Jan 232015
strong passwords are important for online security

“There is a big problem with trust today,” says cable operator Liberty Global’s Micheal T. Fries.

He was sitting on a fascinating panel at the World Economic Forum this week with Yahoo! CEO Marissa Mayer, Salesforce founder Marc Benioff and World Wide Web creator Tim Berners-Lee looks at the issue of trust in the tech world.

In a world where everyone wants access to our data, it’s a pertinent and timely discussion from people at the front line of where these issues of ethics and privacy are being dealt with.

Jan 212015

It’s always best to treat a business’ or industry group’s claims of economic benefits with a grain of salt and the survey released yesterday by Deloitte on measuring Facebook’s effects on the global economy is a good example.

Facebook’s Global Economic Impact looks at what the social media service added to the world’s economy and finds the company created 4.5m jobs and $227 billion of value in 2014 outside of its own operations.

Deloitte’s analysis breaks down Facebook’s effects into three general categories; platform effects, connectivity effects and market effects.

In coming to their figures, Deloitte’s researchers further broke the numbers down into the direct revenues of businesses using Facebook, the indirect impact upon suppliers and the ‘induced effect’ of employee spending patterns.

The basic formula, although the methodology gets quite complex in extrapolating the value added, is described in this illustration.


The main areas of contention are the employment multiplier effect, which Deloitte marks at 3.1 in Brazil down to 2.1 in the UK with the United States coming in at 2.7, and the valuation of individual Facebook actions.

For example here is the description of how companies’  page engagement is valued;

Sales from Page engagement are estimated as
a product of the total sales of businesses with
Pages and the sales uplift estimated due to their engagement on Pages (see section A3 for how elasticities are estimated by econometric methods). The total sales of the businesses that have a Facebook Page are estimated using the revenues of the private sector in the economy based on national statistics. Survey evidence is then used on the percentage of businesses with a Page in the US and the UK.

For the rest of the world, the value of a liking action of a Page is estimated using relative GDP per capita of each country to the UK and USA to reflect the local economic conditions.

The gross revenue supported by Pages is then the product of the number of Pages liked and the value of a liking action of a Page.

The key here is the word estimated, there’s no doubt it’s in the interests of Facebook, the marketing agencies and the staff employed to manage social media to overstate this effect; it’s an arbitrary at best measure.

Marketing is claimed to be the most valuable aspect of Facebook, accounting for about two thirds of the service’s claimed economic value with a $148 billion contribution. Deloitte defines marketing effects as “the impact from businesses’ use of Facebook marketing tools to drive online and offline sales, and to increase awareness of their brand.”

Again this is subject to a number of arbitrary definitions and guesstimates which take us into the tricky area on measuring social media’s Return On Investment.

The reason why the numbers don’t pass the smell test is because of the sheer size; in Australia for instance the company’s effects are valued at $5.7 billion and employment generated at 63,000 workers. If we fully apply the 2.6 multiplier Deloitte attributes to the country this would suggest over 17,000 Australian workers are directly employed full time in running Facebook related tasks.

While it’s hard not to be sceptical of Deloitte’s numbers, it certainly is true that social media platforms have opened new roles for administrators, developers and other staff. We just need to be a touch cautious of overstating the benefits.

For businesses, probably the best lesson from Deloitte’s survey is to measure the genuine effects of social media on a business there have to be properly thought out measures and objectives. Guesstimates are not good enough.

Jan 142015
apple smartphone tablet pc

Links today have a bit of a social media theme with Twitter co-founder Ev Williams explaining his view that Instagram’s numbers don’t really matter to his business while researcher Danah Boyd explains the complexities of teenagers’ social media use.

Apple’s patents and why the tech industry is firing, not hiring, round out today’s stories.

Feel the width, not the quality

Twitter co-founder Ev Williams attracted attention last month with his comment that he couldn’t care about Instagram’s user numbers, in A Mile Wide, An Inch Deep he explains exactly what he meant at the time and why online companies need to focus more on content and value.

Apple gets patent, GoPro shares drop

One of the frustrations with following the modern tech industry is how patents are used to stifle innovation. How an Apple patent for something that seems obvious caused camera vendor GoPro’s shares to fall is a good example.

Why is the tech industry shedding jobs?

Despite the tech industry’s growth, the industry’s giants are shedding jobs. This Bloomberg article describes some of the struggles facing the tech industry’s old dinosaurs.

An old fogey’s view of teenagers’ social media use

Researcher Danah Boyd provides a rebuttal of the story about young peoples’ use of social media. “Teens’ use of social media is significantly shaped by race and class, geography and cultural background,” she says. Sometimes it’s necessary to state the obvious.

Jan 132015

On many measures Google are in trouble, but one analyst thinks we’re panicking and his view is the lead of today’s links of the day. We also look at how the name ‘Silicon Valley’ came about, why solar power is getting cheaper and how some startups die.

Does Google’s future lie in R&D?

“Google is down but it’s not out” is the warning of this analyst’s report on the company’s earnings and strategy. Interestingly Google outspends Apple by $4bn a year on research and development, but both of them are dwarfed by Microsoft’s spending, which indicates R&D investment doesn’t guarantee success.

The origins of the name ‘Silicon Valley’

Last Sunday marked the 44th anniversary of the first time the label ‘Silicon Valley’ appeared in print. The US Computer History Museum looks at how the name came about and no-one will be surprised it was a marketing person who coined it.

