Mereja

Author: Mathew Ingram

  • Farmville Users Send 500M Valentines in 48 Hours

    If you had any doubts as to the kind of influence wielded by Farmville, the animated Flash game that has become popular on Facebook, here’s a statistic that should erase them: In just two days since the launch of a new valentine gift feature on Monday, Farmville users have sent about half a billion virtual presents to other users — and it isn’t even Valentine’s Day yet. According to Zynga, the creator of Farmville, the game has more than 72 million registered users.

    All Facebook reported early Wednesday that Farmville users, who plant crops and raise animals on their virtual plots of land, had sent 220 million virtual gifts to each other in 18 hours (Valentine gifts are free, although other things within Farmville can cost money). A check with a press spokesman from Zynga found that in the 48 hours since the launch at 6 a.m. PT Monday morning, more than 475 million had been sent. “We sent about 255 million yesterday and about 220 million the day before, for a total of about 475 million,” Lisa Chan said in an email.

    Even though the valentines themselves didn’t cost money, the size and power of these kinds of virtual economies (Farmville players helped to raise $1 million for Haitian relief efforts) have led many to wonder what they can tell us about online spending in other ways. Journalist Chris O’Brien, for example, wrote a post recently at the PBS Media Shift blog asking “What Can Virtual Goods Teach Us About Paying For News?” and noting that virtual goods are expected to be a $1.6 billion market this year.

    So what can Farmville teach us about the digital economy? If nothing else, it shows that making it easy for people to give each other presents can get you to some rather large numbers in a hurry.

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  • YouTube Gets Violence and Profanity Filter

    Google has announced new violence and profanity filters for YouTube, an opt-in series of features it is calling “Safety Mode,” in what appears to be an ongoing attempt to clean up the murkier parts of the video-sharing site and make it a little more appealing to advertisers — and possibly to legislators as well. The site’s choice of wording in the announcement on the YouTube blog seems a little odd, however: It says that the feature is designed for those who don’t want to stumble across (or have family members stumble across) an otherwise newsworthy video that might have objectionable content “such as a political protest.” It doesn’t give an example, but Google might be thinking of a video such as the one that showed the graphic death of Neda Agha-Soltan, the Iranian demonstrator who was shot and killed during a protest in Tehran last year.

    When you try to view a video like the one of Neda’s death, you already run into the YouTube “18 and over” wall, which asks you to log in and verify that you are old enough to see the content. But YouTube probably knows that these types of blocks are quite easy to get around, since the site doesn’t verify anyone’s age in any real sense. The introduction of “Safety Mode” allows users to specifically block violent videos and to “lock” those settings into a YouTube account. Safety Mode also has a number of other features, including one that applies to comments on videos, a part of the site that routinely draws objectionable content (and was even voted “Worst Thing on the Internet”). Safety Mode hides all comments by default, and replaces profanity in comments with asterisks.

    In the video below, a YouTube staffer describes how Safety Mode works, including the fact that if it is turned on (which can be done by clicking a button at the bottom of any YouTube page), certain searches — such as one for the word “naked” — will return zero results.

    Post and thumbnail photos courtesy of Flickr user slagheap

  • Identity Theft on the Rise: Survey

    Identity theft has become so commonplace that the odds are pretty high that you’ve been a victim or you know someone who has. Those odds continue to increase, according to a survey released today by Javelin Strategy & Research. It found that the number of identity fraud cases rose by 12 percent in the U.S. last year, to 11.1 million. And the amount of money potentially affected by these frauds, Javelin says, grew by 12.5 percent, to $54 billion. On the bright side, however, Javelin’s survey also showed that more consumers are taking action when identity fraud occurs (i.e., filing police reports) and are also doing more to protect their data in the first place.

    Javelin’s research also showed that there have been other improvements over previous years, including: The average time it takes to resolve a fraud dropped last year by 30 percent, to 21 hours; the number of reported arrests in fraud cases doubled; the number of prosecutions of fraud tripled and the number of successful convictions also doubled. The Javelin survey is in its seventh year, and is co-sponsored by Fiserv, Intersections, Wells Fargo & Co. and ITAC, the Identity Theft Assistance Center.

    Javelin says that the survey is the nation’s longest-running study of identity fraud, with more than 29,000 U.S. respondents over the past seven years. Last year, the company did telephone interviews with 5,000 U.S. adults to identify and track the methods that fraudsters used, the impact of fraud on Americans and how these findings can help consumers most effectively avoid becoming victims of fraud. James Van Dyke, president and founder of Javelin, said in a statement:

    The good news is consumers are getting more aggressive in monitoring, detecting and preventing fraud with the help of technology and partnerships with financial institutions, government agencies and resolution services.

    Among the survey’s other key findings:

    • Identity fraud that resulted from criminals opening new accounts with stolen information increased in 2009. The number of fraudulent new credit card accounts increased to 39 percent of all identity fraud victims, up from 33 percent in 2008. New online accounts opened fraudulently more than doubled over the previous year, and the number of new email payment accounts increased 12 percent. This year for the first time, the survey asked about new mobile phone account fraud and 29 percent of new accounts fraud victims reported new mobile phone accounts were fraudulently opened.
    • Identification most likely to be compromised in a data breach continues to be full name (63 percent) and physical address (37 percent). With a year-over-year increase of 4 percent, health insurance information is increasingly targeted. The percentage of Social Security numbers compromised decreased to 32 percent from 38 percent in 2008.
    • 75 percent of existing card fraud incidents came from credit cards, an increase of 12 percent over 2008. In contrast, existing debit card fraud incidents decreased 2 percent and represented 33 percent of total existing card fraud in 2009.
    • Millennials (consumers aged 18-24 years old) take nearly twice as many days to detect fraud, compared to other age groups, and thus are fraud victims for longer periods of time. Millennials were found to be the less likely to monitor accounts regularly and the least likely group to take advantage of monitoring programs offered by financial institutions. However, Millennials were the most likely group to take action such as switching primary banks or switching forms of payment.

    Post and thumbnail photos courtesy of Flickr user clappstar

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  • Q&A: Stewart Butterfield on the Launch of Glitch

    Last spring, after leaving Yahoo and taking some time off, Flickr co-founder Stewart Butterfield started a company called Tiny Spark Speck with four other members of the original Flickr team, and started work on a browser-based, massively multiplayer game. The product of that effort was Glitch, which Tiny Spark Speck launched this week with a web site and a video highlight reel. The game is in invitation-only alpha, Butterfield said, and then this summer will be moved to open beta in preparation for a full-scale public launch later this year. In a phone interview on Tuesday, the Flickr co-founder talked about how he had always wanted to build a massively multiplayer fantasy game, about the benefits of building a 2-D game rather than a 3-D one, and about how he originally wanted to start a bank.

    GigaOM: Can you tell us a bit about the genesis of Glitch?

