About this Author
Dana Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
About this Site
Moore’s Law defines the history of technology. It held that the number of circuits etched on a given piece of silicon could double every 18 months as far as its author, Intel co-founder Gordon Moore, could see. Moore’s Law has spawned constant revolutions since then, not just in computing but in communications, in science, in a host of areas. Moore’s Law applies to radios, and to optical fiber, but there are some areas where it doesn’t apply. In this blog we’ll take a daily look at new implications of Moore’s Law in real time, as it rolls forward to create our future.
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November 30, 2005

Will the Blogosphere Break Up Sony?

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Posted by Dana Blankenhorn

Sony_logo.gifCBS was one thing.

But can the blogosphere cause the break-up of Sony?

Sony's marriage of content to technology was always a dicey one. It's been underway for nearly a generation, since founder Akio Morita led the purchase of what was then Columbia Pictures from Coca-Cola.

Early failures were blamed on the consumer electronics part of the business. Eventually Howard Stringer was named CEO, because he came from the content side.

But now the scandal launched by the blogosphere is getting completely out of control. California and Texas have launched lawsuits. Eliot Spitzer of New York, who is already running for Governor, is now sniffing around the company.

The smart financial play at this point? Spin-off the content arm.

Separating the content from the technology arms of Sony would hold many advantages:

  • It would "unlock value" as the investment bankers say, another way of saying it would generate enormous fees for Wall Street.
  • It could get many lawyers off the company's back.
  • At minimum it would lay off any liability on the content side of the business.

...continue reading.

Comments (1) + TrackBacks (0) | Category: Business Strategy | Consumer Electronics | Economics | Investment

November 29, 2005

Moore's Chicken Pecks Sony

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Posted by Dana Blankenhorn

chicken6.gifMaxell is planning to release a holographic disk next year that can hold 300 GBytes of data, and transfer it at speeds to 160 Mbps. (The animated chicken is from Krittercards. Get yours today.)

Meanwhile, Sony and Toshiba are continuing to play competing standard games with Sony's Blu-Ray and Toshiba's HD-DVD.

While they've been competing to be "the next standard" for optical storage, in other words, they've been leapfrogged by a better, faster, more data-intensive technology.

They've both lost what I'll call the game of Moore's Chicken. Neither blinked. Neither compromised. Both fought this out over years while the technology clock ticked, and Moore's Law of Optics continued to run.

And they both got leapfrogged. They both lost.

...continue reading.

Comments (1) + TrackBacks (0) | Category: Business Strategy | Consumer Electronics | Moore's Lore | Semiconductors | marketing

November 28, 2005

Finally, Some Decent Podcast Aggregation

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Posted by Dana Blankenhorn

po-di-um.pngOne of my biggest problems with the whole podcasting "phenomenon" is the shortage of good aggregation tools.

There are many Podcast organizers out there, in other words, but no one place you can go to see it all.

Until now. A Japanese outfit called Podium has launched a beta of just such a service. Here, on one page, you have all the major podcast "networks," and their top downloads, one-through-ten, along with direct links to the sites themselves. (Given its location, it's no surprise that the page is available in Japanese, Chinese, and English. The link is to the English-language page.)

The same page also features quick links to the RSS feeds of any existing aggregator. One-stop shopping.

...continue reading.

Comments (1) + TrackBacks (0) | Category: Business Models | Internet | Podcasting

Mapquest Going Down

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Posted by Dana Blankenhorn

mapquest.jpgMapquest, the AOL-owned first-mover in online mapping, is about to fall.(That's their map of Cancun to the right.)

The Clue here is an AP story that looks like it was ordered-up by the AOL marketing department, but which can't resist showing cracks in the veneer.

The headline is about Mapquest pushing mobile mapping (which is good). The unwritten story is how Mapquest may be signing carriers to exclusive deals that keep rivals off, something that is possible since mobile "Internet" service is not Internet service at all, but private networks controlled by carriers.

Still, there are big problems revealed here, such as:

...continue reading.

Comments (5) + TrackBacks (0) | Category: Business Strategy | Internet | Investment | Telecommunications | cellular | computer interfaces | e-commerce | online advertising

November 25, 2005

Where China is Vulnerable

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Posted by Dana Blankenhorn

china%20pollution.jpgStories like this are getting to be old hat.

A blogger is arrested after being nominated for a "freedom of expression" award. Chat sites are closed for allowing dissent. To many western eyes the Middle Kingdom seems secure, a totalitarian state which works and will keep working until its economic success buries us.

That's not true, although I no longer believe that the Internet, by itself, will make the difference.

Instead, it's stories like this that will turn the tide. Harbin, a city of 3.8 million (bigger than Chicago), had its water system completely shut down because of a chemical spill. Hundreds of villages nearby have been evacuated, the BBC reports, because of some 100 million tons of benzene which were released into the river after a chemical plant exploded.

The Western media is focused on the fact that China is actually allowing its state-owned media to report the event. But there are dozens, maybe hundreds, of smaller spills occurring every year throughout the country. The skies above Beijing are a sickly yellow, and it's environmental issues that are the most common cause for political protest throughout the country.

In this, as in the West, China is traveling down a well-trod path. And it's a path that has led, in every country, in the same direction -- democratization.

...continue reading.

Comments (0) + TrackBacks (0) | Category: Economics | Futurism | History | Internet | Journalism

November 24, 2005

How A Titty Bar Visit Could Cost You Big Time

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Posted by Dana Blankenhorn

rob%20mccormick.jpgAT&T and MCI are a giant step closer to pricing power over the Internet backbone because of a 2003 visit to a topless bar.

The visitor was apparently Savvis CEO Rob McCormick (left), , who with just three friends ran up a bill of $241,000, paid for it with an AmEx card, then disputed the charge for two years.

McCormick, 40, was canned Wednesday.

But this was no ordinary lover of the dance. McCormick transformed Savvis after joining it in 1999 from Bridge Information (later bought by Reuters).

