Why Foursquare is Dangerous December 29, 2010
Posted by Peter Varhol in Uncategorized.1 comment so far
I’m not typically an early adopter of technology, but I do get there sooner or later. I don’t think I’m a particularly social person, but I even do my share of social media.
I travel perhaps ten or twelve times a year, usually on business. Occasionally I have the opportunity to meet one or more friends in another city, and that is a particular enjoyment, because we usually manage to have dinner or engage in some other activity. It’s a pleasant surprise to meet up with friends in places where you might not know anyone else, and I try to take advantage of these times.
I’m an obvious candidate for Foursquare, the new Internet darling that lets you tell the world where you are and what you are doing at any particular time, often through your smartphone. (There are other vendors that provide similar services, but I believe Foursquare is the current leader in this market. In fact, Twitter keeps encouraging me to tweet my location.)
Um, no.
I find it a bit creepy to let my audience know exactly when I’m going to be away and out of the house. Even with my alarm system (burglars, take note), I am concerned about leaving the house empty (well, the cats are always around). I don’t leave out-of-office voicemails on my answering machines (I work at home), and I always have someone pick up mail and put out the garbage.
Now, you might argue that Foursquare also enables you to hook up with friends after work, or during a night on the town locally. This doesn’t entail travel, so your house or apartment may not be empty for days at a time. But it doesn’t take long to break in and clean out a residence.
You might also argue that I have a measure of control over who has access to my locations, and can keep the Bad Guys away in that manner. Well, maybe, but there are some tradeoffs there, even assuming that the security on location applications is bulletproof (a bad assumption). The goal of most social network participants is to garner as many friends/followers as possible. Once you accept anyone, you lose control of who obtains your information. If you guard your friends/followers lists carefully, they won’t grow very large.
Of course, it’s also possible for your friends to intentionally or unintentionally let your location become known to a wider audience. They might tweet or otherwise post a comment on their own accounts that they will be meeting you across the country on a given day.
It’s only a matter of time before professional thieves catch on to this newest form of finding traveling or otherwise not-at-home Foursquare users. I can understand a certain affinity toward such a service, but the dangers far outweigh the advantages.
Yes, Virginia, Print is Dead December 21, 2010
Posted by Peter Varhol in Publishing.add a comment
I prefer writing about technology, but because of my background in tech publishing, and my formative education in psychology, I am interest in the future of how people consume information. That’s why I see 2010 as a watershed year for traditional publishing. According to eMarketer, advertisers spent more on online than print advertising in 2010. During the year print advertising fell 6.6 percent, while online advertising rose 13.9 percent.
In publishing, advertising has traditionally paid the bills and hopefully generated a profit. In particular, advertising pays for content. The relationship is symbiotic; ideally, high quality and compelling content helps to attract a better audience, and enables the publisher to attract more advertising, and to charge more for that exposure. Likewise, high advertising rates, and lots of advertising, enable publishers to purchase high quality and compelling content.
In reality, traditional print publishing has been suffering at the hands of the Web for the last fifteen years. Thanks to the public nature of websites, the Web has been wildly successful at making everyone a publisher (case in point: this blog). It’s even possible to build a large audience if you know what you’re doing and willing to take the time and effort. In fact, you can quickly build a reader base, and know a whole lot more about that reader base than any print publication.
All of this means that advertising can’t pay for high quality content, and lower quality content can no longer attract readers. Print publications, especially newspapers, often still have good cash flow, which is maintained by reducing the quality and amount of content. This reduces readership and subsequently advertising still more. I call this the “spiral of death” for a print publication.
According to eMarketer, “. . . print newspaper spending has already been cut in half since 2006, and online has done relatively little to make up the difference. By contrast, total US online ad spending will continue double-digit growth through 2014, when it will surpass $40 billion.”
I hear various reasons why such a trend won’t continue:
– It’s different in my industry
– The allure of the Web will pass
– Print will always be with us
– I like the feel of paper in my hands
And so on. But advertising support for print continues to fall. Which means that newspapers and magazines will become smaller, with less content and lower quality content, and fewer reasons to read. At some point, the economics will reach a point of no return. I don’t think it will take much longer.
Another Dotcom Bubble? December 12, 2010
Posted by Peter Varhol in Software platforms, Strategy.add a comment
So ponders Daniel Lyons in this Newsweek article, pointing to high valuations for tech startups that have little or no revenue. He notes that some well-known companies with just a few employees are receiving VC funds that value them in the tens of millions of dollars.