    Butterfield: It’s something I’ve wanted to work on since I was a little kid. When I played SimCity — the original one, I guess, in the mid-80s — I remember always being curious what it would be like to play a game like that, where you got to play from the perspective of one little ant driving around the freeway rather than from the god’s eye point of view. It was the collective or emergent action of all the players that determined the way the simulation unfolded.

    GigaOM: Did you want to start a game company right after you left Yahoo?

    Butterfield: I knew that I wanted to work with the same group of people again. I actually tried for awhile to convince them that we should make a bank instead, in late 2008. That would be incredibly boring, but I think there would have been some nice opportunities to change the world on that front. But a game is just as good, and everyone else was much more interested in building a game than building a bank. I guess if you’re an engineer, banks are phenomenally boring to work on.

    GigaOM: What’s your view of where the gaming industry is now?

    Butterfield: I’ve been watching everything that’s been happening over the last five years. The pace seems to be accelerating. We’ve seen a lot of increased uptake of what we’ve been calling casual games, and at the same time the iPhone’s done a lot for indie game development. With the Wii, tens of millions of people are buying their first console, and of course there is the rise of social games on Facebook. All these different avenues…it’s like, letting a thousand flowers bloom. There is all kinds of interesting stuff happening all over the place.

    GigaOM: Flickr also started as a massively multiplayer game called Game Neverending. How is this different from what you envisioned then?

    Butterfield: Obviously in the last eight years, a huge number of things have changed. From the perspective of 1982, hardware is effectively free. But the biggest shift is that there are now hundreds of millions of people using Facebook, whereas back then Friendster was yet to launch and when it got to a million people that was a huge deal. So there’s just a lot more people online now, using the web in a social way, and that wasn’t really such a big thing before. So it’s a much better time to be working on this.

    GigaOM: With all those different platforms out there, are you planning to extend Glitch into any of those other markets?

    Butterfield: In the ideal future, we would like to have it be playable across all kinds of platforms. At first it will only work in a browser on a PC, but we will have companion applications for mobile — so iPhone and Android — that give you a more limited amount of gameplay but allow you to kind of interact with the game without having the whole client open. Because it’s massively multiplayer and you’re encountering other people, talking to friends or strangers, it’s tough to play without a keyboard in front of you, because that’s the way people talk. But if, for example, you’re participating in an auction, you should be able to use the iPhone app for that sort of thing; or if there’s a local election happening or some other asynchronous social interactions, that kind of stuff can happen in a mobile app.

    GigaOM: Tell us a bit about the game. What are players trying to accomplish?

    Butterfield: The 30-second version of the backstory is that it’s a billion years in the future and everything worked out perfectly — everyone’s enlightened and it’s peaceful and and just perfect. And of course, that’s a very unlikely future. One day scientists discover that and determine that the solution is to go back to the past and fix it so the future actually happens. Now, as everyone knows, the world was originally spun out of the imagination of 11 great giants, wandering sacred paths on a barren asteroid, and singing and thinking and humming the whole world into existence. So we have to go back into the past, into the minds of the giants and grow the world — so that the future can actually come to pass.

    GigaOM: You’ve mentioned Facebook games such as Farmville and World of Warcraft. Is Glitch anything like either of those?

    Butterfield: When you compare it to Farmville or any of what we’re calling social games for Facebook, they’re all single-player games with a little bit of access from my single-player game experience to your single-player game experience. You can fertilize your friend’s crops but that’s about it. If someone’s better at growing corn, for example, in their farm in Farmville, I can’t just buy their corn. There’s no economy, no real interaction; what I do doesn’t really make any difference to you. So this is what people used to call a persistent world game, a massively multiplayer game — but it’s different from most massively multiplayer games because the focus isn’t on fighting. And the reason for that is just that once you have fighting in a game, then the game becomes about fighting, and it’s really hard to fit in any other kind of significant human interaction. When it’s about getting better weapons and better armor so you can kill more impressive foes, then that ends up being what the game’s about, and we didn’t want it to be about just that.

    GigaOM: Is it the type of game that takes hundreds of hours to play, like some other massively multiplayer games?

    Butterfield: People can sit down and have a multi-hour game session, but they should be able to get some satisfaction out of short bursts as well — 10 minutes snuck in at work, stuff like that. It is definitely possible to wander around the world by yourself, and go exploring and — to use the game industry word, to grind — to do the repetitive tasks and level yourself up by yourself. But there are other people always there. There’s plenty of opportunities to work with people so that for example, a lot of the larger, more expensive things that you can build or develop in a new area require a group of people who have different skills and pool their resources. But there can be competition as well — economic is the most obvious, but I think we’ll see a lot of sort of tongue-in-cheek politics and even religions. Someone started the Church of Emergent Complexity back in the Game Neverending days.

    GigaOM: Glitch is a bit of a throwback design-wise to the early days of 2-D, side-scrolling PC games. Why did you decide to do that?

    Butterfield: It was partly a technology decision, because it’s much easier to develop in that way, and the tolerance for latency is a lot higher. But also 3-D, while it often looks beautiful, is a lot more complicated for people to deal with. Just physically moving a 3-D avatar around in a virtual world is a lot more challenging than in 2-D. If you look at something like Second Life, there are many differences, and just moving around in Second Life is a challenge for a lot of people. But everyone can sort of immediately grok the 2-D, side-scrolling, platformer method of moving and that kind of gameplay.

    GigaOM: What kind of funding does Tiny Spark Speck have?

    Butterfield: We did a small angel round of $1.5 million last spring, and the bulk of that was Accel Partners, plus there were about a half a dozen angels including Marc Andreessen; Jeff Weiner, the CEO of LinkedIn; Rob Solomon from Technology Crossover Ventures and the former CEO of Sidestep; as well as Brad Horowitz, who is VP of products at Google. So there has been a pretty big group of people. We’re going to be doing a Series A round sometime soon.

    Post and thumbnail photos courtesy of Wikimedia Commons

  • TweepML Shows Risks of a Twitter-based Startup

    It sounded like a great idea when TweepML launched last September: an easy way to manage lists of Twitter users, including sharing them with others, allowing anyone to follow all the users on the list with a single click. Unfortunately, it was such a good idea that Twitter launched something almost identical a month or so later, and TweepML founder Marcelo Calbucci has now put the company up for sale on the Flippa auction site. You can put in a bid for the company, or you can buy it right now for $79,000 and get all the code, accumulated data and any associated domains.

    Calbucci, who started TweepML after his previous startup shut down, has written about the sale of his company on his blog. He says the service quickly attracted more than 100,000 users — and maintains that it continued to grow even after the launch of Twitter lists — but says he doesn’t have enough time to devote to growing or monetizing the service.

    If nothing else, the demise of TweepML is a warning sign for other entrepreneurs building their startup on someone else’s platform, whether it’s Twitter or Facebook. The benefit is that you can get to scale quickly by hitching a ride on someone else’s wagon, and there’s even a chance that they will acquire you if they see your service as useful enough and can’t be bothered to build one themselves. But the risk is just as great that they will either a) launch something identical to your service, or b) change their service just enough to render yours either inoperable or unnecessary.

