Hypocrisy is at the heart of Facebook’s refusal to ban false political advertising

Executive Andrew Bosworth’s handwringing about the company’s stance should not blind us to the fact that doing nothing is extremely lucrative for it

On 20 December last, Andrew Bosworth, a long-time Facebook executive and buddy of the company’s supreme leader, Mark Zuckerberg, published a longish memo on the company’s internal network. The New York Times somehow obtained a copy and reported it on 7 January, which led Mr Bosworth then to publish it to the world on a Facebook page. In one of those strange coincidences that mark a columnist’s life, I happened to be reading his memo at the same time that I was delving into the vast trove of internal emails released by the Boeing Company in connection with congressional and other inquiries into the 737 Max disaster. Both sources turn out to have one interesting thing in common – the insight they provide into the internal culture of two gigantic, dysfunctional companies.

Trump got elected because he ran the single best digital ad campaign I’ve ever seen from any advertiser. PeriodAndrew Bosworth

The Boeing trove consists largely of email exchanges between the engineers working on the 737 Max. They confirm that employees knew about the chronic problems with the plane’s design and were aware of the extent to which the Federal Aviation Administration was in the dark about them. Some of the exchanges are graphic. In one – on 16 November 2016 – an employee flying the Max simulator reports that the MCAS autopilot software, which is believed to have caused the two fatal crashes of the plane, is continually frustrating his attempts to control it. “It’s running rampant in the sim [simulator] on me,” he emails a colleague. “I’m levelling off at like 4,000 feet and the plane is trimming itself like crazy.” This is the behaviour that the pilots on the two doomed flights experienced: they kept on trying to keep the nose up while the software continually overrode them and turned it down. And people within the company knew about it three years earlier.Advertisement

When Boeing releases a flawed product on to the market, people die in terrifying accidents. I was going to say that when Facebook does the same, at least no one dies. But that’s not quite true, as survivors of the Rohingya genocide in Myanmar can testify. Interestingly, Bosworth, who continually flaunts his “liberal” credentials, does not mention Myanmar in his memo, but focuses instead on the 2016 US presidential election, when he was head of Facebook’s advertising operation. He maintains that almost all media coverage of the company’s influence in that electoral contest (including our coverage) was misguided or uninformed. Cambridge Analytica were “snake-oil salespeople”, the Russians spent much less than the official campaigns, the power of micro-targeted advertising was overrated, etc, etc.

But was Facebook nevertheless responsible for Donald Trump getting elected? “I think the answer is yes,” says Bosworth, “but not for the reasons anyone thinks. He didn’t get elected because of Russia or misinformation or Cambridge Analytica. He got elected because he ran the single best digital ad campaign I’ve ever seen from any advertiser. Period.” Trump’s crowd apparently “did unbelievable work. They weren’t running misinformation or hoaxes. They weren’t microtargeting or saying conflicting things to different people on the same topic. They just used the tools we had to show the right creative to each person. The use of custom audiences, video, e-commerce and fresh creative remains the high-water mark of digital ad campaigns in my opinion.” Result: President Trump.

This brings Bosworth to the present moment, where Facebook’s advertising policies remain unchanged. “It occurs to me,” he burbles, “that it very well may lead to the same result. As a committed liberal I find myself desperately wanting to pull any lever at my disposal to avoid the same result. So what stays my hand?”

There then follows some ludicrous flapdoodle about The Lord of the Rings and the philosopher John Rawls’s idea of considering such profound questions from behind a “veil of ignorance”. (I am not making this up.) This then leads to the conclusion that Bosworth should do nothing except ensure it is business as usual, even if that leads to Trump’s re-election.

And that’s OK, apparently, because if people are taken in by political propaganda then that’s their problem, just as people who become addicted to tobacco, sugar or opioids ultimately bear the responsibility for their plights. But, Bosworth continues, in a vein that really defies satire, “while Facebook may not be nicotine I think it is probably like sugar. Sugar is delicious and for most of us there is a special place for it in our lives. But like all things it benefits from moderation. At the end of the day, we are forced to ask what responsibility individuals have for themselves.”

