And Then There Were Three (for now)

Is it really surprising that AT&T’s plan of innovation includes buying out T-Mobile, their competitor in the GSM arena?  As Om Malik points out in his post about the merger:

T-Mobile has been pretty experimental and innovative. … AT&T, on the other hand, has the innovation of a lead pencil.

So what does this mean, other than the probable demise of some really great commercials featuring Charles Barkley?  Let’s look at this, shall we?  This leaves AT&T, Verizon and Sprint as the three major wireless companies in the US.  There are smaller companies out there, but we’re not talking about them.  Three major companies.  For the whole US.  Don’t like AT&T?  You would have Two other major choices.  So much for that invisble hand

Now before we go any further, let me point out that we have all ready heard AT&T say that in no way would this affect prices.  As their press release said so quickly:

“The U.S. wireless industry is one of the most fiercely competitive markets in the world and will remain so after this deal. … The U.S. is one of the few countries in the world where a large majority of consumers can choose from five or more wireless providers.”

Only one small problem with that. It always seems as if less competition allows companies to drive the price up whenever they please, since there is no incentive for them to keep prices low.  T-Mobile USA has been fairly aggressive in offering cheaper voice and data plans which has kept the prices in the market low enough. That thorn in AT&T’s side will be gone.  After that, where are you going to go?  Verizon?  Why? They will be following suit with the same excuses as AT&T because suddenly they can.  Sprint?  Possibly, but for how long before Verizon buys them?  Cricket?  US Cellular?  Pardon me while I laugh, French-like at you. 

No, the only real winners here are AT&T and Deutsche Telekom.  And given the climate in Washington, this deal will pass.  It may take a few months until all the screaming from consumers dies down, but it will indeed pass.  So enjoy the Barkley commercial while you can.

Friends With Benefits

The phrase “Friends with Benefits” has always intrigued me.  I mean, what, the person that you’re fooling around with has offered you a dental plan?  That guy over there wants to screw around, but only if you set him up with a 401K?  Please. 

But in the case of Goldman Sachs and and co-investor Russian giant DST’s investment in Facebook,  there are some friends with some major benefits.  500 million dollars worth, to be precise.  That puts the value of Facebook at $50 billion.  Greater than Yahoo! (you hear that, Carol?).  Greater than e-Bay.  As great (as The Register has pointed out) as the British retail giant, Tesco, a company with real honest-to-God assets, like stores and trucks and things.  Clients of the Goldman-Sachs who plan to invest in Facebook have to cough up at least two million dollars each, not sell their shares in Facebook until 2013, and steer clear of trading in secondary markets where the firm trades.  And what will those investors get?  A lot of non-public information about Facebook.  For this, Goldman and DST get about one whole percent of Facebook.  One percent.   

All of this would be fine and dandy, except given the players and what they are playing for.  Enter the US Securities and Exchange Commission (SEC). The fact is, the Sachs-Facebook deal is definitely enough to start the government investigating.  There are more than enough laws that this little transaction is walking on or tip-toeing around. 

So, two questions remain.  What does this mean and more importantly, when does Facebook go public?  Let’s go with the first question first.  What this means is that Facebook is going to get larger than they all ready are.  Zuckerberg just got back from China.  China has about 450 million people on-line right now.  Now, granted, China is not the easiest place to do business in, but you cannot turn your back on 450 million potential users.  The only question is when. 

Another point is that Facebook still really hasn’t focused on advertising, despite that $2 billion annual rev and nearly 1 trillion display ads per year.  Funny, that.  Facebook really has not focused their undying attention on what is probably the world’s largest database of human wants and needs.  When they finally do, be afraid.  You’ll realize it when you start seeing ads that display things that you’ve sometimes thought about, but have never, ever told anyone.  The fact is, the information has always been there, based on your likes, your friends likes, their friends likes, and so on.  Facebook just hasn’t gotten that nuanced enough.  They will.

Finally, when do they go public?  No general consensus on that, yet.  Maybe the end of the year, maybe 2012.  The point is, however, when it happens, expect the bonuses at Goldman to be incredibly huge.  Now there will be some friends with benefits.

It’s A Festivus Miracle!