    A panel of venture investors, including Josh Hannah of Matrix Partners, discussed these risks at the AlwaysOn Stanford Summit last year. Hannah said that he was “leery about companies dependent on the Facebook platform” because they “don’t have control of [their] destiny.” Entrepreneur and venture investor Alexander Muse has written about these risks as well, both in terms of Facebook and in terms of Twitter. The issue of control has led some to speculate about the low prices that Facebook-based businesses such as iLike have attracted when being acquired.

    In an email, Calbucci said that while TweepML was “mildly affected by changes on Twitter,” he doesn’t regret building a business based around Twitter because doing so “provided a viral distribution mechanism that I could not have created on my own.” He added that the service is somewhere between “an end-application and a powerful network infrastructure, except that it has 100% control over that infrastructure.” And that last point is the important one for startups — are you prepared to build a business that depends entirely on someone else’s infrastructure?

    Post and thumbnail photos courtesy of Flickr user JP Chamberland

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  • Flickr Co-founder’s New Startup Finds a Glitch

    Flickr co-founder Stewart Butterfield’s new startup Tiny Speck has announced its first product, to be released in the fall of this year: a massively multiplayer online game called Glitch. Judging by the video trailer provided at the Glitch site, the game is a modern — and somewhat psychedelic-looking — take on the 2-D genre, like a trippier version of Super Mario Brothers (for some screenshots, scroll down). According to an in-depth description at CNET, which got an exclusive look inside the development of the game, Glitch will have a number of social elements, such as collaborative puzzle-solving.

    The Flash-based game, which Tiny Speck has been working on since the launch of the company in March of last year, is a bit of a “back to the future” move for Butterfield. As some Flickr fans know, he and now ex-wife Caterina Fake got their start building a massively multiplayer online game called Game Neverending in the late 1990s, but changed course after it became obvious that users were more interested in the photo-sharing portion of the game. That feature ultimately became Flickr, which the pair sold to Yahoo in 2005 for $35 million. In what could be a veiled reference to Butterfield’s earlier startup, the description of Glitch at the game site calls it a “neverending feast of imagination.”

    The company’s choice of Flash as the basis for a game also makes sense given that Flickr was one of the web services that helped popularize Flash as an interface. Using it as a platform means Glitch will be relatively easy to distribute and even embed in other sites or services (except the iPhone or iPad, of course, neither of which support Flash), and also suggests that Tiny Speck is going after the kind of casual-gaming market that has made Facebook games like Farmville and web sites like AddictingGames.com so popular.

    Butterfield formed Tiny Speck last year with several senior Flickr staffers, including Cal Henderson and Eric Costello. They were later joined by Digg designer (and, like Butterfield, Canadian emigre) Daniel Burka. Tiny Speck is backed by Accel Partners and serial entrepreneur Marc Andreessen. In an interview last year with the Globe and Mail, Butterfield said the game was inspired by Theodore Geisel (Dr. Seuss) and “magic realism” author Jorge Luis Borges, and that the goal was to create a “fun and really interesting world with its own rules, absurdist and strange but fully realized, if imaginary.”

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    This article also appeared on BusinessWeek.com.

  • The 7 Somewhat United States of Facebook

    Peter Warden, a former Apple engineer, likes to analyze data — so much so that he started scraping public profiles and photos from hundreds of millions of Facebook accounts about a year ago, and now has data collected from more than 200 million around the world. He wrote a fascinating post recently on his personal blog about what that data shows about how interconnected (or disconnected) users in the various American states are. The graph below is reprinted from that post, with Warden’s permission:

    In a nutshell, Warden’s data analysis showed that Facebook users in the U.S. can be roughly segmented into seven regions, which he named facetiously:

    • Stayathomia: This belt’s defining feature is how near most people are to their friends, implying they don’t move far.
    • Dixie: Like Stayathomia, Dixie towns tend to have links mostly to other nearby cities rather than spanning the country.
    • Greater Texas: Unlike Stayathomia, there’s a definite central city to this cluster, otherwise most towns just connect to their immediate neighbors.
    • Mormonia: The only region that’s completely surrounded by another cluster, Mormonia mostly consists of Utah towns that are highly connected to each other, with an offshoot in Eastern Idaho.
    • Nomadic West: The defining feature of this area is how likely even small towns are to be strongly connected to distant cities; it looks like the inhabitants have done a lot of moving around the county.
    • Socalistan: LA is definitely the center of gravity for this cluster. Almost everywhere in California and Nevada has links to both LA and SF, but LA is usually first.
    • Pacifica: Tightly connected to each other, it doesn’t look like Washingtonians are big travelers compared to the rest of the West, even though a lot of them claim to need a vacation.

    Of course, Warden’s data — which he collected in the course of analyzing Facebook profiles and fan pages worldwide for various corporate customers — only reflects what users of Facebook choose to reveal about themselves, and many don’t include all their friends or other information in their public profiles. As large as it is, Facebook also still represents only a small slice of the American population, and likely a fairly homogeneous slice at that, although the social network is becoming more cosmopolitan, according to the most recent demographic survey of Facebook users. Marshall Kirkpatrick has more detail on what Warden is up to in this post.

  • More Authors Signing Exclusive Kindle Deals

    Amazon’s recent announcement of dramatically higher royalty rates for authors and book publishers, a move designed to level the playing field with Apple’s iPad tablet, seems to be having some effect: another author has signed an exclusive book deal for the Amazon Kindle. In this case, Gavin de Becker — author of several books about security — has agreed to release expanded and updated editions of two of his books, “The Gift of Fear” and “Just 2 Seconds.” A news release says that while both books have been available as print copies for some time, this is the first time “The Gift of Fear” has been available electronically, and both will be exclusive to Amazon’s Kindle Store for one year.

    This deal appears to be very similar to a Kindle exclusive announced by author Stephen Covey — creator of the “The 7 Habits of Highly Successful People” line of books — in December, which saw the author transfer the rights to two of his books from Simon & Schuster to an electronic publisher in order to do the deal with Amazon. As part of that arrangement, Covey was to get about 50 percent of the proceeds from the sales of Kindle versions of the books, in contrast to the usual 25 percent that most publishers provide. Amazon will have exclusive e-book rights for a year.

    Last month, Amazon signed another high-profile author to an ebook exclusive: best-selling Brazilian writer Paolo Coelho agreed to give the company and the Kindle exclusive rights to Portugese versions of 17 of his popular novels. None of Coelho’s books have been available in e-book format before. A recent report also confirmed that British author Ian McEwan signed an exclusive deal last year for electronic publishing rights to five of his books in return for 50 percent of the royalties.

    One wonders whether any of these authors will want to renegotiate their exclusive deals, now that Amazon is offering authors and publishers 70 percent royalties instead of just 50 percent. In any case, the upward pressure on royalty rates is a welcome sign of increased competition in book publishing, thanks to both Amazon and Apple, and that is something many authors will no doubt be pleased to see.