Back then St. Louis-based Savvis was a medium-sized backbone and hosting provider whose big innovation was the use of Private Network Access Points (PNAPs) to reduce latency. McCormick transformed the company, taking it public in 2000, then buying Cable & Wireless' U.S. assets in 2004 for a reported bargain basement $155 million. While Moore's Law of Fiber was turning backbone provision into a killing field, in other words, McCormick was one of the killers.

Savvis is now known as a data center company and tthe leader in what McCormick calls "utility computing" -- virtualizing services and breaking the link between the applications and the hardware they supposedly run on. Here's how he put it to Infoconomy in July:

"You should not buy from someone who says they can cut your spending by 3%. The real problem is to cut your spending in half, or you are not going to get anywhere. Unless you fundamentally change something, rather than incrementally change it, then you are not going to fix it."

...continue reading.

Comments (2) + TrackBacks (0) | Category: Business Strategy | Economics | Internet | Telecommunications

The al-Jazeerah Story

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Posted by Dana Blankenhorn

aljazeera.jpgI don't know, frankly, whether President Bush sought to bomb Qatar in order to destroy al-Jazeerah TV.

But the way this story has been reported, and not reported, makes me question just how freedom-loving the U.S. and Britain really are.

Let me summarize that:

  • The story has been virtually ignored by the U.S. press. It has been left to political blogs to carry it forward.
  • The British government is prosecuting those who leaked the story under its Official Secrets Act, and the BBC has given it no coverage, making it appear to be a government propaganda organ.

Clearly there is circumstantial evidence for the charge. The agency's offices in Afghanistan and Baghdad were bombed. Both times the U.S. claimed it was an accident. The U.S.-backed government in Baghdad later kicked Al-jazeerah out of the country. The U.S. said Iraq was acting on its own.

But the direct evidence of a 2004 memo on the subject of bombing Al-Jazeerah's main office in Doha, Qatar, if it's real, shows George W. Bush to be nothing more than Saddam Hussein in a business suit. Add the use of white phosphorous (it's a chemical weapon), the horrors of Abu Ghraib, the Cheney fight to maintain torture as an option, and impartial observers will draw their own conclusion.

The point is, simply, that this was an important story.

...continue reading.

Comments (1) + TrackBacks (0) | Category: History | Internet | Journalism | Politics | blogging | ethics | law | war

November 23, 2005

We're Number 21

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Posted by Dana Blankenhorn

feedster.gifEvaluating blog traffic has always been a dicey proposition.

There have been many attempts, with many different methodologies. There were blogrolls, hits, unique visitors, all sorts of nonsense.

Feedster has recently adjusted their methodology. They try to count all links, and discount the spam ones. The most interesting innovation here is the tag cloud, which you can see to the right of the list. Notice that popular tags are bigger than less-popular ones. The biggest remain politics and tech, followed by gadgets (which is a sub-set of tech). (Oh, and let's not forget to send a little link love to Robert Scoble (number 76), who turned me on to this.

What's interesting here is that these are subjects for which print publishers either have poor publishing models or failing ones. If you were invested in computer magazines over the last decade, you lost your shirt. Political publications have always been money holes.

As you will note from the headline, Corante is number 21 on the list, with 18,446 adjusted links. That's well ahead of such reportedly popular sites as Gawker, TalkingPointsMemo, Eschaton and Kottke..

You can see some of the unfairness right there.

Here I'm comparing a whole bunch of people (of which I'm proud to be one) to the sites of individuals. And, in fact, the big MSM blogging headline of 2005 has been the rise of "group blogs," so-called blogs that are actually running some sort of Community Network Service, like Dailykos (number four on the list), and the Huffington Post (number seven).

So let's be fair, with a bunch of group blogs Corante out-polled:

And that's just in the first 150.Don't you wish there were some solid business models on that list somewhere?

...continue reading.

Comments (0) + TrackBacks (0) | Category: Business Models | Copyright | Internet | Journalism | blogging | e-commerce

November 22, 2005

What's In A Name?

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Posted by Dana Blankenhorn

new%20att.gifWhat's in a name?

A lot. History. Image. Attitude. Branding. A rose by any other name would smell as sweet, but might not sell so well. Patagonia toothfish sounds nasty. Chilean seabass, on the other hand, we'll hunt that practically to extinction.

Names, in other words, have meaning. In the case of the new AT&T, the old SBC, the older Southwestern Bell, the name means control. Control of your telecommunications experience, of what comes out of the wire or through the air, control like the old Ma Bell had. (A gracious good afternoon...)

But control is beyond the reach of any phone company in an age of Moore's Law. Moore's Law of Fiber makes it impossible to control the backhaul market. Moore's Law of Radio makes it impossible to control the wireless market. The only way to maintain control, in order to pay-off capital costs, is through government fiat.

The Bell System, the old AT&T, had that kind of control because capital was short and beause it accepted strict regulation of its rates. The new AT&T can never have that control, because capital is abundant and because it refuses to accept rate regulation.

...continue reading.

Comments (3) + TrackBacks (0) | Category: Business Models | Business Strategy | Consumer Electronics | Journalism | Telecommunications

November 21, 2005

Mooreslore Part of the Year

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Posted by Dana Blankenhorn

Every year, it seems a new part comes to the fore.

flash-memory-cat.jpgLast year it was the hard drive. Between TiVos and the iPod, it seemed everyone was buying a new device with a big honking hard drive in it.

This year the product of the year is flash memory. It has many of the same applications, and the new iPod Nano is all about the flash. (Oh, yes, I like them in the pictured application, the "stick drive.")

But when the devices become as small as the Nano, you're really talking phone. That's where Intel is pushing its latest flash chip. It is going to face stiff compeitition in this niche, from the likes of Samsung and others, but competition is the secret sauce of Moore's Law. When companies become dominant in any niche, progress always slows down, and prices don't fall as fast as they might.

...continue reading.