Today is Festivus. In accordance with tradition, I submit my 2010 Airing of Grievances. The following have disappointed me over the past year, in no particular order:

• Carol Bartz for still not figuring out what Yahoo is, $@#$#%#^^$%!!!!!!!!!!!. Of course no one else has either, but really, she is the head Hooligan, so she should have some idea.
• Steve Jobs for not allowing Chris Chang’s company to make a really cool action figure of him. Yeah I know, someone would put a mini Darth Vader helmet on it and then make a viral video which would piss him off to no end. But really, Steve, I promise I wouldn’t skewer you too much.
• Ray Ozzie for not gathering the Microsoft developers French revolution style and storming Ballmer’s office for cancelling Courier. Of course I get the fact that Ray didn’t want his breast exposed as in the painting. But still, it would have been awesome.
• Every single TV maker in the world. 3-D. Really? After all these years and the only thing you can offer as an advancement in 3-d technology is polarized glasses? Really?
• Google. Before rolling out Google TV, don’t you think it would have been a really keen idea to get the networks to buy into it?
• Apple. Ping. The less said, the better.
• Airlines that think that voice recognition is really cool. It isn’t. It’s annoying. I have to say the same thing five times before the system recognizes it, or else do my impression of Lillith from Frasier.
• The TSA. Come on guys, I’ve been looking for a real good grope, and nothing. Am I that undesirable? I feel cheated.
• People on Facebook who immediately are up in arms when a change is made to the system. There’s a life out there. Go get one.
• By that same token, Facebook. You know if you set everyone’s privacy to the highest and let them decide to open themselves up, you wouldn’t have so many people out there screaming. Just a thought.
• Apple again for pretending to be East Germany over losing an iPhone, complete with Stasi-like raids in the middle of the night.
• Steve Jobs again, this time for telling left handed people that the iPhone is perfect and they are not.
• Viacom, for still continuing with a lawsuit that has been thrown out of court once.
• Microsoft for allowing Kin to see the light of day.
• Telecom companies that have made a standard like 4G a marketing tool. When you do things like that, then we know you aren’t telling the truth about anything, OK?
• And finally, to politicians who decry Net Neutrality really loud. Please to note that those who cry the loudest are the ones who have received huge amounts of money from the telecom companies. I still think that our legislators need to wear NASCAR jumpsuits with patches of the companies and groups who have sponsor them. Now that would be transparency I could get behind.

Reach Out And Touch

If there was an argument for a “new” attitude for Microsoft it may be what has transpired in the last few weeks. My thought is, if this keeps up, Microsoft may find itself actually being liked.

Case one: Microsoft unveils its controller-less games controller, Kinect. Within hours, the machine is torn down and hacked, allowing for some really interesting results, like using Kinect to capture video in 3D, or using Kinect to control a computer interface as in the movie Minority Report. Overall, hacking Kinect is growing.

Case two: Windows Phone 7 is released to the public and again, within hours, someone figures how to jailbreak it, enabling owners to load and select their own ringtones.

Now, Microsoft has options. Usually, that option involves lawyers, Cease and Desist letters and generally acting like a typical corporation. But in both of these cases, Microsoft has opted for something different. With Kinect, they have actually reached out to the homebrew community and have allowed things to go as is. As a result, expect more and better hacks with Kinect.

As for the phone jailbreaking, ChevronWP7, the group that initiated the jailbreaking tool, has agreed to take it off the net for the moment. ChevronWP7 was contacted by Brandon Watson, Director of Developer Experience for Windows Phone 7, who connected with them to discuss the development of the unlocking tool. The team and Watson established a mutual understanding focusing on the teams efforts to enable homebrew possibilities and broaden the development of Windows Phone 7 apps and tools.

The endgame to this is simple: better products. Unlike some companies out there, Microsoft appears as if it is starting to understand that by not controlling every little thing, you can actually come up with product that becomes more exciting over time. And given the current movement to walled gardens, allowing people to tinker is a great thing, as going outside the lines will eventually lead to greater developments later on. One thing, though: allowing is one thing. Actively encouraging is another. The fact is, it’s not a great leap from one to the other.

I only hope they keep this up, although the thought of a “cuddly” Microsoft currently ranks with “Happily Married”. But this is a step in a good direction.

Nothing To Do With Advertising. No, Really, Scouts Honor…

I’ll just say it again:  Facebook, man up, admit that you are really wanting to sell personal information to ad companies to make money, take the hit for being honest and move on. Friday was yet another privacy change proposal.  This time up: Facebook may start automatically sharing data about users with special partners the minute they visit a site for a more ‘personalized’ experience.  The company didn’t say who these pre-approved partners would be (why limit yourself), but said that site members would be able to opt-out of having their data shared.

Here’s the proposal in a nutshell:

Pre-Approved Third-Party Websites and Applications. In order to provide you with useful social experiences off of Facebook, we occasionally need to provide General Information about you to pre-approved third party websites and applications that use Platform at the time you visit them (if you are still logged in to Facebook).