    Meanwhile, Amazon continues its fight to keep e-book prices low, although it appears to be steadily losing ground in that battle. After Macmillan refused to lower its prices to the $9.99 that Amazon was demanding, the electronic retailer yanked the publishers books from its shelves (both print and electronic), but was later forced to capitulate. Since then, two other publishers have also renegotiated higher prices with the company. Amazon has since put print versions of Macmillan books back on its virtual shelves, but according to a recent report, it is still not stocking Kindle versions.

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  • PayPal Suspends Personal Payments in India

    PayPal says it has suspended personal payments to and from India, as well as transfers to local banks in India, although it’s not clear from the company’s short blog post what the problem is or what’s being done to fix it. All it says is that the company is working with its ” business partners and other stakeholders to address questions they have about the service.” PayPal says that commercial payments can still be made to India but merchants in that country can’t withdraw funds in rupees to local Indian banks.

    An unnamed analyst quoted by IDG News Service says that the changes may be related to new government rules in India that are intended to prevent or discourage money laundering. These rules, introduced last year, require financial intermediaries to verify the identity of clients carrying out international money transfers.

    India has been taking steps to try and improve security as part of its anti-terrorism efforts, including banning the import of cell phones that don’t have an identity code and thus can’t be tracked. It’s possible that the Indian government is concerned about PayPal money transfers being used to fund terrorism, and is requiring the company to either verify who is making and receiving the payment or block the transfer.

    According to one online forum discussing the topic, PayPal has been reversing payments since Feb. 1, sending users an email that states:

    Dear SENDER,

    Your payment of $XX.XX has been returned to you. If you sent the payment with a bank account, the funds will be returned to your PayPal balance. If you paid with a credit card, the amount will be credited back to your card. We returned the payment to you because we have stopped allowing personal payments to be sent to or from India… If this payment was a personal payment, such as a gift to a friend or family member, then we request that you find another payment method until we restore personal payments to and from India. We are trying to resolve this issue as quickly as possible and we’re sorry for any inconvenience. Thank you, PayPal.

    Another user said that he or she received an email from PayPal saying the company had suspended “specifically those funds transfers that do not have an underlying exchange of goods or services.” The email recommended that the seller contact the buyer and ask them to pay again, and specify that goods were the reason for payment. Other disgruntled and confused PayPal users are discussing the issue in forums here and here.

    Post and thumbnail photos courtesy of Flickr user quaziefoto

  • Like Media, Research Needs to Be Social, Too

    Our friends at Forrester Research touched off a bit of a brush fire this past weekend when it said it would limit its analysts to blogging about research-related topics on the company’s corporate web site, Forrester.com, and decreed that any personal blogs maintained on other domains must be strictly about personal matters. Twitter is apparently not included in this edict, according to a tweet by Forrester analyst Josh Bernoff, co-author of the book “Groundswell.” Dennis Howlett of ZDNet called the move an “Epic E2.0 Fail” while CloudAve blogger Jacob Morgan said it was “the corporate research equivalent of suicide.”

    Here at GigaOM — and specifically at our subscription research arm, GigaOM Pro — we obviously believe that our writers and analysts benefit from being part of the social web in as many different ways as possible. They tweet, have their own blogs and use other social sites.

    It’s true that social tools help analysts develop their own personal brands (as both Charlene Li and Jeremiah Owyang did while at Forrester), but while some firms might see this as being in competition with the development of the overall corporate brand, we disagree. In a social media- and web-centric world, the personal brand is arguably as important as — and in some case, even more important than — the corporate brand. In any case, the two can no longer be separated from one another.

    We heard the same kinds of arguments from traditional media companies in the early days of blogging, and we all know how that turned out. Some media outlets have been trying to restrict what their writers do and say on Twitter and other social networks as well. The reality is that people identify more and more with individuals, and in some ways always have: Do people go to see a Warner Brothers film? No, they go to see “Avatar” by James Cameron, or to watch George Clooney. Do they look for music by EMI? No, they listen to Norah Jones. And the company behind the brand benefits every time that happens. Live Nation is a good example: a record label as well as a live concert company, it puts the artist front and center. Same goes for media and research.

    In his blog post, Bernoff defended the new policy as a necessary step, saying Forrester is “an intellectual property company, and the opinions of analysts are our product.” But a strong analyst who connects with readers and builds a following, wherever that following might occur, is a benefit to the company they work for, even if he or she eventually leaves to pursue other opportunities. That is the nature of a web-based business — something the research industry is becoming, whether it likes it or not.

    Trying to confine analysts and control the access they have to readers through the web is not only wrongheaded (in our view) but ultimately futile. Strong analysts who are treated in this way will leave anyway, thus defeating the purpose. We believe that social media tools can be used both to build personal brands and to benefit the overall corporate brand, and that is what we encourage. If you have any thoughts, please share them in the comments.

  • Pepsi Has Already Won By Avoiding the Super Bowl

    When it comes to the football side of Super Bowl XLIV, everyone knows that today’s matchup pits the New Orleans Saints against the Indianapolis Colts. But there’s another side to the NFL game that is just as competitive and just as expensive, and that’s the advertising that takes place during the broadcast. That battle will see Coca-Cola go up against flavored sugar-water competitor Pepsico. Except that Pepsi won’t be at the Super Bowl. As the company promised two months ago, it’s spending $20 million on a social media-powered community renewal campaign, and avoiding the Super Bowl altogether. And it looks as though Pepsi may already be ahead of the game, even before the kickoff.

    In December, the company said that it had decided to forgo the advertising frenzy that is the Super Bowl for the first time in over two decades (although Doritos, which is owned by Pepsi, will air several ads during the game). Instead, Pepsi said it would spend $20 million funding community renewal events across the U.S. that would be selected through a “crowdsourcing” project similar to Dell’s Ideastorm, in which users get to vote on the various proposals submitted by other users.

    The project, called Refresh Everything, launched last month with a web site, a Twitter presence and a Facebook page that now has over 400,000 fans. The company gives away “grants” of between $5,000 and $250,000 every month to community development proposals, including several promoted by football players who are competing in the Super Bowl. One project will upgrade the facilities at a residence for the family members of cancer patients, while another will train teachers for low-income communities.

    According to a recent survey by Nielsen, this social media-powered campaign has already paid off in terms of increased media coverage for the soft-drink maker: The survey shows that Pepsi accounted for more than 21 per cent of the media coverage and online buzz around Super Bowl advertising — about 10 times as much as Coca-Cola. And the icing on the cake: The $20 million Pepsi is spending on its crowdsourcing project is about $10 million less than it usually spends on Super Bowl ads.