Why does solar power keep getting cheaper

A few years ago putting solar cells on a building was expensive, now in many parts of the world the price of PV panels is becoming competitive with mains power. Vox Magazine looks at the factors driving the price drops and finds that economies of scale are now the main factor affecting the falling cost of installed solar power systems.

RIP Urbanspoon

One of the earliest food review platforms was Urbanspoon which was founded on the basis it would only grow as a bootstrapped company. In 2009 the founders sold out to a larger company who have now sold it onto an Indian business who is going to shut the name down.

Startups who’ve fallen off the map

Business Insider lists 17 formerly hot businesses who’ve fallen out of the public view this year, while some of them haven’t disappeared, it’s a list that reminds us that most new businesses, particularly tech startups, fail.

Jan 092015

Today’s links are somewhat more upbeat; starting with Apple extending its lead over Android in smartphone activations, a teenager’s view on social media and Google’s declining market share.

Apple takes the lead in smartphone activations

In their regular survey of mobile phone activations, research company Kantor found that Apple have taken the lead back from Android phones.  The Kantar Worldpanel ComTech global consumer panel monitors the brands of phones being connected through selected apps to give them an idea of what’s going on in the smartphone marketplace.

While not an absolute numbers, and one that was inflated by the new range of Apple iPhones released late in the year, it’s clear Apple are by no means out for the count when it comes to the smartphone market.

What teenagers think of social media

I’m not sure how accurate or scientific this story is, but it illustrates how complex the social media industry is and how dangerous assumptions are with what age groups use new media channels for.

How boring can driverless cars be?

Another story points out driverless cars are actually quite boring to ride in. Maybe we’ll all catch the train insead.

Google loses market share

Since signing an agreement with Firefox to be the default search engine provider, Yahoo! sees its share of the marketplace spike upwards. Should Google be worried?

So you thought a tech job was safe?

Document service Evernote cuts jobs proving that even a job in the hottest parts of the tech sector isn’t safe. Notable in this story is the concentration of employment in two locations which shows Silicon Valley isn’t keen on remote working at all.

Jan 042015
Hyundai Blue Link Smartwatch App

From a quiet Sunday here’s some of the stories that have kept me occupied; terrorists misusing their Twitter accounts, what chefs really think of smartphone toting customers and more musings on the future of work in an age where robots and algorithms dominate.

To kick off the post, what does a nuclear power plant looks like after it’s been shut down?

Touring a decommissioned nuclear plant

Yesterday former New York Governor Mario Cuomo passed away, one of the most contraversial moves of his administration was closing down the state’s only nuclear power plant at Shoreham, Long Island.

In March last year Nick Carr had an opportunity to tour the abandoned site and posted the story of this visit onto hist Scouting New York website.

Where will all the workers go?

Economist Nouriel Roubini adds to the discussion about jobs in an age of robotics and algorithms in Where Will All The Workers Go? In his Project Syndicate piece, Roubini focuses on how the current wave of automation will affect jobs in emerging markets.

Today, for example, a patient in New York may have his MRI sent digitally to, say, Bangalore, where a highly skilled radiologist reads it for one-quarter of what a New York-based radiologist would cost. But how long will it be before a computer software can read those images faster, better, and cheaper than the radiologist in Bangalore can?

Like the rest of us he doesn’t have any firm answers except to suggest we may have to accept a new age of under-employment. This has serious consequences for today’s consumerist societies and the economic assumptions that underpins them.

The risks of Instagramming your Jihad

A clumsy Kiwi jihadist gave away the location of secret training camps in Syria through his Twitter account reports the iBrabo website. Mark Taylor joined an insurgent group in June this year and publicly burned his New Zealand passport on declaring he had no intention of returning to his homeland.

A few months after destroying his travel documents, The New Zealand Herald reported Taylor wanted to return home. All of which proves the point of The War Nerd that the best way the west can deal with its suburban jihadists is to give all of them a one way business class ticket to Syria.

How do chefs really feel about cell phone use in restaurants?

Many articles have been written about how restaurateurs are driven to distraction by mobile phone users in their establishments, but how true are those tales.

The Daily Meal interviewed a dozen US chefs about their attitude towards diners taking selfies and instagramming their meals. It turns out they are more concerned about their customers enjoying their meal rather than being upset at them shooting photos.

Hyundai connects their cars to Google Android watches

Korean conglomerate Hyundai has joined the connected car race with an Android Wear app that works with the company’s Blue Link system. The app, designed to work on Google’s wearable devices as well as smartphones, will work allow users to lock, open and locate their cars.

It’s another example of how car manufacturers are integrating wearable and mobile apps into vehicles and it’s a small taste of what’s possible when the smart home and the connected car start talking to each other.

Dec 202014

Could Facebook have reached its peak? A report in Bloomberg Businessweek suggests the service may have passed it maximum popularity.

In a survey by consulting firm Frank N. Magid Associates, the proportion of 13- to 17-year-old social-media users in the U.S. on Facebook slipped to 88 percent this year from 94 percent in 2013 and 95 percent in 2012.

What would really concern Facebook are concerns that the service is not safe, “One reason for the decline in teen Facebook usage is due to concerns that the service may not be trustworthy. Just 9 percent of those surveyed described the website as “safe” or “trustworthy,” while almost 30 percent of people said they would use those words to describe Pinterest.”

For Facebook that loss of trust among younger users is it’s biggest threat. Once you lose the trust of a generation, you’ve lost your business. This trend is one that Facebook will need to address quickly.