failing to deliver a penny to their shareholders. The boards of both companies then turned to lawyers to clean up the mess.
The folks at Pfizer insist Jeffrey Kindler’s law degree (Harvard, ’80) had little to do with his selection as the company’s new CEO. At Home Depot, where the top job went to Frank Blake (Columbia, ’76) — a friend and former General Electric colleague of Mr. Kindler — a spokesman says there’s a difference “between having a law degree and being a lawyer. Basically, since 1998, Frank’s been out of the lawyer mode.”
Still, this trend in the corporate world is hard to ignore. Lawyers seem to get called in when companies have serious legal troubles, or when a charismatic leader leaves behind an unmanageable muddle. When then-New York Attorney General Eliot Spitzer lowered the boom on Marsh & McLennan, the board dumped Chief Executive Jeffrey Greenberg and replaced him with lawyer and Spitzer buddy Michael Cherkasky (Case Western, ’79). After Time Warner‘s Gerald Levin brokered the disastrous merger with AOL, he fled the company, leaving lawyer Dick Parsons (Albany, ’71) in charge.
There’s clearly some sense to this. Lawyers are trained to foresee risk, making them well-suited for times of trouble. Perhaps more important, they understand what it means to be a fiduciary, acting in trust on someone else’s behalf. Messrs. Nardelli and McKinnell clearly failed to grasp that basic tenet of public-company leadership.
But some see this trend as one more cause for concern about the direction of the business world in the post-Enron era. “It’s a sign of the times,” says Philip Howard, a lawyer himself and a relentless crusader for legal overhaul who wrote the book “The Death of Common Sense.”
“We’re more concerned with legal compliance than with getting the job done. If you have an economy where people circle the wagons and try and prevent anything bad from happening, the economy will suffer.”
Can lawyers make good CEOs? One man struggling to show he can is Chuck Prince (USC, ’76) who became chief executive at Citigroup in 2003 after spending years as consigliere to his predecessor, Sandy Weill. Mr. Weill built Citigroup through mergers and acquisitions. But his far-flung empire was filled with cowboys, whose relentless pursuit of profits got the company into a succession of scandals. In response, the Federal Reserve shut down Citigroup’s growth machine, prohibiting the giant bank from making any more acquisitions until it cleaned up its act. (The prohibition was lifted last year.)
That left Mr. Prince with little choice but to focus on creating a new culture of ethics and compliance. In an interview two years ago, he told me that today’s CEOs are given little time in their jobs, and as a result he could only hope to accomplish one or two big things. Changing Citigroup’s culture, he said, “is job one.”
Now, Mr. Prince wants a shot a job two: restoring growth. His shareholders, however, are getting impatient. Last fall, they balked as the company’s expenses grew faster than revenue, and as rivals like J.P. Morgan Chase and Bank of America offered better shareholder returns. A number of analysts downgraded Citigroup’s stock. In an eleventh-hour rescue effort, Mr. Prince appointed a new chief operating officer to focus on costs.
At a meeting with analysts on Dec. 14, he made a lengthy and spirited argument that the company would resume solid growth and profitability in 2007. The market responded, and Citigroup’s stock rose to $55 from $49 in the final month of the year. “We scored in the last three minutes of the game,” Mr. Prince told me last week.
Still, the fall flap put Mr. Prince on notice: He has to do better this year. “I will succeed or fail, not on what happens with compliance,” he said. “I will succeed or fail on whether this enormous battleship can get up to” speed.
Like Messrs. Kindler and Blake, Mr. Prince believes his legal training is irrelevant. As long as he remains focused on the goal of expanding the company, he says, “whether you are a lawyer or a plumber — it doesn’t make a difference.”
Meanwhile, those who worry that the turn toward lawyers is a sign of public companies’ poor health can take some comfort from this: They aren’t yet turning to priests.
iPhone + Schmidt + Jobs = crashed Blogger
Blogger, the blogging platform run by Google that I use for this blog, crashed right when Eric Schmidt, CEO of Google joined Steve Jobs on stage at MacWorld to help him announce the iPhone. I guess that combo is a little too much heat for the blogosphere…
iPhone…
This is going to be everywhere in 45 seconds, but damn it looks pretty cool. Runs OSX, huge screen. Wow.
HavenCo and the Principality of Sealand
I am studying e-commerce jurisdictional issues and just stumbled across HavenCo. HavenCo is a server farm on an abandoned British anti-aircraft platform in the North Sea, called “Sealand“.
Ryan Lackey, HavenCo’s chief technical officer, says the company, which spent the summer upgrading electrical power and air conditioning on Sealand, has more than 30 servers up and running, connected to the mainland by satellite and wireless service, and hopes to expand to as many as 5,000.
He says the company has fielded “several thousand” sales inquiries. “The big thing people really want is e-mail servers, because in the past people have been getting their e-mail servers subpoenaed,” he says. He adds that HavenCo would only comply with subpoenas issued by the Court of Sealand. “But there’s no Court of Sealand, so it’s very unlikely.”
A picture of Sealand:
Wow.
Edit: Pics of the inside of Sealand here.
Edit2: Wikipedia on Sealand.
Google + CBS…..+ Apple TV?
So NBC and Google announced yesterday…that they will announce today at CES…that NBC will be going straight to the net with some of it’s prime time shows, a move foreshadowed by the uncensored SNL release of the JT “D*ck in a Box” skit last month…
The word is that Apple is going to be releasing the iPhone tomorrow. Apparently it will have two batteries – one for music and one for the phone – I’m sure it will be sleek and snazzy as well. However, I would be far more interested in an Apple TV. A phone will certainly shake things up in the telecom world a bit, especially if there was some sort of VOIP capability, but an Apple TV would be pretty wild. They could easily put Mac Mini (or the yet to be released iTV) hardware into one of their high quality huge flatscreens, and bam, you would have your music, podcast, youtube, DVR and DVD/hometheater hub. I guess you would still need a set-top-box to get your cable/satellite, but who needs a STB when networks going straight to the net?
The market for the works of Richard Tuttle
I went to the Chicago Museum of Contemporary Art yesterday and saw two very different but very interesting exhibits. The first showcased sustainable design and the innovative materials and designs that are being used to create green architecture. This was extremely interesting in a technical and social sense. The second exhibit, which dominated the museum, was the work of an artist named Richard Tuttle.
I had never heard of Tuttle before I saw this exhibit…his work is “interesting” to say the least. In fact, the most interesting thing about his work is it’s intention to make you wonder if it is interesting (or if it is anything) in the first place. Several of his pieces were singular thin metal wires nailed to white walls. Others were just pieces of plywood. We were confused at first, to say the least, but fortunately we saw a video interview with Tuttle in one of the exhibit halls. He was looking at a piece of painted wood and wire attached to the wall of his studio and asked the interviewer if he thought the stuff was junk or art. Tuttle then said he wasn’t sure himself, but that “there was something preventing him from throwing it away, so it must be art.” The video went on to interview an old couple from New York who were Tuttle collectors. They loved the stuff and presumably paid lots of money for it. A little search on the web reveals that there is in fact a significant market for his work.
Although it was interesting to wonder whether Tuttle’s work was art or nothing at all, it is amazing that this man has created a huge market for little pieces of wood and wire that he for “some reason” doesn’t think he should throw away.
What is something worth? What someone else is willing to pay for it!
First one…
OK, here it goes. The primary goal of this blog will be for me to have a good time posting about things that interest me in tech, law, markets, and stuff on the internet. The secondary goal of this blog will be for me to not shoot myself in the foot by creating a public, permanent record of my thoughts to the world.
Wish me luck!
