What matters

To people living largely in the future, the internet obviously matters but increasingly, matters of governance and politics are starting to pop up on radars. Whether it is the current state of rebellions in the middle east and their aftermath, or discussions around freedom of the press, the first skirmishes of internet and the established political structures are starting to happen.

In 1997, with the landmark ACLU vs. Reno legal win in the United States, those of us who were involved thought we had done most of the work that was needed to avert some bad lawmaking on the internet. Because many of us were relatively young, we had confused success in an early battle with total victory and surrender from the established order. Over the years, though, fighting has continued and the incumbents have slowly been regaining ground and momentum.

Unfortunately, whether it is due to ignorance or arrogance, most of the tech community has been staying out of the many discussions related to government regulations. A small cadre of dedicated activists has tried to work on this or that issue but nothing has been done on a coordinated basis to establish a net-friendly view of the world in Washington DC.

Meanwhile, in countries outside of the US, more progressive governments have established some basic principles of internet governance: for example, Finland made 1Mb broadband Internet access a human right and I’ve heard from several sources that internet access will be written as a right under the new Egyptian constitution.

With that background, you’d assume the US would eventually move in the same direction. However, with little outrage in the online community, a bill to create an internet kill switch in the United States is currently making its way through congress.

Or take the discussions around Wikileaks. Much of the debate last year over the cable release seem to bring politicians and the popular opinion to the view that Wikileaks had broken US laws and done irreparable damage to the US State Department. Now three months later, charges still have not been brought against Wikileaks… and State department officials who looked into the damage done by wikileaks reported back to the US Congress that it had caused little real and lasting damage to American diplomacy. Meanwhile, the revelations highlighted in the Wikileaks documents have been credited as one of the elements that helped launched the recent rebellions across the middle east.

But once again, few geeks came to Wikileaks’ defense initially, and fewer yet are still involved in the freedom of the press discussions launched by the Wikileaks dump. Meanwhile, in an attack on government whistle-blowing, some US congressmen are working to ensure that publications similar to the Wikileaks one (or the Pentagon papers in the past) would become illegal. Once again, few computer geeks are involved.

Those are but a couple of examples of why individuals whose livelihood depend on the Internet need to get involved.

A changing landscape

My first experience with internet policy-making was forged through the Clinton years, when incredible individuals came together to establish basic levels of protection for the then nascent Internet industry. I was fortunate enough to be a fly on the wall for several of those events, hashing out such boring issues as tax classifications for goods and services sold on the internet.

Policy makers in the Clinton administration were, for the most part, relatively friendly. While I thought it was because they were believers in the potential of the internet, a more cynical analysis could highlight than those discussions were happening when the commercial Internet was still a relative novelty and did not seem threatening in any way shape or form to traditional models. Viewed through that lens, to toss a few crumbs to the internet crowd seemed like a no-brainer to governmental institutions, and opposition to such idea was non-existent because the stakes seemed so small to any traditional players that it wasn’t even worth fighting for.

Since then, of course, the internet has moved out of stealth mode, slaying a few established players along the way. Internet issues are no longer considered small potatoes by any industry. In fact, for many, they are the main issues. It is in that new climate that the future of the internet is being fought.

At the same time, the internet itself continues to expand. Only a few years ago, most people accessed the internet via a computer. Nowadays, an increasing portion of the population is starting to access the internet through mobile devices, running IP packet on the network of mobile operators who have looked at portion of their landline business being decimated by decisions they made in the 90s regarding letting the net. Back then, because they could not envision the net as becoming a major economic force, they agreed to giving anyone full access to it at a relatively low cost. The explosion in use put that unmetered access to the test and those players now want to reverse what they see as a costly mistake. Their goal is to throttle wireless access or at least make it more expensive so they can return more profits to their own bottom line.  This also means they could balkanize portion of the internet based on special monetary deals, tipping the balance away from small players and towards the people who can pay the most. This imbalance would have a substantial negative impact on the innovation explosion engendered by inexpensive and unfettered internet access.

Network philosophy and governments

For the most part we, in the internet industry, tend to look at structures made out of networks, where each node in the network has a similar say and amplification only happens as a reward mechanism based on the validity of the content being created. It is something we measure in page-views, referral links, subscribers, and twitter followers. It is a model where a 15 year old kid with good ideas can provide opinions in a similar forum as an retired US congressman and both opinions are treated by the network in the same fashion initially.

The content is there for all to see and to be judged on its own merit. Sure, there is some element of filtering happening as people look to follower counts, or subscribers, or longevity as social proof of value but that social validation changes in a dynamic environment and yesterday’s unknown can become today’s superstar as quickly as today’s superstar can become tomorrow’s has-been.

Our governmental institutions, however, has largely based on a more traditional system of top-down command and control, where vision is created at the top, communicated to the lower rungs, and executed within the frame of what the leadership wants. A government, like any organism, tend to be resistant to change.

Evolution has taught us that it is not the strongest of the species that survive but the most adaptable to change. And changes created by network philosophy will have a direct impact on the current state of government. How well that impact is managed is dependent on how well each side is prepared. If preparations are lopsided to one side or the other, the clash will be extremely violent (think Libya) and the outcome will kill the unprepared side. If the preparations are of relatively equal measure, the clash itself will be relatively painless (think Egypt or Tunisia) but there will still be a lot of things to hash out afterwards.

Incremental AND Revolutionary

So to put things simply: it’s time for geeks to get involved in policy making. Refusing to do so is equivalent to signing a death penalty for the current state of the Internet.

Let me simplify that: You can either get involved or give up on the internet.

Over the next decade, the legal framework and the way government will run for the next century or more will be defined. Your role in defining it will help decide whether we live in as free a society (or even freer) as we do today or whether we end up in a more controlled environment.

In order to facilitate the transition, there is a need for both incremental and revolutionary approaches. The incremental model is one where one works within the established framework (so working with government organizations, for example) to steer it in the direction of change through a series of small, seemingly painless, sets of changes. It is akin to moving everything off by a single degree 180 times to completely reverse course. In that model, the secret is to establish the appropriate partnerships, build the appropriate coalitions between all parties and help everyone understand that change takes time but that each step forward brings us one step closer to the future.

In that model, one can do simple things like supporting pro-internet candidates through donations and volunteering of time, or educating current politicians on certain issues. The incremental model puts the focus on the rules of law and uses the current model to move from status quo to a longer term change over a long period.

Meanwhile, the revolutionary model looks to break down the existing system and, through its attack, forces the system to change itself in order to co-opt the revolutionary elements and get them to stop the attacks. The revolutionary model looks at the edge of changes as the beginning while the incrementalist look at it as the end of the process. Because the revolutionary generally looks much farther, he/she is pulled back from where they want to be and continues to push for more reform on an ongoing basis, always being the early test case and always pushing the dialogue a little further out.

Interestingly enough, both models have the same aims, forward motion and change, and the people from each side tend to be the ones that work together in the post evolutionary state.

So, while I myself am very much in the incrementalist camp, I want to put out a call to everyone out there to choose a side and get involved: If you’re reading this, you care about the internet. And if you care about the internet, you now have to go out and get involved in shaping its future, which will ultimately be defined through new laws over the next decade.

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

Found in the twitter archives from July 4, 1776:

• independence would be a good idea. #independencenow http://bit.ly/usdoi

• The government should not mess with our rights to life, liberty and the pursuit of happiness. #abolishgov http://bit.ly/usdoi
• No one’s above the law #kinggeorge #fail #iblame http://bit.ly/usdoi
• He’s neglecting us #kinggeorge #fail #omgthatssotrue http://bit.ly/usdoi
• He wants us to give up our rights in exchange for help #kinggeorge #fail http://bit.ly/usdoi
• Tweetup was too far #kinggeorge #fail http://bit.ly/usdoi
• Our friends were pushed out #kinggeorge #fail http://bit.ly/usdoi
• No representation for us #kinggeorge #fail http://bit.ly/usdoi
• The king’s stealing our money and not letting us run things #kinggeorge #fail http://bit.ly/usdoi
• Judicial representation now! #kinggeorge #fail http://bit.ly/usdoi
• Stop gov corruption #kinggeorge #fail #gov20 http://bit.ly/usdoi
• Stop gov abuse #kinggeorge #fail #gov20 http://bit.ly/usdoi
• Why is there an army on my street? #kinggeorge #fail http://bit.ly/usdoi
• Why is the military not independent? #kinggeorge #fail #gov20 http://bit.ly/usdoi
• England armies out of colonies now! #kinggeorge #fail http://bit.ly/usdoi
• stop english army abuse now #kinggeorge #fail http://bit.ly/usdoi
• let our markets be free #kinggeorge #fail http://bit.ly/usdoi
• Stop english taxes in the colonies #kinggeorge #fail http://bit.ly/usdoi
• We want juries of our peers #kinggeorge #fail http://bit.ly/usdoi
• Don’t change jurisdictions on us #kinggeorge #fail http://bit.ly/usdoi
• We are not Canada #kinggeorge #fail #blamecanada http://bit.ly/usdoi
• Give us our laws and charters back!!! #kinggeorge #fail http://bit.ly/usdoi
• Give us our legislature back!!! #kinggeorge #fail http://bit.ly/usdoi
• You want war? Then we quit! #kinggeorge #fail http://bit.ly/usdoi
• Say not to death and destruction #kinggeorge #fail #dead http://bit.ly/usdoi
• Mercenaries out of the colonies now! #kinggeorge #fail http://bit.ly/usdoi
• Friends should not be forced to turn on friends #kinggeorge #fail http://bit.ly/usdoi
• The king’s not fostering law and order #kinggeorge #fail http://bit.ly/usdoi
• We’ve tried talking this out but he won’t listen #kinggeorge #fail http://bit.ly/usdoi
• We called, we wrote and only received insults as replies #kinggeorge #fail http://bit.ly/usdoi
• Our friends in the UK also tried but no one listened so war it is #politics #uk http://bit.ly/usdoi
• Independence now #politics #tweetup #gousa http://bit.ly/usdoi
• Let’s hope this works out #gousa http://bit.ly/usdoi

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title #140 Independence. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Then, I picked up the same info from the Apple store offerings for the MacBook today:

So looking at this, the comparison in terms of a price drop, since we’re talking about features, would probably have to be around the 2.4 GHz version since it’s the only version that appears on both pages (the MacBook didn’t have any 2.0 GHz or 2.1 GHz version.)