So, ultimately, it’s not Facebook’s responsibility to, say, ban political advertising that is demonstrably misleading or malevolently false. This has the convenient result of enabling Bosworth to burnish his liberal credentials behind that Rawlsian veil while the money rolls in. There’s an old English word for this: hypocrisy. If he ever needs another job, I’m sure there’s a place for him at Boeing.

Image Credit: www.theguardian.com

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Three Ways Healthcare is Doubling Down to Meet Patient Expectations

Today’s patients expect a higher level of engagement and experience from their healthcare providers than ever before. According to a recent Salesforce survey, 83% of healthcare consumers say it is important that providers know them personally beyond their medical records, and 68% expect engagement in real time. More than 8 in 10 patients say they would switch providers as a result of a single bad experience. 

In part, this is due to the seamless, personalized experiences consumers enjoy in most other facets of life, from shopping to hospitality. The widespread availability of medical information online has also made patients more informed and proactive about their health than ever. There is increased market consolidation across all segments of healthcare and life sciences as organizations strive to be more effective at driving greater consumer (e.g. patient, member, provider) experience, broadening capabilities and services at scale.

Heading into 2020, the healthcare industry is uniquely positioned to push ahead in meeting these growing demands. From electronic health records (EHRs) to diagnostic imaging, the industry has digitized vast arrays of data that can now be used to track care. With relationship management platforms, providers and insurers as well as pharmaceutical and medical device companies, can combine multiple, traditionally disparate sources of data to gain a 360-view of patient preferences and behaviors, while offering improved experiences and better engagement. The ability of health information systems to work together beyond departmental and organizational boundaries has advanced to the point that interoperability is a reality. Digitization of data has also given us a better understanding of the multiple determinants of health in ways that can drive care forward. And patients have quickly become informed advocates around data ownership, driving a conversation that will help define healthcare technology over the next decade.  

Here are three trends the healthcare industry will double down on in 2020: 

1. More personalized experiences for patients will come to fruition. 

In recent years, the healthcare industry has made strides in operationalizing patient-centricity, and a focus on providing personalized experiences and treatment will continue into the new decade. Troves of digitized data, and the increasing ability to unify and analyze it, will help healthcare move toward the kind of consumer engagement that industries like retail and hospitality have been delivering. Patient-centricity will drive everything from interactions with providers to tailored access to care to interventions for medication adherence. Part of personalized treatment will be new developments in precision medicine, which uses data and algorithms to suggest targeted therapies for patients. For example, with genetic tests for guiding treatment, decisions becoming increasingly available and providers can now tailor treatment depending on how different patients respond to medications. 

But delivering personalized healthcare is a lot more complex than offering shopping recommendations. Before a wider shift toward precision medicine can take place, the industry will need to have nuanced conversations about data privacy and ownership. Transparency around data utilization will come to the fore, not only for building trust among patients and doctors, but also in light of regulations like the California Consumer Privacy Act and the European Union’s General Data Protection Regulation, not to mention rules specific to the healthcare sector, such as CMS’s recent Interoperability and Patient Access Proposed Rule. The industry will need to examine what it means for patients to own their data and how organizations can ethically use private information, in a conversation that includes both patients and regulators. Discussions about how new technologies and personalization can be built on a foundation of trust will reach a new pitch in 2020. 

2. Healthcare consumerism will continue to drive new business and delivery models.

Health systems and providers will respond to the rise in patient consumerism by looking for ways to provide care when and where patients need it. This means rethinking business models and delivery systems in order to craft exceptional consumer experiences. One manifestation of this is that care will increasingly take place beyond the four walls of the hospital, largely enabled by new digital technologies. This includes expanded access to telehealth services, in-home healthcare and digital therapeutics, in which a doctor can monitor indicators like glucose levels remotely and deliver interventions as needed.  

Payers and providers have historically operated in silos, with patients visiting doctors and insurers approving or denying claims on the back end. With the level of data now available, there is a real opportunity for payers and providers to partner to make patient care more effective and cost-efficient than ever before. This can take the form of partnerships between hospitals and insurers to provide higher quality care. Or it can be the result of new business models in which insurance companies merge with providers (like insurer Humana’s acquisition of Kindred Healthcare) or healthcare providers purchasing insurers (like CVS’s acquisition of Aetna). 

