Looking Back

In the ensuing 6 years, I’ve been going over and over what went wrong and discovered more lessons along the way: the market conditions were wrong, we were young and arrogant, and, for the most part, we didn’t really understand the magnitude of what we were trying to accomplish: to remind people, our goal was to launch a website in 16 countries (15 EU countries + the US) on day one, localizing our site for each of them. At the time (1999), no one had accomplished that broad a coverage (nor had anyone even tried to).

So it seemed a little crazy but, then again, crazy people had built Netscape, Yahoo, Ebay, and Amazon in the previous few years. So crazy seemed not only possible but it seemed to be the key to success on the Internet. The problems we encountered fell in a number of areas: currency exchanges, tax issues, language localization, integration with many fulfillment partners and a front-end experience that called for broadband connections. We basically wanted to build eCommerce 2.0 long before there was a web 2.0.

Looking Forward

So fast-forward to now. Broadband uptake is nearing 50% in many of the target countries and the number of users has grown tremendously, governments have learned about internet ecommerce and now have specific rules relating to it. And integration across many system is what web services and mash-ups are all about. Do I smell progress? So let’s revisit my old post (which later was published in Business 2.0) points and look at them through the 2006 lens.

The Currency Problem

Back then, the 16 countries we targeted meant 16 different currencies.

Today, with the rise of the Euro as a unifying currency, the same 16 countries only have 4 different currencies (the UK still being stuck on the pound sterling and Denmark keeping its currency a national one pegged to the Euro. The US and the Euro are the other two currencies covered.) This greatly reduces the complexity of pricing models across Europe and makes the overall cost of managing the catalog much lower.

Back then, we actually had to build our own currency tracker, with people inputing the exchange rates daily into the system to keep everything aligned.

Today, you can get access to currency exchanges via web services (just off the top of my head, I can think of Reuters and CBS Marketwatch providing this type of data), therefore automating what was once a manual task and, once again, reducing administration costs for the catalog.

Tax Issues

Back then, there was no consistency in the way taxes were assessed on goods sold online. The financial people at Boo.com version 1 spent a lot of time with a big 5 accountant group and a lot of local government to lobby for normalization of rules around taxes on cross-border business.

Today, because all of those governments understand the value of internet commerce and because many have worked in conjunctions with each other (through the G8 and the EU) to normalize rules surrounding taxation of goods sold on the Internet the problem is easier to solve.

Back then, we had to build our own systems to track all the vagaries of the different tax systems. It wasn’t a build vs. buy decision because there were no packages offered on the market to deal with this.

Today, you can buy software packages that has all the taxation rules built in so that problem is no longer one you need to build for. You can just buy the technology and let the vendor worry about the changes in taxation laws.

Language Localization

When we set out to build Boo.com, a strong component was the idea of offering the online store in the local language of the user. Boo.com was actually the first store to offer as high a level of customization by market and we had to make a number of changes to the e-commerce software package to make it into a globalized platform. Remember that, at the time, e-commerce was primarily the domain of US and UK companies so selling in a language other than English was rare. E-commerce sites which sold goods in non-English markets were generally customized on a one off basis but no one, prior to Boo.com, had attempted to have a single back-end system run multiple countries.

Today, more vendors are selling solutions which can be customized across a variety of western languages. The solutions are not yet perfect but, for the most part, they work (there are still a number of issues when it comes to localization across 2-byte languages, especially when it comes to site with mixed languages.) Back then, we also had to develop a content management system that could handle translation workflows and management of content in multiple languages. It wasn’t pretty but it worked and it required a lot of internal translation to happen. Each product had description, sizes, etc… available in multiple languages. That part was actually a fairly large management of content nightmare. Today, modern content management system can handle more complex workflows (allowing to track when translations are completed) and even can provide hooks to farm-out translation of the content to external parties. This substantially reduces the cost of a multi-country offering.

Integration with fulfillment partners

Back then, a fair number of people at Boo.com were experts in EDI (or electronic data infrastructure) because EDI bridges were the only way to integrate into our fulfillment partners. Web services didn’t exist so we had batch jobs triggering every hour to the warehouses at DeutchePost and UPS so they could pick, pack and ship the orders. This was expensive and probably the area where we lost the most money on a single transaction.

Today, services like fulfillment by Amazon provide the same service at a substantially lower cost and with less integration headaches as web services are making it easy to integrate their services into an e-commerce operation. That saving alone could justify the existence of Boo.com 2.0 (actually, it would be 3.0 as FashionMall tried to resurrect Boo.com once already).

Front-end

No discussion of Boo.com can be full unless we talk about its front-end.

The Broadband Penetration Problem 

Many people laughed at the attempt we made at creating a more user friendly interface to e-commerce. Back then, a more interactive experience meant using Flash. It was the only way to get a lot of parts moving together. Things like Zoom-In/Zoom-out or Rotate type of effects were hard to accomplish with DHTML and much easier to do so with Flash. Since XML didn’t exist, we didn’t have AJAX. Since we didn’t have AJAX, we went with Flash. Since we went with Flash, the assets were large. Since the assets were large and the average user was connecting via a 56k modem, the site looked slow.

The idea was that every click should feel snappy, a model now common with AJAX-based applications but we failed in one assumption, which is that broadband penetration would move at a faster rate. Our expectation were that 1Megabit lines (much slower than what one now gets via cable or DSL) would be readily available within a year. That was a very flawed assumption and we had not planned any contingency for any slower a deployment.

Selling clothes requires details

Another interesting challenge was that we were trying to sell clothes online. Evaluating a DVD, CD, or book online is easy. However, clothing is different: when people shop for clothes, they like to feel the fabric, look at the details in the fabric. That experience was hard to reproduce online. Back then, what we set out to do, in order to help mimic some of the experience was to have highly detailed pictures of the goods. 

Every product was shot multiple times at a stunning 5 megapixels per picture (the highest possible resolution at the time). This meant picture files that were about 1–2 Mb per file, something that seems small in the era of Flickr and YouTube but was massive in the era of 56k modems. The advantage of such detailed pictures was that you could zoom in to a level higher than what you could do in a store (part of our attempt to compensate for the fact that you couldn’t touch the merchandise). Today, such level of detail is standard among most of the online clothing manufacturers and with more broadband lines, it’s no big deal.

Another innovation we introduced was the presentation of products in 3D. You could basically rotate every product in our inventory any way you wanted. This, at a time when QuickTimeVR was not on the marketplace. This meant getting our photography partners to come up with completely new approaches to taking product shots, sometimes requiring as many as 15–20 shots per product in order to get everything right. Those pictures were then taken into Flash and adjusted so that you could rotate the product and zoom in and out of it, a feat that now seems pretty standard, using QuickTimeVR.

All that photography work didn’t come cheap, especially when you consider that this was done across 5,000 products and that all the assets were then stored on our servers (Hard Drive space was nowhere near as cheap as it is now). 

Modeling

Another innovation was the introduction of virtual models you could use to try the clothes on. Today, Sears offers a lower quality version of what we were offering back then (their model still requires a reload of the full page to turn it.) Because all the products had 3D equivalent, modeling them was relatively easy and we decided to throw it in as an extra feature that helped enhance the user experience. Once again, because of the processing and bandwidth required to make that happen, the idea was ahead of its time. 

Miss Boo

So we now all know that chatty avatars on web sites are not a good idea. The concept behind Miss Boo was to help make the experience similar to that of a store, with a sales assistant (Miss Boo), helping you out. Our long term goal was to have Miss Boo attached on the back-end to a real person so we could have integrated IM while you were shopping (that plan never came to fruition as the company had other concerns after launch). In the process, though, we’ve learned that avatars are generally despised and probably helped many sites avoid them.

Tagging

Because we wanted the experience to be a more communal one, we had a way for users to tag clothing (well, we didn’t call them tags, we called them “LaBOOls” (labels, with a Boo in the middle, get it?) in the great tradition of badly named things on our site). However, because there was no AJAX or other way to quickly get the data back and forth, it required a reload of the whole page after each tag was applied. The feature was quickly killed in order to gain speed but I can’t think of any other site that had tagging on products at the time (if I’m wrong, please rectify me in the comments).

Chatty Tone

The BooZine (Boo Magazine) was our attempt to create a more friendly, open tone when dealing with users. We didn’t want to be just a store, we wanted to engage the users. When our forums (remember, this is before blogs were popular) started filling up with vitriolic comments, we were forced to shut them down, closing a channel of communication for users to us. It was a real shame but I think our attempt can be mirrored in the way most web 2.0 companies now have a blog that they use to receive feedback from users.

A more mature market

Back then, few people were buying stuff online. Even fewer were buying clothes online and an even smaller number than that was buying hip clothing. Considering all the challenges Boo.com was trying to address, its target market was just too small to make it a successful business.

Today, blogs like CoolHunting, HypeBeast or MocoLoco show that there is a market for the types of goods Boo was trying to sell. That, in itself, could be a good reason for Boo.com to come back: The market they were addressing is finally there. However, it may also be a reason for it to not comeback: the market they were addressing now has competitors in it.

Was Boo.com the first Web 2.0 company?

I have to admit that I’ve been feeling a certain level of uneasiness about Web 2.0: to me, there didn’t seem to be much there that I had not seen before: web services (yup, done since 2000), user generated content (tried it in a limited fashion with with the “labools” and forums), more transparency (tried that with forums in the past), chatty tone (attempted at Boo). What I failed to realize is that where we failed was in the way we implemented things. But looking back now, the reason it didn’t feel new was that much of that experimentation was on our site only, not part of a more widespread phenomenon.

Another thing that got me thinking along the way of Boo.com as a Web 2.0 company was the excellent post on Pixel Acres about the visual design of web 2.0. Let me explain, picking points from the article:

Integral to Web 2.0 is harnessing the input of website visitors. Users can generate content for a web service, promote it in a “viral” peer-to-peer fashion, and improve it’s data quality through their opinions and preferences.

Users of Boo could create their model, share it with friends (following the UGC model, I guess). So the input component was there, as was the sharing one.

Most Web 2.0 sites come across as friendly, approachable and small-scale, using subtle design decisions to gain our trust.

Every decision about the front end was to make it appear friendly, chatty and hide as much of the complexity as possible (that’s why so many people thought what we were doing was easy but badly implemented).

Bright, cheerful colors dominate Web 2.0 sites… Bold primary colors suggest a playful, fun attitude and also help to draw attention to important page elements.

One word: orange. The boo.com site had cheerful colors all over the place (sometimes so cheerful that I worried it would be seen as a toy)

Rounded Everything: The friendliness of rounded corners is in keeping with the comfortable, informal tone of many web 2.0 sites… In a great FontShop article analysing the logos of Web 2.0, it was clear that rounded typefaces are all the rage. This smooth approach to type lends a modern playfulness to a company’s visual identity.

Yup, Boo.com was round, very round, even the logo and the fonts. From a visual standpoint, it was much closer to today’s web 2.0 site than the ones it lived among.

Most Web 2.0 sites devote prime real estate to the message that they offer a free service.

Well, we kept pushing our “Free” boozine (Boo Magazine) and looked at it as a way to hook people into coming back again and again to the site.

You won’t find any stock photography of smiling support staff on a Web 2.0 site — that’s a tactic favored by small companies trying to mimic large corporations. Simple icons and screenshots are the order of the day when it comes to imagery on Web 2.0 sites. 3D and beveled icons can lend elegance and polish to a page design that is otherwise fairly stark.

Boo.com was 100% stock photography free. It was all icons and cartoons.

A good Web 2.0 app ought to be lightweight and easy for users to grasp, and clever visual design and copywriting can help remove barriers to entry. Smart use of layout, color, type and copy can go a long way towards easing the pain.

Well, we failed on the lightweight end of things but the design was to be as airy as possible.

As far as Web 2.0 is concerned, bigger is definitely better. Bigger text, that is. Large text is easy on the eye, and coupled with snappy copywriting makes information easy to absorb. And now that accessibility is cool, it’s possible to be a hotshot web designer and use enormous type.

… and back then, people said we didn’t make good use of the real estate because the fonts on our screens were too big. However, note that accessibility was inexistant at Boo.com

The layout of Web 2.0 sites might be described as minimal. With a focus on legibility and ease of use, good use is made of white space. White space allows important information to stand apart, provides rest for the eye, and imparts a sense of calm and order. Generous leading also makes text copy easier for the eye to follow. Some Web 2.0 layouts are so minimal that they verge on boring, but designed well, an uncluttered page can be incredibly tasteful.

Yes, we had a lot of whitespace.

Friendly, informal copywriting allows a more personal relationship with website visitors.

People complained that our content was too informal, actually. I guess taste has changed in the following years.

So, from a visual standpoint, we may have established some of the rules that are now considered good visual rules for Web 2.0 companies. Of course, feature wise, we didn’t have RSS (it had not achieved the level of popularity it now has) and worked largely as a walled garden (all interaction happened on our site) but Boo.com was probably sitting closer to a Web 2.0 sensibility than most companies that existed at the time.

Conclusion

Based on past history, the complexity that existed back then has largely disappeared, making it possible for Boo.com to exist in the web 2.0 world. The market has also evolved to the point where many of the innovations first introduced by Boo.com are now considered mainstream and where many of its barriers to entry seem to have disappeared. This means that Boo.com could have a chance at surviving this round. However, one would have to be careful about overspending on advertising (a crime that Boo.com was responsible of, with its massive multi-country ad budget). A question that remains on the viability of the brand is whether the errors of the past have damaged the brand to a point where it would not be able to come back. It is probably the most dangerous factor in the rebirth of Boo.com and, if the negative press of the past overshadows the re-emergence of this company, it could be a fatal flaw that could ultimately make this a bad idea.

I wish much luck to the parties involved in the relaunch. Hopefully, they won’t suffer from the same arrogance we suffered from in the first iteration of the company and will be able to build a strong business around this brand.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Why the Boo.comeback makes sense. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

It all really started when, in a discussion about video, Mary Hodder mentioned the words “community standards”. For some reason, those two words launched a whole new set of thoughts in my mind. In the early 90s, when I was in journalism school, I took a class on censorship. One of the interesting things our teacher highlighted was the idea that there was a grassroot movement appearing around the country to censor certain types of books. He highlighted some basic efforts at the time to remove books about evolution from high school bookshelves in the southern United States and how those efforts seemed separate initially but seems to pop up like mushrooms in different places to represent a cohesive whole. What they were pushing for was a change in each of the communities to the community standards in terms of assessing such material. While predicting the larger political fight over evolution of a decade later, our teacher highlighted to us how community standards were formed.