However, here is the first problem with the statement. The 2.4Ghz MacBook version offered today is $1599 and the 2.4 Ghz MacBook Pro version offered yesterday was $1999. That’s only a $400 price drop.

Using the same advanced “check the Google cache” methodology, I pulled up the technical specification list for the MacBook Pro as it appeared on Apple’s site yesterday. It looked like this:

I then pulled up the similar data from today’s specifications for the MacBook. The idea here is to get a fair assessment, based on Apple’s words yesterday and today, about whether one really gets the same value for less.

So let’s take a quick run down through the features of each devices, since Steve Jobs asked us to keep thinking of today’s MacBook offering as equivalent to yesterday’s MacBook Pro, based on the data provided by Apple itself:

So by the look of it,it’s not an exact match. The screen of the old MacBook Pro is, of course, larger, which accounts for it being heavier and bigger. But other features seem to have disappeared: The 2 firewire ports are gone, as is the ExpressCard slot; So is the antiglare screen (with glossy available as an option instead of a default) and the DVI port. Oh, and the supported screen resolution goes from a top of 1440 by 900 to 1280 by 800.

On the plus side, the multi-touch pad is a glassy button-less one, a new video card is available, as is a larger hard drive (50 more Gb to use) and a speedier motherboard is available. Also, it appears that the battery is now a 45-watt-hour one instead of a 60-watt one so I suspect that there are some power enhancements in this new machine.

Are the two machines similar? No. However, each of them has pluses and minuses and they are only $400 apart which, considering some of the things that have been dropped and added, seems to point to a machine that, assuming depreciation, is probably in line, price-wise, with the earlier one.

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

A few months ago, I started getting the feeling that we are in the process of moving into a post-boomer era, and highlighted some of my thoughts on the subject. This was a surprising change of pace to my readers, who are generally more used to my studying things with technology as my focus lense but it was the beginning of an evolution in my thinking.

As the first rumbles of the economic crisis started appearing a couple of years ago (HSBC, my employer at the time, was one of the first companies to aggressively write off bad loans), I started wondering whether the crisis in the mortgage space was only the beginning and thinking that the credit card crisis was probably going to dwarf the mortgage crisis if it ever happened.

At the time, however, I had been so focused on looking at the world with a technology focus that I was failing to find the words to really describe what I was witnessing. My gut was telling me that this was a big turn but I neither had the audience nor the vocabulary to express my thoughts in a clear fashion.

Furthermore, not being a citizen yet, I felt that it might be presumptuous of me to point to the ills of a country that was hosting me as a guest, a country that had offered me so much opportunity. So I kept quiet.

But I now believe that it’s time to attempt to highlight a few things that do not appear to be part of the debate surrounding how to deal with the current crisis. And since I have the luck of dealing with readers who generally are much smarter than I am (and many of them much more powerful than most people), I thought that maybe, just maybe, I could get some of the basic discussion started here, spreading a meme around the concept of a culture crash.

In this particular case, I think the issue is around the destructive culture of credit America has been cultivating with the rise of the post-WW2 generations. I am not saying baby boomers because they are only part of the problem, as my own generation ( Generation X) and the following one, are also involved in the same destructive addiction to credit.

At issue is the concept that over-extending oneself is a good idea. It may be because I am coming from a foreign country, or it may be for other entirely different reasons but I have always had an aversion to credit. When I took my first mortgage, I worked hard to try to repay more of the principal than was requested by the bank. My concept was simple: I thought that if I could repay my loans early, I’d give away less as interest and could then use that interest to pay myself. It turned out to be a smart move but I have no idea as to how I came around to that conclusion. The funny thing is that I had discovered the concept of, to put it in terms that are now being used by every pundit, “liquidity is king.”

Whether it is credit cards, mortgages, or other forms of loans (student loans, car loans, etc…), I’ve always been suspicious of the idea that one could spend more than they had. I was aware of the concept of assets but ultimately, I felt that assets should be, for the most part, tangible. And a bank account with cash in it is about as tangible as things get.

Living in the USA, however, I have always been surprised by how much of a credit culture the country has. When asking for a mortgage, I had to fight my bank to get a “lower” mortgage amount because they felt I was asking for too little. The idea of lowering the risk (both mine and the bank’s) of financial default seemed to go counter to many in the go-go run-up of stock prices in the dotcom era, following by the go-go run up of real estabe prices in the recent housing bubble. Sure, I didn’t spend a lot of time jetting around the world on a lot of vacations as I toiled to ensure that my mortgage was paid off (and it took me a few years to do so)  but I discovered that many of the people who had run up their bills based on the promise of paper fortunes represented by their dotcom options were the same people who were financially wiped out when those paper gains evaporated.

The same phenomenon seems to have repeated itself with the housing crisis, as people refinanced their houses to take cash out and traded those houses as investment vehicles up until the point where the virtual gains they had made in the run-up on prices evaporated.

The similarities between the dotcom crash and the housing crash are a little eerie and, with the benefit of having gone through one of those crisis, I am now starting to gain perspective on the other one.

Meanwhile, the risk of dangerous investment securities (the so-called structured investment vehicles) seem to have been balanced by taking a few bad loans and mixing them with good ones. The problem was that these mixes got increasingly complex and, as I was talking to a friend of mine involved in developing some of those products, my gut feel got stronger. The thing in my discussion with said person (who shall remain anonymous in order to protect the guilty parties) was that “no one really understands many of those investment products anymore.” It felt a bit like a house of cards to me but once again, I figured that I didn’t really know enough to talk smartly about it.

Until this current crisis.

Students of history are familiar with the concept of a run on the bank. As I was reading up on such issues as part of my preparation for a speech, I started thinking about how brittle our economic system really is. Ultimately, most of the financial markets are based on people’s perception of value and, if that perception changes, the whole thing can unravel pretty quickly.

I think we are now at the tipping point of a major shift in the perception of what a good financial decision is. Wall Street may be the most impacted by this for now but I suspect that it will spread relatively quickly (my gut tells me the perception will be generalized globally within the next 3–12 months). The change is coming from the fact that growth may no longer be considered as valuable as tangible assets.

During the dotcom days, I received a couple of crash courses in perception management. The first one was going from VC to VC with a plan trying to raise around a million US dollars for a start-up. The company was slated to be profitable within 2 years and would grow at 15–20 percent afterward, per our projections. To say that our financing efforts were not going well was an understatement. The moment of realization came when, in another disastrous meeting, a VC told us “you’re asking for a million dollars, and will only give us 15–20 growth after the initial couple of years. Your plan lacks ambition.” The whole time, we had been basing our plan on realistic achievable numbers and I failed to understand why we were considered to not be ambitious. Things got worse and, in a fit of desperation, my business partners over-rode my decision of conservative growth based on solid revenue and created a projection set based on year on year tripling of the business, starting with an initial investment valuing the company in the 15–20 million dollar range. I thought were were going to be laughed out of the room by the first VC we presented this but something truly scary happened: not only did the VCs like it, but some of the people who had previously given us a soft no were now banging on our door, trying to get into the round. Of course, we took a first round, and a few more afterward, and enjoyed a nice liquidity event that achieved a nice profit for the initial investors. The company continued on air until the dotcom crash, which it didn’t survive as a going concern.

The lesson here is that VC investment, IPOs, the housing bubble, etc… all have one thing in common: they are based on the idea of future payout, due to year on year growth that is often based on numbers that are wishful thinking in the best of cases ( and outright fraud in the worst cases, as we have learned from Enron and Worldcom)

I think this concept is now hitting the wall. The problem is that it has yet to be replaced by something else as we are moving through the irrational stage that generally marks the end of every great cultural movement. So the operative word is “sell, sell, sell” and confidence has shaken some of the mightiest institutions on Wall street as it will shake up other institutions soon.

On Wall street, they are now well aware of that reality and some of the cooler heads are realizing there may be some ways to profit from the stampede by acquiring assets at fire sale prices.

However, I’d venture that both the panic and the cool reaction are relatively contained right now. Contained to people in the financial industry, the media (who have never seen a crisis they can’t hype), and the reacting investors.

A few days ago, I was at a party in the tech community, and the happy atmosphere reminded me of the euphoria I had experience in the late 1990s, only a few months before the dotcom bubble went crashing down. As I travel in the murky waters between Wall Street and the technology world, I was shocked by the contrast between the panic I was witnessing in the financial space, and the relentless optimism I encountered in the tech space. The assumption that the crisis is contained to Wall Street was well engrained (and may yet change as more people see their 401k go down) but I started wondering about the disconnect. When presented with the issue, one person pointed out that a lot of people would go to grad school, as had happened after the last dotcom bubble and the only thing I could think of, upon that remark was “and where will they get their student loans from?”