    Post and thumbnail photos courtesy of Flickr user James Cridland

  • Wikileaks Raises Enough to Keep the Lights On

    Wikileaks, a non-profit agency that exposes government and corporate secrets by publishing documents through its web site, said on Twitter that it’s managed to raise enough money to continue operating, but not enough to pay its staff. The site suspended operations recently, saying it didn’t have enough funding to pay its expenses. It also asked for donations, claiming it required at least $200,000 just to pay its costs, and as much as $600,000 if it were to begin paying its volunteer staff. At last check, the note was still on the Wikileaks site, but the Twitter message said the minimum amount had been raised.

    Wikileaks, which is run by a non-profit entity called The Sunshine Press, has been described by The Guardian as “the brown paper envelope for the digital age.” In one recent case, the service published documents relating to the Trafigura scandal in Britain, documents that a corporation involved in the scandal tried to prevent newspapers from publishing. It also recently released 500,000 pager messages relating to the 9/11 attacks in New York.

    The site says it has defended itself against over 100 legal attacks to date. In 2008, a California judge forced the site to remove itself from DNS records due to a complaint by a Cayman Islands-base corporation. Although the founders of the site kept their identities secret for some time after Wikileaks was founded in 2006, it is known that they include Australian hacker Julian Assange and Australian broadcaster Phillip Adams.

    The Wikileaks Twitter stream says that the organization is working on a proposal to “transform Iceland into world centre for investigative media,” in part because awareness of government corruption and incompetence has been heightened by the recent meltdown of the country’s banking industry. In the video embedded below, from the 26th Chaos Communications Congress, an annual hacker conference in Berlin, two members of Wikileaks discuss their proposal to create an information “data haven” in Iceland, or what they call a “Switzerland of bits”:

    Post and thumbnail photos courtesy of Flickr user griegophoto.

  • Facebook Has All The News That’s Fit to Share

    Facebook staffer Malorie Lucich wrote a post on the site’s blog recently in which she talked about using the social network to keep up with the news in two different ways — both by picking up news from the friends you follow through their news feeds and status updates, but also by becoming a fan of pages from news outlets such as The New York Times, The Guardian, CNN and so on. As I read her description of how she found out about Michael Jackson’s death, the earthquake in Haiti and other major news events through Facebook, I remember thinking to myself: “I do that, too. But is it really that big a deal?”

    As it turns out, it just might be a big deal, in the sense that whatever a social network of 300 million people does tends to be a big deal. According to research from Hitwise, the number of visits from Facebook to news and media web sites has been climbing rapidly — particularly when compared with Google News, which has barely budged from where it was a year ago. Hitwise staffer Heather Hopkins writes that “Last week, Google Reader accounted for .01% of upstream visits to News and Media websites, about the same level as a year ago. Google News accounted for 1.39% of visits and Facebook 3.52%.”

    As Marshall Kirkpatrick has pointed out in a recent post at ReadWriteWeb, not many people (apart from hardcore geeks and news junkies) use RSS readers such as Google Reader. Increasingly, regular folk seem to be getting their news from social networks such as Facebook as well as from the usual news sites such as MSN, Yahoo and Google News. And as more and more traditional media entities build out their Facebook presence, that trend seems likely to continue.

    One thing that might be hindering this process, however, is that most major media outlets are still only sharing a fraction of the news they have on their web sites through Facebook — and even then, it’s often the “soft” features or lifestyle issues rather than hard news. Many of the leading sites such as the New York Times and The Guardian use their pages in part for contests and other promotional items as opposed to news, although that could be changing as they get used to being on the network.

    Another factor that’s likely accelerating the use of Facebook for news is the integration of Facebook Connect into web sites such as The Huffington Post, as well as The Washington Post and USA Today, a feature which allows readers to log in with their Facebook credentials and then share stories and comments from those sites with their friends through their Facebook news feed. Do you use Facebook for news? Let us know in the comments.

    Post and thumbnail photos courtesy of Flickr user Captain Suresh

  • Mark Cuban Tells Media “Google Is a Vampire”

    Entrepreneur, basketball team owner and billionaire Mark Cuban isn’t one to keep his opinions to himself, particularly when it comes to something he feels strongly about — like the performance of his beloved Dallas Mavericks, or the flaws in the NBA, or the path that the media industry must take to survive in a digital world. It was the latter that Cuban held forth on in New York City on Tuesday, although to be fair he was asked for his opinion: He gave a keynote address at the AlwaysOn OnMedia 2010 conference, during which he said that Google and other aggregators are “vampires” and the only way to stop them is to “put a stake through their gosh darn hearts.”

    The vampire metaphor may be Cuban’s, but this is a refrain that the newspaper and magazine industries have been hearing repeatedly over the past few years, from luminaries such as News Corp. boss Rupert Murdoch (who said Google “steals our content”) and Sam Zell, the former owner of the Los Angeles Times and the Chicago Tribune (who said papers needed to end Google’s “free ride”), not to mention the World Newspaper Association and the Associated Press, which seem to believe things would be better if all the content could just be locked away the way it used to be, back in the good old days.

    We don’t know what kind of reception Cuban’s comments got, but it’s not hard to imagine the heads of some media establishment types nodding in agreement. After all, Google just takes media content for nothing, right? (small chunks of it, but still). And then it puts it up there for people to see, and then it sells ads and makes money. And what do traditional media entities get? Bupkis. Surely Google could spread some of those billions around, or do without the content.

    This well-trodden ground was apparently trod again by the Mavericks owner in his keynote. Too many newspaper and magazines see traffic from search engines as being like customers coming through the door of a shop, said Cuban, but in reality, readers who come in from search rarely turn into customers. “You haven’t gotten anything back except that you’ve turned into zombies,” he told the assembled throng of cutting-edge CEOs and media establishment. “There is no reason to be indexed in Google.”

    Cuban reportedly dared newspapers to pull their papers out of Google’s search index. “Show some balls,” he said. “If you turn your neck to a vampire, they are [going to] bite. But at some point the vampires run out of people’s blood to suck.” This is right out of Murdoch’s playbook. The News Corp. chairman recently threatened to remove all of his various newspapers from Google’s search index entirely, to which Google effectively said to go right ahead.

    Both Cuban’s pitch and Murdoch’s, of course, ignore the fact that search-driven traffic is growing at most newspapers (in contrast to direct traffic and print circulation), and that if they don’t find a way to appeal to and monetize those readers then they will be catering to an ever-shrinking number. What good is having a store if no one knows that it exists? As Google continually points out, it drives billions of page views to media sites — surely some of those readers might want to return, if they were appealed to in the right way. Perhaps they might even pay for something now and then.

    Does Mark Cuban believe any of what he was saying, or was he just trying to be provocative? It’s difficult to say, although it’s worth noting that while he is one of the few CEOs or billionaires who blogs regularly (OK, Bill Gates just started), he’s also the guy who got mad when a newspaper quoted some of his Twitter messages, and wondered aloud on his blog whether you could copyright a tweet. Maybe he could talk to his pal Rupert about some kind of exclusive Twitter licensing deal, while readers are occupied elsewhere.