In the United States, the concept of community standards was established as law in 1973 when the US Supreme Court, in a case called Miller vs. California established that speech or other form of expression could be deemed obscene if a substantial portion of the local community, considered the average member of that community, considered it though. This opened the doors for many challenges to some form of speech.

Enters the Internet

Applying this type of standard was easy when the community could easily be located within a set of geographic boundaries. However, with the rise of the Internet, the gegraphic boundaries have dropped. Theoretically, a piece of content, once put on the internet, is available to all communities around the world. I say theoretically because many countries have found ways to block certain types of content they consider objectionable by forcing users in their country to go through proxy servers. Furthermore, some countries, like China, have had enough political muscle to force companies like Google to self-censor.

However, the more technologically advanced users can find a way to get around these types of restrictions and have access to the content, whether their government wants them to or not. Where it gets interesting is when one starts dealing with a virtual world. Of late, SecondLife by LindenLabs, has been getting a lot of attention. Looking at their site, it seems they have set up their own community standards for what can and cannot happen in the world of SecondLife. The question, however, is whether any of those terms could withstand a court challenge. As I look at cases like the China and Google case, or the rise of virtual world, I am starting to wonder how laws will be established to govern the internet. The question is what legal regime should apply to the Internet as a whole. Should we look at the most restrictive standards avalaible and comply to those, thus greatly reducing the value of net content as a whole? I doubt such approach would work as it would require a global agreement on such restriction and would probably give rise to data havens, located in countries that would refuse to sign on to such standards. A lot of Internet traffic would move to those countries, depriving countries adopting a highly restrictive model from realizing revenue in terms of hosting and traffic. Alternately, the net could adopt the most open type of standard, leaving some countries to ban the net outright, for fear that their users/citizens would have access to content they find objectionable. Ultimately, I suspect that rules will fall somewhere in the middle. As far as to how close to either end, it will depend largely on what lawmakers are willing to do.

Online World = Private Spaces

In essence, the issue becomes one of frictions between governments and private interest. When a company like LindenLabs establishes community standards for their space, it is akin to a private corporation establishing what amounts to law for what sits on their servers. The next question is what physical laws can apply to those server. If, for example, you were to take a user who lives in Europe spending some time in the SecondLife universe, what laws would apply to that user? European ones? American ones (based on where the server is located) ? Or something else? Under the current regime, it appears that these types of things could generate some frictions. What if, to take a more extreme example, a user in a country were to play in a virtual world located in a country his own government considers an enemy (for example, US and North Korea). What if that user were a productive member of the community, generating money in the virtual world on the servers of a country his government bans trade with? Would the hosting government or the user government be allowed to cease those assets? Similarly, what about speech? Could a user’s speech in a virtual environment be threatened because it does not meet the requirements of that company (in a fashion similar to suppression of speech in US shopping centers because they are private properties, could we see users of myspace being banned for saying things that do not align with what NewsCorp considers proper speech?)

Because virtual worlds are largely private communities, run by corporations, it seems that those scenarios are likely. When one injects sources of revenue in those communities, the potential for lawsuit is large.

A coming crisis

As Danah Boyd pointed out in a recent paper (paper seems offline, portion of the content I’m referencing is here):

Teens have increasingly less access to public space. Classic 1950s hang out locations like the roller rink and burger joint are disappearing while malls and 7/11s are banning teens unaccompanied by parents. Hanging out around the neighborhood or in the woods has been deemed unsafe for fear of predators, drug dealers and abductors. Teens who go home after school while their parents are still working are expected to stay home and teens are mostly allowed to only gather at friends’ homes when their parents are present.Additionally, structured activities in controlled spaces are on the rise. After school activities, sports, and jobs are typical across all socio-economic classes and many teens are in controlled spaces from dawn till dusk. They are running ragged without any time to simply chill amongst friends. By going virtual, digital technologies allow youth to (re)create private and public youth space while physically in controlled spaces. IM serves as a private space while MySpace provide a public component. Online, youth can build the environments that support youth socialization.

In the early 90s, I was tuned to the addictive nature of such space, when I spent a fair amount of time on LambdaMoo, the text-only grandfather of places like SecondLife. What it did was not only get me addicted to a game but changed my purview on virtual versus physical space, making the virtual as comfortable as the physical. As I moved from location to location for work, my virtual community was always in the same place. As such environments become more immersive, a whole generation will grow up seeing little boundaries between the physical and virtual spaces. Already, word has spread of people spending large amounts of time in those virtual worlds. If the proper legal system is not in place when those people grow up, frictions between the physical and virtual worlds will become the subject of front-page articles.

Establishing a baseline

I believe that some type of global agreement or directive will have to be set in the near future to establish how laws will work in the online world. Something similar to a General Agreement on Policing Online Communities (GAPOC), which would initially follow the same type of process that was established to establish such global rules as the Berne conventions on copyright or the GATT, would probably be a good place to start. Establishing a set of agreed upon principles as to what can and can’t be done in terms of policing online communities would help different countries then modify their own legal process to deal with this emerging phenomenon. I don’t really have any particular answers as to how such things would be done and will leave it to the legal scholars to figure out but am I the only one feeling that this is an upcoming issue?

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Where Virtual and Physical meet. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Broadband penetration

Broadband penetration will continue to increase in the United States and Europe. Large scale deployments of city-wide broadband efforts in several large cities will start making internet access similar to phone or electric service, widespread and the type of thing few people think of. On the bleeding edge of the Internet access development world, some large scale networks, most probably coming from phone companies, will break the 10-Mbps barrier and close in on the 100-Mbps speed, making internet access on par with regular local network access.

The downside of this widespread deployment of high-speed internet access will be in the phone industry, where next generation (3G) rollouts of high speed wireless networks will prove costly and offer lackluster service considering its high price. This will force a drastic reduction in prices towards the end of the year or early 2007, in an attempt to recover some revenue from the large investments.

Implications of increased broadband penetration

The increase in broadband penetration will have several large implications, including the rollout of more voice over IP services, video services, and the infrastructure security.

Voice Over IP

Voice over IP will continue to see widespread deployment and large phone companies will start migrating their full networks to IP-based traffic. This will make VoIP the primary form of telephone communication for wired lines by the end of 2006, though few people will be aware of the change as it will largely happen behind the scenes, not touching people’s independent system.

Telephony services will increase as the VoIP phenomenon continues to increase. Expect early efforts in video telephony to start rolling out and becoming more mainstream towards the end of the year. Also expect to see the rise of wireless devices that can bridge the gap between computer and regular telephony, providing access to the network in a number of different ways.

Video

Video over IP will be very hot in 2006, with several major changes in the industry. First will be the announcement, by Apple, of its new mac-mini intel-powered platform designed specifically for the living room. Following on the success of the iPod, Apple will market the device less as a computer and more as a video consumption tool that will include stunning high definition resolution and will offer direct access to the iMedia store (formerly known as the iTunes music store) where one will be able to download movies and TV shows, as well as content created by amateurs.

Google, in partnership with AOL (and its sister companies within the Time-Warner world), will offer a pay-per-view system, mirroring some of the iMedia store offerings. The system will be available both in the AOL closed garden client (where it will use some level of acceleration to speed up delivery) and on the web through a new client package offered by Google and largely developed by the AOL client software team. The strength of the move will generate enough positive buzz for AOL that Time-Warner will be able to spin-off the unit and will be considering an IPO towards the beginning of 2007.

Seeing their advertising revenues eroding, TV stations will start offering more content online, also sponsored by advertising. New types of online video ad insertion and tracking system will be created by several companies, with Google, Microsoft, and Yahoo! offering aggregated model based on something similar to Google AdWords but offering not only targeting based on keywords but also based on certain demographic information.

New video aggregators will start appearing, offering a way to customize your own TV station. Some will be acquired by the major portals (unless the portals themselves have already developed that capability by the time this trend manifests itself). Meanwhile, Tivo will recast itself as one of those portals and will be acquired by Microsoft and merged with MSNTV (unless it is acquired by Sony, and merged with the PlayStation 3, or Panasonic, and kept as a standalone.)

Having lost in the bidding war for Tivo, Yahoo! will decide to acquire NetFlix and merge it with some of its video offerings, providing not only distribution of DVDs but also online streaming of content.

On the strength of revenues from online ads, some small cable or local TV stations will start offering their complete programming slate online, for free, and adverting supported. This will rankle a few of the cable companies and syndicators who looked to those companies as another revenue stream. Meanwhile, on the same basis, most local TV news will be available online for free through an advertising supported model. During one major story, a local TV station’s feed will compete with the national networks in terms of reporting, as more viewers flood its website than watch the same story unfold on television.

The competition for those types of stories will continue to increase, as citizen journalism provides raw unscripted video of events. Videocasting, following on the success of podcasting, will start seeing some traction with a few podcasting and vidcasters signing deals with traditional media. Traditional media will look at it as an interesting set of development but one that ultimately won’t be trusted by the public because they do not have the right seal of approval; their prediction will turn out to be wrong.

Infrastructure

The rise of broadband and the increasing numbers of basic services running on the internet infrastructure will give rise to fear that the infrastructure is under-protected. From a technical policy viewpoint, electronic infrastructures will become a major national security matter with fears that the very openness of the internet could represent a large security risk. This will be seized upon by the network providers (phone companies, cable companies) and some security consultants as a way to push for policy that will allow those incumbent communications services to administer their networks with tighter control, with decision as to what they are willing to let run on the network and what they are not willing to. A subsequent battle will ensue as VoIP companies and media companies will complain about the network providers squeezing them out. No decision on any of this will be made in 2006 but the debate will continue through 2007 and beyond.

Growth and Scalability

2006 will be an explosive year in the Web 2.0 sphere. Explosive because it will see triple if not quadruple digit growth in number of users but also explosive because it will see several popular sites unable to deal with the capacity issues relating to that explosion.

On the RSS end, the explosion in growth will really start when Internet Explorer 7.0 becomes a priority upgrade on windows stations. The inclusion of some RSS feeds as defaults in the browser will prove to be too much for some sites which had not expected the onslaught of millions of new hits. Readership from RSS readers will increase as more users realize that they can get their favorite sites delivered to them instead of going out and checking to see if they are updated.

As more people discover RSS, more of them will start valuing blogs and many will start their own. However, the concept of becoming a professional blogger will decrease as many people who thought they could make money off their blog will find that the effort in doing so was higher than they had expected and will abandon their blog.

Meanwhile, other web 2.0 subjects will fail: Tagging services like del.icio.us will be see as too complicated by the general public (although they will continue to thrive in the more geeky world) but tagging of pictures (as in Flickr) will continue to grow. Most blog networks will fail to attain the amount of traffic required to play seriously in the advertising world and will be forced to either merge or shut down. Meanwhile, companies offering only a set of web services with the idea to generate revenue solely from advertising may find themselves in a bind as advertising revenue will fail to grow at the same pace as the new offerings.

Implications of Growth

The explosive growth in traffic see during 2006 has implications across a number of players in the blogging world and metadata space. It also has implications in terms of scalability, business, and trust.

Blogging, podcasting, vidcasting

As blogging takes better hold in the mainstream (your parents WILL be blogging), the number of subscribers per individual blog feed will drop into the low teens, with blogs being read by close family members and friends only. A few breakout blogs, specializing on particular narrow subjects will manage to increase their readership but the world will largely consolidate around less than 1,000 major blogs: of those, the vast majority will not be from any members of the Technorati 100 or any other such list. The vast majority of those mainstream blogs will be the ones created by mainstream media outlets, which will use their existing reach to heavily promote their own blog.

Radio stations will increasingly start offering podcasts and TV stations will offering vidcasts. Most, however, will do so through centralized hosting capabilities provided by their parent companies. Smaller podcasters and vidcasters will have a hard time to compete with those larger companies as they are forced to look into ways to support their own bandwidth costs and will sign contracts with hosting services promising a share of advertising revenue in exchange for doing the hosting: that share will largely go to the hosting service with many podcasters/vidcasters finding they are not really making more than a few 100 dollars a months from all their hard work.

Crash and Burn

One of the hosting services will crash in a major way, taking with it a few days worth of the hard work of thousands of people who were hosting on it. The provider will initially recover but suffer a subsequent crash that will seal its fate as a doomed company. The majority of its users will leave and join one of the larger hosting services provided by Yahoo!, Microsoft, and Google.

Beyond the hosting world, scalability will also be a hot buzzword as more services, ranging from RSS hosting providers like FeedBurner to search engines like Technorati and Feedster to analytics providers like Google and MeasureMap will experience temporary failures and growth pains.

The cost of upgrading the service infrastructure will be too much to bear for some companies, which will be forced to shutter their door, sell out, or merge with a similar service. Meanwhile, many web-based service companies will fail to generate enough advertising revenue to continue upgrading. A flurry of mergers and closures will happen over a few months, leading people to wonder if this is bubble bust 2.0.

The downside of all those fears about a bust will be in the increased number of negative stories about technology in the mainstream media. Stories will mention the hubris of web 2.0 founders and will showcase Google as a typical example of this hubris, highlighting its free lunches and other things that were thought cool in 205: As a result of all those negative stories (and others but more on that later), Google will loose several billions (possibly even tens of billions) of dollars from the high of its market capitalization, shedding anywhere from 10 to 25 percent off its high.

After the consolidation, there will only be one or two independent players in each of the following (notwithstanding the fact that there will also be offering from the bigger portal players): blog hosting , vlog hosting, podcast hosting (WordPress and Typepad will either be the two in these three sectors or will have merged), blog search, social networks (speaking os social networks, Yahoo! or Microsoft will buy LinkedIn (if it’s Microsoft, LinkedIn will quickly be integrated with Outlook and offer Plaxo-like features).