The New York Times concurs, in this article published a day later.
In some respects it certainly doesn’t feel like another dotcom bubble. A decade ago, unemployment was hovering around four percent, and anyone who wanted a job in the new economy could pretty much get it, no matter what their qualifications. The NASDAQ was peaking at over five grand, and fortunes were being made.
But perhaps the bubble was more hype than reality to begin with. While I was gainfully employed in software and making a decent income in the late 1990s and early 2000s, I wasn’t making an outsize salary, and I wasn’t (regrettably) at a company with high growth prospects. But I did okay, and wasn’t thrown out of work at the bust, but other than 401K losses, the bust didn’t affect me all that much.
As is often the case, there are doubters. In Lyons’ article, he notes that VC luminary John Doerr thinks that valuations are appropriate, primarily because the winners in social networking technology will see outsized results once the business model becomes clear.
There are a couple of worrisome signs. Relatively mature companies such as Facebook and Twitter don’t have business models that bring them to profitability. They may be looking for acquisition rather than an IPO, which means that any bubble isn’t affecting the stock market, but that doesn’t mean that they are worth what VCs and investment banks are valuing them at.
Despite the fact that the everyday economy doesn’t seem very strong, there’s a lot of investment money chasing some not-very-good opportunities right now, so it’s costing a lot to get into the game. Does this mean that the money is worth the investment? Probably not.
At the very least, look for popular social media companies to be bought for huge amounts by more established (and profitable) tech companies (Google and Microsoft, anyone?). I’m seeing this turn out like Oracle’s acquisition of Sun and Java. There’s the need to have the acquisition make money, so the acquirer is going to find a way to charge for previously free services. And no one will be happy.
Cutting Edge Computing is A Year Old December 3, 2010
Posted by Peter Varhol in Uncategorized.add a comment
I started this blog one year ago today. Over the last year, I’ve posted on average once every three days, and have had a total of about 15,000 page views. I’m not very adept at marketing myself (a really bad deficiency these days), so I’d like to think that most people come here because they find the topics relevant and the content readable.
I recognize that it’s not particularly cutting edge, and often not very technical in general, but I do take on topics that I believe are of interest to many today. I’d like to thank those who have found my blog interesting or useful in some way, and hope that you will continue to read it occasionally.
The Sausage Behind the Net Neutrality Debate December 3, 2010
Posted by Peter Varhol in Publishing, Software platforms, Strategy.add a comment
The saying goes that you may like to eat sausage, but you don’t want to know how it’s made. The same goes for the broadband Internet delivered to our homes. I’ve largely avoided discussions on net neutrality, because I’ve found it difficult to take a position one way or the other. I don’t think some traffic should be prioritized over other traffic, but I can appreciate the need for the backbone and delivery providers to make a profit.
Reading this conflict between the broadband provider Comcast and streaming video provider Level 3, I think I’m now prepared to take a position. The pipe is really nothing more than a conduit. As David Isen called it over a decade ago, the Internet best works as a “stupid network” with intelligence at the endpoints, and that’s pretty much what we have today. While traffic may be different, the network should treat it all the same.
That makes broadband providers such as Comcast little more than utilities. They string the lines (well, bury the cables), and ensure that the lines stay available. They are the ones I call when I can’t ping an external server or website. Further, current regulation treats them as monopolies, allowing only a single cable company to serve each individual town and city.
One problem seems stem from the business combinations of content and delivery. With the upcoming acquisition of NBC Universal, Comcast now has a vested interest in promoting its own content. That can take the form of charging for the delivery of third-party content, instead favoring its own.
I recognize that the Internet has enabled a lifestyle and economy that could only be imagined twenty years ago. Whereas we were watching VHS tapes from Blockbuster stores in the 1990s, today we are streaming movies to our HDTVs (well, to be honest, I’m not; I still use the DVD mail service, and don’t own an HDTV). But I would rather not have my broadband provider decide for me that it has the preferred content. Instead, I want my broadband provider to reliably deliver bits, something that in my case Comcast only has a so-so record of doing.
David Isen has a couple of pointed posts on this topic, here and here. The net is effectively the airwaves these days, ever since the US Congress decreed that all network broadcasts be digital (arguably, cable and satellite are more obviously the airwaves, but you can make the argument that they are simply a special case of the Internet).
This is clearly an area for Federal regulation, and Comcast and the other broadband providers are clearly public utilities, not growth companies in content. Let them have a decent regulated profit, but keep them out of the content business. Really.
Cutting Edge Computing 