Similarly, when one of your friends visits a pre-approved website or application, it will receive General Information about you so you and your friend can be connected on that website as well (if you also have an account with that website).

In these cases we require these websites and applications to go through an approval process, and to enter into separate agreements designed to protect your privacy. For example, these agreements include provisions relating to the access and deletion of your General Information, along with your ability to opt-out of the experience being offered.

You can also remove any pre-approved website or application you have visited here [add link], or block all pre-approved websites and applications from getting your General Information when you visit them here [add link]. In addition, if you log out of Facebook before visiting a pre-approved application or website, it will not be able to access your information. You can see a complete list of pre-approved websites on our About Platform page.

So what’s it mean?  When a user visits partner sites, Facebook may hand over information including their name, their friends’ names, profile pictures, gender, connections, and any content shared using the ‘Everyone’ privacy setting. On top of that, it could also include information about a user’s location and their age for security and to guarantee age-appropriate content.

Kim-Mai Cutler at Venture Beat had a conversation about this with Facebook’s director of communications and public policy, Barry Schnitt.  Well, tried to have a conversation with Barry.  A conversation is where a person answers back with more than “I really can’t say at this moment”.  What I got out of the shuffling of feet was that it is something like Facebook connect, and there’s nothing you can really do with advertising through Connect.  To quote Barry, “This is not about driving any data for advertising. Nothing could be further from the truth.”  Uh-huh.  Oh yeah, the opt-out portion has not been developed yet.  Because opting out is the option, not the rule.  Oh, one other thing-you may opt out, but if one of your friends wants to make their life totally public then chances are, you’re out there with them, whether you like it or not.  Is that a true statement?  In the words of Barry Schnitt, “It’s a is weird limboland”.

Of course the geo information is the golden egg here, as Facebook looks to go toe to toe with companies like Foursquare.  And it is also another sticky privacy concern that they will want to keep as quiet as possible.  Location disclosure is a very touchy subject and Facebook’s recent about-face towards a default all-public privacy stance could cause a substantial backlash when it comes to the mainstreaming of location sharing.  Everyone screamed over Google Buzz and geo-tagging.  We have yet to see the reaction here.   So what does this all mean?  Expect an answer at f8.  Trust me, there will be winners and loser here. 

WordPress Tags: Facebook, privacy, advertising, money

Now Playing: Fatboy Slim – Moulin Rouge – Because We Can

Child, Please

It was an interesting little tête-a-tête between Michael Arrington and Mark Zuckerberg, boy genius and creator of Facebook. And then came the bombshell.  The question was referencing the changes Facebook underwent last month. Your name, profile picture, gender, current city, networks, Friends List, and all the pages you subscribe to are now publicly available information on Facebook. This means everyone on the web can see it; it is searchable. More importantly, it is no longer private.  Which is the reason why so many people signed up in the first place.  And now it is not.

"When I got started in my dorm room at Harvard, the question a lot of people asked was ‘why would I want to put any information on the Internet at all? Why would I want to have a website?’

"And then in the last 5 or 6 years, blogging has taken off in a huge way and all these different services that have people sharing all this information. People have really gotten comfortable not only sharing more information and different kinds, but more openly and with more people. That social norm is just something that has evolved over time.

"We view it as our role in the system to constantly be innovating and be updating what our system is to reflect what the current social norms are.

"A lot of companies would be trapped by the conventions and their legacies of what they’ve built, doing a privacy change – doing a privacy change for 350 million users is not the kind of thing that a lot of companies would do. But we viewed that as a really important thing, to always keep a beginner’s mind and what would we do if we were starting the company now and we decided that these would be the social norms now and we just went for it."

I’m not too sure that the “social norm” has radically changed that much from two years ago when Zuckerberg proclaimed to ReadWriteWeb that  Privacy control was "the vector around which Facebook operates."  The point is, Facebook has convinced users that their personal info is private under their website. Now after millions of signups, they suddenly would say it’s better if user accounts would be made public because people are used to it by now.  

Child, please.  

It is very obvious Facebook is now hooked into advertising (read: revenue). As they say: "It’s ALL about the money."  The closer the IPO, the less privacy there suddenly is.  Man up Mark, and admit it:  negotiations with potential large investors have centered around reselling user data to third parties in order to make quarterly revenue goals.  Just say it.

This isn’t about social norms or anything like that.  This is about business, plain and simple.  You’re only fooling yourself, Mark, if you think otherwise.  And you’re a bigger fool if you think that anyone else is falling for it. 