Meanwhile, a sector which will have been decimated will be tagging. Following slow adoption by the mainstream, largely due to the complexity of adding tags to pages, many tagging companies will fail. Tagging, as a concept, however, will remain and be adopted by most major search engines: as Metadata entry is simplified with the introduction of Windows Vista and Office 12 (both of which will be delivered by Microsoft to a relatively lukewarm market), and tagging becomes a browser feature, it stops being a differentiator.

Trust is hot topic

Fear of Google knowing a little too much about people will bring a slate of bad press for a company that was the darling of the mainstream media in 2005. The introduction of its Google finance service, hooking up into people’s bank accounts and payments systems will be seen as the company becoming too large a player, with fear of it becoming a monopoly. The backlash will first start in silicon Valley, with many tech luminaries starting to tear down the company. It will continue with publications that were once its biggest cheerleader becoming its biggest detractor. As a result, many of the companies that relied on Google for key services (advertising, analytics) will try to distance themselves from it and start looking for other providers (meanwhile, companies looking for funding will excise Google from their business plans, in order to avoid being associated with it by VCs). Yahoo! will pick up some of the adsense/adwords business, along with Microsoft, which will offer a similar service.

Meanwhile, in the analytics space, new companies will be formed and attract a lot of venture capital. Many of them will offer ways to opt-out of their tracking and some will offer added incentive to people willing to provide them with more information. New models in the space will emerge and at least one player will provide a revolutionary approach that will change the analytics landscape.

In the blogosphere too, trust will be a major subject as some of the top bloggers will grapple with issues surrounding defamation of character, libel, accuracy, and reliability after a top-name blogger is sued for something he/she said or linked to. Furthermore, some of the top bloggers will grapple with issues relating to invasion of privacy as they become more famous in the mainstream media.

On the Wikipedia end, anonymous editing will be abandoned after the revelation of a major hack altering minor facts over several months in an automated fashion has rendered a core version of the wikipedia unusable. The wikipedia trustee will revert wikipedia to an earlier date, erasing all changes performed during that period of times and destroying several significant entries on 2006 current events. The mainstream press will pile on about the inaccuracies of wikipedia, bringing back earlier scandals as proof that no information on the internet can be trusted unless it comes from a reliable source (incidentally presented as being a member of the media establishment).

Conclusion

In late 2006, a substantial portion of these predictions will be wrong and some may turn out to be dead on (although most of the ones mentioning companies by name will most probably be wrong).

Meanwhile, on a personal level, 2006 will be a year of big changes. However, I promise it will also be a year of continued writing on TNL.net, even if it is at the same substantial post every week or two rate that readers have gotten accustomed to. I hope you’ll join me for the ride.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title 2006 Predictions. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Side by Side

The biggest impact will probably be felt on the low end of the creative space. Here’s a rundown of the upcoming battles to come as a result of this acquisition (this is based on the product sheets on the Macromedia and the Adobe sites) and my predictions on who will win each:

Vector Graphics: Freehand vs. Illustrator

While Freehand got a nice following, I believe this one will end up with Illustrator winning, largely due to its installed base. Expect the Flash integration to come into future versions of Illustrator and the Freehand platform to be de-emphasized

Digital Imaging: Photoshop vs. Fireworks

Once again, advantage Adobe, largely due to the larger feature set and the widespread development community that has brought extensions to it. However, expect the optimize for web section of the program to improve as these will be worked on by the old Fireworks team.

Web Authoring: Dreamweaver vs. GoLive

Advantage Macromedia. While GoLive is a nice product, the Dreamweaver suite has a richer set of operations and is better integrated with other parts of the product suite (Flash, ColdFusion, etc…) and I believe one of the key reasons Adobe is acquiring Macromedia is to gain a strong foothold in the web space. Expect more integration of the Acrobat suite into Dreamweaver.

Fonts: Fontographer vs. the Adobe Type Library

Say goodbye to Fontographer, which just isn’t a player in that space, considering the lead Adobe has.

Web Publishing Systems: Macromedia suites vs. Acrobat server

Winner in this category will be the suite of products offered by Macromedia. I believe this sits at the core of the acquisition and that the Acrobat server suite will be merged into the Macromedia offerings.

XML handling: Flex vs. Framemaker

Initial advantage to Framemaker but short lived, as migration path moves it to Flex-based approach. Once again, web trumps legacy. However, one eventual victim of this is Director, which ends up being killed in the process (and I would note hold my breath for the RoboHelp, RoboDemo, and RoboInfo suites to survive for long either.)

Formats: PDF vs. Flash

Tie and win for both. I think both formats will evolve but both will survive this. Tying the two is obviously part of the strategy. What I suspect is that we will see an end-to-end product offering integration of the whole thing from paper to web and back

Monopoly?

One could argue that the merger will create a monopoly situation in the creative space. However, I think this deal will pass in the US and Europe as it will be presented as Adobe+Macromedia vs. Microsoft, Apple, and others. A careful dissection shows that it’s not the case (as it will give the new company a substantial share of the creative market) and makes me think of an ad I saw for Adobe this weekend: the slogan for the new Adobe Creative Suite is “everything but the idea” and it looks like they are now indeed making good on the promise an offering creative types a marketplace where “everything from Adobe” is the only choice (and before you comment about other offerings, ask yourself, what is their market share vs. Adobe+Macromedia?)

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Adobe acquires Macromedia. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Voice Over IP

VoIP experienced tremendous growth in 2004 but it was just the beginning. This year, much more will happen in that space.

Cable providers will start deploying VoIP services on their networks and phone companies will start bundling VoIP services with their DSL offering as a way to compete. By year end, all major broadband providers, whether they are offering services over cable or DSL lines, will have a VoIP service bundled with their access service.

Unable to compete with the larger telcos, some smaller players in the market will merge on order to lower their cost per subscriber by bringing their infrastructures together. Also, independent VoIP companies will sign peering agreement with each other in order to bypass traditional telcos and lower the cost of connectivity from one independent VoIP company to another.

Further pressure will be put on all players on the American market as overseas companies will start targeting U.S. customers. Before year-end, at least one company will offer an unlimited calling to several countries plan. Other plans will provide unlimited calling to each continent. This will start putting pressure on established government monopolies in several countries, especially in Europe.

VoIP will also experience strong growth within the enterprise, with companies looking to open-source solutions like Asterisk to replace their PBX infrastructure with a lower cost alternative.

As all this happens, equipment will not only become cheaper but will also become much easier to use and install. Along with it, new sets will come out, with cordless VoIP offerings becoming much more common. Competition in this space will be on features available in new handsets.

With substantial portions of the phone network switching to VoIP, video telephony will start taking hold. However, the price of equipment will still be too high for those services to experience the kind of growth other sectors in the VoIP market will experience.

Entertainment Convergence

The convergence of the computer and other entertainment forms (television, radio, gaming, mobile phones) will continue, further blurring the lines in the convergence world.

With broadband now being the major way to access the Internet in the United States, Internet usage for new forms of entertainment will grow. Along with it, however, will be a continuing challenge to the established media order.

The challenges faced by the music industry with the introduction of Napster will now be the new reality for the movie and television industry. Five years ago, I started seeing the phenomenon emerge and believe the four step process of the digital asset dance will be full blown for the MPAA this year. The MPAA will spend part of the year suing companies and users for downloading movies. However, they are also better prepared that the music industry in that they are already offering legal download services like MovieLink.

While litigation will be one of the ways convergence appears on the front page, many providers will find a way to mine this new world for new dollars. Expect some companies to start offering legal download of television programs for a fee. As the Internet becomes the standard telecommunication infrastructure, content will start getting carried more heavily. Phone companies will start using this to offer bundle TV services with their DSL offering as a way to compete with the cable TV companies that have invaded the telecom turf. Before year end, at least one traditional telco will offer TV over IP. All that content will be protected by DRM systems, getting people more and more used to having less and less rights over the content they receive.

Meanwhile, on the wireless end, the introduction of more powerful mobile phones and the introduction of faster mobile phone networks will also play out in the favor of content producers. As voice traffic revenues continue to decrease, expect mobile phone companies to push data services such as downloadable movies and downloadable music more heavily. By year, MP3 will be the standard format for cellphones and Apple will offer a mobile phone version of the iTunes music store, allowing users to download music from the store and customize their phone with the latest hits.

On the non-Internet end of things, video on demand will continue the strong growth it experienced in 2004 and more programming will be offered in HDTV format, prompting an increase in sales of televisions and tuners that can receive those signals. Meanwhile, radio will follow the path taken by cable television in the early 80s. As satellite radio takes hold as the new “edgier” alternative to traditional radio, people will get more used to the idea of paying for radio. However, they will also require that those services be offered over the Internet as well as over the proprietary networks like XM and Sirius.

But not all content will be coming from big corporations. The grassroots will also play a key role in the distribution of online media in 2005. While podcasting has been the domain of a few geeks in 2004, easier to use tool will bring the phenomenon to the forefront and expect more audio services to be available from regular users. Following on the tail of this phenomenon will be an increase in videocasting from individuals. Much of it will be disappointing but a few gems will emerge, creating new stars who will emerge from the Internet and move on to more traditional media, based on the fame of their online offerings.

Business

Mergers and acquisitions will dominate the software world this year, as more companies realize that the only way into the enterprise is through a complete set of offerings. Expect several multi-billion dollar mergers and/or acquisition. In my mind, McAfee will be acquired or merge with either Symantec or CA; SAP will be acquired by Microsoft; Business Objects will be acquired by Oracle. As holds true for such precise predictions, none of this will actually happen the way I predicted it.

In late 2004, IBM left the personal computer business, selling its unit to Lenovo, a Chinese manufacturer. Expect the same to happen to at least one other PC vendor this year as the margins on personal computers continue to decrease, turning them into commodities.

Apple

Apple, which to date has resisted the price pressures other computer manufacturers have experienced, will introduce a cheaper version of their Macintosh. This, however, will not stem the continuing loss of market share they are experiencing. As Linux continues to grow, the Apple story in the computer business becomes more and more difficult and the company will increasingly rely on the consumer device business as its savior, building a new economy around the success of the iPod and iTunes music store.

The company will not, however, release a video player this year. Among some of the new features I would envision coming from Apple are:

• A flash-based iPod, which will be even smaller than the iPod mini and will be in the $100-$150 price range
• A partnership with a phone company to create a phone that will be able to download music from a special version of the iTunes music store and play MP3 ringtones
• An iPod with audio recording built-in
• A portable camera with iPod-like features
• A new way to send pictures from the iPod directly to printer via Airport express

While it focuses on the music business, Apple will not spend much time updating its laptop business. Adoption will drop in that part of the business as PC vendors start selling sub-$500 laptop PCs, making the iBook look expensive by comparison. Apple will try to enter the low cost market but not with a laptop: they will introduce a mac without monitor for under $500, offering integration with the iPod, and plugs to attach the computer to a television as its major features.

On the software end, the company will introduce a Word Processor and Spreadsheet program. They will release them, along with Keynote, as a complete package named iWork which will be aimed at students and small businesses. The package will be available for free on new computers.

Development

Blogs and RSS will continue their growth and will move strongly within the enterprise space. Adoption of RSS will continue its explosive growth but crest in 2005 as users start trying to find ways to cope with the information overload. New components in RSS readers will attempt to help organize RSS feeds but those basic efforts will initially fail and discussions will be set towards the end of the year as to the effective way to organize large amounts of data.

Weblogs and content management systems will start covering some of the same ground and enterprise will start using weblogs internally at the departmental level. Meanwhile, external employee weblogs will start becoming the focus of more litigations as corporation try to retain their intellectual property and fight the kind of transparency that comes from having employees talk openly on the web. Internal rules and regulations will be set in how employees can use blogs.

Meanwhile, in the development world, Service Oriented Architectures will continue being the approach to delivering next generation services. SOA will grow largely internally but some companies will start exposing some web services via XML to their partners. A new set of interesting new applications will come out as a result of those exposures.

Security and trust will continue to be big subjects and I suspect that trust will become an even bigger one with new standards emerging around the concept but no general agreement as to the best implementation.

Open source software will continue its strong growth, getting into more and more specialized fields. With the delays in delivery of Microsoft’s next operating system, Linux will continue to grow but complaints about price will start to arise. While the open source movement has offered free software, there will continue to be an increase in the price of supported version of the software.

Personal

I’ll promise to update the blog more often, will do OK for a little while and will then fall back into my regular pattern of a couple of updates a week. Or not… Either way, only the new year will tell.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title 2005 Predictions. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Before the convention

For New Yorkers, the Republican effort started becoming visible weeks ago, as police tightened up the area. Living only a few blocks from Madison Square Garden, where conventioneers gathered, I started to realize with some level of concern that this convention had the potential of being a major annoyance. Rumors were flying high of the potential of some public transportation being shut down and, in the absence of actual information from the city (since none of the plans beyond street closures were revealed until the last minute), most New Yorkers made do with rumors.

Feeling that I needed to take a break and figuring that this might be a good time to skip town, I started planning on taking time off from work for convention week several months in advance. It then hit me that the mass hysteria stirred up by some of the more extreme newspaper (The NY Post, for example) was just media people playing around with facts that had little grounding in reality. Besides, having been through town on 9/11 and then again during last year’s blackout, I figured that New Yorkers had the guts and resolve to face any challenge. Combined with the lure of being close to a hot story, this left me with the decision to stick around.

The next question became how to best experience this. Of course, I knew that I had little chance to get into the convention itself but its perimeter seemed to offer a million interesting stories. With hundreds of thousands of protesters at the ready, it seemed to me that a potentially huge story could be developing outside the convention center, directly on the streets of Manhattan.

The First Amendment

One of the reason I love living in the United States is its constitution and attached bill of rights. Go read it, if you haven’t already. It’s quite a combo and of course, coming out of journalism, I fell deeply enamored with the first amendment and its protection of the press. However, re-reading it recently, I became more keenly aware of its other parts:

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

These considerations, in an age of increasing uncertainty in the balance of civil liberties versus security, have led me to be a contributor to the American Civil Liberties Union, a group that works hard to ensure that the government lives by this promise.

