Society and business in the 21st Century
Foreign Policy magazine on The Rise of Europe’s Internet Police
Why a Japanese e-commerce giant is the lead investor in Pinterest.
Fast Company’s list of the most creative businesspeople in 2012.
Some interesting perspectives from the New York Times Magazine on Making Choices in the Age of Information Overload.
Buying friends on the Internet? $75 buys you a thousand on Facebook.
Facebook is problematic for schools. On one hand it’s a great tools for kids to connect with their peers and relatives while it also can amplify problems for children who don’t have the emotional maturity to deal with online issues.
A common aspect of Facebook and many of the other social media services is that the minimum age for sign ups is thirteen years old and the consensus among online safety experts is children younger than that shouldn’t be encouraged to break the rules.
Given the issues involved with younger children using Facebook it’s not surprising that teachers and school principals try to discourage younger children from signing up.
One Queensland school principal has now ordered that any of her students breaching Facebook’s terms by signing up when under 13 will be expelled.
That’s pretty draconian although one can sympathise with the teachers, particularly given many parents allow children to sign up despite knowing they are breaking Facebook’s terms.
How the parents have reacted is interesting too, with online safety expert Susan McLean saying “”You could not print the response to the principal that some of the mothers wrote on Facebook”. None of this is surprising as some see their rights, and those of their children, as being paramount.
Facebook and other social media services are tough for parents as younger kids see their old siblings online and want to be there too. Given many teenagers build their social lives around the service, you can understand the pressure children put on mum and dad to sign them up.
As kids are going to eventually sign up to Facebook, and are probably already on services like Habbo Hotel or Club Penguin, they are going to have to deal with the issues all of us encounter online. So at least if parents are supervising usage, harm can be limited.
One area that seems to be misunderstood is why Facebook has a “no under 13s” policy. It isn’t, as child psychologist Dr Michael Carr-Gregg believes, because Facebook care about emotionally immature children, it is due to the US COPPA law.
COPPA – the Children’s Online Privacy Protection Act – was passed in the late 1990s to prevent inappropriate data being collected on minors. For US based social media services it’s easier to exclude children rather than set up systems that comply with the law.
There’s many good reasons why children should be allowed to use online services, but respecting the terms of conditions of these sites is important too.
While expelling children from school may be taking things too far, it’s not good to be encouraging twelve year old kids to lie about their ages – they’ll be doing that soon enough in their late teens.
Today’s notable links are a great read with Letters of Note’s stunning letter from Ronald Reagan to his newly engaged son, worrying developments in China and an excellent read on London’s Olympic bid.
Vanity Fair on London’s convoluted, difficult and expensive Olympic bid. This was the basis of today’s blog post.
China’s currency exodus accelerates. Watch how this story affects James Packer and the Macau casino boom.
A stunning letter from Ronald Reagan congratulating his newly engaged son. This is well worth a read.
Entitled apparatchiks never learn. Dominique Strauss-Kahn sues his accuser.
China starts to crack down on foreign workers. Is this part of a bigger trend?
Quit Facebook or be expelled says a Queensland primary school principal.
Tomorrow we’ll be looking at politicians and online media as well as the age of Facebook users. Be sure to join us tomorrow night on ABC Nightlife.
Today’s links are another diverse bunch ranging from how Nokia can save itself, the compelling story of a US execution and how a Unicorn harpooned a whale.
Today’s links are another diverse bunch ranging from how Nokia can save itself, the compelling story of a US execution and how a Unicorn harpooned a whale.
Russia Today’s Capital Account on JP Morgan’s “Unicorn Hedge” Fairytale Harpoons the London Whale.
A powerful story from Al-Jazeera – An Anatomy of an American Execution.
Giga Om looks at a cute way some online services are arbitraging how Facebook acts as a gatekeeper in displaying news. Only read this if you’re a serious search or social media geek.
You know an online sensation is well past its peak when big business starts piling in – Amex sets up a Groupon competitor.
Nokia’s Last Stand. Wired UK looks at how the former mobile phone giant can fight its way back to market leadership.
Ad Age on why YouTube is deliberately reducing web page views.
Canon Australia to stop publishing Recommended Retail Prices on their products. Is this an admission of an open market, or an effort to further muddy the retail waters?
Twitter starts sending out summary emails of friends’ postings. Will this work to drive engagement and create much needed revenue for the sharing platform?
Tomorrow, the blog will look at whether the London Olympics will really be a disaster and whether British business can capitalise on the event.
Monetization is a horrible word.