Comments (0) + TrackBacks (0) | Category: Moore's Lore

Solving The Retail Experience

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Posted by Dana Blankenhorn

cingular_guy.gifWhere competition is limited, service sucks.

Competition for mobile services are limited by government fiat. Services have to buy the frequencies they use. In fact, most service is held by a small oligopoly, often Verizon on one side, Cingular (soon to be AT&T) on the other. Sprint and T-Mobile are secondary players.

The limited number of suppliers have complete control of their channels. It's hard for a consumer to know whether the store they're in is company-owned or a franchise. And it doesn't matter. Customer service is terrible regardless.

Want proof? NPD says only one-fourth of consumers, 24%, are satisfied with their mobile phone retail experience. This despite the fact that the service has become so essential in modern life that just about everyone has a phone.

The biggest problem? Turnover. No one knows anything. There are no incentives in place for anything except getting contracts signed. And since sales remain strong, there seem to be few incentives for anyone to get better.

This is a general problem throughout the chain retailing industry. Everyone wants to be Wal-Mart and keep costs as low as possible. No one has any ties to the community or loyalty to the customer.

Yet this doesn't have to happen.

...continue reading.

Comments (1) + TrackBacks (0) | Category: Business Strategy | Consumer Electronics | Economics | cellular | marketing

Microsoft's Latest Cable Play

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Posted by Dana Blankenhorn

media_center_pc2.jpgIPMediaMonitor is trumpeting Microsoft's latest agreement with CableLabs as the Next Big Thing. (Bigger than the Sony Rootkit fiasco? Yep.)

The story, by Cynthia Brumfield, is that next year's version of the Media Center PC spec from Microsoft will support a digital set-top card from CableLabs, meaning the PC can double as a cable television.

A few simple questions are all that's needed to knock this one down like a last-second Hail Mary:

  • The Media Center PC spec has been a market failure.
  • Nothing here about who's going to make these boxes. Notice?
  • TV displays, in the age of HDTV, have moved miles from the standard PC aspect ratio.

The fact is the actions of watching TV and using a PC are different. With a TV, you're mostly passive, except for that remote in your hand (and we know who you are). With a PC you're constantly active.

...continue reading.

Comments (3) + TrackBacks (0) | Category: Business Models | Consumer Electronics | Futurism | computer interfaces | marketing

November 18, 2005

Open Source Political Opportunity

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Posted by Dana Blankenhorn

boycott-riaa.jpgThe year 2006 is shaping up to be a bad political year for incumbents, a good one for challengers of all sorts.

It may be the best opportunity ever to end the Copyright Wars and gain political neutrality (at least) for issues like unlicensed spectrum (WiFi) and open source.

Challengers may have Karl Rove's K Street Project to thank for this chance. As soon as Bush took office, Rove began pressing lobbyists to end their even-handed treatment of the parties and put all their eggs in the Republican basket. The result is most corporate lobbies are locked-in to supporting GOP incumbents, which until now let them write their own tickets.

But in a democracy political winds shift. Democrats are not interested in doing lobbyists any favors, even with the wind at their backs.
And Democratic challengers may be downright antagonistic, especially if they come to office as so-called "netroots" candidates. That's because one of the main policy differences between Washington and the netroots involves technology policy, such issues as copyright, network neutrality, and competition for broadband.

But that's not all.

...continue reading.

Comments (0) + TrackBacks (0) | Category: Copyright | Digital Divide | Futurism | Internet | Politics | blogging | law

Blogging Bubble

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Posted by Dana Blankenhorn

bubble.jpgThe launch of so-called Open Source Media (no, they're not open source, in fact they try to keep people from even using fair use quotation through a EULA, don't get me started ) is proof that a Blogging Bubble is well underway.

Why? No business model.

Everyone doing a blogging network, whether AOL (Weblogsinc), Gawker Media, Metroblogs, Huffington Post, OSM, you name it -- they're all using a media strategy. And Dana's First Law of Internet Commerce is:

It's not publishing, it's not TV, it's the Internet.

Any strategy based on bulk advertising, based on pure page views, is going to fail. No strategy based on pure star power can succeed, because it doesn't take into account the fact that stars fade and stars emerge. (It's not who you are, it's what you're saying, that counts.)

So, smart guy, what do we REALLY want?

...continue reading.

Comments (2) + TrackBacks (0) | Category: Business Models | Internet | Investment | blogging | e-commerce | marketing | online advertising

November 16, 2005

What Becomes a Blog Most?

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Posted by Dana Blankenhorn

kent.gifI just spent several hours working (free) for a friend, tearing through and reviewing several dozen blogs he thought were pretty good. (That's George Reeves, at right.)

This helped me a great deal. I learned a lot about what I like to see in a blog, and what I don't like to see.

Let's start with what I like to see:

  • Good thoughtful writing.
  • Unpredictability.
  • The feeling that there's a person there.
  • Availability of comments.
  • An RSS feed that at least tells me what I need to know about an item before it's truncated because they're looking for ad revenue.
  • Some reporting that involves more than a hotlink would be nice.

This is part of what's wrong with corporate blogging. Whether it's an executive blog, a publisher blog, or a product blog, it's just too predictable. The writing is often so strait-jacketed (in order to make it replicable and corporate-approved) that the life is knocked out of it.

Blogging is a very human activity. So is reading blogs. Given that general topics such as "politics" or "technology" are going to result in a lot of coverage of the same things, it helps if the writer has a unique take. There better be someone home. Talking points, whether corporate or political, are a waste of my time.

Which leads me to what I don't want to see in blogs:

...continue reading.

Comments (5) + TrackBacks (1) | Category: Digital Divide | Internet | Journalism | blogging | personal

November 15, 2005

Sony's Crocodile Tears

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Posted by Dana Blankenhorn

howard%20stringer%202.jpgSony says it's (sort of) sorry. They say they'll take the CDs back (although they don't say how they will find the things). They say they won't do that again, exactly, but might do something close to it.