As a contributor, I get to receive the newsletter for the local New York chapter and had recently learned from it that there would be a storefront established during the Republican convention as part of a wider campaign to protect the rights of protesters. This seemed like a great fit for me and I walked in there on the Saturday prior to the convention, asking if they needed volunteers. They did and I signed up to start on the following Monday, the first day of the convention.

Protesting

I am not a radical leftist. Nor am I on the right. The best way I could possibly describe myself on the political spectrum would probably be extreme centrist. I believe almost religiously in the genius of capitalism. That belief is only trumped by my belief in what I would call “Capital D Democracy”: A government of the people, by the people and for the people. Coming from Europe, I may have a different view from most Americans when it comes to social issues. I strongly believe that anyone should have access to free health care and free high grade education. Because those sit at the core of my political belief, and because I grew up politically through the Bush father administration, followed by the Clinton administration, I would probably qualify as a fairly conservative (small d) democrat in the United States.

Over the past couple of years, I must say that I’ve drifted a little further into that camp, as a direct result of what I’ve experienced and what I read. As everyone knows, September 11th was a horrible day, when many of us lost friends in the Twin Towers. Looking back at that time, I still feel that the Bush administration did a great job by going into Afghanistan to dislocate the Taliban, which had been a long-time supporter of Al-Qaeda. I know that it must have been hard to do so, as no president really wants to put soldiers in harm’s way. The Afghani mission was an important one and one that still needs more support than it gets.

However, as many New Yorkers, I felt blindsided when the administration decided to start making the case for going into Iraq. I had read a fair amount about Iraq and the middle east region in general. As far as I could tell from all the newspapers and magazine reports I was reading, Sadam Hussein was a megalomaniac who would do anything to hold on to power. After being rebuffed from Kuwait by an international coalition led by Bush pere, he had focused inland, using chemical weapons against the Kurds in order to avoid having them overthrow him. For the following decade, the United Stations enforced sanctions that contained him while looking for more information about what types of weapons he had. He kept stonewalling them on two major issues: chemical and nuclear weapons. I personally believe that this was a tactical moved aimed at dealing with internal Iraqi issues: By stonewalling the UN, he ensured that questions would be raised as to how many of those weapons he could have. If word that he held chemical weapons came back into Iraq, along with the remembrance of what he did to Kurds, people would be afraid to attempt an uprising. Similarly, if word was spread that he had a nuclear program, Iran might stay more quiet.

In fall 2002, then CIA-director Tenet testified before Congress about the Iraqi thread. His belief at the time (or at least what he told senators) was that involving ourselves in Iraq would only increase the terrorist threat. Having lived through 9/11, the words increase and threat were not the ones I wanted to hear. At the time, reports from the United States and Europe also pointed out that there was no credible reports of evidence linking Iraq and Al-Qaeda. This was all public information available in late 2002 (I do read a lot on the Internet, not only by using RSS feeds but also visiting the web sites of several news sources in the United States, United Kingdom, and France). This led me to believe that the Iraqi threat was being overstated. However, trying to keep an open mind, I listen to arguments from the administration and, for every point they would make, there would be tens of rebuttal points coming from European publications.

I started to feel that people living in the US were being bamboozled so I started listening more closely to the people advocating peace. I did not agree with all of them (I believe war is sometimes necessary) but I did agree with them that this threatened conflict (at the time, the war had not started) was one that was unnecessary. I joined demonstrations, I met smart people there. Over time, I became more acquainted with the issues surrounding them. While I disagreed with the most extremist elements, I believed in their rights to free speech.

Last year on February 15, a huge march was impeded by the police, which would not let people get to the proper location of the rally and where policemen would provide misleading information to people who were trying to legally join the march. The tactics prompted an ACLU lawsuit which resulted in orders by the court for the police to alter their practices. Knowing this, I still approached the largest protest set for August 29th with a little apprehension.

It turned out that I didn’t need to. The police worked hard to keep the peace while respecting the rights of protester. Countless times, I saw police officers doing their job as they should, ensuring that things would work out and that protesters could stay safe. With half a million people taking to the streets of Manhattan and a police contingent that numbered in the thousands, it turned out to be a really great event and made me feel better about the week that was to come up. All the tension that had existed prior to the protests starting seemed to dissipate and free speech was respected, just as the founding fathers would have it.

With protesters as far as the eyes could see (45 blocks of solidly packed people were taken over by the protest), my wife and I joined the 1000 coffins group, which honored the memory of fallen American soldiers in Iraq, all the while making a powerful statement on the impact of this war on our troops.

At the end of the protest route, I had the chance to witness a crowd of hundreds of people folding American flags in a way that was both respectful and legal.

The New York Observer

On Monday, after some basic training on what to do and what to watch for, I made my first foray in the field. The police presence was strong at every event but, for the most parts, things would run OK during daylight. Once night fell, however, it seemed that the police turned into Mr. Hyde, arresting peaceful protesters rather quickly and working in an intimidating fashion otherwise. Many of the clashes I personally witnessed were at night, probably as much the result of exhaustion (I don’t know how long the police shifts were but it seems that nerves were more frayed towards the end of the day, leading me to conclude that some of the officers may have been tired).

Much of what a legal observer does is very similar to what a journalist does. Largely, the job of a journalist in the field is to sit around the location of an event and talk to people, hoping to get some juicy bit. Often, it’s just sitting around waiting for something to happen. In the case of legal monitors, the situation is similar; you sit (or stand) around, checking whether fencing is locked or not, and eventually post yourself in a location where it is likely that something would happen. You then idle around that location until something happens, and then start taking notes, observing whether policemen are doing their job properly and calling in to the main office if infractions are very serious and could lead to further trouble. Your job is, however, not as a participant but an observer.

Occasionally, you cross the line into a more active role, at the request of one of the two actors (protesters or cops) asking you to step in. For example, I was asked by a cop if I could work as a liaison to help relay an inquiry to the leader of a protest group. After putting the top officer in charge on the scene with the lead organizer in touch with each other, I watched the interaction to ensure that the police was not trying to abuse its power. The discussion between the two people was tense but cordial and an agreement was quickly struck, leading to an eventual change of location for the protester so they would not block regular pedestrian traffic and a pull-back from the police force so they would not seem as intimidating to protesters. This was an example of the two groups working together properly.

While police and protesters danced around each others, with legal monitors and observers like myself checking the scene out, other people seemed intent on disturbing this tight choreography. At ground zero, a woman looked at my ACLU T-shirt and exclaimed “the ACLU, those free speech Nazis” (emphasis is mine).

However, at times, there were failures. I witnessed such a failure at ground zero on Tuesday when police worked with a group called the War Resisters League decided to start a march from ground zero to Madison Square Garden. The police worked out what seemed like an agreement to let protesters go through their march without a permit and then, a few minutes later, changed its mind and arrested a number of people. The Jekyll and Hyde nature of such incident can be considered fairly worrisome and a true threat to democracy.

Republicans in the Square, Dancers in Elephant country

Fortunately, the real spirit of democracy could also be felt this week and it came for a bi-partisan effort to work together. On Tuesday night, a group of about half a dozen Republicans skipped their attendance at the convention and headed down to Union Square, where many of the protesters were gathering. A dizzying array of discussions ensued as people from the complete political spectrum engage in debate for most of the evening. Groups gathered to listen in, sometimes throwing extra discussion points into the flow. Conversations covered such a wide range of issues such as the recent success/failure of the war in Iraq, the economy, educational reform, job programs, environmental issues, general foreign policy, etc… Kudos to those republicans for having the guts to enter their enemies’ territory and be willing to engage into longer discussion on policy matters. If such thing were happening more frequently, we would be better off as a country.

Sadly, however, the current tenor of the political dialogue seem to be far from such matters. When discussion surrounding candidates are limited to “George Bush is a baby-killer” or “John Kerry is a flip-flopper”, the system needs fixing and it is incumbent on everyone to get involved in creating that fix. There are approximately two months between now and the US presidential election so I would urge all my readers in the United States to do the following: find someone you disagree with politically, and agree to go out to lunch at least once a week to discuss political matters. Similarly, put pressure on politicians to discuss issues of substance. Whether John Kerry should have received two or three purple hearts in Vietnam, or whether George Bush did not tend to his national guards duties during the same era will have little relevance on the future of the country. What does, however, is how they see the future of the country. There are substantial differences in how the different candidates view the world. Dig in, get informed, and go out and get other people to do the same. It’s part of the homework required to make a democracy work.

And remember that it can all be fun. While there is some homework, there are occasional recesses and sometimes some out and out silliness. John Perry Barlow put together some Dance Flash Mobs which were quite a blast to follow. Imagine a basic street crowd. People are walking around, traffic is busy. All of sudden, someone turns on a boom box. Three quarters of the crowd start swerving, slowly; building, building, and then, all of the sudden, it’s a street party, with 15 to 20 people out in the street, dancing their hearts out. One has to admit that it is a very effective form of protest. A sudden derivation from the norm by a large group of “normal looking” people can create quite a disconnect. If you’re a New Yorker, you find such variations generally amusing, part of the great thing about living in the city. Based on my observation at one of the event, that may not be the case if you’re from out of town. They’re is something a little crazy that feel a little threatening. Your reality gets shaken for a moment, you pause, not sure of how to react and by the time you realize what happened, the crowd has moved on.

Protest Tech

Of course, I couldn’t resist going a whole post without sticking in some thoughts on technology. For the most part, technology at these events was more interesting because of its pervasiveness, rather than any single technologies being of interest. I’ve learned that the police did use some cameras with head mounted displays for monitoring but I do see any. What I did see, however, was heavy use of technologies like text-messaging and push-to-talk telephones to coordinate protest efforts. It’s interesting to me that those are now part of the protester’s arsenal as they provide with quick ways to deploy small to medium sized groups across a grid. When flash mobs happened last year as a summer diversion, I did not imagine the potential they could have in the political world. Witnessing events this week, I’ve come to realize that flash mobs can have a tremendous power in reshaping political dialogue by quickly creating and disbanding protest groups. This will probably be a challenge for law enforcement officials wanting to control such thing as they might have difficulties to locate such events in the future. One could consider those to be essentially guerrilla tactics empowered by technology and they can represent of fairly powerful component of new protests.

The other bit of surprise, to me, was to importance blogs have taken for some people. At one of the events, I was chatting with one of the observers, waiting for a group of conspiracy theorist (yes, their theories are protected by the first amendment too) to wrap up their protest so I could move on to something more interesting. Some guy seemed to be getting a lot of media so I asked the observer if he knew what the deal was with that guy. “He’s a major star. You should check out his website at…” I don’t remember the guys name but did check out his site. Basically, it was a badly designed conspiracy theory site run by a guy who seems to have his own online streaming show. When upper middle class people (the observer is actually a lawyer for a big firm) look at people as big stars because they have a website and a radio stream, you know the Internet has become pretty pervasive.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Conventional Wisdom: The RNC Hits New York. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Traditionally, telephone service was offered on a land line and was divided into local service, long distance, and extra features like caller ID, call forwarding, etc… The model was predicated on the concept of one device (the phone) receiving a package of services.

The mobile phone business started having an impact by untying the phone lines from the wall, making the concept of localization a relatively moot point. Once localization was broken, the differentiation between local and long distance disappeared which left a division only between connectivity and extra features. Since most of the signals going over the air became digital, the cost of delivering extra services dropped to almost nothing, destroying the competitive value of such offerings.

While mobile phone service made headway against traditional land lines, a new set of telephone offerings appeared on the Internet: Voice over IP. With VoIP, telephone just becomes a software issue, unbundling telephone from the concept of a telephone network and dropping the connectivity issue altogether. While mobile phones were tied to a particular phone network, VoIP phones are not tied to any network: they can run anywhere as long as they are running on an Internet infrastructure.

It is due to this realization that AT&T abandoned the consumer market. Since services like Vonage are redefining the concept of telephony by moving the phone away from the lines and away from the device. Vonage service runs on a number of platform including telephones, computers and will soon run on PDAs equipped with a wireless card. This means that companies which were once relying on the bundling of a line, a device, and a set of features can no longer do so. It also means that the concept of overseas long distance will eventually disappear since one could easily run a telephone service on their computer with a local number in a foreign country.

For example, I can envision a time when I will have a phone number in France that will relay my calls to my computer, phone or PDA wherever I am, making it impossible to guess whether I am in the United States, Europe or Asia at any given times. However, I may sound sleepy in the middle of the caller’s daytime because I could be in a time zone where it is the middle of the night.

With this model now in place, the challenge of telephony is no longer a local one but a global one. Telephone companies will have to fight against companies all over the globe in order to retain their customers and since the delivery of those services does not rely on the introduction of expensive networks in order to provision service, it will soon be possible for small companies to provision phone services. One can expect countries like China and India to be the recipients of such outsourcing and your telephone company could well be located in one of those countries in the future.

How does one solve this issue? By providing cheaper products, emphasizing customer service, generally doing right by the customer or getting out of the competitive space. The power base has shifted to the consumers and the only way to fight it is to serve them better than a competitor could.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Modular by Design — Telephony. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

• Physical security for electronic systems
• Rigorous testing of electronic machines
• Properly trained poll workers, and rapid-response teams on Election Day
• Public records at the precinct level
• The option to vote non-electronically
• Independent security experts
• Transparency in electronic voting

Looking at this list, it seems that an e-voting system would benefit from being open-sourced.

Democracy and Open-source

My first reason for mentioning open-source as the savior of e-voting is that the open source community is inherently democratic in its nature. If you have something to contribute, you just go ahead and do it. If it’s good enough to withstand the scrutiny of other developers, it gets used. If it isn’t, it gets abandoned. This system of peer-review has already helped in turning some projects into the basic foundation of the everyday Internet: BIND basically covers how Internet addresses are translated from numbers to more friendly domain names; Apache powers the majority of the web servers in the world; Sendmail still sits at the core of most email implementation. Quietly, each of those tools gets improved by open-source communities, which can be seen as the best example of meritocracy in existence: you are what you contribute in the open source space.

Because the open-source community is a global one, tools can take into accounts variations at local levels, which is also something that benefits a more democratic process.

Democracy, Open Source, and weblogs

Weblogs have, other the last few years, added a missing component to the open source community: non-techie user feedback. When a blogger complains about a particular open-source tool, he’s providing feedback as to what works or doesn’t. In some cases, it can get contentious, as techies sometimes dismiss the user as clueless; but in other cases, it can be a good way to provide feedback.