Once again, I was getting stuck in the credit mindset and it made me uneasy but it came from the realization that credit is a core basis for the current US economy.

What I suspect is now going to happen, after the credit culture crash, is a move to core value, with people working hard to save up in order to buy things in cash. Actually, I hope that that is the case because any other option only seems to provide a short term band-aid to a major problem. If we fail to take the opportunity to move beyond the credit mindset, the next crisis will make this one look as easy to deal with as the dotcom crash currently looks to us: a big deal for a few people but ultimately something we can get past.

And I’m afraid that we will continue to spiral down the road of an ever increasing amount of debt until such time as there is no other thing to do but crash the culture in order to reset it.

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

$700 billion is a pretty large figure (TechPresident has a good post that puts it in perspective) and it’s one that will only increase the national deficit.

But interestingly, there’s a way to cover the $700 billion. If we are in a time of crisis, we all have to tighten up our belts: the president has said that the alternative is a really bad economy so I’d assume we are all in this together and we all need to pull in. With the figure of $700 billion being rougly $2300 per person, there’s no way we can ask for everyone to chip in that exact amount. But what if we decided to spread paying it back over several years.

So I started playing with the national budget simulator, a handy little tool which has older budget figures but can give us some ideas.

The first thing I did was repeal the Bush tax cuts from 2001 and 2003. If we are in an economic crisis, we have to figure out a way to get the country back on track so repealing tax cuts that were creating when the economy was arguably in a better state might do the job. Doing so against the 2006 Budget would have yielded $294.88 Billion. That gets up about a third of the way through paying for the bailout. So, if you repeal the 2001 and 2003 tax cuts over a 3 year period, you pay for the bailout. In times of crisis, that might work.

But that was the easy part. What if we need to pay for this in one shot. If that’s the case, we’d need to find another $400 billion in the budget:

• Get rid of reconstruction aid for Iraq gets us $6.84 billion. With $80 billion in oil revenue currently running for the Iraqi government, we could argue they can cover their own reconstruction cost and eliminate this.
• Cutting untaxed foreign profit would yield another $15.74 billion. You could argue that in times of crisis, we need to focus on internal profit and foreign profit is fair game.
• a 20% cut in defense research and development would yield another $13.62 billion (from base of $68.129 billion) but slow down our ability to develop new weapons.

But those are all small cuts and other cuts could have negative impact on the economy so, looking at most of the budget, the only way to get anywhere near the $700 billion mark would be to repeal those tax cuts from 2001 and 2003. They were expensive then but are now downright unaffordable and one could argue that it would be our patriotic duty to cut them.

Ideas, comments, suggestions as to how to raise the $700 billion are welcomed in the comment thread.

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

But today, I can say that I got past most of the funk. Sure, I still look up in the sky when a plane flies lower than expected; Sure, I still get some chills down my back when I get close to ground zero; but, for the most part, I can go about my life without being reminded of what happened.

Today, my concerns have evolved: it’s more about building a better future for the generation born after 2001, that of my son, than it is about dwelling on that horrible and unfortunate date.

But today is also a time for reflection: there is still only a construction site on ground zero, the result of wrangling by different factions about what the place should be: it may be weariness on my part but maybe the best way to honor the dead would be to put your own agenda aside and try to figure out where the common ground is. Whether you were affected directly, through the loss of friends and loved ones, or indirectly (and, let’s face it, most of us in the USA were affected at least indirectly), a way to celebrate might be to reach out to someone you generally wouldn’t and try to understand what ground you share.

7 years ago, New Yorkers pulled together. 7 years ago, we were all as one but somewhere along the way, the country went back to being apart. Why not make today a day to bring all of us together again as New Yorkers, as Americans, as members of the human race.

In Memoriam: Carlos Dominguez, Mark Ellis, Melissa Vincent, Michael DiPasquale, Cynthia Giugliano, Jeremy Glick, David Halderman, Steve Weinberg, Gerard Jean Baptiste, Tom McCann, David Vera.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title 7. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

My journey to this moment is one that, in retrospect, would pretty much a given. Since 1992, I’ve been involved on the outer periphery of presidential elections. In the mid-1990s, for a brief period, I was even lucky enough to be present when policies and legal precedents that continue to shape the Internet were established.

In the last presidential election, I took a week off from work to put my money where my mouth was, volunteering with the A.C.L.U. to help protect individual citizens’ right to free assembly and free speech during the New York Republican convention. I’ve had many memories from that week but what stuck most, in my mind, was the courageous group of three Republicans who, one night during that week, went down to Union Square, where most people were protesting against the GOP, and set up individual spot asking the protesters to debate them. The exchanges were both fiercely partisan and cordial and I am still amazed by the fact that people who sat on opposite extremes of the political spectrum could not only sit down and talk with each other but do so in a manner that may have helped all participants.

And yet the time passed and it took me another few years to even apply for American citizenship. But last year, I finally decided to make the leap. And the leap was made on one small but crucial and all to often taken for granted right: the right to vote.

I have not posted any partisan thoughts on this site when it comes to American politics. It was a conscious decision: back then I was a resident alien (yes, that’s the technical term) and I felt that to use this bully pulpit to discuss American politics would be in bad taste. As a non-citizen, I felt that I had little or no right to really voice my opinion as loudly because I considered it to be in bad taste.

But things started bugging me. It’s not that I was starting to dislike America but rather that I started to dislike how the administration was dismantling the idea of America that has been set down by the founding fathers. People who know me well know that I can be a bit obsessive about the US constitution and the bill of right. And what I felt, after a few more years of the Bush era, was that this administration was going against a substantial amount of what the founding fathers intended.

A worse crime than attacking the foundation of the American republic though, was in the way it was done, attempting through twisted logic, to paint that attack as in line with what the founding fathers intended. To besmirch their names in such a way was, I think one of the final straw.

The people who assembled in Philadelphia in 1776 and declared that enough was enough put their necks on the line for us with the declaration of independence. And the people who, 11 years later, came up with the US constitution did the improbable: they decided that, having defeated the mightiest army of the time, they would not accumulate and aggregate the power amongst themselves but rather, they would form a country where checks and balances would rule the day to ensure that the people had the strongest voice possible.

So the states would act as a check on federal powers; 3 branches of government would balance each other out to ensure that none became too strong; even those would be balanced as internal mechanisms would limit the authority of any single person within that branch.

George Washington, who had initially had a hard time prosecuting the war but eventually turned things around to win a country was given a chance at becoming the country’s new king. But not only did he turn down that opportunity, he did not seem to argue for a strong executive branch. Once in power, he not only avoided the trappings of royalty, but also set foreign policy precedents by declaring the US as a neutral nation in foreign conflicts, and eschewed any attempts at war, preferring peace.

Alexander Hamilton believed that the country’s burden ought to be shared by all. However, while heading the house of representative, he decided to sway votes to ensure that his political opponent (and a fierce advocate against that idea), Thomas Jefferson, could become president because he felt that doing otherwise would undermine the legitimacy of the country.

Thomas Jefferson, a slave owner, decided to deride the practice of slavery in his initial draft of the declaration of independence and time and time again, pushed for laws that ended up dismantling some of his own interests.

The men intended on building a new country based on equality and justice for all, even if that meant that they would no longer be guaranteed worship but instead would be considered equals to all. And for this, I would say that they were not just mere men, they were supermen.

But somewhere, somehow, things started going horribly wrong in our times. And I suspect that the main issue has been one based on economics, with many people believing that the golden rule (“he who’s got the gold makes the rule”) should be the basis for our nation. That golden rule led to a belief that each American is an individual and, as such, has little or no responsibility to the rest of society. It elevated the individual to a place where kings would be OK, and thus, the belief of a strong president, stronger than congress or the courts, started to take hold.

And so, a new era of selfishness replaced the basis of selflessness that our founding fathers intended.

I could recount the ways in which those things can be illustrated by the actions of this administration. Whether it is a rush to war (and here, I do not talk about Afghanistan, a war that was based on facts and a real enemy but rather about Iraq, a war that was “sold” because it appealed to a certain group) or the belief that corporations can be above the law (for example, the telecom prosecution exemptions currently being discussed which, I’m sure, are leaving every criminal trying to figure out how they can present their trade in a way that will make them benefit from the same approach large telcos do), something went amiss.

But things going amiss are not the reason to become citizen of a country like the United States, a country that was founded on optimism, hope, and renewal.

And hope, renewal and optimism seems to be the flavor of our times. While we are still living in dark ages, there is a sense that a new breed of politics, a new breath of fresh air, may be allowed its place at the public table. In fact, I would even be so bold as to say that wild concepts like substance over style could have a chance to enter this election cycle.

Granted, Obama oozes style, with the type of delivery that not only presents new ideas but voices them in a way that people find it inspiring. Granted, McCain offers substantive policy but I am not wild about that sustance, as it provides a view of an America angry at the world, and fearful of others.

And that, ultimately, is what this precious voting right comes down to. By now, having lost half of the people who generally read my site (an assumption I’m making because I suspect that the previous few paragraphs will leave many of my Republican leaders angry), I can say that a lot of my thinking about getting US citizenship revolved around the right to vote and the right to belong. The USA, only 7 years ago, was a country that, for the most part, welcomed non-Americans. But since 9/11, things have changed and there seems to be a growing resentment of foreigners, largely dictated through policy pronouncements that would make the founding fathers spin in their graves.

So I am now a new citizen and, on election day, I will most probably go out and vote FOR Barack Obama. Voting FOR someone is an opportunity I missed in the 2000 election cycle (I have to admit that, had I been a citizen in 2004, I would have been more intent to vote AGAINST George Bush than FOR John Kerry).