Too late.

Wired estimates the "rootkit" (a virus kernel) distributed without notice by Sony's BMG Music now affects a half-million networks. Microsoft says it will have its security software disable the virus.

Not enough. Because by this action Sony has done more to encourage the piracy of intellectual property than a million real pirates could have. Sony has also poisoned its entire sales channel, and for years to come. How many small used CD stores are going to go out of business over this?

A CD is not like most products. CDs have an active after-market. Since you can't tell which CDs have the virus, all CDs are suspect. So Sony hasn't just ruined its own business, but the businesses of its competitors. It has destroyed their goodwill, and made the entire industry out to be a bunch of crooks who don't care about their customers. (And by the way, why haven't we heard from the RIAA on this issue?)

This is not an honorable company right now. Sony's honored ancestor and great founder, Akio Morita, is spinning in his grave over this.

At the very minimum Sony CEO Howard Stringer MUST BE FIRED. NOW. If he's not then some district attorney somewhere is going to come up with a piracy charge that will throw top executives in jail. And deservedly so. If anyone else had mass produced a virus precursor and infected CDs with it, they would be in jail. Just because Sony claims a clean motive doesn't change the facts of the case.

Unless Stringer is fired, and restitution is paid, this scandal is going to destroy the company. They're still behind the curve, and they will remain behind it until they make a clean break with the policies that got them into trouble in the first place.

...continue reading.

Comments (3) + TrackBacks (0) | Category: Consumer Electronics | Copyright | ethics | law | marketing

Give Me Hotzones or Give Me Death

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Posted by Dana Blankenhorn

Patrick%20Henry.gifThere's a lot of hyperbole there. (Patrick Henry, right, was nothing if not hyperbolic.)

But the fact is that the tools and technologies needed to create a "hot zone" -- an area that can get 802.11 wireless coverage -- keeps going down.

There is no need for such zones to be defined by political boundaries. There is no need for there to be just one such network in an area. There are tons of places near me that have multiple networks in reach. That's the beauty of the unlicensed band.

What you need to deliver a HotZone to a corner, a neighborhood, or a development are:

The biggest danger to this vision is coming, the mergers of local and Internet backhaul outfits to be known as Verizon and AT&T.

If those companies are allowed to consolidate and control Internet backhaul and sell it through an eye-dropper, as they now sell broadband through an eye-dropper, then they can halt the American wireless revolution in its tracks.

But there's a dirty little secret for these boys.

...continue reading.

Comments (1) + TrackBacks (0) | Category: 802.11 | Always On | Business Models | Business Strategy | Digital Divide | Internet | Investment | Moore's Lore | Politics | Telecommunications

Phishing and Terrorism

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Posted by Dana Blankenhorn

john%20robb.JPGJohn Robb, at his Global Guerillas site, today has one of his most fascinating posts yet, a comparison between terrorism networks and phishing networks.

He starts with an analysis of the phishing business from Chris Abad of Cloudmark, which found that its vertical integration is very loose. Instead it consists of specialists in various horizontal skills -- mass e-mail, templates, chat rooms, fences - which individual gangs then put together. Then he notes this is just the way the IED market is run in Iraq.

The result is intense competition at each stage of the supply chain, and incredibly low prices for phishers and terrorists. A terrorist can get an IED to blow up an American convoy for just $50.

The bazaar for such transactions is the key. It's virtual.

...continue reading.

Comments (0) + TrackBacks (1) | Category: Digital Divide | Internet | Politics | Security | law | spam | war

Content Fetish

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Posted by Dana Blankenhorn

brian%20roberts%20comcast.jpgOne of the strangest aspects of the post Bell break-up era has been the continuing Bell fascination with content.

The reason for it: cable envy.

While phone service, and Internet service, take money only for bits, cable companies have long made money three ways. They make money on the bits they transmit, they make money from the content companies sending those bits, and they make money from local advertising.

Seen from that point of view, Ed Whitacre’s nonsense about charging Google rent for reaching “his” customers makes a little sense. It makes more sense when you look at history. ADSL was first launched a decade ago as a way for phone companies to offer cable service. BellSouth, Sprint, and MCI all bought MMDS bandwidth in the 1990s to deliver wireless cable service.

The triple play has nothing to do with consumers, in other words. It has to do with revenue streams.

...continue reading.

Comments (0) + TrackBacks (0) | Category: Business Models | Business Strategy | History | Internet | Investment | Telecommunications

November 14, 2005

War Among the Democrats

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Posted by Dana Blankenhorn

This is another one of my political analyses. Please go elsewhere for tech bloggie goodness.

...continue reading.

Comments (1) + TrackBacks (0) | Category: Politics

November 12, 2005

Stringer's Choice

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Posted by Dana Blankenhorn

howard%20stringer%202.jpgThere are two salient points about the Sony scandal you will only read at Mooreslore. (Or at least you'll read them here first.)

The first point you've already gotten. Who's behind the scandal? It's not a Japanese.

It's a U.S.-based executive, Howard Stringer. He became chairman and CEO in March, after heading up the company's film and TV units. (He was pictured in my previous note on this topic.) Before joining Sony Stringer was at another American company, CBS.

Stringer is the key to the motive. Go back to that first link again.

As manager of the U.S. Operations, Stringer cut back a total of $700 million a year since 2001, and overhauled the studio operation by cutting TV producer deals and sharing costs on films.

Stringer reached his position of eminence by cutting budgets and cutting deals. Previous Sony chairmen were Japanese gadget heads. Stringer is a card carrying member of the American Copyright Autocracy.

The motive, then, is a simple truth about DRM systems.

DRM systems aren't about software. DRM systems are about hardware.

...continue reading.

Comments (1) + TrackBacks (0) | Category: Business Strategy | Consumer Electronics | Copyright | Economics | Software | computer interfaces | law

November 11, 2005

The Fall of eBay

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Posted by Dana Blankenhorn

MegWhitman.jpgeBay is going down.