E-voting as the most important open-source project

At the core of the open source argument is the concept of openness. At the core of the democratic argument is the concept of… openness. A strong democratic society stays open. However, power lobbies attempt to close things down for their own benefit. We’ve seen it happen around copyrights in the United States and are now seeing it happen in a number of other areas. In a strong democracy, watchdogs keep those attempts to be overly abusive. One way to ensure that they’re not is to provide some of the basic tenets of democracy. As a result, I’d venture to say that creating an e-voting package that is freely distributable is one of the most important projects the open source movement could undertake.

E-voting: A lot of work

Creating a good, secure, and open e-voting system is a lot of work. The work spreads across two key areas: hardware specifications and software development.

On the hardware end, a base implementation needs to provide a system that is inexpensive (so it can also be used in poorer countries), secure (so it cannot be tampered with), stable and reliable (so it does not add complexity to managing the electoral process), easy to use (so non-techies can put them in place and maintain them) and auditable (so its value can be proven).

On the software end, the software must be reliable and stable (so it doesn’t disturb an election), secure (to solve existing problems), auditable (so it can leave a trace of anything done to the system, either on the administrative end (setup and maintenance) or on the usage end), anonymous (so one can’t track who voted for whom), easy-to-use (so that even non-computer users can use it), scalable (so that it can be used at the local as well as national (or supra-national, in the case of Europe) level).

This is work that will need to bring experts from a number of areas in the open-source community, from people well versed on security to people well versed on design. However, because of diversity in the open-source community, the experts already exist. The question that remains is how to bring them together.

A long term project

In 2000, I called for more computerization of the voting system. Four years later, we seem to be facing similar predicaments. The private sector has stepped up to the plate but seems to have failed on a number of fronts, one of which is transparency. Considering that vacuum, it looks like it’s time for the open source community to step in. Results won’t be clear for many years to come, which makes it more difficult to manage as a long term project. However, projects like Linux did not just pop-up all built. To date, they have been the result of continuous improvement to a strong core.

The real test would be to see those machines deployed on a short term basis to do things like non-government related elections (maybe initially to vote on things like who gets to sit on the board of a foundation that would run this effort moving forward), and as time goes on, test them in school elections, then local government elections, and so on… As a result, it will be a project that will probably not alter the course of a democracy for at least another decade.

Can the open-source community work on such an effort for as long a time? I believe it can.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title E-voting and the Open Source community. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

• Europe and the United States are now moving forward on two different paths when it comes to technology and its uses. I’m still working on sorting some thoughts on this and will post more on the subject in the future.
• While we believe that the Internet is accelerating the speed of change, our fundamental assumptions of the impact of new communication tools may be wrong. This thought is due to the fact that I’ve now realized that the great shift of the renaissance happened over the course of only a couple of decade, a radical shift that was much quicker than I had previously thought. My trip, coupled with reading The Confusion by Neal Stephenson, which covers a similar stretch of time prior to the enlightment, leads me to thing that all great historical changes are made over a one to two decade period. If you consider the Internet just a natural evolution of the computer evolution, we are now looking at a movement that lasted about as long. Will the impact of computing be as radical as the changes made during the renaissance and the enlightenment? I don’t know for sure but do believe this to be true. Need more data to formulate a longer theory.
• When presented with two much data, your brain needs rest to process information. I started to suffer from a mild case of Stendhal’s Syndrome during my visit, which required a little brain rest.

All and all, though, I must say that this was a great vacation. I’m now tanned, rested, and ready to join the conversation again.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Quick Notes on my Firenze trip. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Strong Growth

France had been a leader in terms of establishing an information society but was starting to get trapped by its legacy Minitel tool. The Minitel was introduced in France in the late 70s as essentially a precursor to the web. The service allowed users to read online versions of magazines and newspapers, shop in online catalogs, chat, play games, and have access to every government office. In the early 80s, Minitel penetration became so high that the government-owned phone company decided to drop printing of phone books and move that service to the Minitel.

Fast forward to the late 90s. France is still on the Minitel and the Internet has gotten wide acceptance in the United States. At that point, Internet penetration in France is sluggish as few people see any value in it. As a result, the French government issued an ambitious plan to move France onto the Internet. As is the case for every major government project, little happened for several years.

However, the combination of government support for a new Internet initiative and the rise of global services finally started a revolution in French online services. According to several people I talked to in Paris and in the south of France, the effects of the Internet were not really felt until about a year ago, when a sudden usage explosion started. From 1999 to 2001, the number of Internet users in France tripled and it is expected to double this year to about 30 million. As more and more services are now moving away from the Minitel and onto the Internet (as I was told by an American living in France, the Minitel is now fairly useless as most everything has moved onto the Internet.)

Combined with growth in other European countries, this represents a market of almost 150 million users in Europe.

Broadband

While most Internet users in Europe still use narrowband, a few people are starting to make the move to broadband. However, prohibitive costs for DSL mean that most broadband users in France are accessing the net via cable. A DSL line can cost over 100 euros whereas a cable modem connection can be had for as little as 15 euros, with averages of 30–45 euros per months for a 500Kbps connection. The big advantage of such connections in Europe is that local phone is metered whereas broadband is not. As a result, heavy Internet users are finding that it is less expensive to get a broadband cable connection than it is to use a modem and phone line.

The Euro

For the first time in history, 12 countries have simultaneously gotten rid of their currencies and moved to create a single monetary block: the Euro is here and it has wide implications on global E-commerce.

No more Austrian schillings, Belgian, Luxembourg or French francs, Finnish markka, German Marks, Greek drachma, Irish punts, Italian lira, Dutch guilders, Portuguese escudos, or Spanish pesetas. No more complexity in trying to convert those from one to the other when doing electronic transactions. Now, the Euro is the currency for this whole zone (dubbed the Eurozone) and it represents a very large market, larger, in fact, than the American market in terms of customers.

One the biggest challenges in dealing with the European market was the lack of standardization when it comes to laws, shipping, currency, and language. With the Euro, a large portion of that problem can be taken care of as members of the Eurozone start moving towards developing a similar set of economic policies.

Essentially, the Euro takes away the barrier of multiple currency transactions that held back some users from shopping online and some vendors from launching e-commerce sites.

A couple of years ago, I alerted our readers to the fact that Europe was quietly rising as a new giant in the global E-commerce arena. With the rise of the Euro, this message is becoming more important. Now that a market of almost 150 million people has been created, the US is no longer the only place where E-commerce can work and as such, it is important for people in the US to start looking at technological developments in Europe. In the long run, a number of European companies will probably become some of the larger players in the online space.

Wireless connectivity

While everyone in the U.S. is starting to pay attention to WiFi, the wireless computing revolution has not yet taken hold in Europe. On the one hand, cell phones keep getting smaller and offering more features (Multimedia messaging is started to take hold among European digerati), there seems to be some lag in the adoption of wireless computing offering. A few underground efforts are getting organized, in a fashion similar to that seen in the USA a couple of years ago.

Conclusion

The Internet space in France seems to now follow a curve similar to the one experienced in the United States in the late 1990s. However, the lack of venture capital and the fact that, much like the United States, France is suffering from an economic slowdown, have tampered the explosion. While acceptance for everything Internet is growing, the adoption of networked technology is following a course that is different from that of the US and UK. While there will be strong growth in the Internet field in France over the next year, expect that revolution to be relatively quiet, compared to what was experienced in other countries.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Internet in France 2002: An overview. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

While it currently carries a non-destructive payload, some Anti Virus developers are worried that its plug-in architecture could turn it into a much more dangerous virus, opening backdoors in computer systems and escalating the war between virus makers and anti-virus developers.

First discovered in South America by Kapersky Labs, a Russian anti-virus developer, the worm has spread through email to Europe and the United States at an increasing pace.

“Hybris is one of the more common virus we’re seeing right now,” said Brian Kinj, a member of the technical staff at the CERT coordination center.

Because it carries a non-destructive payload, the anti-virus community has been split over the threat level the virus represents. In the United States, the Joint Task Force Computer Network Defense, a division of the US department of defense, has upgraded the virus to a high-risk status. Meanwhile, European virus tracker Peter Kruse, of virus112.com, has announced on Usenet that his company was upgrading the virus threat to a medium risk status, due to the recent spread of the virus in Europe.

Companies like Symantec and Sophos, however, have given the virus a low risk status since it is carrying a non-destructive payload. McAfee, on the other hand has upgraded the virus to a medium risk status based on “its prevalence and commonality.”

In its original version, the virus was spreading as an email attachment but recent reports indicate that it can also propagate itself using ICQ, an instant messaging platform used by over 30 million people. It infects WSOCK32.DLL so it can control the internet connection and intercept email addresses of incoming messages using a method similar to that of the MTX virus. Once it has obtained an address, the virus automatically sends itself to the next computer.

The virus can also modify the winsock DLL if it has been write-protected. What the virus does in this case is make a copy of wsock32.dll, infects the copy and then writes the name of the infected copy in WINIT.INI, therefore replacing wsock32 with an infected version the next time the system is rebooted. The virus also makes a copy of itself with a random name and creates an entry in the Run_Once windows registry key, ensuring that it can recopy itself if erased.

Its originality, however, lies in its plug-in architecture. Using this new model, the virus can connect to either to the alt.comp.virus Usenet newsgroup or to a series of web sites and download new updates, in a way similar to trojan horse programs. By upgrading this component the author is able to completely change the appearance of the worm in unpredictable ways in an attempt to defeat anti-virus products detecting it. Not only is the virus payload updatable but so are the methods for updating in that they are also upgradeable components. To date, all the plug-ins included in the virus have been using a very strong encryption algorithm.

One of the components of the virus searches the PC for .ZIP and .RAR archive files. When it find one, it searches inside it for a .EXE file, which it renames to .EX$, and then adds a copy of itself to the archive using the original filename.

Another component takes the infected files on your system and uploads them to the alt.comp.virus newsgroup. That component also grabs email addresses from newsgroups the user is subscribed to and sends itself to those email addresses. Over the past few weeks, this seems to have increasingly become the way by which the virus is propagating.

The only existing danger is a payload component, which on the 24th of September of any year, or at 1 minute to the hour at any day in the year 2001, displays a large animated spiral in the middle of the screen which is difficult to close. Due to the fact that most of the plug-ins are non destructive, anti-virus companies see Hybris as a low to medium risk virus.

Given its ability to become malicious, it’s up there but there are more malicious viruses out there said Jeremy Pacquette, vulnerability analyst for securityfocus.com. However, writing code like this is probably more challenging than writing code to stop it.

As medium risks go this is on the higher end of the spectrum, said Patrick Nolan, virus researcher for McAffee.

It illustrates that virus writers are not lazy that a few of them have taken it upon themselves certain skills in order to enhance the cat and mouse games they’re playing with virus software.

Apart from the standard practice of updating your virus file on a daily or weekly basis, Pacquette also recommends that IT manager educate their users about safe ex, the practice of being careful about who you communicate with and not opening plug-ins coming from unfamiliar sources. Kinj added that system administrators should consider installing a centralized email filtering system to protect their users. Nolan adds that people who share their hard drive either through a cable modem, a DSL line or a direct connection to the Internet should password protect that share to ensure that it doesn’t get accessed by the virus writers.

Kaspersky warns that the replacement of certain components could turn it from harmless to hazardous. What we have here is perhaps the most complex and refined malicious code in the history of virus writing, said Eugene Kaspersky, Head of Kapersky Labs’ Anti-Virus Research Center, in a statement on the company’s site. It is defined by an extremely complex style of programming and all the plugins are encrypted with very strong RSA 128-bit crypto-algorithm key. The components themselves give the virus writer the possibility to modify his creation “in real time,” and in fact allow him to control infected computers worldwide.

Those plugins are possibly encrypted with a PGP key or similar scheme used by virus writers, adds Nolan.

The architecture of the plug in approach is interesting and it makes it achievable for a programmer to turn it into a dangerous virus said Pacquette. New threats like this are going to promote changes in the work to fight viruses. These kinds of threats are an evolutionary pressure on AV technology.

However, Kinj said that once a virus has been discovered and analyzed, those sources are disabled and that limits the impact of the virus. Nolan adds that the plug-ins can’t work without the base executable and we now know how to stop the base executable file.

On the other hand, the morphing nature of the virus could spawn several new versions. Already, older anti-virus can’t recognize Hybris because it evades CRC checks. When you’re dealing with something that changes, you can’t use CRC checks but our algorithms go beyond that and can identify threats like Hybris based on other factors said Nolan.

According to warnings on the web sites of several anti-virus developers, the infected message reads:

Today, Snowhite was turning 18.

The 7 Dwarfs always where very educated and polite with
Snowhite. When they go out work at mornign, they promissed
a *huge* surprise.

Snowhite was anxious.

Suddlently, the door open, and the Seven Dwarfs enter…

and has been spotted as coming from the address hahaha@sexyfun.net. New variants are also sending emails with no subject and no user name but including attachments carrying Hybris.

The virus only attacks windows-based systems and most anti virus packages have released a patch to their software to deal with it. Pami Katcho, spokesperson for Microsoft, said that Microsoft is not currently planning to release a fix, but that users should download the latest virus definitions from their AV vendor.

Sources in both the virus and anti-virus community have confirmed that the virus has emerged from Brazil. It’s a cousin of Babylonia, which was touted as the first of its kind in 1999, and it looks like it was written by the same author, said Nolan.

As to whether Hybris is the beginning of a new trend, there is some disagreement. It’s more a proof of concept than anything, says Nolan. It’s phase 2 of the existing technology and has the potential to really be something else. System administrators should not be overly concerned about it right now. I doubt there will be a phase 3 because the writer has proven his point. But in virus writing circles, Hybris is providing a roadmap. This is a great tool to learn new ways to propagate a payload, said a virus writer who prefers to be unidentified. New variants of this will come out and I think that within 6 months, Hybris and its kids could be the most widespread trojans making the rounds.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title New Virus Evolves. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

This is not exactly the way Deja.com presented themselves but ultimately, this may be what transpires from their recent attempt to put the Usenet archives on sale.

