June 2007 Archives

I won't lie to you: It's hard out there for a tech blogger. The industry's annual summer news slowdown has commenced, and there are only so many ways to say that Google is taking over the world or that the i-Phone sure will be cool.

In scouring the Internet for blogworthy ideas, I often run into stories that I couldn't wring a blog post out of even under threat of torture are meant only for the hardcore techie. Such as:

New IBM supercomputer achieves petaflop

Linux Computer in USB Key Form-Factor

Writing Java Servlets to Produce XHTML Code That References External SVG Files

Intel and India's NIIT team on multicore training

Studying Maggots And Whale Dung Better Than Being Microsoft Security Guru

Actually, I think I could work with that last one.

My sister's frustrated these days. She and her husband have been trying to sell their house in Connecticut for six months now. They've only gotten a few nibbles and an insulting lowball offer.

Fortunately, the two or three houses they're interested in buying also are languishing in this, the slowest real estate market in four years.

Not only did sales of existing homes in the U.S. decline in May, the third consecutive drop, the median sales price fell for the 10th straight month, extending a record losing streak.

With the market in freefall, I figured it might be time to pick up some bargains in the heart of Silicon Valley. So I got on Realtor.com and checked the inventory in Palo Alto, home to Stanford University and conveniently located between San Francisco and San Jose.

First things first: There are no farms for sale in Palo Alto. Fine by me; I'm no sodbuster. Plus I decided to focus on single-family homes, though the two mobile homes currently on the market are brimming with "curb appeal."

But you should sit down for the next part. I got a list of the 167 single-family homes in Palo Alto. Care to guess how much the lowest-priced home is, in this depressed market?

$425,000

But don't worry, the listing says, "with some work this can be a true beauty."

The next cheapest single-family home on the market in Palo Alto is $449,900. It's 580 square feet.

Of the 167 single-family homes, 47 were priced at $1 million or more, with the list topping out at $5.2 million. (Just for fun I changed some of the assumptions on Realtor.com's mortgage calculator and got the monthly payments for this shack down to $25,000, which, with four or five side jobs, definitely is doable.)

Clearly we're not yet at the "bargain" phase in Palo Alto, but I can wait.

Maybe it's a kind of karmic revenge on the Internet, which many in the movie business fear is endangering their cash cow. Or maybe it's just a wily Hollywood executive maximizing his personal ROI at the expense of some green Silicon Valley geeks who didn't know how to get their company to the next level and threw out a lifeline for help.

However you look at it, ousted CEO Terry Semel departs Yahoo a much richer man than he was when he joined in 2001. The former Warner Brothers chairman earned $70 million last year and more than $500 million in his six-year run.

What he leaves behind is a company spinning its wheels strategically and financially, unsure of what it is and how it can compete in Google World. See, it was a win-win!

I jest, of course. The Semel years will go down as the era when Yahoo lost its edge. Not to Google, per se, though there sure has been plenty of that. Rather, Yahoo's sizzle as an Internet destination has gone silent. Why does one go to Yahoo? Well, there's no compelling reason, and that's the problem. Yahoo has tried to be all things to all people and now is spread too thin. (Not just my theory, I remind you.) Which is what can happen when you don't really have a strategy. Sort of ironic, given Semel's hollow taunting of Google almost two years ago:

"So far they don't seem to have a plan, but maybe they do," Semel said Thursday during a question-and-answer session at an Internet conference. "Maybe magic will happen tomorrow."

Don't you hate it how embarrassing quotes like this have a way of sticking around on the Internets? The Warner lot was never this disorderly.

Which gets to the underlying motivation, if you recall, behind the Semel hiring. With the Internet bubble in full pop by 2001, Yahoo needed to diversify its revenue stream, which was heavily dependent on online advertising. Also, Google at that time wasn't seen by Yahoo as a rival. But AOL was, and a potentially dangerous one after its blockbuster merger in 2000 with media conglomerate Time Warner.