The collapse of its stock price may be followed by the collapse of the entire company. Certainly a fire sale is in the offing.

I can say this with some certainty because eBay has bought itself an enormous political problem with Skype, a fight it can't win because of its diminishing goodwill.

...continue reading.

Comments (23) + TrackBacks (0) | Category: Business Strategy | Internet | e-commerce | law

Analysts, Advocates and Journalists

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Posted by Dana Blankenhorn

thinksecret.pngThe real difference between mere "blogging" and "journalism" is a functional one.

And here is the test. What does the opinionated blogger do when the story goes against them?

Analysts cover the story. They may or may not admit to error, but they write through the pain. The real journalists among them put their feelings about the event completely aside, they go into the winner's locker room, they get the quotes, they describe what happened, and (based on the facts they gathered) they help the reader or viewer understand what may happen next.

The advocates drift away. They change the subject. They're full of "oh, yeah" because they were never in the fight to begin with, just in the crowd.

There are many people who are paid to do journalism who are, in fact, merely doing advocacy today. They're the columnists who write about something else when events go the other way. I find such behavior all over the blogosphere -- liberals who were quiet through November 2004, conservatives who are now silent on the Administration's scandals. I also find it in the nation's biggest newspapers, and on the TV news.

Advocates wait for the talking points, or they change the subject and keep attacking rather than dealing with what anyone else may be saying.

Analysts admit defeat, and try to see what is next.

Journalists act like they don't care, and that's a good thing. They look for facts, they write up what they find, and they move on.

...continue reading.

Comments (2) + TrackBacks (0) | Category: Copyright | Internet | Journalism | Politics | blogging | personal

November 10, 2005

Binary Thinking in an Analog World

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Posted by Dana Blankenhorn

howard%20stringer%202.jpgTwo press releases came in today and demonstrated to me that the biggest problem we have in this world right now is a lack of ethics.

In one a business research group, Info-Tech, is asking us to ban eBay's Skype from corporate system, saying the software is dangerous. In the other, the Electronic Fronter Foundation basically wants us to boycott Sony CDs because they're secretly installing malware disguised as a DRM that keeps people from fairly using what they thought they bought.

What these stories share is an assumption, a very dangerous assumption in an interconnected world.

The assumption is a lack of ethics by all. Sony is treating all its customers like criminals, and acting in a criminal manner in response. Info-Tech is assuming that Skype, along with other "peer to peer technologies" such as "IM," (as noted in their press release) is dangerous and must be outlawed from corporate networks.

We can speculate over why this has happened, but a fish rots from the top. CEOs get the big money because they're responsible. So in the case of Sony Corp., it rots from Howard Stringer. In the case of Skype, it rots from eBay CEO Meg Whitman. If we can't assume good ethics in their products, nothing their employees do matters much.

It's one thing for large institutions to be on guard against consumers or employees, to take precautions against theft. It's quite another for them to take the law into their own hands, or to take on the characters of a police state in response, to assume by their actions that everyone is a thief.

Once that line is crossed, all bets are off and the market becomes a war of all against all.

...continue reading.

Comments (3) + TrackBacks (0) | Category: Business Models | Business Strategy | Consumer Electronics | Copyright | Internet | ethics

November 09, 2005

How To Be A Big Time 21st Century Brand

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Posted by Dana Blankenhorn

dana05b.jpgEasy to say, tough to do.

Ready? OK.

  1. One thing. Your Unique Selling Proposition (USP) must be simple, powerful, easily understood by everyone you do business with -- employees, suppliers, customers.
  2. Fulfill the promise. Do what you say you will do, always, Any failure to meet your USP can be fatal. But failures will happen. Meet them with kindness, and redemptive behavior. Think of the result as customer make-up sex.
  3. Don't lie. This starts with no lieing to yourself. Delusion is the first temptation of success. Always keep someone close who will tell you the truth about yourself, and let them. It's going to come out, whatever it is. The rule is not, don't let it. The rule is, don't do it.
  4. Identify with your customer. It's not just, the customer is always right. It's, you're the customer. Your interests are their interests.
  5. We're all publishers now. Your job is to organize and advocate a community or lifestyle. That's your business. Organize what your customers want into one place, and be an advocate for their interests.
  6. Keep it simple. Don't let the complexity of a growing business tear you away from a simple, coherent message. Some profits aren't worth chasing. Stay in your niche.

Like I said, easier said than done.

Comments (0) + TrackBacks (1) | Category: Business Strategy | Consulting | Investment | Journalism | blogging | e-commerce | ethics | fun stuff | marketing | online advertising | personal

Why Monopoly 4.0 Will Fail

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Posted by Dana Blankenhorn

AnimRob4.gifOne word: branding.

Microsoft is not a Big Time Brand, as my friend Rob Frankel would say. It doesn't give most of us the warm fuzzies. It's not a trusting relationship. There's no love there, as there is with Apple or Google.

So while I enjoyed Russell Beattie's brilliant summing-up of the strategy, I am far more confident in Om Malik's competitor sum-up. Look at the left side of Om's chart, then look at the right. Is the right side of the chart going to collapse because the left side is tightly integrated?

Remember what's coming, please. Apples are going to be on the Intel platform next year. That means they'll be just as cheap as Dell machines, maybe cheaper, and more stylish to boot. Google dwarfs what Microsoft is doing online, because they know where their business starts (search).

It's good that Microsoft is understanding where their business starts (the desktop) but just putting extensions on that into others' turf isn't monopoly.

...continue reading.

Comments (0) + TrackBacks (0) | Category: Business Models | Business Strategy | Consumer Electronics | Futurism | Software | Telecommunications | e-commerce | marketing

Intel WiMax Strategy Fizzling

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Posted by Dana Blankenhorn

wimax_logo_b.jpgIntel's strategy of delivering a fixed 802.16 WiMax standard, then moving immediately to a mobile version, is fizzling.