Usenet History

For those of you who have never heard of Usenet, here’s a quick definition from the Usenet FAQ:

Usenet is a world-wide distributed discussion system. It consists of a set of “newsgroups” with names that are classified hierarchically by subject. “Articles” or “messages” are “posted” to these newsgroups by people on computers with the appropriate software — these articles are then broadcast to other interconnected computer systems via a wide variety of networks.Some newsgroups are “moderated”; in these newsgroups, the articles are first sent to a moderator for approval before appearing in the newsgroup. Usenet is available on a wide variety of computer systems and networks, but the bulk of modern Usenet traffic is transported over either the Internet or UUCP.

To put it simply, prior to the web, Usenet was what defined the Internet as a community. It covers subjects ranging from politics to computing, arts to news, and everything in between. Usenet, to the old timers was the town square. It was the place where jobs were posted, discussions about technical standards were going on and the latest movies or TV shows were dissected. It was on Usenet that Tim Berners Lee first announced his development of the World Wide Web, and it was also there that Marc Andreesen announced the release of Mosaic (the PC and Mac browser that popularized the web) and the subsequent launch of Netscape.

To put it quite simply, Usenet archives document the early days of the Internet (well, 1981-present anyways) in a way that no other place on the Internet does. As a result, I would venture to say that they are historically significant documents that should be held in the public domain, much like other historical records are. The Usenet Archives are not something that should be a private property.

In the mid-90s, Deja.com, then known as DejaNews, took on the mission and started archiving Usenet materials. The community was happy to find someone willing to do so and let Deja.com do it, assuming that it would remain faithful to the original code of sharing that then existed on the Internet. The model was Usenet plus ads, which would, according to a popular view on the net, help conserve these historical documents while covering costs and making a modest profit.

But Deja.com decided to shed its original mission, refashioning itself as a consumer advice portal instead of going the non-profit route as the Internet Archive did, and here the trouble started. Now moving away from conservation, Deja.com first started pushing the Usenet archives to the back. Then, during a system upgrade, Deja.com decided to take those archives offline. And now we learn that they are going to sell them off to the highest bidder.

In fairness to Deja.com, they did a great job in preserving material that may have otherwise disappeared. However there are several legal questions to deal with when considering such a sale. Today, we take a look at those issues.

Copyright Issues

According to 10 Big Myths about Copyright, most of the content on Usenet is covered by copyright law. But it is unlikely Deja.com holds copyright on that content. They are selling the intellectual property of the millions of people who have posted to Usenet. In doing so, they are breaking several laws, both in the United States and abroad.

For starters, they are in violation of Title 17 of the US Code, which covers copyright and copyright transfers in the United States and Title I of the Digital Millennium Copyright Act, which extends copyright protection to digital works. Under the provisions of both those acts, no one can profit from a Usenet post unless they have received an express grant to do so from the author of that post. As far as I know, I have never formally granted Deja a right to carry my Usenet postings and the people I surveyed had not done so either. I don’t want to over-generalize but it would be my guess that most of the people who have posted articles to Usenet have never granted Deja the right to reproduce them and, as such, there are hundreds of thousands, if not millions of people who are owed by Deja.com.

Going to an international level, they are in violation of Article 9 of the Berne Convention on Copyrights, Annex 1c of the 1994 WTO Agreement on Trade-Related Aspects of Intellectual Property Rights, Article 5 of the Universal Copyright Convention. Those essentially all cover the same thing, which is the issue of copyright transfer (getting the right to reproduce content from the content creator) and the right to redistribute those copies.

Under both US and International status, Deja.com would be in violation of so many copyright rules that it would cost them more to defend a lawsuit arising from the violation than whatever proceeds they made from the sale. In order to fully comply with copyright law, Deja.com would have to obtain approval from every single person to have posted to Usenet during the period covered by the archives… or from their heirs if the person has died. See, the problem is that Copyright extends to 50 years beyond the life of a person. As we know, Usenet is less than 50 years old, which means that EVERY post on it is covered under copyright law. The exercise, though, seems to be one in futility as people may have changed email addresses or disappeared altogether from the net. As a result, it is impossible for Deja.com or the purchaser to be in compliance with copyright law. Seems to me that this is a class action lawsuit in waiting.

Privacy Law

In the United States, consumer data is not as well protected as it is in Europe. Germany and France, for example, have policies that forbid gathering any kind of data from consumers without their prior approval. This includes data that would be entered in a form as well as data that would be gathered through the use of a cookie.

The 1995 European Directive on Data Protection was enacted to control the use of personal information gathered on European citizens. It has already been put into law by eight of the fifteen European Union countries. The law does not allow American companies to gather any data on European consumers because there is a lack of protection for personal data in the United States. This means that any data gathered about Europeans has to stay in Europe. If you transfer that information from a customer based in Europe to a server based in the United States, you are in violation of that directive. Technically, each of the signatory countries could take you to court over that gathered data.

Since Usenet is a worldwide system, Deja.com is already in trouble for transferring information from Europe to the US. As far as the net was concerned, it was fine when Deja was collecting archives as a public service but now that money is involved, this could become a legal quagmire for the potential new owner.

Under the Directive, European consumers are also granted a number of important rights and may appeal to their local government if they consider their rights are not being respected. Among the rights covered are:

• The right to know what the data will be used for, including who will use it and how it will be used
• The right to access personal information upon request.
• The right to rectify information. This means that the customer must be able to change the information if it is incorrect.

The directive also says that in the case of sensitive data, such as an individual’s ethnic or racial origin, political or religious beliefs, trade union membership or data concerning health or sexual life, the Directive establishes that such data can only be processed with the explicit consent of the individual, subject to a number of exemptions for specific cases such as consent of the data subject or where there is an important public interest where alternative safeguards have to be established.

Now, what does this have to do with Usenet News? Well, based on the content that is posted to Usenet, a lot of personal data can be culled. This information can then be used for purposes other than originally planned. Under the European privacy dictums, the data on Usenet could be protected by privacy rules and represents another legal minefield.

Defamation and Linking Issues

Beyond the possible privacy implications at hand here, users could also complain about defamation of character in a Usenet newsgroup. A question that I have for the legal scholars on this list is whether Deja.com could be cited as a co-plaintiff in a lawsuit arising out of a defamatory post. Based on my cursory knowledge of the law, I think they could argue that they are covered under Lunney v. Prodigy Servs. Co., which said that Prodigy was just a common carrier and could not be held accountable for carrying defamatory content as long as it wasn’t editing the content. However, Brown v. City College of San Francisco, which arose out of the linking to defamatory comments could be and issue for Deja’s archives and their linking to defamatory comment.

Also of concern is DecSS. Buried deep inside Deja’s archives are links to sites that allow for DecSS to be downloaded. In the first interpretation of the DMCA, a judge ruled that linking to illegal code is a violation of copyright law. As a result, could Deja be held accountable for linking to DecSS download sites? Could they possibly be sued for not cutting those pages out of the archive? Once again, we are talking about tricky legal issues covering the right to link to certain software and the common carrier provisions. And that’s not even talking about links to illegal software emanating from the Deja.com site. By providing news groups that offer illegal passwords and links to copies of cracked software, doesn’t Deja break the law? Considering that Deja.com does not carry ALL newsgroups (for example, notice the missing talk.rumors newsgroup which is listed in Lizst but not Deja.com), does its selection of the newsgroups it support imply an endorsement of those newsgroups? And if that is the case, isn’t Deja.com then responsible for the content of those newsgroup?

All and all, it looks like Deja.com may be getting itself in hot water from a legal standpoint. Should it transfer the archive to a public organization, it might be able to sidestep a number of those issues by having the archives be held for the public good. However, a public institution will probably not be the highest bidder and the new owner may end up with more than it’s bargained for when making the purchase.

On the other hand, Deja.com could try to spin the archive into a non-profit organization and ask for immunity from prosecution in exchange for maintenance of an important historical entity.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Double Trouble for Deja.com. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Since Boo’s failure, we now all know that trying to attack 15 markets at once is sheer insanity when you’re a startup. As some of the people within Boo used to say, if we make it, people will think of us as geniuses, and if we don’t, there will be studies written about how it’s impossible to do it. Hindsight being 20/20, we can now say that the attempt to capture so many markets quickly failed.

In my discussions with European companies, however, I’ve noticed a number of ways in which companies are globalizing. Here’s a quick rundown.

Partnerships

When Internet.com started expanding overseas, we were looking at a way to limit our potential risk. As a result, the approach we took (back in 1996) was one of joint partnerships, offering our content in exchange for a stake in the new business unit. Internet.com would focus on producing content and the partner would translate the content, market the brand in the local market, and sell advertising in the local market. In exchange, Internet.com would receive a quarterly fee based on a percentage of advertising revenues. This approach has advantages for content providers in that it does not affect the bottom line in a negative way. The downside, however, is that you do not have much control over the total deal and it makes it harder to assume full control if you feel like doing so.

Franchising

Etrade is now in 9 countries outside of the United States. In doing so, they have been using a franchising model. Entrepreneurs have approached them and bought the rights to the name and are renting the technology from Etrade. If the market succeeds, Etrade then looks at the partnership and talks to its franchisee about possibly merging the operations within the global Etrade by acquiring the franchise. It’s an interesting model in that it goes beyond what Internet.com did. The one extra step is the license of technology. As a result, Etrade is a financial technology company when it comes to the international market. This model seems to have worked well for Etrade and seems to be the most cost-efficient approach to going global.

Glocalization

This is a term popularized by Yahoo! The basic idea of glocalization is best embodied in the slogan think globally, act locally. In entering foreign markets, Yahoo! hires a completely local team which has full control of the local Yahoo! portal. The team strikes partnerships, sells advertising, and does marketing as an almost independent company. Essentially, the local Yahoo! portals are wholly-owned subsidiaries of Yahoo! corporation and act relatively independently of the parent company.

In this model, Yahoo! essentially becomes an incubator for people who want to become the Yahoo! of [insert country here]. Yahoo! owns the whole company but by going local, can be more in tune with local business traditions, which may be different from those of the United States.

As a result, overseas Yahoos sometimes have strategies that differ from the main site but are a better fit for the country they are in. For example, Yahoo! Europe entered into distribution deals with large media companies whereas it wasn’t traditionally something Yahoo! US did and got into the access game long before its US counterpart did.

As time went by, the US operation have started to take a look at what its European counterpart is doing and sometimes adapted similar strategies.

Another advantage in this approach is that, by having local executives, your company is not seen as an American invader (and in Europe in particular, American domination is a big issue).

Buy It!

Back when it was riding high, Amazon did something very smart: it started using its overpriced stock to acquire companies. In doing so, Amazon ended up picking up a German online retailer. This approach can be seen as a good way to quickly enter a market if you’ve got the money.

However, this is a strategy that is very difficult to accomplish. First you have to have the cash or stock to make the acquisition. But that’s the easy part. The tough part comes in the integration of back-end systems and the switch in brand name. If you want to become a dominant player globally, having a strong brand is essential but what do you do when you have several.

In the case of Amazon, they went out and completely changed the name from the get-go, creating some controversy in the process. Over time, this proved to be the right strategy but had they picked up a more established player, it might have been difficult for them to do so.

The other issue they have had is in integrating the back-ends. In the final analysis, they decided to drop the integration altogether and completely switch to Amazon’s back-end, but not after having spent many months trying to make the two systems talk to each others. Once again, this is something they managed to do without causing too much trouble for the customer but it shows that you need more money than just the price of acquisition in order to take that approach.

An interesting case to follow now is the acquisition of Lycos by Terra Networks. At the current time, few customer facing changes have been made but it will be interesting to track as both companies are trying to merge their operations.

Which brings me back to Boo.com’s revival. Fashionmall bought the brand name and is now trying to relaunch Boo under a new model. Will they succeed? I really don’t know but I’d like to wish them the best as they attempt it. What is interesting in this attempt is the fact that Boo may or may not be a tarnished name. What I mean is that Boo is a well known name but many people know it because of the headline-grabbing failure of the previous iteration.

Interestingly enough, however, there were still enough visitors to the site this summer, after it had closed, for it to rank in the Media Metrix ratings. It will be interesting to see if Boo can survive as a brand and whether the original ad campaign built enough goodwill for it to succeed.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Boo’s Rebirth. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

The Hybrid World Lives!

Many of you may remember the February 10th issue about Hybrid Computing. While talking with Birger Steen, CEO of Scandinavia Online, I discovered that the concept is not that far off the market. It is his contention that WAP-enabled phones are largely a pain in the back when it comes to interface. Having to key in every letter on the small phone keyboard is far from the easiest thing in the world. As a result, Scandinavia Online has developed a set of services that allows users of their portal jump on their site and configure their WAP view on the web. From his point of view, this is the best service he can offer now to wireless users.

The point was reiterated by a few people around the conference that told me that going to the web to configure a cell phone was the best way to deal with the small screen interface problem encountered by most WAP phones. Anne Rasmussen, of WAPportal.net demonstrated how their company plans to offer a similar service in a hosted fashion for corporate sites and others. The word around Scandinavia is that if you want to find the best way to configure a WAP phone, you have to go to the web via a computer to do so.

M-Commerce Huge … but not for Etailers

Another significant trend is the rise of M-commerce. In Finland, and to a lesser extent Denmark, Norway and Sweden, people can already use their WAP phones to buy from vending machines. The vending machine has a telephone number on it. You dial that number and a credit is added to the machine, to be billed on your phone bill. With the introduction of security in the new WAP standards, a few people were talking about how in the future the question “will it be cash, check, credit card, or phone?” may not sound silly.

What they envision is that WAP phones could become the new credit card.

A recent survey found that in Scandinavian countries, 82% of the people would go back to get their cell phone if they forgot it before leaving home, while only 64% would do the same thing if they forgot their wallet. The basic concept is one that may be foreign to those of us who live in the United States and revolves largely around the fact that GSM phones are equipped with a small identification chip called a SIM card. You can take the chip out of one phone and put it in another and you don’t have to worry about changing phone number or contact info.

Because of the emergence of such a way to do billing, some of the speakers at the conference predicted that the long run path for mobile phone operators would be to merge with financial institutions as their services will increasingly resemble those of credit card companies.