    Post photo and thumbnail courtesy of Flickr user Thomas Hawk

  • Subtract the Swearing and Dave McClure Has a Point

    If you can get past the blue language (which seems to come with the territory when he’s involved) there’s a new blog post from startup investor and adviser David “Master of 500 Hats” McClure that makes a number of good points about revenue models for startups, and (among other things) comes to the conclusion that “subscriptions are the new black.” As McClure describes it, the rise of Google has meant a corresponding dominance by CPM- (cost per thousand) and more recently CPC- (cost-per-click) based advertising, which has turned startups into “a bunch of lazy, ad-happy, Web-Tards with crappy ROI.”

    “Everyone seems to have assumed that since Yahoo and Google were giants in internet advertising, therefore all internet startups should be using some form of CPM or CPC ad-monetization. This is a very large lemming-like error in logic that must be corrected immediately.”

    McClure says that apart from a few notable exceptions, recent startup history shows “an uninterrupted string of uninspiring business models and small-time acquisitions of Web 2.0 startups filled with rainbows & unicorns, rather than those based on simple, transactional revenue models.” And what does he see as the future? In a nutshell, subscription and transaction-based models involving e-commerce, digital goods, etc.

    “Gradually we are discovering that the default revenue model on the internet should probably be the simplest one — that is: basic transactions for physical or digital goods, and recurring transactions (aka subscriptions) for repeat usage.”

    One of the biggest flaws in a transaction-based model McClure notes (drawing on his past life at PayPal) is that it requires users to register and engage in other complicated tasks such as creating and remembering their passwords, which they either make too easy and/or instantly forget after signing up. And the easiest way to get around all of that is to make your service one that users come back to repeatedly and often, so that they care deeply about it and/or don’t forget their passwords and login info.

    And who does this model favor based on those criteria? Services like email and social networks. As a result, McClure says, in the near future, “the default login & payment method(s) on the web will be Facebook Connect, Google Gmail, or Apple iTunes,” for the simple reason that they already have your information on file, you access their services regularly and they are interoperable with almost everything (or can be). He adds:

    “Now I’m not suggesting PayPal and Amazon are going to disappear overnight — both probably have hundreds of millions of users (well, at least double-digit million *active* users anyway). And in fact, they will likely still have dominant positions in the market. But I will say this: if they rely *purely* on purchase behavior, they are fighting a losing battle against other services with more frequent usage, whose users will be more likely to remember their passwords.”

    There are some obvious holes in McClure’s rosy picture of the future. He even mentions one of them, which is that Microsoft and AOL and Yahoo have repeatedly tried to construct the type of model he is describing, using their massively popular networks — instant messaging, email, etc. — as a foundation for a single login system that would connect to transactions. In Microsoft’s case, it was called Hailstorm, and it soaked up billions of dollars before being absorbed back into the Borg, never to be heard from again.

    Are users likely to be any more comfortable giving Facebook or Google access to their wallets and full (i.e., bank-verified) identities now than they were with Microsoft or AOL? Have times changed enough that online transactions are seen as routine, and a single sign-in-and-pay system would be viewed as a pleasure rather than a privacy intrusion? I’m not convinced. And will companies be any happier with Facebook or Google or Apple coming between them and their customers than they were when Microsoft tried it?

    McClure is right about one thing, however: Display ads and cost-per-click are a mug’s game. Companies that can perfect a subscription and transaction-based model are likely to be the mammals in the ongoing evolution of the web.

    Post and thumbnail photos courtesy of Flickr user (davide)

  • UPDATED: Has Amazon Won or Lost the e-Book War? Both

    Amazon’s battle with book publisher Macmillan was a valiant attempt to retain control over pricing in the rapidly changing world of e-books, but its weekend display of brinksmanship was short-lived. The online retailer yanked Macmillan books from its virtual shelves — both e-books and regular books — on Friday, triggering an online flame war with Macmillan authors and many of their supporters, but by Sunday night Amazon had capitulated and agreed to accept Macmillan’s new pricing model.

    Update: According to a research note from J.P. Morgan, the Amazon/Macmillan dispute isn’t quite over yet. The brokerage firm said that as of 5 p.m. ET on Monday, “many best-selling Macmillan titles appear to still not be available on Amazon, suggesting the situation is still not fully settled.”

    The unseen actor in this little mini-drama, of course, is Apple. With the launch of the iPad, the consumer electronics giant tilted the balance of power in the e-book market decisively away from former leader Amazon, even though Apple’s device isn’t shipping yet. The company also negotiated a new payment structure with publishers like Macmillan, which is being referred to as the “agency model.”

    In a nutshell, instead of Amazon or Apple behaving like a retailer of e-books — someone who should get to set the ultimate price of the product, as I argued in this post about Amazon’s duel with Macmillan — they would instead be treated as an agent of the publisher, and receive 30 percent of the list price of the book in question. The surprising thing about this arrangement, as Brad Stone notes in the NYT’s Bits blog, is that this gives publishers exactly the kind of pricing flexibility music labels wanted from Apple but were repeatedly denied (they eventually struck a deal late last year).

    So Amazon has lost and Macmillan has won, right? Not exactly. One of the ironic things about the battle is that the pricing model Amazon was resisting will pay the retailer more than the model it favored, which would have seen all e-books priced at $9.99. Under that system, Amazon actually loses money on each book, since it has to pay publishers about $15 for them. Under the “agency model,” Amazon will be paying publishers about $10 per book, and selling them at between $12 and $15 apiece (under the arrangement described by Macmillan, prices will decline over time).

    While it may make more money in the short term, however, Amazon still loses, because it has to give up pricing control to publishers, and a rise in e-book prices won’t help move more Kindles, either. The retailer’s exercise in brinksmanship also made it look bad: Author John Scalzi does a good job of rounding up the mistakes Amazon made, including the fact that its unilateral removal of Macmillan books (print and electronic) turned both authors and their fans against the company. Amazon also didn’t respond when the battle broke out, letting Macmillan win the high ground.

    In the long run, of course, Amazon’s biggest fight isn’t going to be with Macmillan, or even with the book industry as a whole. Its true nemesis is now Apple (Michael at The Apple Blog has his own take on the Amazon/Macmillan brouhaha).

    Post and thumbnail image courtesy of Flickr user Frederic della Faille.

  • UPDATED: Amazon Is Doing to Publishers What Apple Did to Record Labels

    UPDATED: If you’re interested in books, either the old-fashioned kind or the electronic kind, you’ve probably caught wind of a major dustup going on between Amazon and book publisher Macmillan over what price Macmillan should be allowed to charge for its e-books. Macmillan took out a full-page ad in the magazine Publishers Lunch to inform authors, retailers and readers that Amazon had yanked all of its books from the company’s electronic store.