But of course, there is a lot of work to do between now and then, and there is more than one election to go. This country, my country, is in trouble and I, like many others, have worked to do. And I hope that one or more people, having read this, will consider reconnecting with their civic duty.

But do not take this for my telling you who to vote for. Whether you believe in John McCain or Barack Obama only matters to me inasmuch as I might have to work with or against you politically. However, what would really touch me more than anything is if you, reader in any country where leaders are chosen by election, could reconnect with your community and help improve it by restoring real political dialogue, just like those republicans, with whom I respectfully disagreed on a warm night in August 2004, who decided to talk to their non-republican counterparts. On that night, all those involved may have come from different political factions but they talked in the language of exchange of ideas that so many decades ago inspired the world and defined one country, my country, the United States of America.

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

I was first walked through the script by employee C13763, who balked when I told her that I didn’t know the exact date of purchase of my device. Having purchased the device from the palm US store, I thought they could look that up but I discovered that it wasn’t the case. Keeping her on the line while I tried to login in the store, I discovered that palm no longer had any trace of any accounts of mine on their site. With 4 palm devices bought over the last 3 years, I was surprised by that fact, especially after checking the address on the welcome email (palm has a tradition of sending you a welcome note to their world every time you buy another device) and asking for a password to be reset for the email address I had received emails at from Palm.

But at that point, I could say it was all basically my fault for not keeping good records. I asked for forgiveness and gave a date based on my rough rememberance. It was around the end of the year and the Treo 680 has been introduced at a show in New York only a few days before. So I looked up the rough timeline (device introduced late November 2006 and released around December 2006) and gave a date (January 1, 2007). I knew the date was wrong as I had gotten the device later than that but figured I needed to give them a date that was within the range of warranty and on the outside of the date I bought the device.

After doing so, I was told that I needed to do a hard reset (I had already walked through that) and indulged the call center person (I figure they get enough abuse as is). That, of course, did not solve the problem since it was a hardware issue (speaker blown off due to the fact that the volume setting on the palm, if set too high blows off the speakers and the fact that the volume setting buttons do not lock with the rest of the buttons on the device, ensuring that any type of shaking in pockets or bags will ensure that your volume is either set to the top or bottom setting most of the time). After another 15 minutes of walking through the scenario, I was told that the replacement unit would cost me $299.

$299 would not be much of an issue, with one possible exception: the retail price for a brand new, unlocked, Treo 680 is $379. The street price ranges from $200 to $300. A new unit comes with a one year warranty on all parts. A replacement unit does not.

The message this sends to customers is that once you’re a customer, you’re hooked and therefore the company is going to try to milk any profit it can out of you. As a shareholder, I thought this was the wrong message so I asked employee C13763 to transfer me to her superior. After some going back and forth, I was finally transfered to employee C11329, a “senior technician” to whom I referred my case number (case number 1–511-464–84488) before continuing the discussion.

I first voiced my concern about the fact that there was a problem in terms of locating sales data from their own servers. Since I had bought the device from Palm’s website and I had given my serial number while on the previous call, I thought it odd that they could not locate the date of purchase of the device (especially since they consider it such vital data for customer service) . I was told that since my device was sold on January 1, 2007, the date I had given only a few minutes earlier to the previous call center person, it was out of warranty. I’m writing this on December 27, 2007 and, the last time I checked, a one year warranty generally extends 365 days from the date of purchase. My concern as a shareholder now turned to anger and frustration. With 3 other broken palm devices in front of me (2 of them my own fault so I won’t even bother talking to Palm about those), I thought that I could be considered a solid customer. But now I was told that warranties were not real and paying $199 (a drop in price of $100 in only a few minutes since talking to the previous person) was going to solve my problem. In the past, broken devices were repaired for $100 so this was getting closer to reality but I wanted to talk to someone more senior about two problems: first, it seemed that one can give any date and it won’t be checked (or maybe it will) and two, if it is checked, warranty terms do not apply for a full year.

So I asked employee C11329 to be transfered to her manager. She told me she was the most senior person at Palm. I asked her again politely to transfer me to her manager. She told me she had none. I asked to be transfered to the person that was reviewing her work, giving her assignments, etc.. I was told she had none. I told her I felt that was odd as, apart from the chairman and CEO, I didn’t know of anyone in a company not having a manager. She told me she was the CEO.

For a second, I paused. “You’re the CEO of Palm, Inc.?” I asked again, not really believing what I was hearing. “Yes, I am” she replied, now with a defiant tone. “So you’re telling me you’re Ed Colligan?” I asked. “I am the CEO and that’s all you need to know.”

Well, turns out I was now in a very odd situation. I had been at several industry events where Ed Colligan spoke (including a number of product launches from Palm) and, as far as my memory was concerned, his voice was neither feminine nor did it sound south-Asian in its inflection. My memory might have been playing games on me but I was pretty sure I was not talking to the CEO of Palm.

“Do you mind if I start recording this call? I’d like to get your answer to my question about being CEO on an audio record as I’m having a hard time believing it” I asked. The first part of this question is a standard I was taught in journalism school: if you’re going to record a call, first ask if it’s OK to do so. Laws applying to phone taping are a complex mess of regulations with little overlap between different jurisdictions: however, if both parties to a conversation agree to the taping of that conversation, it is generally recognized as OK to do so.

Obviously, I was dealing with someone who knew (or guessed) that I would not legally be allowed to record the conversation so she replied that “no, that would be illegal”. I was stuck so I asked her to transfer me to her manager again. She said no. I asked again with the same result. After another 15 minutes of back and forth, I finally figured that she being CEO, she could transfer me to anyone in the company so I asked to be transfered to the company’s general counsel. The call dropped. I let the line run for another few minutes figuring that maybe it was taking time for the transfer to occur but no, the line went dead.

After a few hours, I realized that while my experience had been horrible, I may have found a great story: PALM, the stock, is not doing so hot. Palm, the company is having its own issues, as are Palm the devices. In the past, the saving grace in all this was that the customer support was very good and decent. So the question is whether tech support (or other forms of horrible customer interactions) could be the straw that breaks Palm’s back. I called Palm’s PR agency to ask some questions about this but most of the people are on vacation. One of their agency’s PR people told me that she’d pass the message on so we’ll see what happens.

On a personal note, I’m joining the many others who are abandoning palm the device. I am also, like Mary Hodder, regretting all the recommendations I made. I’m now shopping for another device and would welcome any recommendation. I also wouldn’t mind getting some information about how other people feel about tech support not only at Palm but also at other unlocked devices sellers. Is unlocked a category of the market that most vendors dismiss, reserving their best services for 3rd party mobile providers and is it something that might change in the future? I don’t know but what I do know is that I am now part of the group of people who must say: “Don’t ever buy a Palm device.”

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

June 26th of this year will mark the 10th anniversary of the ACLU vs. Reno decision in the supreme court, which struck down the communication decency act and extended first amendment protection to the Internet:

The record demonstrates that the growth of the Internet has been and continues to be phenomenal. As a matter of constitutional tradition, in the absence of evidence to the contrary, we presume that governmental regulation of the content of speech is more likely to interfere with the free exchange of ideas than to encourage it. The interest in encouraging freedom of expression in a democratic society outweighs any theoretical but unproven benefit of censorship.

It is based on that legal grounding that I believe that codes of conducts will generally result in lowering the value of internet speech. The last sentence, in particular (“he interest in encouraging freedom of expression in a democratic society outweighs any theoretical but unproven benefit of censorship”) represents what I believe to be the most outstanding statement as to why Internet speech needs to be protected. That said, let’s now go into a dissection.

We celebrate the blogosphere because it embraces frank and open conversation. But frankness does not have to mean lack of civility. We present this Blogger Code of Conduct in hopes that it helps create a culture that encourages both personal expression and constructive conversation.

I, too, believe in frank and open conversation. The establishment of rules (or codes) seems to act as a way to “close” conversation, even if it is in a way that is limited by certain boundaries and while I agree that frankness and lack of civility are not equals, a question immediately arises as to who considers what proper civil discourse? Looking back at the creation of the United States and the institution of the Federalist papers, civility has generally been seen as the enemy of openness. The discourse between the US founding fathers was far from civil (even, in the celebrated case of Hamilton vs. Burr, ending up in a disagreement on civility ending up in a duel that greatly shortened the life of one of America’s greatest genius.) So, from the opening statement, we are already faced with an interesting challenge: how do we “encourage both personal expression and constructive conversation” while at the same time trying to clamp down on disagreement through that dangerous weapon called civility?

1. We take responsibility for our own words and for the comments we allow on our blog.

I generally agree with that comment but the challenge here is that it leads to immediate censorship. If I disagree with a comment on my blog, this statement basically puts me in a position to forbid that comment as I do not want to take responsibility for it. So, at this point, I am being forced to decide that comments on my site will have to agree with my own view or I have to take responsibility for comments that I disagree with. How many bloggers will be tempted to act as censor in those cases?

We are committed to the “Civility Enforced” standard: we will not post unacceptable content, and we’ll delete comments that contain it.

Deletion works as active form of censorship and also introduces an interesting legal question. As editor of the comment section, one would then become liable for every other comment that made it through, increasing the possibility of people being prosecuted because of the comments on their sites. Without censorship, they could be seen more along the lines of common carriers and would find themselves faced with a greater chance of winning such case. By agreeing to delete, they could face a tough battle.

We define unacceptable content as anything included or linked to that:
– is being used to abuse, harass, stalk, or threaten others

Once again, let me harp on who gets to define those terms. What constitute abuse? Is saying that “I believe so and so is a dimwit for saying…” considered a type of abuse?