Companies outside of the healthcare industry have also begun joining forces with traditional players to improve access to care. For example, ride-sharing app Uber has announced plans to link up with healthcare IT company Cerner Corp. to let health providers schedule non-emergency rides for patients, while Lyft is providing Medicaid-covered rides for beneficiaries in six states. Retailers like Walmart and Walgreens have opened up clinics at locations around the country. Innovative partnerships and strategies like these will proliferate in 2020 with the ultimate goal of addressing patient needs, bridging access gaps and improving outcomes. 

3. Artificial intelligence will tackle more real-world use cases. 

Artificial intelligence (AI) in healthcare will increasingly move from the realm of theory to real-world use cases. Providers are already beginning to use machine learning tools to aid in diagnosis. For example, algorithms are helping identify everything from tumors to brain hemorrhages in radiological images. One study involving breast cancer screening found that AI nearly doubled accuracy while reducing the time to review images by more than 35%. And in 2018, the FDA approved a fully automated AI tool that diagnosed diabetic retinopathy, a debilitating but treatable disease, with 87% accuracy.  

Going forward, providers will increasingly rely on AI tools to augment clinical decisions and recommend the next best action. Algorithms will get better and better at diving into clinical data and analyzing characteristics that suggest a patient is at higher risk for a particular complication or could benefit from a particular treatment. AI also has the potential to transform nonclinical aspects of healthcare that contribute to huge administrative costs, such as billing and coding, credentialing and scheduling. These applications are still in their early stages but will increasingly be used to streamline processes. Futurists talk about how AI can find cures for terminal diseases, and maybe someday it will. But it also has the potential to improve outcomes for patients and make healthcare more cost-effective in the near term. 

Patients today want personalized, real-time engagement throughout their interactions with providers and insurers. As a new decade unfolds, the healthcare industry is finally poised to rise to these expectations. Deploying data and emerging technologies, along with new business and delivery models, can help deliver personalized care and improve outcomes while driving down costs. As the industry continues to innovate and transform, it is vital that patient rights remain at the center of the conversation.

Image credit: www.salesforce.com

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Google owner Alphabet becomes trillion-dollar company

Google’s parent company Alphabet has achieved a $1 trillion valuation, making it the fourth US firm ever to surpass the milestone after Apple, Microsoft and Amazon.

Alphabet reached the figure just before the close of trading on Thursday, when its share price soared to $1,450.16 (£1,113.09), with analysts forecasting that it could go higher still.

The company’s shares jumped 30 per cent last year and 17 per cent in the last three months alone.

Google’s strong gains have come as it has consolidated its dominance of the online advertising market and expanded its cloud computing business, muscling into territory that Amazon considers its own.

Amazon fell out of the $1 trillion club shortly after joining when its streak of record profits came to an end in July.

Google is also strong in artificial intelligence and machine learning, two areas predicted to grow rapidly over the coming decades.

“It still has significant further room to grow, both in its core online-advertising business as it innovates in advertising monetisation and formats and in its cloud computing business,” said Christopher Rossbach, of private investment firm J Stern & Co.

“Alphabet is laying the foundations for a much larger company as it is the unequivocal leader in artificial intelligence and machine learning. 

“It is also disrupting new multi-trillion dollar markets, for example healthcare, with this technology. Its sizeable investments give Alphabet a sustainable competitive advantage as it applies this technology across its business.”

Some market watchers have even forecast that Alphabet will hit $2 trillion, a landmark that only Saudi Arabia’s state-owned oil company Aramco has so far achieved.

However, there are concerns about Alphabet’s opaque accounts. Google makes the vast majority of the group’s revenues, with the rest of its businesses accounted for together under a category Alphabet calls “other bets”.

This includes potentially valuable businesses such as autonomous driving startup Waymo, but little information is published about how these companies are faring financially.

Google and other technology giants also face the prospect of stricter regulations on privacy, competition, taxation, and extremist content.

Alphabet remains some way behind Apple’s $1.4 trillion valuation and Microsoft on $1.27 trillion.

Image Credit: www.independent.co.uk

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LinkedIn’s Faulty Guidance System Just Cost Them $10 billion

I’ve always said LinkedIn stock was way overpriced and the actual value of the company was probably half of what it was. And helping prove my point, LinkedIn shares plunged 42% today, shaving $10 billion off the company’s valuation. Ouch.