That merger was supposed to trigger a wave of Hollywood-Internet marriages as companies positioned themselves for the brave new high-speed digital subscriber age. Things didn't work out that way, in part because AOL Time Warner has stumbled so badly that less than two weeks ago Time Warner CEO Richard Parsons offered this rousing assessment:

"By the end of this year, we can make the call on AOL (on whether) we have found a business model or approach that can result in sustainable growth over time."

Back in 2001, though, not everyone (including me) knew the AOL-Time Warner thing was a misstep. So rather than find another movie studio to merge with, Yahoo did the next best thing and hired a movie executive -- Semel -- and better yet, one from Time Warner (which owns Warner Brothers).

Now it's clear that going Hollywood wasn't the answer for AOL. Or, for that matter, Yahoo.

Did anyone focus-group this ending?

Sorry, I misread the headline to this article on a federal judge's recent ruling in the copyright infringement battle between TorrentSpy and the Motion Picture Association of America.

The headline reads, "TorrentSpy ruling a 'weapon of mass discovery'," and it refers to U.S. Magistrate Judge Jacqueline Chooljian's decision that a computer's RAM is a viable, storable document that must be turned over in a lawsuit.

CNET News.com explains the potential ramifications:

If allowed to stand, the groundbreaking ruling may mean that anyone defending themselves in a civil suit could be required to turn over information in their computer's RAM hardware, which could force companies and individuals to store vast amounts of data, say technology experts.

That's swell news for enterprise IT pros, who simply never have enough to do on the job. Fortunately, the decision is being appealed, and it seems as though the judge's apparent confusion about how RAM works could make her ruling vulnerable.

As Dean McCarron, principle analyst at Mercury Research, explains to CNET News.com:

"RAM is the working storage of a computer and designed to be impermanent. Potentially your RAM is being modified up to several billions of times a second. The judge's order simply reveals to me a lack of technical understanding."

So it seems. However, McCarron explains, a "tap" could be installed in a server, but this would necessitate a running log of IP addresses and other information, along with the costly storage of huge amounts of data.

The judge ordered TorrentSpy to begin logging user information (though the company is allowed to mask visitors' IP addresses) and then hand over the data to the MPAA. But Chooljian stayed the order pending the outcome of TorrentSpy's appeal, which was filed on Tuesday.

Poor Google. All it's ever wanted was to catalog every piece of information in existence, privacy and copyright concerns be damned "do no evil."

And now, after all the online search king has given the world (starting with a cool, new verb!), the backlash is in full swing. That's the thanks Google gets for helping you and a few select advertisers know what information is on your desktop, or in your email, or in your voluminous search records, which Google has kindly stored for you and a few select advertisers. And maybe, eventually, the National Security Agency.

Datamation's own Josh Greenbaum was playa-hatin' just last week in a column that likened Google to "the Manhattan Project – an assembly of the best and the brightest who, in the process of striking a blow for freedom, end up creating one of the most dangerous genies ever to escape from the bottle."

Perhaps, but if it's 12:30 a.m. and I want to know who the drummer is for Golden Earring, what would you suggest I do? Google it or call Josh Greenbaum? (Actually, I'd probably Wikipedia it first, but you get my point.)

Greenbaum also claims Google is "slowly sucking the life out of the mainstream publishing business, and along with it the profession of journalism and the role of the fourth estate in modern society."

Nonsense. Journalism is as vibrant and relevant as ever.

News bulletin:

[Paris Hilton] said a "spiritual adviser" told her that her spirit or soul did not like the way she was being seen, and that is why she was sent to jail.

Then, on Saturday, a British advocacy group called Privacy International issued a preliminary report in which Google was ranked dead last among more than 20 other sites in terms of valuing and protecting user privacy:

Google's increasing ability to deep-drill into the minutiae of a user's life and lifestyle choices must in our view be coupled with well defined and mature user controls and an equally mature privacy outlook. Neither of these elements has been demonstrated. Rather, we have witnessed an attitude to privacy within Google that at its most blatant is hostile, and at its most benign is ambivalent.

Sounds like the authors of the report were caught in an unflattering photo on Google's new Street View.