- is libelous, knowingly false, ad-hominem, or misrepresents another person,

Libelous is a word with a lot of legal weight to it. This opens up a whole set of legal issues around how people talk online. The appearance of falseness can be enough to trigger a lawsuit (but not enough to win) and this portion seems to also fly in the face of a lot of established law (Zeran v American Online, for example). Another question about this section is “knowingly false”: to whom? to the owner of the blog? to the writer of the comment? to the person the comment is made about? to other parties?

- infringes upon a copyright or trademark

Google, Yahoo, Microsoft, O’Reilly, AOL, etc… are all trademarks. I have not put a TM after every single one of those trademarks in posts I write on TNL.net, which technically makes me in violation of this effort, from a trademark standpoint.

For the purpose of this post, I am quoting the substantial majority of the post by tim O’Reilly, which would technically put me in violation of his copyright. However, Tim has a Creative Commons License so he’s granting me some rights. Unfortunately, the rights granted by the CC license also say that you can’t reuse the content for commercial purpose: I run adsense ads on this site, which could be considered a commercial effort so, as such, I would technically be in violation of Tim’s copyright AND CC license. Under the terms of this, quoting substantial portion of copyrighted content would be a violation of the code. This means that blogs now have a choice: write only original content without extensive quoting or don’t run ads. It’s a tough choice for many bloggers.

- violates an obligation of confidentiality

Enron, the Pentagon Papers, and Watergate are only a few high level cases in the United States that involved a violation of confidentiality. Recent such violations could include the revelations about Abu Ghraib prison and Walter Reed. None of these stories could exist without such violation. Would it be a good thing to purge them?

- violates the privacy of others

This is a higher standard than what is currently given in any other media. Public persona are not given privacy protection in traditional media. Should it be different online?

We define and determine what is “unacceptable content” on a case-by-case basis, and our definitions are not limited to this list. If we delete a comment or link, we will say so and explain why. [We reserve the right to change these standards at any time with no notice.]

Who is we here? And why a “case by case” basis? This seems very dangerous to me, especially with the express notion of those standards changing at any time with no notice.

2. We won’t say anything online that we wouldn’t say in person.

I generally agree with that but what about people using the anonymity of the Internet in order to avoid reprisal. If that standard is held, then it will do a lot to clamp down on information that could have been useful but, because it is about powerful people, can’t be disclosed without fear of reprisal.

3. We connect privately before we respond publicly.

Does that mean that every person that’s talked about it contactable? If the president of the United States makes a comment, how do I connect privately to him before responding publicly? Does my sending him a letter constitute such private communication or do I need to wait for an acknowledgment of receipt?

When we encounter conflicts and misrepresentation in the blogosphere, we make every effort to talk privately and directly to the person(s) involved–or find an intermediary who can do so–before we publish any posts or comments about the issue.

Same as above. What if the attempt is not answered? Does that make it OK? Do we need to vet every comment beforehand? Should I send this to Tim and wait for his comment before I publish it? What if he sits on it: does that quash the story altogether?

4. When we believe someone is unfairly attacking another, we take action.

What type of action? What constitutes an unfair attack?

When someone who is publishing comments or blog postings that are offensive, we’ll tell them so (privately, if possible–see above) and ask them to publicly make amends.

Once again, how do we contact them? What if they don’t respond?

If those published comments could be construed as a threat, and the perpetrator doesn’t withdraw them and apologize, we will cooperate with law enforcement to protect the target of the threat.

Isn’t that already codified by existing law? Why does a code of conduct need to codify this? It’s already a given that such thing must happen (lack of cooperation with law enforcement can carry heavy fines and imprisonment). Which law enforcement authorities should we cooperate with: all of them? Only some? For example, if the Chinese government, Syrian government, Iranian government, South Korean government or other type of government where freedom of expression is not as expressively granted as it is in the United States contacts us, should we comply? I say no, but this code appears to say yes.

5. We do not allow anonymous comments.

Going back to my examples regarding the pentagon papers, Watergate, Enron and others: those would not have existed without anonymous comments. How does this code deal with that?

We require commenters to supply a valid email address before they can post, though we allow commenters to identify themselves with an alias, rather than their real name.

What happens if they hide behind a free email service? Is that OK? If so, what is the value of this statement?

6. We ignore the trolls.

This seems to be in violation of the rest of the code as ignoring them means giving them a free pass? If we delete their comments, we’re not ignoring them.

We prefer not to respond to nasty comments about us or our blog, as long as they don’t veer into abuse or libel. We believe that feeding the trolls only encourages them–“Never wrestle with a pig. You both get dirty, but the pig likes it.” Ignoring public attacks is often the best way to contain them.

If that’s the case, why should they be deleted then? This last section seems to contradict the rest of the code…

Because of such lapses and because I believe that “the interest in encouraging freedom of expression in a democratic society outweighs any theoretical but unproven benefit of censorship,” I have to say that this code is not only a bad idea but one that should strenuously be rejected by members of the blogosphere.

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

To recap, Kathy Sierra is the creator of a popular blog called “Creating Passionate Users.” In a recent post, she asserts that she has received death threats that are paralyzing her with fear and left her so terrified that she’s canceling her appearance at the Etech conference. I do not know Kathy personally and am only acquainted with some of the people she mentioned in her post.

Before I go any deeper into this post, let me state that I do not agree with threats of any violence in general: one’s freedom stops when it start interfering with another person’s. Having been on the receiving end of such threat, I know first-hand what effect they can have on an individual’s psyche (during my college years, I received death threats (at gunpoint, no less) as a result of a politically charged satire article I had written for a local publication.) My thoughts go out to Kathy on this and I hope that the passage of time will help her overcome her fears.

That said, I worry about the current reaction in the blogosphere turning into a mob justice against the alleged guilty parties. The court of opinions seems to have convicted the people Kathy is pointing to with little evidence as to their assumed guilt. Under the model the blogosphere seems to have taken, carrying anonymous comments is cause enough for being guilty. I thought we had fought that fight long ago and agreed that carriers are not generally to be held responsible for what the community posts unless they edit or moderate the content.

This creates an interesting conundrum and one that cannot be easily solved. Remember that the genius of the US founding fathers was in ensuring that speech, no matter how unpopular it is, is generally broadly protected under the first amendment to the US constitution. This is why neo-nazi groups are allowed to deny the existence of the Holocaust or why the KKK is still free to operate as long as its activities are just communication related and do not expand to actions. The problem with speech, in general, is that you can always find a type of speech you object to and if you want to be fair about free speech, you are forced to defend people you disagree with. It’s not easy but it’s also what makes this country great.

In the mid-90s, I was involved as part of a group that took a lawsuit all the way to the US Supreme Court to ensure that free speech would remain protected on the Internet. I was a wide eyed idealist then and still remain one today. And thus, the conundrum: in order for a free society to exist, hate speech cannot be condoned but must be allowed.

The knee-jerk reaction from the blogosphere calling for outing the guilty parties and taking them to the gallows will not solve the fundamental problem and will actually make things worse. A mob, not matter how well meaning, is always ugly. As Scoble pointed it, “we have to fix this culture.” But that doesn’t happen overnight and calling for jail time is not the answer. While I deeply disagree with the premise behind sites like meankids.org, I do not believe that shutting them down would solve the problem. If anything, it might serve as a way to pour fuel on the fire, allowing for such thing to spread at a much quicker rate. Lisa Stone puts it best when she said “My opinions aside, we don’t believe that linking to and associating with sites we don’t like is currently in and of itself a breach of our community guidelines and editor agreements.”

In the past, I’ve bumped into a few people who were extremely unhappy (not to the point of death threat but definitely working through other forms of intimidation) about posts I made about the A-list. This is actually part of the darker side of the A-list: what happens if an A-lister breaks the code of civility? In 4 short points, Ross Mayfield gets to the crux of it: “Being safe is something most everyone can agree is a right… Being anonymous on the web matters… Being open on the web matters… Being free with speech is both what makes us great and makes us go too far…”

What is disheartening, though, is that few people are trying to provide answers as to how to deal with the situation. Umair Haque proposes a system that would remove anonimity from the system. I don’t think that’s the solution but at least he’s trying.

As Doc Searls points out ” Getting your facts right isn’t always so simple” and, in this case, it’s not clear what all the facts are. Sitting here as an outsider, I have a hard time understanding the basic issues at hand (what provoked the initial arguments?) So maybe, the first thing is understanding the fact.

The other thing I’d suggest the blogosphere look at is how hate speech sites can co-exist with the rest of the web. Hate speech online is not new (I’m sure that a little research could yield both Zionist and anti-semite sites turning their hatred of the other people into online posts) but it seems it CAN be contained. Based on that, here are some prescriptions:

• Don’t link to site that support hate speech: Obscurity is generally the enemy of hatred as it doesn’t allow it to spread. The more one pays attention to people speaking hateful words, the more those people will post so highlighting them has a negative effect. Linking is a choice the writer makes so it doesn’t violate the right of the haters to speak, it just denies them traffic flow.
• When confronted with hate speech, either confront it on the speaker’s site itself (hence ensuring they don’t get the flow while at the same time, presenting your own point of view)
• If hate is followed through with actions, out the actions. The speech in itself may be disagreeable but, as long as it is not followed through with actions, it is constrained. However, if it turns into harassing phone calls and emails, or worse, it then becomes something that can be taken care of in a court of law.
• Be mindful of the dangers of mob justice. In this month’s wired, I’m quoted saying: “have you considered the difference between the “wisdom of crowds” and “tyranny of the majority.” It is something that I haven’t heard too many people talk about but what happens when the majority is wrong?” In this case, I’m afraid the majority is wrong in calling for jail time due to speech.