There's not enough equipment for the fixed, because everyone is waiting for the mobile. And anything for the mobile has to face down cellular providers (potential Intel customers) who have lots of weapons to knock it down.

While hotspots are becoming hotzones, and cities are handing out franchises (exclusives on rights of way and poles) to WiFi everything in their borders, the whole thing looks ready to collapse as SBC and Verizon (AT&T and MCI) consolidate their control of the backhaul market, then squeeze prices.

Here's a dirty secret for the boys and girls at Intel. You're no good at defining standards. Your single success, the PC standard, was set by Microsoft, not by you. And now you've lost big hunks of that market to AMD.

What you need, more than anything, is a big vendor willing to place big bets on whatever wireless standard you choose to set (and you need to set one, not several). If you think you're that vendor, you're kidding yourself. You're an ingredient brand, not a product brand, that's not your business.

...continue reading.

Comments (8) + TrackBacks (0) | Category: 802.11 | Business Strategy | Consumer Electronics | Moore's Lore | Semiconductors | Telecommunications

The Achilles Heel of Web 2.0

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Posted by Dana Blankenhorn

eBayLogoTM.gifThe hidden flaw, or Achilles Heel, of scaled technology systems like Amazon, eBay and Google is that the technology replaces human action.

Techdirt's recent story of the angriest eBay seller is just one example. The folks at eBay have always been lax in putting human resources against their computerized auction house, and frankly I won't do business with it as a result. A seller who threatens buyers physically should not be on the system, period.

It's an open secret that eBay is beset by fraud, on both sides of transactions, that Google results can be clickfrauded, that Amazon is robbed by identity thieves. These companies regularly calculate the cost of real police against the perceived benefits from better policing and keep the wallets in the pocket. We all suffer from that.

The danger is that every Web 2.0 start-up I've seen or heard of goes the same route. Computer interactions are replacing human interaction, cutting the costs of transactions. Perhaps we're cutting too deeply.

The problem, technocrats insist, is that people "don't scale." I can only do a certain amount of work each day. Same with you. When it comes to computer work, just put in another server, another T-3 line, and the same software's impact is multiplied.

...continue reading.

Comments (2) + TrackBacks (0) | Category: Business Models | Business Strategy | Consulting | Economics | Futurism | Internet | e-commerce

November 08, 2005

Democracy vs. Consensus

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Posted by Dana Blankenhorn

un%20san%20francisco.pngAmericans idolize democracy. It is, as Winston Churchill observed, the worst political system possible, except for all others.

In a democracy forging a majority gives you power. The system is stable because majorities shift. People change their minds over time and give power to other leaders. Coalitions are flexible.

But democracy is not the only way to run a free system. Consensus is the alternative.

With consensus a mere majority won't create action. Minority groups must agree to accept a solution as well.

The United Nations runs based on consensus. To Americans this explains its general inaction and irrelevance. But the UN actually does a lot of good work. Blue-helmeted UN troops are familiar scenes in world trouble spots, once both sides in a conflict agree to their appearance. UN agencies do a lot of good work in health and global development. It's not "world government" -- far from it -- but it's not irrelevant.

The Internet also runs based on consensus. The "governing entity" -- ICANN -- is nearly powerless. Every country agrees to use the same DNS, the same IP addressing systems (IPv6 is backward-compatible with IPv4), and the same economic model. The "threat" of WSIS is that the consensus may be broken leaving us, in time, with multiple Internets that don't communicate.

Open source is also driven by consensus. You don't have majority rule in an open source project, that's a recipe for a fork. What you have is either a dictatorship, in which one company or developer group exercises control of the whole, or true consensus, in which developers get together (usually online) and agree on priorities, and on how to divvy up the work.

This is at the heart of a great deal of misunderstanding. Some Americans confuse consensus with Communism. Some of that confusion comes from proprietary software FUD, some from a raw ideology that rivals Leninism (in my view). Some is simply honest head-scratching.
Tim O'Reilly has spent much of his career fighting the misunderstanding. He's fighting it today in a BBC interview. He describes it in terms of the evolution of capital, of value moving from hardware (the IBM era) to software (the Microsoft era) to services (the Google era).

What really separates open source from proprietary models, however, lies in how it harnesses altruism. "I believe that the human motive to share is very powerful," O'Reilly told the BBC's Bill Thompson. "The human motive to profit is also very powerful and I think that the profit motive and the sharing motive are not exclusive." The idea that they are is the FUD O'Reilly fights every day.

The battles over open source, and the lessons from that battle, are now spilling into the common political sphere.

...continue reading.

Comments (6) + TrackBacks (0) | Category: Digital Divide | Futurism | History | Journalism | Politics | law | war

Bush and Gates

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Posted by Dana Blankenhorn

MalariaHP.jpgWhen exchanging e-mails I am struck by how support for Microsoft seems to correlate with support for the Bush Administration.

It's not just the numbers, but the rhetoric. When people talk negatively about Microsoft they often use the same language, and make similar charges, as made by the Administration's opponents. Supporters of Microsoft don't always make that connection. Right now, Bill Gates is far more popular than George W. Bush.

Gates has always cloaked his personal politics in secrecy. He doesn't go to fundraisers. His foundation supports causes like health and education that some would consider liberal. The illustration, for instance, is from his foundation's home page. (Then again, Gordon Moore's foundatoin also focuses on environmental and health causes, and he's a reliable Republican.)

The politics of Microsoft seem to have shifted during the 1990s and over one issue, Microsoft. The Clinton Administration pursued the anti-trust case. Republicans opposed the prosecution, and it was quietly drop after Bush took office.

...continue reading.

Comments (7) + TrackBacks (0) | Category: Business Strategy | Politics

November 07, 2005

The End of Online Freedom?

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Posted by Dana Blankenhorn

left%20blogistan.jpgThe failure of the Online Freedom of Speech Act has provoked intense anger in Left Blogistan (pictured), directed mainly at its own representatives in Congress, and those interest groups supporting "government reform."