All kidding aside, I think Google has been great for the Internet and the pursuit of information. Like most people, I use it every day. But I also worry about so much of my personal information being in the hands of one company. And Street View does give me a queazy feeling.

I'm not sure, though, that Google deserves to be singled out as the world's greatest privacy abuser, unless you're merely factoring in its size. Indeed, search expert Danny Sullivan argues as much here:

Overall, looking at just the performance of the best companies PI found shows that Google measures up well -- and thus ranking it the worse simply doesn't seem fair. But the bigger issue is that the report itself doesn't appear to be as comprehensive or fully researched as it is billed.

Actually, it is billed as a preliminary report, but Sullivan is right. It smacks of shoddiness. And language like this, in the "Justification" comments for Google's rating, does raise the spectre of bias:

Every corporate announcement involves some new practice involving surveillance.

Every one? I'm skeptical, but I guess I'll Google it and find out.

I know mass-market business publications cover technology issues, but I usually expect to read articles about Six Sigma on tech-geek web sites.

BusinessWeek, however, is diving right in with a couple of pieces questioning the role and value of the best practices framework in an economy that demands fluidity and innovation.

The main article examines 3M's efforts to reignite the sparks of creativity that slowly have been extinguished by the rigid conformity that is Six Sigma. Think I overstate? Try this:

Efficiency programs such as Six Sigma are designed to identify problems in work processes — and then use rigorous measurement to reduce variation and eliminate defects. When these types of initiatives become ingrained in a company's culture, as they did at 3M, creativity can easily get squelched.

The requisite sidebar broadens the issue beyond 3M, telling us that "as its popularity endures, the notion of Six Sigma as a corporate cure-all is subsiding."

One company that found out the hard way -- to my delight, as a disgruntled ex-customer -- was Home Depot, whose former CEO was a devotee of Six Sigma. Profits soared but worker morale and customer satisfaction plunged under Robert Nardelli, who apparently was fond of saying, "Facts are friendly."

You know what's friendlier? I'll tell you. Not making someone wait eight weeks to get back his $2,000 for the lawn mower he ordered and then, literally an hour later, cancelled before any paperwork had been processed, never mind product delivery made. Apparently their magical electronic payment system only works when they're collecting the money. Must be a Six Sigma thing.

Go Lowe's!

It has been argued for some years that pornography has been one of the main engines driving the commercial development of the Internet.

But don't take my word for it. Here's a quote from a 2001 research paper from Stanford University:

The pornography industry is at the forefront of technology. While it is not the only industry supporting technological advances, the pornography industry has invested a lot of money into the future of technology. Porn sites have been dedicated to upgrading their servers and developing broadband capabilities to make access faster and easier for their users.

The Stanford author goes on to predict that "the future of the porn business can only get financially better." But that may no longer be the case, according to an interesting article on CNET News.com:

"The online availability of free or low-cost photos and videos has begun to take a fierce toll on sales of X-rated DVDs. Inexpensive digital technology has paved the way for aspiring amateur pornographers, who are flooding the market, while everyone in the industry is giving away more material to lure paying customers."

CNET says that while online porn subscription and sales revenue inched up to $2.8 billion in 2006 from $2.5 billion the previous year, "sales and rentals of pornographic videos were $3.62 billion in 2006, down from $4.28 billion in 2005."

Given how easy it is to find porn online -- either copyrighted material being illegally posted and downloaded or free amateur productions -- it's no surprise that fewer people are paying for their porn.

And unlike the music and motion picture industries, the porn business isn't likely to find a legislative champion in Washington to stand up for its legal ownership rights.

So that leaves the porn industry to its own devices, which primarily comes down to slicker packaging (like that will matter), an emphasis on "quality" and giving away short clips in order to entice viewers to subscribe or buy.

However, some in the industry believe that free "teasers" have the opposite effect, and undermine efforts to sell porn by giving viewers what they want -- videos of naked people, and for free.

No doubt, naked and free is tough to beat. It'll be interesting to see how the porn industry's strategy evolves as the Internet becomes more participatory and user-driven.