However, few people were optimistic about the prospects of etailers when it comes to mobile phones. “When I’m in a store buying something, I’m not going to go up on the web to check if it’s available at a web store,” told me one attendant. “I want to get it now and not wait a few days for it to show up in the mail.”

As a result, the promise of m-commerce is good for software vendors (who will sell packages that allow operators to set themselves up as currency clearinghouse) and mobile phone operators (who could become the next big financial force) but unfortunately, current etailers will not fare as well.

Content is King… in a Wireless Republic

The promise of advertising supported content on wireless phone has been hailed by some as a new way to support content sites. Unfortunately, few content providers will survive in the wireless space as demand for those services does not seem to meet expectations. Talking with people from the Scandinavian arm of large American companies who have tried to go the wireless route as a distribution channel, I discovered that there was not much demand for those services. “Sure, people do check the price of their stock on the phones but they still call our voice line to place their order,” said one executive from an online trading company.

As a general rule, the demand for content seems to be limited to a few areas: entertainment (bars, clubs, and restaurants locators), financial (stock prices) and sport-related (latest scores). However, many of the people involved in those areas told me that they were still looking for a proper business model. The locators are looking at a coupon-like scheme, whereas bars can offer a special coupon and people can go to a bar and show the phone coupon to get a rebate on drinks (“It appears that beer is the hot wireless app” quipped one panelist). Financial services and sports services are currently looking at possible subscription based models or at deals with operators whereas they would share a portion of the revenue they are generating for the operators.

CN U RD THS

On the other hand, communication in the hot wireless app. SMS has clearly become the hot app when it comes to wireless service across Scandinavia and across Europe. Because operators are charging lower rates for data services than they are for voice traffic, short messaging has become the quickest way for people to get in touch. A new lingo is starting to pop up around SMS as people are trying to economize the number of keystroke they type (SMS messages are limited to 160 characters). As a result, the headline for this section would translate from CN U RD THS to Can you read this?

Convergence in the Making

I also talked to a bartender who told me that the previous night a woman was in the bar looking for some of her friends and asked him if he could change the TV channel to a particular teletext page (in a lot of European countries, TV channel use the extra bandwidth to carry data. As a result, while watching the BBCyou could switch to the BBC teletext channel and read the latest news, etc… on there). The channel this woman was using allowed her to converse with several of her friends in a TV-based chat room by using her phone and an SMS gateway. True convergence in my book but the problem here is where revenues for an online operator are. Unfortunately, the only operators who will make money on this will be the phone operators who are racking up extra data minutes of usages.

Smaller, Faster, Cheaper

The good news, from a user’s point of view, though, is that those services are coming in a smaller package. A lot of the phones I saw over there would put our American phones to shame. On average, European phones are now weighing about 2.78 ounces (79 g.), a form factor of 3.9 X 1.75 X .6 inches (101.5 X 44.5 X 17 mm.), and a battery life that allows for either 150 hours of standby time or 4 hours of talk time. Of course, they come equipped with voice recognition (so you can have the number dial based on a name you give to it), predictive text input (a new set of tools for SMS which allows the phone to predict what word you’re going to type based on your input), and are WAP ready. The most interesting thing is that they usually are priced under $200 which makes me feel that we’re overpaying in the US.

The future is now?

The new thing around that space, though, is not a smaller phone or a better way to do e-commerce but a new set of services around higher speeds of access. The first step in that direction is GPRS, which offers about 20kb per second and has been rolled out around Europe. This is seen as a way to distribute such services as music and better news on the phones. However, the real discussion is centering on UMTS which promises wireless throughputs of 2Mb per second or more. Portions of the UMTS spectrum have already been allocated in the United Kingdom, Germany, France, Spain, Norway and Finland, with the rest of Europe moving quickly on allocating this space. UMTS proponents envision the use of wireless video conferencing and a better Internet experience to result from this new development.

Euro Fighting

One of the big challenge in terms of doing business in Europe is location. Because most of the European countries are too small to create an actual market for digital services, European operators usually have to provides sites in multiple languages, and support multiple currencies. As a result, European etailers tend to be in favor of the Euro, which would make their lives a little easier. However, as the currency is slowly deflating in the currency market, opposition to the Euro is growing across Europe. On September 26, Denmark is holding a vote on whether to join the Eurozone or not and this election is seen across Europe as a big test for the Euro’s power.

The reason it the Danish election is so important in Europe is that if the Danish vote fails, England’s upcoming vote will probably do so too. As a result, there is a lot of concern across Europe about this election. Many etailers I met in Copenhagen told me that they were trying to organize themselves to push for adoption and work across borders when it comes to those election. Danes I talked to told me that British conservative politicians (who are opposed to joining the Eurozone) had been lobbying in Denmark. This is a race that etailers both in Europe and the United States should pay attention to as it will most probably dictate the viability of the Euro as a currency and, if the Euro succeeds, could mean less headaches to all of us.

Going beyond Economic matters, support or lack thereof could mean either an acceleration or a slowdown for eEurope, a new initiative by the European Union to become a force in the information age by normalizing rules related to e-commerce across the difference members of the EU and offering incentives to companies that want to bring net services to the EU marketplace. Among the initiative supported under eEurope are net access in public schools and public centers, lower access costs for businesses and individuals, agreement on common specifications for a smart card infrastructure, financial support for emerging tech companies and a number of social support and government services becoming available to all via the Internet.

All and all, what eEurope would mean is that countries would work in the EU government to set up rules about the Internet. I do not need to tell anyone reading this that it would be better for those of us in the industry as we would not have to lobby several governments in order to get the proper support for our industry.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title From Scandinavia With Love. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

At the same time, the World Wide Web Consortium has introduced the P3P, a new standard to facilitate the distribution of a web site’s privacy policy.

Implementing P3P, users could choose to visit only Web sites that promise not to track their movements or to collect personal information. Or they could decide to go to Web sites that collect personal information, like their name and address, but only if that company promises not to share that information with anyone else. The browser will take care of notifying them of each site’s policy and let them decide whether they want to opt in or out. With Microsoft and Netscape being involved in those efforts, expect the next iteration of web browsers to be P3P-compliant.

The CDT has endorsed P3P as a step in the right direction. While it stops short of saying that it is the be all end all of privacy, the CDT praised P3P as an “important opportunity to make progress in building greater privacy protections in the Web experience of the average user.”

The CDT warns, however, that P3P will not insure that companies follow privacy policy nor will it ensure data safety in countries where no data privacy law has been enabled. More critics have said that P3P was not the appropriate answer because it created a default where companies could grab any data and users had to opt out of that gathering. This, to certain consumer privacy advocates, is bad because they believe that most people will not bother with opting out (studies on opting out of any kind of data gathering have shown few people polled bothered to do so, thus giving more control to corporations). In other words, while concerns around the issue are high, most people don’t want to have to deal with it and calls for increased protection are starting to pop up on Main Street as well as in congress.

The Federal Trade Commission, which up until recently had a laissez-faire attitude towards such data gathering has now recommended that Congress enact legislation to ensure a minimum level of privacy protection for online consumers, establishing basic standards of practice for the collection of information online. The recommendation includes four basic areas of protection:

• Notice: Web sites would be required to post a privacy notice telling consumers what data they gather, how they collect it, how they plan to use it and who has access to it.
• Choice: users should have the right to decide how their information would be used beyond a transaction.
• Access: Web sites would be forced to give consumer a chance to access the information that has been gathered about them and make modifications including deletions and corrections.
• Security: Web sites would be required to take steps to protect the privacy of users in order to ensure that data would not leak out unknowingly to other sources.

These suggestions mirror the 1998 European Directive on Data Protection, which was enacted to control the use of personal information gathered on European citizens. It has already been put into law by eight of the fifteen European Union countries. Originally, the European directive does not allow American companies to gather any data on European consumers because there is a lack of protection for personal data in the United States. However, discussions between the European Union and the US department of commerce are currently under way to allow American companies some protection. Passage of the FTC recommendation into law would insure compliance and alignment between European law and American law, which would facilitate global e-commerce.

However, there are a number of issues to look at. The FTC suggestions came as the result of a recent study the commission did, which showed that only 20% of the sites they surveyed did not fail in at least one of those four areas.

I would recommend to the readers of this newsletter that they examine their own internal policy on data gathering in order to comply with such rule. I may not be a rabid consumer data privacy advocate but I believe that these rules make sense for several reasons. Our business, as Internet builders and managers, is to ensure the highest level of customer services on our web site. Data protection is a new area of customer service that we need to concern ourselves with (the FTC is a political organization and I’m sure that they have some internal pollster telling them that consumers want to see their data protected). Web sites who pioneer data protection and develop strong rules internally will benefit greatly as consumers will feel more comfortable in their dealings with them. Beyond that, data protection is one of the fundamental pillars on which expansion into foreign markets lies. When I was working at Boo.com, one of the things that we worked on diligently was compliance with the many European data laws. As a result, we ended up following the European Directive on data gathering relatively quickly (however, I was surprised to see that Boo had allegedly sold its customers list to FashionMall as part of its divestiture, leaving a huge question mark on the legality of the matter).

As a quick reference point, here are a few questions that web site operators should ask themselves:

• Do we have a privacy policy and is it posted?
• Does it provide information on every piece of data we collect? (for example, a number of privacy policies do not cover use of cookies, server logs, or emails send to an address on the site)
• Do we give consumers a chance to opt-out of that data gathering? If not, can we? If so, do we provide the necessary tools to do so (web-forms or email address)?
• Do we give users a chance to correct personal information we have gathered about them and select whether they want us to use it in the future? Do we cover every scenario under which that personal information will be used?
• Have we audited our site to make sure that the information is stored securely?

Let me address each of those points in more details.

Privacy policies

: the first thing in drafting a privacy policy is to involve the lawyers (I know that may sound stupid but I know of a couple of corporate web sites where that job was left up to the webmaster). While the lawyers are involved, however, a good privacy policy should be easy to understand so skip a lot of the legalese and explain your policy in plain English (think of it as a marketing piece: the message you are sending here is “we understand your concerns about privacy and here is how we are answering them”).

Opting out or correcting data

: Most web sites keep the consumer data in a separate database or set of database tables. As part of good netizen behavior, companies should create a user name and password for every user who decides to give them data. Among some of the tools you would provide to that user are: a form where the data they have submitted is listed and where they can make corrections. Furthermore, a second page should be offered to allow users to opt out of different marketing options (for example, a user could choose to opt into receiving snail mail special offers but not email ones). However, as part of these opt-out options, you should add some value to your data. If a consumer is willing to give you their snail mail address for marketing purpose, you could offer them certain special discounts on products. This could include discounts within your own store as well as on other web sites (example: imagine your online electronics store wants to share data about users who have recently bought a stereo system with a web site that offers music CDs for sale. As a way to entice customers to agree to your selling their name to another web site, they could receive a discount on CDs on that other web site).

Data audit

: The recent news about hotmail passing email addresses in the URL field showed that user data can sometimes leak out without your planning on it. Instead of passing such precise identifier, user a customer ID in the URL field. That ID remains unknown to outside web sites but allows you to personalize the user’s experience. A check of all the personalization features on your site should reveal such problems. Fix them before the news goes out. I had noticed the email address in a URL problem with Hotmail and sent them an email about three weeks ago but never heard back from them. Last week, I read about it on the front page of Cnet’s News.com. I’m not sure of whether my email went to the wrong person at Hotmail or to a mailbox that did not get read much but my feeling about seeing this pop up on the front page of a leading tech news site made me feel that data handling at Hotmail was sloppy at best.

Either way you handle it, the data privacy debate will not stop. You can choose to bury your head in the sand but ultimately, it will have to be dealt with. Why not lead the charge and ensure that you are in compliance before you are forced to do so?

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title The Privacy Police Strikes. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

I’ve been looking at the press coverage and it seems that some of the coverage does not work out. For starters, Boo.com’s failure is not an example of why B2C E-commerce will fail, it’s an example of why Boo failed itself. Nor is it a failure of E-commerce in Europe.

Now that the company is buried, I’d like to take a look at what went right and what went wrong with the company and go into more details as to what we should learn from that failure. I will try to summarize what I learned over the 6 months I spent there but I may be off a little here and there since it’s been a while since I’ve left the company.

Boo was the first company to launch from the ground up in multiple countries from day one. This represented a set of challenges that were previously unadressed, ranging from technology challenges to more traditional issues in generating a global brand. While I was working for Boo, I was in charge of developing the back-end fulfillment system, a platform that allowed us to handle multiple currencies, multiple languages, on the fly tax calculation, and integration with multiple fulfillment partners. Let me go into more details on what this means.

Multiple currencies

If you want to trade globally, you can’t only offer US dollars. As a result, you need to figure out a way to handle multiple currencies ranging from dollars to pounds to liras to francs, to deutshmarks, to kroners, etc… If you are planning on doing this well, you have to peg your prices to a particular value. However, you have to realize that prices are not the same in every country and what may seem expensive in the US can be seen as cheap in other countries. This is where you have to make a decision as to whether you want to set a fixed price in the local currency or set a more dynamic price that is affected by currency exchanges and other fluctuations. It’s a fascinating problem in and of itself but it’s one that we discovered to be a big pain to deal with.

In the end, Boo built a system which allowed us to set a different price for each country or set a single price for all countries and have that price be translated in the proper currency based on a set exchange rate. It was a bit of a kludge but it worked and, to this day, I haven’t seen an Ecommerce shop with a similar system.

LESSON:

When dealing across multiple countries, decide early on how you want to set up your pricing scheme, it will save you headaches down the road.

Multiple languages

First of all, forget translation software packages. They are still relatively immature and there is (at this point anyway) little hope that they will mature much beyond their current point in the near future. If you’ve taken any linguistics course, you know that grammatical rules can hardly be standardized for several languages. For example, something as simple as a verb can become a whole new set of problems. In English, there is a relatively small set of basic rules. The verb “to want” breaks down into “I want, you want, he wants, we want, you want, they want”. Notice that there are only two basic variations here. In French, the same verb “vouloir” breaks down as follows: “Je veux, tu veux, il veut, nous voulons, vous voulez, ils veulent.” In this case, there are 5 different variations. In spanish, it’s six… and so on. Take that problem and try to automate it and you are building a system that is bound to fail. The way we worked around it at Boo was to create a system where the copy was translated by hand by people who were fluent in the language.