I know this post will probably result in my losing some readers and for that I am sorry but I cannot abide letting a mob run while so many of the facts are still unclear. I do believe that what happened to Ms. Sierra sounds horrible and for that, I send her my best wishes but, at the same time, I want to make sure that the blogosphere does not over-react because the result could be a more limited definition of free speech in the blogosphere. Hate speech, because it is so dreadful, crosses a line that most of us (myself included) would like to see not crossed but it is exactly why it is protected: because it makes us uncomfortable, because it goes where none of us wants to go and that is the genius of the US founders: to protect even the vilest individuals from the overbearing abuse society can impose upon them.

To deny that protection would be denying the genius of the US founding fathers and that’s a step that I, for one, am not yet willing to take.

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

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.

Understanding the mobile landscape

In a lot of ways, the mobile phone landscape in the United States could be considered a case study into how sometimes the free market fails end users. Let me explain: in the late 80s and early 90s, there were two different types of technologies available in the US for mobile phone delivery: CDMA and TDMA. However, due to vendor differences, the market fragmented even further with Sprint PCS (now Sprint Nextel) adopting a different flavor of CDMA than Verizon. Meanwhile, Nextel (now part of Sprint Nextel) adopted a proprietary technology called iDen, which was based on TDMA while T-Mobile and Cingular adopted GSM, a flavor of TDMA that has become the global standard outside of the US.

The bottom line on this whole acronym soup is that most mobile operators in the United States cannot operate on each other’s networks because they are using different technologies. This is why foreigners visiting the US generally lament about the poor quality of the mobile experience in this country and why the US is falling behind in the global mobile race. This is also why most American mobile phones don’t work abroad.

Because Cingular and T-mobile used the same GSM technology, they agreed to share their networks, allowing their customers to use both networks transparently, in a situation similar to the one one would witness outside of the US. The fact that they use GSM is also why a lot of cool phones make it to their networks before they are available to other providers. Verizon is now hedging its bets by introducing hybrid CDMA/GSM phones under the heading of Global Phone Service. To many outside the US, it looks like GSM is already the winning format in the standards war.

Enters Apple

Traditionally, Apple has been known for its exceptional industrial design (creating hardware people lust after) and marketing (also known as the reality distortion field). However, one of the other interesting features of Apple is the company’s willingness to take a standard and move forward with it. For example, by rebranding the 802.11b standard into Airport and later the 802.11g standard into Airport extreme, Apple pushed forward usage of wireless networking. Apple was also the mainstream PC first company to decide to drop disk drives being installed by default on their machines, prompting the rest of the industry to follow suit. The recent removal of modems from their new laptop lines does, in my view, harbor the death of modems being built into computers by default.

Meanwhile, the recent success of the iPod eco-system has gotten many vendors to rethink their strategy when it comes to the portable media player.Microsoft is now creating a closed system called Zune, following the Apple iPod + iTunes strategy and Sandisk and Real Networks are working on a similar walled garden approach. These trends seem to be defying common wisdom as to the progression of markets, whereas markets would generally tend towards standardization.

But what does all this have to do with mobile, you might ask?

Well, the question here is how successful Apple can be. If it creates a product that is so compelling that users will be interested in switching carrier for it, Apple may actually tip the scale on adoption of GSM in the United States. Going back to the ThinkSecret piece

insiders say Apple is internally estimating that shipments of the iPhone will top a staggering 25 million in 2007 alone

According to Gartner, roughly 700 million phones will be sold this year so it’s not improbable that Apple would try to sell 25 million, which would garner it a marketshare of 3 percent. But the overall market numbers may be misleading as many of those mobile phones are on the lower end of the price range, aiming at the developing world, a market Apple is not current going after. The numbers get more interesting when one considers single operators: for example, Cingular is the largest US operator with 56 million subscribers. If Apple were to work its magic here, Cingular could see anywhere up to a 10% growth or more in their subscriber base just on that one product. These users would move to a GSM network and away from CDMA technology.

From there, two possible scenarios could evolve: Apple could decide to license CDMA technology from Quallcom (CDMA is a proprietary technology so every vendor has to pay Quallcom for its use) or say that they are happy in the GSM-only market. If they were to do the latter, they could potentially tip the scale in a life-long fight in the US, making GSM the standard.

But why is Apple interested in mobile?

When considering rumors about an iPhone, one might wonder the interest Apple may have in that marketplace. After all, it’s not one that the company has ever entered and there doesn’t seem to be much overlap with their current existing products.

However, one has to look at the natural progression of the music business to understand why Apple would be interested in this market segment. While its current iTunes store sells roughly US$2 million a week of tracks, the ringtone market is much larger and the margins are supposedly better. So Apple is getting into the market for two possible reasons: first, it needs to protect the market it’s created with the iPod and sees mobile as the next evolution and a potential competitor to their single use device. Second, the company sees a market it wants to dominate. So that adds up to a new phone

But can Apple tip the scale on GSM?

As it stands, GSM in the US is supported by 2 of the big four operators. If Apple is successful, one could see defection from the other two. It’s not going to be an overnight kind of thing but, much like Apple has forced its competitors in the music field to reconsider their position, it could happen in the communication field.

Of course, all this is predicated on those standards still being relevant further down the line. If phones move towards more of a VoIP model, as I suspect will happen over the long run, this may all be irrelevant but, for the time being, a major shift of that kind could have tremendous impact in the telecom 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 Could Apple Solidify GSM in the US?. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Overall Numbers

The overall population, according to MMOG Charts, is currently about 12 million people strong. What is interesting, however, is the growth rate: looking at the linked chart, one can see the population doubling at an increasing rate: it took 24 months to get from 6 million to 12 but it took 48 months to go from 3 to 6. This accelerating rate of growth is an interesting one. Assuming that few other factors change, one could envision a 24 million people strong population within the next 12 months or, on a more conservative basis, within the next 18 months. Considering the upsurge in stories about the phenomenon in the mainstream press, growth will, at least, continue at the same pace over the next year. A recent estimate shows that SecondLife is growing at a rate of 22 percent a month though a more conservative estimate shows a growth rate of 15 percent. Any which way you play it, this is a fairly high growth rate.

Age

The videogame industry has evolved and every year, the average age of videogame consumer is increasing. At the current time, the entertainment software association estimates the average videogamer age to be 31. They also say that the average gamer has played for about 12 years, which would mean that they started at 18–19 year old.

Based on that data point, one could assume that the virtual world phenomenon would slant young. However, research by Nick Yee of Stanford University points to an average age of 26 years old for those users, with only 25 percent of the overall population being teenagers. While Yee’s numbers are for the category of virtual worlds as a whole, more granular data is available for certain worlds. In September 2005, IGN entertainment reported that the average age of players in their survey was 27, which seems to be echoed by 2004 research at the University of Nottingham Trent (UK) which puts the average age of players at 27.9 years old. Also of interest, a recent post on Nature’s weblog points out that the average age for people in SecondLife at 33, which slants older than even the general gaming category. This seems to bolster the claims that those environments are not games but real virtual environments.

Education

In “Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier”, Edward Castranova, of the University of Indiana at Bloomington, points out that 35.6 percent of the people he surveyed in those environments had a 4-year college degree or more. Yee’s study showed that 33 percent of the people he surveyed were students. However, he also showed that, for the non-student population, 44.8 percent of the population had at least a college degree. This number in and off themselves are meaningless but, when compared to the US Census data, they are amazing: according to the 2004 census, 28 percent of the overall US population had graduated from college. What this shows is that this phenomenon is primarily driven by more educated people than the average.

Employment and salaries

Of course, this higher level of education has some effect on the employment profile of denizens of those worlds. Castranova’s paper highlighted that 53.4 percent of his respondents were employed, with hourly salary averaging $20.74. Assuming 2,000 work hours a year, this translates into a $41,480 yearly salary. By comparison, for 2002, the last reported year, the US Bureau of Labor and Statistics reported an average US yearly salary of $36,214. Assuming a similar 2.5 percent yearly increase over the next two years, this would translate into $38,047.34. What this means is that virtual worlds denizens tend to be more affluent than the average American citizen.

Engagement

While the demographic data is interesting, the engagement metric is the one I’m most excited about. Nick Yee estimated that Everquest players spent 22.9 hours per week in that world and that people spend 21.9 hours per week across the category as a whole. Similarly, Ed Castranova found that Denizens in Norrath, a World a Warcraft server, spent an average of 29 hours there a week. When taken together, those statistics point to a level of engagement that is on par with television in the United States, which presents new opportunities for marketers.

Conclusion

The demographics profile of virtual worlds shows users who are young but more educated and more affluent than the general public. The trends in user numbers show a hockey-stick growth pattern that will look familiar to any early adopter of technology, highlighting that this is a nascent industry about to go mainstream. Because the levels of engagements for those users are very high, I expect stories in the mainstream media to soon come out talking about addiction to those worlds (in a fashion similar to the stories that came out about internet addiction, blogging addiction, etc…) which will validate the staying power of those worlds.

From a business standpoint, I’d recommend to my readers that they take a serious look at how they can expand their business in this arena. In my view, what we are seeing here is the emergence of a new way to engage with the Internet.