The term is necessary though as many online business models are based upon giving away a service or information for free. For those businesses to survive, they have to find a way to “monetize” their user base.
When Google were floated in 2003, the question was how could a free search engine “monetize” their users. The answer was in advertising and Google today are the world’s biggest advertising platform.
Facebook’s Inital Public Offering (IPO) announcement raises the same question; how does a company valued 99 times earnings find a way to justify the faith of its investors?
Advertising is the obvious answer but that seems to flattening out as the company’s revenue growth is slowing in that space. The AdWords solution tends to favour Google more than publishers as most advertising supported websites have found.
Partnering with application developers like the game publisher Zynga is another solution. Again though this appears to be limited in revenue and Zynga itself seems to be having trouble growing its Facebook user numbers.
So the question for Facebook is “where will the profits come from?”
There’s no doubt the data store Facebook has accumulated is valuable but how the social media service can “monetize” this asset without upsetting their users is open to question.
For Facebook the stakes are high as the comparisons with Friendster and MySpace are already being drawn.
We’ll see more partnerships like the Facebook Anti-virus marketplace, but these seem to be marginal at best.
In the next few months things will get interesting as Facebook’s managers and investors strive to find ways to make a buck out of a billion users who don’t pay for the service.
While “monetization” is an ugly word, it is one that every online company thinks about.
Every web based businesses will be watching how Facebook manage their monetization strategy closely as the entire industry struggles with the faulty economics of providing services for free.
The argument continues about Facebook’s purchase of photo sharing site Instagram.
One side claims a billion dollars for a business with barely any revenue and 13 employees is clear evidence of a bubble while the other side say its a strategic purchase that is only 1% of Facebook’s estimated $100 billion market value.
The latter argument is deeply flawed, comparing the purchase price against the value of other assets is always risky – particularly in a market where those underlying assets are being valued at the same inflated rates.
We could think of it in terms of a Dutch farmer in early 1637 claiming that paying a thousand Florins for a tulip is fine when he has a warehouse containing hundreds of them.
In reality, that farmer during the Dutch Tulip mania of the 17th Century held contracts for delivery; just as modern day investors held Collateral Debt Obligations.
Measuring value against other inflated assets is always dangerous and only fuels a bubble.
A much more concerning way of judging the wisdom of Facebook’s investment is against profit and revenue.
If we compare the purchase of Instagram against Facebook’s revenue, then the investment has cost them three months income.
Should we compare the acquisition against profit, Instagram has cost Facebook five years of profit at current rates.
Both of those numbers are very high and it indicates how big a gamble the Instagram acquisition is for Facebook.
It can be argued there is a lot of blue sky ahead for Facebook and that future profits and revenues will justify the Instagram purchase.
There’s also a very compelling argument that Facebook has to get into mobile services and Instagram does that.
Whether Instagram is worth three months income or five years profit to Facebook remains to be seen, but we should have no doubt it indicates we are well into Tech Boom 2.0.
This morning I sat in on a corporate breakfast and heard a well known presenter talk about social media for business owners and managers.
The advice was terrible and what was valid could have come from a 2008 book on business social media marketing.
But the room loved it and obviously the client – a major bank – thinks the speaker’s work is worthwhile. He has a market while many of us who’ve been covering this field for a decade don’t.
Timing is everything in business. Earlier this week stories went around the Internet about how Microsoft could have invented the first smart phone.
Microsoft could well have done it, they tried hard enough with Windows CE devices through the late 1990s and there was also the Apple Newton and the Palm Pilot.
While all these companies could have developed the smartphone in the 1990s it wouldn’t have mattered as neither the infrastructure or the market were ready for it.
Had Microsoft released the smartphone in the mid 199os it would have been useless on the analogue and first generation GSM cellphone networks of the time.
Customers were barely using the web on their personal computers, let alone on their mobile phones, so the smartphone would have been useless and unwanted.
Ten years later things had changed with 3G networks and real consumer demand so Apple seized the gap in the marketplace left by Motorola, Nokia and the other phone manufacturers with the iPhone and now own the market.
Apple weren’t the first to market with a smartphone, just as Microsoft weren’t the first with a Windows-style operating system and Facebook weren’t the first social media platform.
Those who were first to the market stood by while upstarts stole the market they built.
Plenty of people have gone broke when their perfectly correct investment strategies have been mistimed – “the market can stay irrational longer than you can stay solvent” is often proved true.
That’s the same with the speaker this morning; he’s not the first to discover social media’s business benefits but his timing is impeccable.
Being first is no guarantee of success if your timing is wrong.