Unfortunately, another problem cropped up: British English and American English are EXTREMELY different. Considering that the assumption was that one version of each language was sufficient, problems cropped up and some of the perfectly normal British english stuff ended up being very offensive in the US. THAT was a major problem.

LESSON:

One language per country can be a dangerous road, check with the locals before making anything available to the general public.

On the fly tax calculation

This one almost killed me. In the US, it’s relatively easy to deal with taxation. For the most part, the only taxes you have to pay are for states in which you have a physical presence. Where it gets tricky is when your servers are located in one area and your offices are in another. Technically, that is two locations.

In the case of Boo, it got worse. For example, a sale to France was taxed three ways. Why? Quite simply because the company had offices in Paris, its servers were located in London, UK and its distribution center was in Cologne, Germany. However, the interesting part of the problem was that we were making a sale but not delivering a good in the UK, delivering a good but not making a sale in Germany, and making a sale and delivering a good in France. This was just one example. Multiply that by the number of countries the company was doing business in and it soon got VERY complicated. Add to that the fact that certain goods were coming from China or Taiwan and the picture got so clouded that we had to bring in tax attorneys to help us on the details.

LESSON:

Hard to believe, but accountants and tax attorneys should be part of your development cycle if you are developing global Ecommerce apps.

Integration with multiple fulfillment partners

The main issue here was dealing with different file formats for DeutschePost (the European fulfillment company) and UPS (the company that did fulfillment for the US). What we ended up doing was create an EDI link to those guys (DeutschePost was not web-enabled yet) and create a set of filters for each of them. A simple answer to a simple problem but this little answer cost about 150 man months of work as the content had to be migrated from the old (untagged) setup to the new one. Because the original database was originally set up wrong, we had to totally reorganize the schema and refit the content into it.

LESSON:

Plan early, think of all that can go wrong, and then plan it again. Usually, spending more time on specs saves you from many headaches down the road.

Where’s the plan?

When I joined the company in August, the launch was behind schedule by three months and we had ten weeks to the Christmas season. The first thing I asked to see what the project plan. It didn’t exist. People were working on bits and pieces of the project without communicating with other people they were affecting. Within a week, we put together a MS-project chart and things started to move properly.

LESSON:

An e-commerce project without a development plan will always be “this close” to launch but will never launch.

Front end is technology

One of the biggest failures at Boo was to assume that the front end was not a technology issue. Up through launch and beyond, the front end team was first reporting to business development and then to marketing. This was a capital mistake that I kept fighting over. A web site front-end is interface design, it’s not a marketing exercise. It should include people who are versed in this and not just people who know about pretty colors. Ultimately, I think this was one of the big failure factor in the company.

LESSON:

No matter how good your backend systems are, the users will only remember your front end. Fail there and you will fail, period.

There are many other reasons for which Boo failed (I’d rather not go into them but I can say that the press is on the mark on a lot of their accusations) but ultimately, there were a lot of really smart and really good people there who worked very hard to put together what, to my mind, was an amazing back-end operation. Lack of communications to and from the top was definitely a problem as well as a lack of understanding of Internet time (the redesign of the site I heard about on the day after launch has not yet happened and probably never will now). In the end, though, Boo’s failure was not that unexpected to anyone who had worked for or with the company. Boo.com did not fail as an Ecommerce company, it failed as a company, period. The thing that took it down were not Ecommerce related as much as they were just plain business. Yes, I’m a bit saddened by the fact the company went downhill but I already knew this was going to be the outcome back in January when I left.

Ultimately, Boo is a typical example of a lesson that many VCs are pushing these days: Management makes or break a company.

Let’s hope we all take that lesson, remember it, and let Boo stand as old mistakes we will never make either again (for those of us who made them) or at all (for those who haven’t).

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Boo.com Goes Bust. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Last week, while on a business trip in California, I bumped into what may be the largest barrier to a wireless Internet: lack of connectivity.

San Francisco had OK coverage but the Silicon Valley, supposedly ground zero for the Internet revolution, seemed to lack the proper infrastructure. At any moment, your connectivity is jeopardized and a move of a few feet can make all the difference in the world between connection and lack thereof. All and all, a sad state of affairs.

However, it was perfectly understandable, considering all the hills and valleys covering the area. What is more worrisome is that I have yet to find someone else addressing this issue. In the last week, I have talked with several people in that area and most of them looked at wireless internet access as somewhat of an oddity. All the people I talked to are actively involved in the Internet industry, either as I-builders, content developers, or software manufacturers. All of them took it for granted that bad cellular coverage and lack of reception was a fact of life. A lot of them were involved in wireless development.

What does all this mean? It means that we are dealing with people developing applications without really using them. Is that good? I doubt it. From my point of view, one can only make truly revolutionary advances in a field if he or she lives within that environment.

So the progress will have to come from somewhere else. Last year, I warned of Europe potentially becoming centerstage to the Internet revolution; This year, I am starting to see proof of that.

In Finland, Nokia has already connected most of the country with a very impressive WAP network. 65% of the people have cell phones and most of those are WAP enabled. Want to check a movie time or restaurant reviews, you can do so, using WAPit, one of the largest portals in the world for WAP applications (unfortunately, most of the content is in Finnish so if you dot know the language, is pretty difficult to use).

Most people over there send short e-mail like messages over the SMS protocol. At 160 characters per message, you cannot say much but is enough for “Meet you at the movie theater at 7pm” or “Lunch?”

In Spain, Motorola and Packet Video recently demonstrated wireless video over a GPRS ( the next generation of high speed GSM) network. For the Barcelona exhibition, both streaming and live video content are being provided from the Internet and a selection of web cameras, and transported across the Motorola end-to-end GPRS solution to the end-user device. The web cameras are situated at PacketVideo’s headquarters in San Diego, at the Barcelona congress centre itself, and at the Invisix centre of excellence in London, a Motorola/Cisco joint venture says the press release.

In Japan, the revolution is in color. A recent survey by Nikkei Market Access showed that over half of the Japanese phones produced this year will have color LCD screens. Those will be use to not only surf the web (in full color) but also potentially to do videoconferencing over GPRS.

Why is progress happening outside to the US? Quite simply put, because they have agreed on a standard (GSM) and are now all working on building its next generation. In the US, we are crippled by a number of different proposals from each of the providers, which has crippled progress as each company goes its own way developing its own proprietary network and technology.

What is needed now is for the American wireless service providers to sit down and agree on implementing GSM. Once that first step is accomplished, they will then need to figure out a system to charge each others back for carrying a competitors traffic on their network. Here’s how it would work. At some set times, the wireless service providers would sit down and agree on a standard and a rollout schedule. Once that is accomplished, they would jointly rollout GSM networks all over the country and work on building a system that would allow anyone to use anyone else’s wireless network. The companies would then charge each others back at the end of the month for all the minutes that non-subscribers have spent on their network. The result would be increase coverage for everyone, but may be a little more expensive than the service we have nowadays.

Where phone companies would innovate is on package of new services they could offer and still on the discounting schemes they already offer.

The customers might have to pay a little more for service from their provider but they will not have to worry whether they are running on AT&T, Sprint, or someone else’s network.

Crazy concept? I dot think so. Do you worry about whose network you’re running on when you are making a long distance call on your landline? No, you do not and the kind of agreement I am talking about already exists among telcos in that space. Why should it be different in the wireless world?

You’re probably wondering why any company would agree to something like this? How about to regain a leadership position in the world market and allow to use your phone anywhere. If such a plan were to be put in place, you could technically have the same phone whether you are in the US or in another country and the wireless provider could expand into overseas markets more easily. Foreigners are already starting to get onto the American market (British company Vodafone, for example, merged its American wireless operations with Bell Atlantic). If American companies want to continue their growth, thell have to expand overseas.

Last but not least, the Internet industry will have to eventually push for something along those lines if it truly wants the wireless revolution to happen. Otherwise, the US will still remain one of the most disconnected country in the world.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title It’s Connectivity, Stupid!. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Much like new developments in wireless platforms (mobile phones and other devices) and interactive television are now moving at a faster pace abroad than they are in the US, E-commerce is bound to become a non-US lead field if American companies don’t watch out. The reason is quite simple: legacy systems and lack of identification of variances that exist outside of the US.

Let’s take a simple example: selling in multiple countries. Because no country in Europe is sufficient to create a strong market for a particular retailer, Europeans Etailers are keeping an eye out on issues like multiple currencies and multiple language management. In the US, it’s dollars and English. In Europe, it’s pounds, deutchmarks, kroners, etc… and English, French, German, etc… That somewhat simple difference means approaching the development of systems with a different view. From the get-go, Europeans are kicking off their systems with an eye towards supra-national sales. That means being able to deal with custom taxes, rates of conversions, and multiple languages from the start.

Those are but a few of the issues they are accustomed to deal with but not the only ones. In the UK, for example, the interactive TV platforms have been rolled out and web and email access from your cell phone is more of the rule than the exception. As a result, European Etailers are developing their web based systems with an eye to other platforms. Most American systems are stuck into legacyware that ties their platform specifically to the web and will eventually have to be trashed in order to take advantage of the new platforms.

That said, American companies have a definite advantage in knowing the web VERY well. That advantage turns to disadvantage though, when they are asked to do things differently. We are now an industry that is getting more ingrained into its own frame of mind (well, this is the way other web shops do it so why should we change it). However, because non-US markets got into the game late, they had the advantage of being able to deal with more mature tools and try to go beyond anything that’s been done before. For example, I talked about Accompany.com back a few months ago, and saw it as a major development in the way people buy (Aggregation of customers for reverse auction). That message apparently also sunk in with some people in the European market and there is now a healthy competition among vendors in this market. However, in the US, it seems that by and large, this area of Ecommerce is widely ignored.

What will we do if that landscape is dominated by non-US players?

It’s now high time for American Etailers to wake up and realize that the global market is as important as the American one. After all, we’ve all been talking about one of the advantages of the Internet being that it is a global market. Let’s remember that fact and start acting as global companies instead of US-only ones. Otherwise, European companies will most likely eat our lunches.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Tech Race: Is Europe Getting Ahead?. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

What is Boo.com ?

Boo.com is aiming to build a global e-commerce platform that will allow to trade in multiple language and multiple countries. Based out of London, Boo.com will initially sell wares in the United States and in Europe.

For those of you who may be interested, the ad campaign is starting this month with print ad already being available in Details, GQ, ESPN magazine, Vogue, and Elle (those are the only ones I’ve heard about so far but I’m sure there’s more)

What will you do there?

As senior adviser to the CEO (a consulting gig for now), I will be helping the company build its backend infrastructure. On a day to day basis, it means I will run a team that will build a world-class E-commerce system (I hope). Once we have built the system, I will most probably start focusing on internal applications and general strategy (I figure that will be in about a couple of years as building the infrastructure will most assuredly be a long term project).

Does that mean you think Net Quotient has no future?

NOT AT ALL. Since I started here, I’ve seen the company change hands, helped it being split up and acquired, and helped transform it from a do-anything-to-pay-the-bills (hasn’t that been the case with every startup that bootstrapped?) shop to a stable project implementor. I would recommend it to anyone who’s looking for professional Internet systems integration work to be done and will probably use it myself in the future.

If you like Net Quotient so much, why the move?

If someone had come to you with a job that pulls not only from your Internet experience but also from other background stuff (like my knowledge of European culture), would you turn it down? If you could get a chance to build a multi-country, multi-currencies system, something that hasn’t been done before, would you do it?

In my case, those were the main issues. I have to admit that it is tough leaving Net Quotient behind but this opportunity ended up being too good to pass up. I’ll get to spend time in Europe, and I’ll get my hands back into back-end coding, which I really enjoy.

The company’s based in London. Does that mean you’re moving?

Nope. While I initially will be spending a lot of time in London, I will be working out of our New York office. Eventually, I’ll be back in NYC full-time only going to London a week every months.

So when is this official?

I am leaving Net Quotient on August 13th and will start at Boo.com on the 16th of August.

Q: So where do we reach you now?

You can always use my personal email address or check my web site for most recent contact info. I will have my new work contact info on there as soon as possible.

Q: Anything else?

Yes, as I customarily do when I leave a company, I’d like to recognize a few people that have definitely made my leaving Net Quotient a very difficult task. I have made some very close friends here and I hope I will remain so with them for many years to come.

First of all, I would like to thank Jonathan Wallace, Net Quotient’s president. I’ve learned a lot from Jonathan in my stay here, most of which is how to temperate myself. For those of you who’ve met me face to face in the past, you might remember an overly agitated kid who was going in a billion directions at once. Jonathan helped me focus more and for that, I will be forever thankful. Furthermore, he’s a big movie buff and we spent countless hours chatting about the latest flick.

Jon Davis, NQ’s big man in New York, is another friend I will regret no longer working with. He often was there as a cheerleader when, exhausted by hours of work, I would flinch and worry that I was doing it all wrong.

Harry Kapsales, one of our systems architects, was a close smoking and then non-smoking partner. Together, we manage to kick that nasty habit and became good friends along the way, trading jokes and views on the industry.

The rest of NQ’s management We went through two acquisitions together and, as is the case in such crazy times, ended up bonding in the process. From Chett Rubenstein (New York sales) who brought me up on all the latest sales theories, to Andy Galewsky (the Austin boss) and his Texan one-liners, I want to make sure that, if we’re ever in a war, I’ve got the whole management team of NQ in my foxhole!

The rest of the NQ New York office. There’s a little tradition here that we all go out at lunchtime to grab food, and bring it back to the office where we talk about news, movies, music, etc… as well as joke around (interestingly enough, the talk of sports is fairly limited). This combined with the office happy hour on Thursdays made for a very fun atmosphere and I will miss them all.

Anyway, I’ll miss working with those guys but considering how small our industry is, I’m sure it’s only a matter of time before our paths cross again.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Tristan Goes to Boo.com. You can follow him on twitter here or receive his weekly newsletter by subscribing here.