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

Size of the market

When talking about virtual worlds, I am focusing on the new space created by the gaming industry that allows to create online avatars and interact with other players in a fully immersive environment. From an economic standpoint, estimates range from around 100 millions to a high of US$1.5 billion a year. These are not insignificant numbers and they point to an emerging phenomenon and potentially the rise a new industry, with its own set of marketplaces, gathers, owners, creators, and marketers.

Marketplaces

To understand virtual worlds marketplace, one must first understand what si going on in those virtual worlds. When a player sets up an account, he’s given a basic set of skills. As he or she progresses and interacts with the virtual world and its denizens, the player gains more and more skills and goods. However, this type of interaction requires time. Some people have figured that, because time is money, the amount of time spend in a virtual world could be converted into real hard currency. Thus was born the concept of Real Money Trading (aka RMT), whereas players go to specialized sites and buy virtual goods with real financial currency.

The action initially started on auction sites like Ebay, where characters or other virtual goods range in price from a few cents to several thousands of dollars. Because the trades were largely unregulated, some companies, like Sony, decided to set up their own exchange while others (Internet Game Exchange, Massive Online Gaming Sales, Tek Gaming Supplies, Swag Vault, and Gamers’ Loot) have created specialized marketplaces to cater to this new phenomenon. This, in turns has led to the rise of two new classes of activities: informational ones that provide analysis on the financial going ons in those worlds and arbitration, whereas companies use people in the developing world to build up assets they resell to people in the developed world. Let’s go deeper in those areas.

Information Sites

There is now a nascent information industry surrounding the costs of goods in virtual worlds. For example, Eyes on Mogs is a shopping search engine for virtual goods. All the attributes of other search engines are part of it, including comparison shopping, comparisons of the different vendors, pricing, delivery date, and buy it now info. GameUSD tracks the financial value of virtual currencies over time, providing price trends across not only the provider but also the alternative marketplaces. MMOfx claims to track “over 18,000 price quotes daily” and provide information on the fluctuation of virtual currencies.

Arbitration

Another type of economic activity to have arisen out of the marketplace phenomenon is the arbitration of virtual work. As the primary pursuit in these worlds is the acquisition of wealth, status or levels, an emerging market has arisen to give people with real money a chance to bypass the time investment required to acquire those things. For example, Chinese workers get paid between $75 and $250 a month to work in World Of Warcraft, in 12 hours shifts, “killing onscreen monsters and winning battles, harvesting artificial gold coins and other virtual goods. Affluent online gamers who lack the time and patience to work their way up to the higher levels of gamedom are willing to pay the young Chinese to play the early rounds for them.” Similarly, Romanian players can make a living wage (the ABC News story I linked to says that $200 is a good wage for Romania) on the same kind of activity.

Edward Castranova, the leading economist on the subject of money in virtual worlds has been quoted as saying that “They’re exploiting the wage difference between the U.S. and China for unskilled labor.” What is basically happening here is that these companies have found a niche on the global marketplace to accumulate goods at a low cost and resell them at a premium. This type of arbitrage has been the way a lot of developing markets have revolutionized industries, from the export of manufacturing capabilities in the 20th century to the export of some service jobs nowadays. It’s a natural phenomenon and shows that those marketplaces are starting to develop a high level of maturity, which should be noticed by a lot more people.

Virtual Goods Ownership

Beyond the buying and selling of virtual goods in virtual marketplaces, there is also an emerging trend in the real estate business, which can be broken down into three main groups: real-estate owners, creators and integrators, and marketers.

Second Life is a virtual world more focused on the social aspect of virtual environments than on the goal oriented aspect of missions and war-craft. Fortune Magazine reported last year about the interesting case of Anshe Chung, a character created by a German woman who has accumulated more than US$200,000 in virtual land holdings in Second Life. She rents the property out to other people, after having developed the property. Similarly, the BBC reports that a 23-year-old spent £13,770 in Project Entropia and recouped his investment in under a year. In fact, the land rush has been so strong that Second Life has build a model around land use fees, generating a nice chunk of income in the process.

While visiting this world, I’ve talked to people who had few problems paying $75 per month to Linden Labs for those fees. This is pretty incredible when you think that all they are buying is portion of disk space on a server. In a way, the real estate market presented by those virtual worlds can be seen as a hosting fee in a 3D environment and could represent a high growth market (in a future entry, I will look at the opportunities in the Virtual Spaces in more details).

The Integration Model

Another nascent portion of this new industry is the integration game. As with any new technology, developing and managing something in a virtual world is an endeavor that requires specialized skills. New companies like The electric sheep company and Space Think Dream have emerged as developers/integrators, offering their services to other companies. Their main business is to use the skills they’ve acquired to help existing companies experiment in these new worlds. This is, in a way, similar to the type of work that was done by early web design agencies, treating virtual worlds as a new interface either to existing systems or to create a new value proposition.

Other companies have emerged with the sole purpose of selling digital goods in those worlds. SLexchange is a virtual market where people can buy and sell such goods. Similarly, the Electric Sheep company has created SLBoutique as a competitor to SLexchange. What is interesting here is that there is a whole ecosystem building around Second Life, allowing other companies to prosper based on this new platform. This is similar to what has happened with Ebay and allows us to better understand SecondLife as a platform for e-commerce rather than just a game, a fact that Philip Rosedale, CEO of LindenLab and the power behind Second Life, likes to emphasize. This explains why the company has received investments from people like amazon.com CEO Jeff Bezos, Lotus founder Mitch Kapor, Ebay founder Pierre Omidyar, and Microsoft CTO Ray Ozzie. Those people understand that this a new emerging platform and could see potentially high return on their investment.

Bridging the gap

The development of virtual worlds as a new platform is starting to take shape. Companies and organizations like American Apparel, the BBC, Major League Baseball, NASA, The American Cancer Society, Amazon.com and Wells Fargo are starting to experiment in that space. Increasingly, virtual worlds are becoming not only a new way to market but also a new integration point for e-commerce.

Some of the virtual worlds (Project Entropia, for example) have even gone as far as issuing ATM cards that allow denizens of those worlds to take virtual money and trade it for real money that they can use for regular economic activity.

Conclusion

With large amounts of real currency already moving through virtual worlds, we are looking at a major new economic phenomenon that parallels the initial development of the commercial web and the rise of software as platform in the last few years.

With a new ecosystem forming around some of the virtual worlds, there is a fair amount of incentive for a lot of people to see this phenomenon succeed. SecondLife will probably be an early winner in this race, largely due to how quickly it has managed to get other companies to rely on it. A few more established companies are also early in staking ground in this new space and will probably reap rich rewards for their efforts, expanding their brand into those virtual spaces.

While it may appear that this is largely a subculture of gaming, the phenomenon is much more widespread. In my next entry, I will go through the demographic profile of denizens of those virtual spaces, showcasing a rich and varied texture to this phenomenon.

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

The Music Industry

Take, for example, the music industry. Traditionally, the music industry has been based on aggregating multiple songs on a piece of media. Every few decades, they would benefit from the introduction of a new technology (for example, shifing from LPs to 8-tracks, then to cassette tapes, then to CDs) as people had to basically purchase the same good over and over again when they upgraded their equipment. Then came the concept of a digital track available via download. The music industry is trying to resist that change because the shift from selling pieces of plastic at a premium to buying individual tracks hurts them in two ways:

• first, they now have to ensure that every track they sell has the potential of getting some buyers. Gone are the days of packaging some sub-standard product with some better products in order to average out the difference. Now, every track has to fend for itself.
• Secondly, they can no longer rely on technology as a way to get sell the same track again and again to the same people.

So, of course, they are resisting the change. The issue they have with MP3s and downloadable music does not have to do with people sharing things illegally (as people have been sharing music illegally since the first days of recordable media) but rather because digital music has the potential of making their market a lot more efficient. Now that goods (in this case, songs) are parceled out in their most atomic way, there is no room for them to repackage them into something bigger that may be 10 percent good and 90 percent useless. Their approach to fighting things, of course, is to sue and attempt to create a new closed system through the use of digital rights management (DRM) in order to protect their advantage.

The advertising industry

Another industry getting hurt by the Internet is the advertising business. Traditional advertising business have been based on selling a general audiences to advertisers. The model, however, was based on the concept that some percentage of the audience would buy the product. What was always in question, though, was how much that number was. Then came the Internet with its easy to measure model. Ad banners were measurable but response rates were low. Then came google, with its rich contextual advertising model and its offer to charge advertisers only for the clicks they received. This started to change expectations as to what is now expected of advertising. As a result, advertisers are becoming more demanding of traditional media, requiring more information about the effectiveness of their purchase. Television, newspapers, radio are now considered less effective, because they can’t provide the rich tracking data that the internet does. The net result of this is that advertising is becoming more efficient. Along with that efficiency comes the fact that less dollars will be wasted and therefore less dollars will be spent. Because expectations have changed, advertising is suffering. Their model is evolving and they’re having difficulties adjusting.

The phone industry

The Internet is also starting to hurt the phone industry. The recent announcement by Gizmo that they would offer free calls is just another thing highlighting how the phone company model is broken: traditionally, phone calls have been very cheap to deliver (in an order of magnitude much lower than 1 cent) and phone companies have been charging a very large amount for those offerings. Voice over IP is undermining that, showing people that phone service can be very cheap. In the US, the telcos are trying to fight this by attempting to create a multi-tiered internet where such services would not go through. That model is doomed as mesh networks could undermine their ability to do so. Once again, efficiency is making a product much cheaper. At that point consumers win and the remaining players are making good money but are playing in a marketplace that is much smaller than it used to because inneficiencies have been worked out of the system.