WordPress Tags: Facebook, Internet, Privacy, Money

Now Playing: World Party – Goodbye Jumbo – Put The Message In The Box

What If They Started a War and Everyone Bought It?

I am not a gamer.  I enjoy videogames, but I am far from being a hardcore gamer.  But I do understand opening night numbers.

Activision Blizzard said that Call of Duty: Modern Warfare 2 has sold $550 million worth in five days.

That is a little over half a billion worldwide.  That is a larger take than the first five days of ANY movie.  If this can be verified, this should be huge news.  But overall, it has been met with a collective yawn in this news cycle, where the President’s bow to the Emperor of Japan seems to be generating more heat.  While this may not represent anything other than something a lot of people have been waiting for in a year where there have been no really huge titles to go against, it is still news. 

Still, that success hasn’t come without some controversy. Several British politicians have spoken out against Modern Warfare 2, and in Russia, Activision is releasing a censored version of the game. The Russian edition leaves out a scene called “No Russian,” which allowed the user the opportunity to shoot at – or otherwise injury – innocent civilians in a Moscow airport.

But no matter. Reports are overwhelmingly positive on game play, from what I have seen on the boards.  Heck, I might even give it a shot.

Now Playing: Dire Straits – Brothers in Arms – Brothers in Arms

WordPress Tags: Videogames, Opening Night, games, Money, Call Of Duty

Who Saw This One Coming?

Ah yes, the unicorn called Net Neutrality.  Plenty has been written about it, people have spoke about it, and the moment someone starts to do something about it…

Yeah, you know what happens.

Now for those of you who do not know what it is I’m writing about, Net Neutrality is based on a simple thoughts.  From Wikipedia:

A neutral broadband network is one that is free of restrictions on content, sites, or platforms, or on the kinds of equipment that may be attached, and on the modes of communication allowed, as well as one where communication is not unreasonably degraded by other communication streams.

That’s a mouthful, so let me break it down.  Let’s say I’m a user of Time Warner’s Roadrunner cable system.  I want to communicate with someone who uses a Comcast system.  Net neutrality says we should be able to communicate, play games, pass home videos back and forth without having to worry that Comcast will slow down or even block my access because I’m using Time Warner or vice versa.  This would also apply to me wanting to visit certain websites that may hold views that Time Warner opposes (hello freedom of speech issues).

Now of course, there are some who say that the telecommunications companies would never do such a thing, while we have watched telcoms intentionally slow down peer to peer transmissions (Comcast), while others have instituted a cell-phone style billing system of overages, free-to-telecom "value added" services, and anti-competitive tying (known as "bundling") and pay by the gigabyte service.  All in the name of transmission “quality”

So onto this stage comes the current FCC chairman, Julius Genachowski giving a speech in which he outlined the FCC’s plan to enforce Net neutrality.

From Genachowski’s speech: "Broadband providers cannot discriminate against particular Internet content or applications, nor can they disfavor an Internet service just because it competes with a similar service offered by that broadband provider. The Internet must continue to allow users to decide what content and applications succeed."  That bit seems to have been directed at Apple and ATT.

And within twenty four hours, six Republican senators  introduced an amendment that would block the Federal Communications Commission from implementing its recently announced Net Neutrality policy.  A response within twenty four hours, from Republican Senators, no less.  As my Grandmother was fond of saying “must have touched a nerve.”  

It would seem almost farcical, but it is reality.  After all, ATT is based in Kay Bailey Hutchison’s home state of Texas.  Did I mention she’s running for governor as well?  Co-sponsors are Sen. Sam Brownback (R-KS), Sen. Jim DeMint (R-SC) Sen. John Ensign (R-NV), Sen. John Thune (R-SD) and Sen. David Vitter (R-LA).  All one can say is that they haven’t met a Democratic action they didn’t hate, so it really is no surprise that they would sign on because it is all politics for these show ponies.  The part of Genachowski’s plan that ISPs are most opposed to, according to PCWorld , is that it would apply to mobile carriers as well — cell phones, Blackberries and the like. Bandwidth for wireless is not infinite, and some carriers have argued that they need to shape some traffic on their networks in order to make sure there is space available for everyone.

But by the way things look, the only shape the telcos want to see are the shape of dollar bills.  So pull up a seat, and get ready to Tweet because this is going to be a fight.  Oh yeah, and you might want to make sure your voice is heard like a wingnut at a town hall healthcare meeting. 

Now Playing: Counting Crows – Recovering the Satellites – Angels Of The Silences

WordPress Tags: Internet, Net Neutrality, freedom, telecommunications corporations