It's easily dismissed as a left-wing copy of the right's anger over the Miers nomination, except that while Bush eventually pulled Miers and gave the right what it wanted, liberal bloggers are not going to get what they want, which is an exemption from the demands of the McCain-Feingold Act.

The rage is especially acute against the Pew Charitable Trusts, which worked with other liberal foundations to pass campaign reform and then beat back the Online Freedom of Speech Act. For the first time, liberal bloggers are comparing Pew with the right-wing Scaife, Olin and Heritage Foundations, and not in a good way either.

Regulations for the Internet under McCain-Feingold have not yet been finailized, and while the left rages, let me offer another view..

...continue reading.

Comments (4) + TrackBacks (0) | Category: Consulting | Digital Divide | Internet | Journalism | Politics | blogging | law

November 04, 2005

This Week's Clue: 20th Century Limited

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Posted by Dana Blankenhorn

lightning.jpgWith a "crack" of thunder last Friday I was plunged into the deep past, into the 20th century.

The sound fried my phone line. More important, it knocked me off the Internet.

The world of the 20th century, I quickly learned, is a world of limited information. I had to watch Hurricane Wilma on TV. I couldn't get any word on my favorite football team (Sheffield Wednesday). My view of the local scene was limited to what my newspaper chose to print.

It took me back to my own life in that century. I gathered information by phone. I entered it on a typewriter. I flashed my eyes across typewritten notes to produce my copy, and I filed the results in real file folders.

I also worked within a functional business model, one I'm still trying to replace.

...continue reading.

Comments (0) + TrackBacks (0) | Category: Business Models | Digital Divide | Internet | Investment | Journalism | personal

Is That HotSpot Registered?

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Posted by Dana Blankenhorn

guy%20kewney.jpgGuy Kewney reports that Westchester County in New York is seeking to force all "public" WiFi hotspots to register in the name of security.

The intent is to force those who operate hotspots in coffehouses, etc. to install firewalls. But security is available through just about any router you can name. And what do they mean by firewall? Do they mean preventing any ports from activating other than those the authorities want? No, not now, but it easily could come to that.

The basic rationale leading to the claimed requirement, Kewney writes, is entirely bogus. Apparently someone went "wardriving" and found a bunch of "open" hotspots. Well, just because something is open doesn't mean you can just walk-in (although sometimes it does mean that). My new $80 NetGear wireless router doesn't have a firewall, but it does require the use of a password for access, and thus is "security enabled,." Does that meet the law's requirements?

...continue reading.

Comments (1) + TrackBacks (1) | Category: 802.11 | Security | law

Viruses Cut out the Middleman

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Posted by Dana Blankenhorn

Instead of attacking Windows, Linux, or the Mac, today's hip, new virus writers are going after the anti-virus programs.

Russian-born Israeli Andrey Bayora has documented how this is done at his company, SecurityElf. He dubs the attack, "The Magic Byte." and the trick is simply to hide from anti-virus scans the type of file you've inserted into the system.

In hexadecimal (which is where all software actually lives, no matter how it's written) all executable, or .EXE programs start with the characters MZ, expressed in hex as 0x4D5A. But many files let the header start anywhere, not just the head, so by just adding a byte in front of that header, or prepending, you're giving an anti-viral scan the equivalent of "go on along, there are no droids here." When in fact there are.

This problem affects just about every anti-viral scanner out there, including the one you're probably using, and definitely including the one I'm using. Bayora took some old, easily-disabled viruses, used this trick on them, and bango - they were invisible (but still active).

...continue reading.

Comments (1) + TrackBacks (0) | Category: Consulting | Internet | Security | Software

November 02, 2005

The Second Great Reversal

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Posted by Dana Blankenhorn

There was a reversal in American politics during the 20th century. Democrats went from Woodrow Wilson's racism to Bill Clinton's liberalism. Republicans went from being the Party of Lincoln to the Party of Reagan.

We may be seeing a second reversal here in the early 21st century. Republicans who once preached deregulation are now micro-managing the market and defying science. Democrats who urged regulation are now calling for it to end and embracing technology.

The reasons for this reversal come down to money and power Republicans see money as fueling their power. Democrats are stuck relying on bits. But bits can set you free.

bob%20frankston.gifBob Frankston's latest essay, called "Reality vs Regulation," illustrates this profound shift. Copyright and telecomm businesses threatened by rapid change have gone to Washington, campaign contributions in hand, to halt technology in its tracks. Moore's Laws of fiber, storage and radios, on the other hand, have moved us from an age of information scarcity to one of abundance.

Until this week, however, the rhetoric had not decisively shifted. Republican regulators still pretended to be in the deregulation business. Democrats were calling mainly for different regulations, not deregulation.

...continue reading.

Comments (2) + TrackBacks (0) | Category: Copyright | Digital Divide | Economics | Futurism | Internet | Investment | Politics | Telecommunications

Where Bloggers Go For News

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Posted by Dana Blankenhorn

PRESS%20hat.jpgJoe Strupp of Editor & Publisher wonders why bloggers haven’t joined the White House Press Gaggle.

A better question might be, why haven’t others left?

What exactly does “covering” the White House bring any reporter, or news organization (regardless of size)? You’re not told anything you can’t get out of a press release. The media spokesman lies and stonewalls. This has been the case for decades. What most White House reporters do, when they're not being lied to in person, is sit on the phones, something they could just as easily do from somewhere else, maybe with bunny slippers on.

The more important question Strupp is asking is, how do bloggers gather news. It’s true, most start with the work product of the MainStream Media. But if AP or UPI refused to link we’d still have the press releases and TV reports. (The White House Gaggle often appears on C-Span.) What most bloggers try to do, it seems to me, is go beyond the basic report. Among our resources are the Web and e-mail. These are increasingly powerful resources.

...continue reading.

Comments (0) + TrackBacks (0) | Category: Business Strategy | Journalism | blogging | ethics | personal

SBC Worldcom?