Services

Service providers who do not need to have a foot in meatspace (accountants, lawyers, etc…) have the potential of being affected too. In “The World is Flat”, Friedman argues that this type of work is shifting overseas. He’s right and the long term trend has the potential of shaking up many services industry by providing those services at a much cheaper rate. Once again, the introduction of the internet and globalization is making a market more efficient (hence cheaper costs) but leaving behind a much smaller marketplace.

What to do?

When this stuff happens, the only thing you can do is figure out how to move upstream or change your business model. Large corporations are generally slow at making those types of evolutions but it’s a make or break scenario: adapt or die. The process can be painful: One of the first thing to do is figure out where your fat is and reduce it. This means getting rid of people who do not provide real value. The second part is figuring out which part of your business are highly efficient and invest in innovating with those companies. Ultimately, costs will continue dropping and survival will continue to be about increasing efficiency.

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

Today’s news that the Net Neutrality bill was defeated may create future problems for American internet businesses but will not kill the Internet, as some have claimed. Instead, it will probably dictate, in the long run, the death of the very proponents of a ban on net neutrality: phone and cable companies which have been trying to overreach in their attempt to fatten up their bottom line.

Looking at the stakes

At issue in this debate is how bandwidth is distributed and whether it should be metered in any fashion. At the current time, in the US, most people who get broadband pay a flat monthly service fee that gives them unlimited bandwidth at up to a certain speed. Under a new model many phone companies and cable companies are trying to popularize, this would change. Their view is that certain services, like phone service or video service, require more bandwidth and therefore should be charged in a different way. they would basically introduce new charges that would offer access to such service for a premium.

The fear from many is that such model would get them into the business of monitoring what type of services are available and being selective in what access they offer. For example, they could start offering access to certain sites at a premium fee but decline access to other sites or degrade the service in such a way that those other sites would not work well on most computers.

Short term impact

In the short run, few will feel the impact of the communication providers’ strategy. A few pockets here and there will start failing but, all and all, only new services will be affected. Where it gets interesting, however, is when new offerings start making their way onto the Internet.

At the current time, the US is already starting to lag in broadband penetration. This will become a bigger issue if the telecommunication providers have their way as they will probably start moderate increase in the basic price of broadband access. Some may consider this view alarmist but history tells us that basic rates on phone service have generally been increasing, which is interesting considering the complains about competition forcing companies to lower their rate. The same increase in rates has been true on the cable side of the equation, where rates of service are slowly moving up.

As price is one of the major levers in increasing broadband adoption, such rise in prices will only slow things down. Of course, it may not be a point of concern until one considers the global marketplace. Unlike the United States, other countries are rapidly moving to increase broadband adoption and the speed of broadband lines altogether. What that will result in is a greater capacity to create and develop next generation applications that they will then be able to resell to the rest of the world.

We’ve already witnessed the rise of foreign companies establishing themselves almost overnight as major player with the recent appearance of Skype, a company that was born outside the US borders and rapidly acquired a following that made it worth several billion dollars. This wealth generation happened outside of the US because broadband was cheaper and more accessible there. I’ve also recently seen offerings by a couple of non-US companies that may follow the same curve and I am getting concerned about the US ability to compete if bandwidth is not widespread, increasing in size and inexpensive enough for all.

Restrictions on broadband access and degraded (or uncompetitive speeds) may ultimately represent a major Achilles heel in the US ability to compete on the global stage.

Long Term Impact

But what if…

John Gilmore, prominent Internet activist, once said

The Net treats censorship as damage and routes around it.

Extending the approach, one could start wondering how the net would work around censorship at the source (which is basically what limited access could become).

Enters the concept of Mesh Networking. In a mesh network, computers can work in a peer to peer fashion to connect to each other. One could envision mesh networks being created out of thin air (using wireless Internet access card) without having to go onto the lines of the telco providers. Of course, the issue would still be in terms of traveling over long distances to ensure that sites that are located in far away locations are still accessible. This problem could be solved by some of the content providers themselves, who could enter in some form of social contracts amongst each others agreeing that they would carry each other traffic back and forth, bypassing some the last-mile telco providers in the process. Under such a model, Google’s data center would allow for amazon to use their bandwidth and vice –versa, Microsoft or Yahoo would allow each other similar rights of way and so on… As they all operate large facilities, they could cover a substantial portion of the US public and bypass the telcos all the same.

Under such a scenario, people would start abandoning the restrictive networks offered by phone and cable companies to access the more free and open network offered by the content providers. The result would be an eventual displacement of the telco providers in the long run and, due to probable resentment fostered in the process, an evaporation of any revenue from their other services as those would probably be tied to line access.

Conclusion

If Net Neutrality goes, US competitiveness will be affected negatively and will result in more new wealth being generated outside of the US than in the US. Furthermore, in the long run, an overreach could result in people abandoning the telcos altogether, if Mesh networks take off.

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

The first change I envision is a generational conflict over rights and governance on the Internet. I alluded to it in a previous entry but I am increasingly wondering whether we are not seeing the end of the care-free internet. As IPzation impacts more businesses, they will ask for government help and government regulation. Similarly, some business will flock to the Internet to avoid regulations (for example, one could see television companies producing edgier content for the unregulated online medium than they do for the TV medium which, in the US, is under the watchful eyes of the FCC). IPzation allows for sidestepping a lot of laws because it is in an area where few laws have been enforced.

The second change I believe will happen is a move to a more connected set of data across all systems. I capture this trend as IPzation, a new word I coined to reflect the belief that every system will have an IP and the net will become the underlying infrastructure for every form of communication. One of the downside of this is that it will increase the potential impact on such a critical architecture. One could envision armies trying to take down portions of the network in countries they are at war with. Similarly, one could see radical groups or terrorists try to attack Internet infrastructures to undermine economic activity. At the current time, little safeguards are in place to present such catastrophic attack but we’ve been saved by the fact that, while important in people’s lives, the net is not critical yet.

The third change I see is a potential fight between large network providers and users. As the net becomes a more critical infrastructure, there will be a push to lower access cost to it to ensure that everyone is connected (something known as closing the digital divide). However, large network providers will see this as a unique opportunity to solidify their power and their economic potential and will fight any attempt at government regulation. On the other hand, governments, seeing that economic power, will want to move towards stronger regulations of the net. One other potential outcome of all this would be that some users would start creating a net infrastructure outside of the existing one, only connecting it to the current Internet in a very loose fashion.

The fourth change I see is that software applications are going to become harder to program. As one injects the human element as a key actor in the development of a system, the level of complexity of that system will start getting to the point where it adapts to human behavior. The issue here is that such self-healing code (a dream at the current time but potentially a reality in the future) will evolve beyond human comprehension, not because they will become smarter than human but because they will rely on the collective intelligence of their user base, thus making it almost impossible for a single user to comprehend how it works.

The fifth change I see is a large shift in economic value to virtual worlds. Electronic games have already taken a substantial chunk of money from more traditional form of entertainment. I suspect that they will actually move beyond entertainment and start realizing some of the dreams or distopias envisioned in many science fiction books. There are already millions of dollars going through those environments and thus, I would venture to say that companies in that space are currently undervalued as people are still stuck in a mindset that sees them as entertainment and not potential business areas.

Those, of course, are long-term trends. In my view, I’ll consider myself lucky if I’m right within the scope of a decade. I suspect that those changes may take longer than a generation to fully come through but either way, I will continue writing about them over the next few years.

This is the sixth article in a 6 part series. You can read the following parts here:

• Part 1: Intro
• Part 2: Always on
• Part 3: IPzation
• Part 4: Sensors
• Part 5: Participatory Applications
• Part 6: Conclusion

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

As broadband access to the net becomes more prevalent, those applications will increasingly shift to a net-only model. We’re already seeing this switch with applications like webmail or search, which are purely web-based. Similarly, applications like desktop search now integrate with an online component (for example, Google Desktop Search allows you to store documents on their server or services like Plaxo allow you to store data in an online repository and resync it with different devices) and move data back and forth.

As broadband access continues to increase, the important part is not just the speed (although it is an important factor since it allows for richer online experiences) but I would venture that the more critical part of broadband access is the always-on point. Because a broadband connection does not require to dial-in, it is increasingly becoming ubiquitous. Much as people do not think about the systems of filtration and delivery that provide water to their house or the systems of power generation and distribution that allow them to use electricity, the prevalence of broadband will decrease discussions of what is on the net and what is off it. Applications will just be there and a cloud of connectivity will exist around all of us.

To this end, two potential scenarios could play out: the first one would see the communication providers (telephone companies, cable companies, etc…) continue to provide different access points around the globe. However, another potential scenario could develop around the area of a mesh network that would tie all users together in a peer-to-peer network that would be managed by every single user. One could envision each computing device connected to the cloud to allow for some traffic to go through. Because the protocols that dictate internet based communications have been designed to distribute communications across a number of points (what is called, in more technical terms, packetized communication), one could envision a scenario where an increasing amount of communication would happen in areas independent of the systems provided by the communication providers.

The rise of always on, always fast communication can already be seen in some countries like South Korea, where such thing is considered so commonplace that few people bother discussing it. The United States, unfortunately, are starting to fall behind on this and, because large telecommunication providers are trying to protect their monopoly on access to the high speed lines, efforts to increase speed and coverage could be impeded. However, in the long run, something like a mesh network could make an end-run around the telecom companies, which would then put such decisions in the hands of users.

This is the second article in a 6 part series. You can read the following parts here:

• Part 1: Intro
• Part 2: Always on
• Part 3: IPzation
• Part 4: Sensors
• Part 5: Participatory Applications
• Part 6: Conclusion

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Future Tense — Always On. 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.

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