    According to several reports — the most detailed (if confusing) of which comes from author Charlie Stross — Amazon didn’t take kindly to Macmillan’s proposal for a new book-pricing structure, which would see new books, both printed and electronic, priced at $14.99 and then gradually dropping in price over time. Amazon is apparently not impressed with this idea at all, and would like virtually all of its e-books to be priced at $9.99 or lower.

    In fact, the new royalty rates that the retailer offered to authors and publishers in advance of the Apple iPad announcement requires them to guarantee that their books will not be priced any higher. Amazon seems miffed that Macmillan is not only proposing to raise prices, but is also playing footsie with Apple about book sales on the iPad.

    As Amazon and Macmillan retreat to their respective corners, with Apple waiting in the wings, authors have been taking sides on the dispute, and many of them seem to be siding with Macmillan, including John Scalzi and Cory Doctorow of BoingBoing. Why not let the publisher charge more, or have a more flexible pricing scheme, they argue? It’s better for the consumer, etc. (there’s another good overview of the fight here).

    One thing no one seems to be talking about, however, is how similar this is to the strategy employed by another large consumer technology company whose name begins with an A. In effect, what Amazon is doing — trying to maintain a fixed, low price for e-books to help stimulate the market, both for e-books and the Kindle — is almost exactly the same as what Apple did several years ago, when it was putting the screws to the major record labels on music prices through the iTunes store.

    Virtually every major record label tried to boost prices for their songs, or at least get Apple to agree to a variable-pricing model, which would let them charge a higher price for the current hits that customers wanted most, and lower prices for older songs from the “back catalog.” Apple repeatedly refused, until a year or so ago, when negotiations began to modify prices in just such a way. The two sides reached an agreement a year ago.


    So why did Apple not get criticized the way Amazon is now? Perhaps because not enough musicians had blogs, and authors do. Or it could be that no one in their right mind would have thought of supporting a record label — one of the most reviled corporate entities of the modern age — whereas many feel more kindly towards a book publisher. In any case, the issue is the same: The labels wanted to charge more to preserve their profit margins from the compact disc, and Apple wanted to charge less to spur market growth.

    If you’re trying to decide which side is right, ask yourself this question: Why should consumers support the right of book publishers to charge whatever they want for their product? Since when does the manufacturer or distributor of a thing get to set the price? Surely the retailer is the one that should be allowed to determine the price, based on market demand and a host of other factors (including what price the manufacturer charges him to supply it). In this case, that retailer — or the closest thing to it — is Amazon.

    Wal-Mart doesn’t charge whatever Kimberly-Clark says to charge for its toilet paper; the store charges whatever it thinks the market will bear, or whatever it needs to charge. Admittedly, toilet paper and books are somewhat different (depending on whose book you are reading) but the principle is the same. If MacMillan wants to have its e-books on the Kindle, or its printed books in Amazon’s online store, then Amazon gets to decide what to pay for them. Even if a quasi-monopolistic situation has developed with the Kindle, Apple’s iPad should ensure that it is shortlived.

    Update: According to a post in Amazon’s Kindle Community forum, the company has decided to capitulate to Macmillan and allow the publisher to charge higher prices for its books. Obviously having Macmillan books in its stores means more to the retailer than winning a price war. The somewhat passive/aggressive post states:

    Dear Customers:

    Macmillan, one of the “big six” publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switching to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.

    We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. We want you to know that ultimately, however, we will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books. Amazon customers will at that point decide for themselves whether they believe it’s reasonable to pay $14.99 for a bestselling e-book. We don’t believe that all of the major publishers will take the same route as Macmillan. And we know for sure that many independent presses and self-published authors will see this as an opportunity to provide attractively priced e-books as an alternative.

    Kindle is a business for Amazon, and it is also a mission. We never expected it to be easy!

    Thank you for being a customer.

    Thumbnail photo courtesy of Flickr user bass_nroll. Post photos courtesy of bass_nroll and Flickr user gadl.

  • Apple and the iPad: Beyond Good and Evil

    As often happens when Apple releases a new product, the conversation around the iPad has quickly changed from “Oooh, I want one!” and discussions of what arcane features it’s lacking into a debate over the eternal question of good vs. evil — or rather, open vs. closed, which in the tech community amounts to pretty much the same thing.

    Although many have hinted at or danced around the issue — among them Twitter engineer Alex Payne in a widely read post and Annalee Newitz in a post/polemic at the io9 blog — the first person that I know of who flatly posed the question in good vs. evil terms was Reddit co-founder Aaron Swartz, with a post entitled “Is Apple Evil?” Swartz’s point is that however seductive the iPad might seem, the essence of it is evil, because it involves Apple controlling everything — not just the locked-down platform, but every piece of content that comes to users through that platform. As Swartz writes:

    “That’s not to say the iPad won’t sell, or that I don’t want one. The scariest thing is that I think it probably will. It’s clear that Apple plans for the iPhone OS to be the future of its product line. And that’s scary because the iPhone OS is designed for Apple’s total control.”

    Swartz says the only reason he can see for pursuing such a goal is Steve Jobs’ “megalomaniacal need for control.” After declaring himself to be a huge Apple fan, and saying he would buy an iPad right now if he could, he says that despite all that, “for the first time, I’ve got a real sinking feeling in my stomach.”

    Payne, meanwhile, declared himself “disturbed” after watching the launch, because the product looked to him like “an attractive, thoughtfully designed, deeply cynical thing.” As he explains:

    “The iPad is competing with full-fledged (if small and ugly) computers capable of running arbitrary programs and operating systems. Play all the category games you want, but the iPad is a personal computer. Apple has decided that openness is not a quality that’s necessary in a personal computer. That’s disturbing.”

    Payne says he’s concerned that because the iPad is meant primarily for consumption, and because the platform is so closed and controlled, the device could actually usher in the “end of the hacker era” in digital history. The future of personal computing that the iPad shows us, he says, “is both seductive and dystopian.”

    Newitz says Apple’s control over the device and everything in it will return the computer world to a time of “televisions and strip malls.” Because the iPad is merely a media consumption device, rather than something that can be modified or used to create much content, Newitz says it has “all the problems of television, with none of the benefits of computers.”

    “I know a lot of otherwise-savvy consumers and hackers who are already drooling over the iPad and putting in their orders. They hate the idea of a restricted device, but they love the shiny-shiny. I’m not saying that they should deprive themselves of this pretty new toy. What I am saying is that this toy represents a crappy, pathetic future.”

    Evil, megalomaniacal, deeply cynical, the harbinger of a crappy and pathetic future (the Free Software Foundation calls the iPad “bad for freedom”) — none of this is anything Steve Jobs hasn’t heard before (for the good side of things, see Joe Hewitt’s post.) Similar criticisms have been leveled against the iPod and iTunes for years (Chris Dixon of Hunch deals with the quasi-religious open vs. closed question here, and says he would like Apple to remain closed). But is all of this heavy breathing over openness and creativity and the end of the hacker culture really something we need to be worried about? Hardly.