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Posted by Dana Blankenhorn

worldcom_logo.jpgWorldcom was a classic “roll-up” which hid the truth behind accounting tricks, clever lies meant to create the appearance of profits where there were none.

Now TeleTruth charges SBC with doing the same thing (PDF warning on that link), except this time the lies were told to government regulators across the nation.

Writes analyst Bruce Kushnick, “It cut the fiber optic deployments in 13 states, California, Texas, SNET Ohio, Illinois, Michigan, Wisconsin, etc. and in all all of the states, the companies got billions extra in higher phone rates, higher USF (Universal Service Fees), tax breaks, etc. And they all promised fiber to the home, 45mps, 500+ hannels. And when SBC merged, every fiber optic service was cancelled.” (Boldface is mine.)

Is this actionable? Were any of these promises made in contracts, or under oath? Is there a state attorney general willing to take this on as a case of fraud? And if they do, what can they turn up in discovery?

...continue reading.

Comments (3) + TrackBacks (0) | Category: Digital Divide | Economics | Internet | Journalism | Telecommunications | law

November 01, 2005

Cops vs. Robbers

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Posted by Dana Blankenhorn

Cops_Robbers.jpgSome recent posts at Techdirt have me thinking of some basic questions, about the pace of change and the continuing battle between cops and robbers.

In successive entries, we have dismissal of new anti-crime ideas from the banking industry, copyright cops taking on tricks of online robbers, and the same industry trying to push DRM technology onto analog devices. (I know, the order should be reversed, because the last item was written first, and the first last, but what can you do?)

In many ways robbers have natural advantages over cops in technology crime. Cops have to stop everything. Robbers only have to succeed once. But that's misleading, because once a robber is caught they're "in the system" -- you only have to be caught a few times to have your life ruined.

Robbers can also use many open source advantages, sharing tips freely while cops obsess over secrecy, engaging in innovation while cops have to maintain standards.

These are some of the concepts John Robb deals with in his Global Guerillas blog. How popular must an uprising become before it becomes impossible to take down? Put in terms of more ordinary crime, how many must oppose a law before it becomes virtually unenforceable?

What cops, and civilization, fear more than anything else is that the answer to that question drops as technological sophistication rises. They see civilization as digital, either existing or not existing.

This is the great false assumption of our time. It's false in two ways.

First, technology does increase the need for consensus, rather than narrow majorities, in order to hold society together, because the percentage of "objectors" needed to threaten society does go down as technological sophistication increases. This is not a bad thing. In fact, consensus is far more stable than democracy. Consensus is what keeps the Internet together.

Second, civilization is analog, not digital. The alternative to the absolute triumph of law and order is not chaos. We're talking about a much more complex structure. A certain amount of chaos must be acceptable in order for progress to continue. Shrinkage is natural. We work to balance shrinkage with costs in all our enforcement efforts. It's the only rational way to go.

...continue reading.

Comments (0) + TrackBacks (0) | Category: Copyright | Digital Divide | Futurism | Internet | Moore's Lore | Politics | Security | law | war

Net Neutrality Will Triumph

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Posted by Dana Blankenhorn

at%26t%20logo.JPGA lot of people are (rightfully) upset over SBC CEO Ed Whitacre's recent statements dismissing the concept of network neutrality.

Given that SBC will take the AT&T name once its merger with that company is complete it has many fearfully humming the theme from "Empire Strikes Back," seeing the Death Star in the sky again, preparing to see the Internet lights turned off all over the world. (The song is now a favorite of every Enormous State University band, usually played in the Third Quarter as Little Sisters of the Poor are crushed.)

Frankly, Mr. Whitacre is an idiot. There are many reasons why net neutrality, and not paid content access, will triumph in the U.S.:

  • Google is one of the largest owners of dark fiber in the world. That's what their San Francisco WiFi bid is really all about. They need to fill that fiber, and WiFi can easily render wired phones (and lines) obsolete.
  • Sprint has some interesting deals going with cable companies that create a "triple play" with cable networks combining phone, mobile, and television service. Network neutrality in that offering could cause millions to switch off their phones.
  • Level 3 can easily link their fiber backhaul capacity to new providers via WiFi and WiMax, delivering another alternative for consumers.
  • People aren't stupid. Consumers understand what the concept of network neutrality means. If it's threatened they will demand it from regulators and Congress.
  • The U.S. is an increasingly small portion of the Internet. Continued slow growth will make the U.S. an economic backwater, and people know that.

...continue reading.

Comments (6) + TrackBacks (0) | Category: Business Models | Business Strategy | Economics | Internet | Politics | Telecommunications | e-commerce | marketing

Still the Economy, Stupid

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Posted by Dana Blankenhorn

debtmountain1.gifExcuse me if I take politics off for a while. (Picture from Estelle Carol of EstelleGraphics.)

Despite the excitement both sides feel toward political minutia, politics is still generally driven by the economy. Without profound economic change there is no real political turmoil, just the appearance of such created by politicians, pundits, and a press that demands stories.

For the last quarter, officially, GDP was up 3.8%. (Actually, it was up at an annual rate of 3.8%, but that's how it was reported.) Sounds good. Is good. Employment is even up in Silicon Valley. It's not the go-go 1990s, but then what is?

On the other hand we already know what will cause the next recession. Debt. The world economy is running on twin Ponzi schemes right now -- our willingness to create debt, China's willingness to buy debt. Those trends can't continue indefinitely. China's currency must rise in value to reflect the country's holdings of our assets, and our currency must be devalued to reflect our Peronist economic policy.

There is no such thing as a "soft landing" from that unwinding. There are literally trillions of dollars in real estate debt whose holders think it's backed by the U.S. government, but isn't really. (It's backed by two quasi-government agencies, FNMA and FHLMC.) Popping that bubble will make the dot-bomb look like a picnic.

...continue reading.

Comments (2) + TrackBacks (0) | Category: Economics | Politics | Telecommunications