Stories

Web requires Brunel-scale thinking

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Three years ago I caught a glimpse of a new social network built around music. You could follow people, chat with them, and enjoy the same music stream in real time.

There were many other clever things about it, such as a very slick integration of music news. But the killer feature, one that made it unique, was that you could also drop songs you liked into a little box, and keep permanently. This was genuine P2P file sharing. There were no strings attached – no DRM, no expiry, no locker (your stash was your hard drive) and no additional fees for this feature.

And it was all legal.

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Facebook, Tesco and music platforms

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We all know why Facebook has such astronomical valuations. It is already as ubiquitous as Tesco. It is a place a billion people go to: whereas they only ever leave Google search, to go somewhere else. But people hanging around, poking, throwing cows, ignoring the adverts and goofing around doesn’t pay the rent. To increase revenue, Facebook needs to sell more stuff: products and services.

A Facebook music “dashboard” has long been rumoured: it would be a way of tying together disparate offerings such as eavesdropping on what friends are playing, streaming music yourself, or buying songs, ticketing or merchandise. A music dashboard is a subtle and relatively unobtrusive way of turning Facebook into a grown-up retail and services platform; an approach which borrows from the classic (Porter) Tesco philosophy of taking a tiny margin from a large volume of transactions.

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‘Google is fantastic and should be applauded’ – competition regulator

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What happens when competition watchdogs lose their teeth – and roll over to have their tummies tickled? Via the influential chair of the Commons Culture Media and Sport Select Committee, John Whittingdale MP, comes a very interesting story today. Whittingdale relates a conversation with John Fingleton, the head of the Office of Fair Trading. The MP asked if the agency had looked at the question of Google’s power in the marketplace.

Google has a dominant market share of paid search advertising, effectively setting the price of doing business on the internet for small companies. The conversation took place at around the time it became known that the European Commission began to probe the company, and its customers, in response to a series of complaints. The FTC opened its own investigation this summer.

“The head of the OFT told me that Google was a fantastic organisation, a fast developing company, and should be applauded,” the MP said.

The job of a business regulator, we hardly need point out, is not to swoon like a gushing schoolgirl delighted that a boy band star has swept into town. Fingleton had also offered his views – although a little more circumspectly – to The Guardian newspaper, in November 2009.

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“Disruptive Technology” blather is not clever or useful

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I have a list of some words that really should be banned in polite conversation. The only reason not to ban them is that they’re useful indicators, an unambiguous warning that the speakers are going to be a serious waste of our time. The use of any of these words is like wearing a giant invisible that that says: “I have no insight or experience to offer and talking to me represents a huge opportunity cost.”

Many of the most enthusiastic users work in consultancy or academia or punditry or new media – the parasitic professions. So what might be on my little list?

One is “meme”, obviously.

Another is “business model”. Nobody in business ever used the word “business model”; it’s the sign of an outsider who has never run a business. But people in consultancy or academia use it profusely. It’s like virgins talking about complicated sexual practices.

The word I’ll look at today, the first day of the reign of Apple’s new full-time CEO Tim Cook, is “disruption”.

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Wolfie of the IPO

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Britain could have invented the iPod – if it wasn’t for a copyright law that everyone ignores. So says the UK government in a remarkable economic justification of the so-called “Google Review”, the Review of IP and Growth led by Ian Hargreaves. The document was written for the government by civil servants at the IPO, part of the business department BIS.

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Julian Huppert’s “One-Speed Internet”

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Lib Dems are appealing to the vital online pirate vote at this year’s party conference, putting the membership on collision course with LibDem ministers in the coalition government. In a new IT policy paper called “Preparing The Ground”, a team of party activists led by Cambridge MP Julian Huppert calls for the Digital Economy Act to be gutted of its copyright measures. It also threatens new legislation to ensure all “traffic flows at the same speed”, and wants the IR35 contractor tax suspended.

Senior party figures speaking on condition of anonymity expressed dismay at the proposals. The LibDems are in government for the first time in 70 years, and have attempted to leave behind the Party’s old “sandal-wearing” image as a haven for single-issue-fanatics.

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Free Ride: Disney, Fela Kuti and Google’s war on copyright

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Wars over creators’ rights are pretty old – much older than copyright law. In one of the first “copyfights”, in 561AD, about 3,000 people died, writes Robert Levine in his new book Free Ride. St Colmcille and St Finnian clashed over the right to make copies of the Bible, with the King castigating Colmcille for his “fancy new ideas about people’s property”.

Levine’s book is a story of the digital copyright wars.

“I tried to write in an analytical way about something people get very emotional about. I don’t really believe the entertainment industry is good and the technology industry is bad; I just don’t see it as a morality issue. Businesses are in business to make money,” Levine says.

The book details the calamitous decisions made by the music business, particularly in its suing of end users for infringement. “In a few years,” he writes, “the major labels managed to destroy the cultural cachet they had spent decades building.”

The book also follows in detail Google’s “war on copyright” and the academics and activists who benefit from it. It comprehensively demolishes the arguments put by Lawrence Lessig, who helped create the cyberlaw industry. This is a book with masses of solid, meticulously researched detail.

I caught up with Levine in Berlin.

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Panic in The Chocolate Factory

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Is Google’s acquisition of Motorola Mobility is good for Android, or an expensive mistake for Google, made in a moment of irrational panic. Columnist Matt Asay thinks it “spells iPhone doom“, and he’s not alone. John C Dvorak thinks it’s “pure genius“. This supposes that Google performed a cost-benefit analysis and calculated that the cost of not buying Motorola’s phone and set-top box division was greater than $12.5bn.

I beg to differ. Not all business decisions, made in the pressure cooker, are as rational as they should be.

On Monday, I explained that Google hadn’t bought what it thinks it has bought. Since then some very interesting new detail has come to light. This suggests that the Chocolate Factory really doesn’t understand the value of its proposed acquisition, and snapped up Motorola not merely in a hurry, but a blind panic. Pulling out of the deal may now be sensible – but also costly for Google. The deal carries a $2.5bn break-up penalty, which is smaller than AT&T’s penalty for failing to complete its acquisition of T-Mobile US, but is still a hefty sum of money. Should this happen, Google will have paid almost as much to buy nothing as it did to buy Doubleclick, its largest ever acquisition.

Let’s look at some evidence.

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Murdoch and Mythology

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Keyser Sose

If children didn’t believe in Santa, thousands of grown men wouldn’t dress up in fur-trimmed red jumpsuits, put on false beards, and give children unwanted gifts in tents every year. Perhaps some would, but they’d probably be arrested.

For the past fortnight, TV and newspaper editors in the UK have pushed aside stories of famine and the European financial crisis – which is greater now than the credit crunch three years ago – in favour of saturation coverage of the troubles of a rival media company.

This rival has real troubles, to be sure, which I will not attempt to diminish. But the volume and intensity of coverage is defined by the real size and reach of News Corporation. And this is not reality, but a myth. Just as children want a Santa, so too do editors and Prime Ministers want a “Murdoch” that resembles the omniscient movie villain/myth Keyser Soze. They’ve defined themselves by this myth.

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