    The reality is that hackers will continue to break open and get root access to things, installing workarounds and reconfiguring whatever they wish — just as they have with the iPhone. If anything, it will make them smarter because they’ll have to try harder. And even Apple isn’t immune to the marketplace: The entire app store evolved because of market demands, and the open web will continue to put pressure on the company to be more open (the advent of app-like sites through HTML5 — which has allowed Google Voice to appear on the iPhone — will likely hasten that process).

    If anything, the concern about Apple somehow killing our creativity or our open future give Steve Jobs and Apple far more credit for revolutionizing or impeding the evolution of computing than they likely deserve. It’s a little like conspiracy theorists assuming that the CIA and the FBI and the NSA and even more shadowy organizations are hard at work altering the very fabric of society to their own nefarious ends.

    The reality, of course, is that most of those agencies couldn’t find their butts with both hands, and have a hard time even battling a cyber attack now and then, let alone planning some huge, ultra-secret conspiracy.

    That’s not to say Apple isn’t a very smart company, or that its products aren’t influential — they are, in many cases far more influential than their sales would indicate. But to assume that just because the iPad runs on a locked-down phone OS or has an iTunes-style content platform that the foundation of our entire digital culture is at risk seems a bit much.

    Thumbnail photo courtesy of Flickr user zoomar, in-post photos courtesy of zoomar and Flickr user Helico.

  • Can You Crowdsource Journalism? Seed Is Trying

    In what he hopes will be the first big demonstration of the “crowdsourcing” potential of AOL’s new Seed.com service, former New York Times writer Saul Hansell says he is looking for writers who will write up interviews with all of 2,000 or so bands and artists at the SXSW music festival in Austin. The assignment will involve “real reporting,” Hansell said in an interview, in which writers will have to pick up the phone and call the band or artist and write up a 1,000-word interview in question-and-answer format, as well as a 300- to 500-word biography. The price for this assignment? The princely sum of $50.

    Both Seed and similar web-based contract-writing services from Demand Media and Associated Content have come under fire from a number of critics who say they are primarily designed to generate low-quality, cheap content that contains just enough keywords to attract search engine traffic, and therefore advertising. Hansell, however, who joined AOL in December as head of programming at Seed, says that what he is trying to do is to figure out how to “deploy human intelligence at scale,” and that it is much more than just an effort to generate “the lowest-common denominator of SEO-friendly pages.”

    When it comes to the price, Hansell says he wants to “attract the people who are already excited about the process,” either because they want to interview someone, or because they’re music fans. The idea, he said, is to give them a “mix of financial and non-financial rewards.” When asked about the danger of getting fawning fan interviews instead of something worthwhile, Hansell said that questions would be provided for the freelancers, and that all the pieces would be edited by AOL staff.

    He also said that Seed was “not trying to find something new to say about Bruce Springsteen for the cover of Rolling Stone,” but instead was expecting “light, fun questions” and that the project was an experiment (AOL recently bought a video production studio called StudioNow to add to the Seed network). As he put it to me:

    “The only way we’re going to learn about doing this kind of journalism at scale is to try things in public and experiment and learn…we need to explore what the market will bear in terms of how much money it will pay for what quality. We need to understand the economics of it. If readers aren’t paying us enough with their attention, or advertisers aren’t paying us enough for access to them, then we need to know that.”

    Hansell said that Seed was not intending to “investigate corruption in some government agency, but we’re not just rewriting Wikipedia entries for $10 a pop, either. We’re going to try a bunch of different experiments and see what’s possible.” In a recent blog post at the Seed blog, he said that the company’s main job was to “satisfy the world’s curiosity.” But the big question is, can AOL accomplish that and still make money?

  • 5 Ways the Kindle Can Fight the iPad

    Now that Apple has unveiled its iPad, plenty of people seem ready to buy the Kindle a coffin and tell the band to start playing the Funeral March. Heck, after seeing Apple’s sleek touch tablet, even Om came to the conclusion that it would kill the Kindle.

    One of the few tech bloggers defending the Amazon e-reader (apart from those who write for Kindle-related web sites, of course) is Brad Stone at the New York Times, who has a list of “Three Reasons Why the iPad WON’T Kill the Amazon Kindle.” Undeterred by his colleague’s arguments, NYT tech blogger Nick Bilton followed up with a response detailing three reasons why the iPad will kill the Kindle. (Ben Elowitz of WetPaint, meanwhile, has come up with 10 reasons.)

    It’s fun to talk about how new products will kill other products (which rarely happens, of course), but a more interesting discussion would be about how Amazon could fight back against the iPad. One way it can do that is by strengthening its relationship with authors and publishers, which it has already tried to do by raising its royalty rates substantially (in return for lower book prices, which it no doubt hopes will increase demand). Publishers may be tempted by a relationship with Apple as well, but Amazon has been around longer and has some solid deals on which it can build. Plus it’s just focused on books, whereas Apple’s attention extends to a host of other media, including music, print, movies, etc.

    Here are four other ways I think Amazon could fight back:

    • Open Up: One surprising announcement from Apple was that it will support the epub format, the same open-source standard that Google uses for Google Books. Amazon still uses its own proprietary format, which is likely to be a disincentive for some users, particularly if they also want an iPad. Amazon should open up or at least make translation easy. Building an app ecosystem is a good idea, too.

    • Brighten Up: One most obvious difference between the two devices is that the iPad sports bright color, while the Kindle is dim and gray. Colorlessness may be easier on the eyes (although it sucks if you want to read in bed without the light on) but it detracts from any book that has pictures, theoretically a large market. Amazon needs to upgrade the screen, possibly by using the PixelQi screen.

    • Get Social: As Nick Bilton mentions in his post, one of the big drawbacks of the Kindle is that it’s a single-use device. That might impress purists, who don’t want to be distracted while they read a book, but it makes the Kindle fundamentally unsocial. Even smart readers like to share links, send snippets to friends, maybe write a blog post or Twitter message about a great book. Why make them pick up another device?

    • Get Cheaper: One of the things that iPad fans continue to mention is that the Kindle DX is only $10 more expensive than the iPad (although that compares it to the cheapest one without 3G wireless), but has none of the added features such as games, apps, movies, etc. Amazon needs to defuse this criticism by dropping the price of the KindleDX (which will likely make it even more appealing to buyers who don’t want all the bells and whistles of the iPad). Why not make the KindleDX $289 instead of $489?

    Jeff Bezos didn’t get to be where he is by backing down from a challenge, so I imagine he’s looking forward to doing battle with Apple on the e-reader front (Om collected some entrepreneurship tips from Bezos in this post, and also did an interview with him after he spoke at the D6 conference). If you have any thoughts as to how Amazon could compete effectively with the iPad, feel free to share them in the comments.

    Related posts from GigaOm Pro (subscription required): The Evolution of the E-Book Market and
    Irrational Exuberance Over E-Books.

    Thumbnail photo courtesy of Flickr user aaronisnotcool