I can imagine there are a lot of unhappy shareholders. Ironic that investor and shareholder pressure help cause LinkedIn to make a sequence of ill-conceived mistakes that took the company further and further away from where they were making money.

020516 LinkedIn Stock.V3 smallLinkedIn started out as a recruitment site. They should have stopped there because that’s where they still make most of their money. But early on investors were unhappy with the “low” monthly visitor rate, and time between visits. Well, that’s what you would expect from a recruitment site and LinkedIn was making lots money from recruiting.

To appease investors they came up with a half-baked idea that they could be a social network, and that would pump up the number and regularity of site visits. A little while passes and they realize they’re a third-rate social network, and people still didn’t come to the site that often. But, hey, they were still making a lot of money from recruitment.

Guess what? Instead of acknowledging their failure as a social network, they came up with another half-baked idea. We’ll become a content site! That way people will come to the site more regularly to get news and other content.

So, they plunked down nearly $100 million for Pulse. What idiots! They aren’t a content company and will never be one. The content biz on the web is brutal.

And where do they still make most of their money? You got it, recruitment.

Linked in made a series of misdirected efforts that were intended to pump up site visits, retention, and frequency. All that did was drain away tons of money and resources that should have been spent strengthening LinkedIn’s real business, which is recruitment. They should have bought Dice, not Pulse.

Hey, Linkedin! Stop trying to be something you’re not! Get back to your core business and stop chasing markets that have little to do with recruitment.

Apple, Where Did the Magic Go?

I first fell in love with Apple in 1978. I was 23. So was Steve Jobs. Woz was about 5 years older. Apple had the look and feel of a counter-culture renegade company that was on an almost subversive plan that would allow people to own powerful computers that were previously only available to corporations… power to the people!

I do understand brand value, as well as valuable brands, and I’ll admit I hold Apple to a higher standard. I felt Apple used to meet that standard, and the higher prices still delivered tremendous value because of their innovation, functionality and comparable value.

I sold my car (Volvo station wagon) to buy an Apple II in 1978… it had 16K of RAM, you had to save your programs and data on an audio cassette tape, you had to use a TV with an RF-modulator as the display… and it cost over $2,000! That was a lot in 1978… adjusting for inflation, that would be around $7,500 in today’s dollars. Yikes! Everyone thought I had gone totally crazy. My wife at the time was against it, but I did it anyway (I made it up to her, largely from stuff I did with the Apple II).

I gambled my life on that ugly beige box. But to me, it was beautiful, sublime, and magical. I had learned programming in the 60’s as a young kid… the popular computer back then was the IBM 360, which came with 16K memory, and would set you back about $250,000. The price I paid for my Apple II was about 1% of the cost of an IBM 360. So in that respect, it was a tremendous value!

An individual never had the opportunity to own a computer of any kind… so this was a huge innovation. Microsoft started as a third-party Apple II developer. Apple was creating a new industry thanks to the two Steve’s incredible innovation.

Then Woz designed the 5 1/4 Apple II floppy disk, another huge innovation. Game changing. Insanely great. The market was disrupted once again, with Apple’s innovation offering a previously unavailable technology at a price that someone could actually afford. Apple became the world’s largest manufacturer of floppy disk drives overnight.

Then along came a long line of Apple II’s, and the flops, like the Apple /// and the Lisa. Even though the Lisa flopped, it was still hugely innovative… it’s where the Mac came from.

And then they did it again. 1984. The Macintosh. Still expensive at $2,000… about $4,500 in today’s dollars. But again, what a value! The only thing like it was the Xerox Star, a corporate computer that cost $75,000 dollars! So a Mac cost only 2.5% of what a Xerox Star cost. Another tremendous value.

I was so excited and when I manage to smuggle a Mac out of Apple before the release in a black plastic trash bag. I knew I was holding the future in that trash bag. I’m so thankful to my friends at Apple who helped me get ahold of the Mac early. I knew they were risking their careers to help our Apple magazine, A+, be the only other magazine to have an issue out about the Mac when it launched.

Back then getting out of Apple was almost impossible, let alone the hugely secret ground-breaking, revolutionary Macintosh. It was high drama with a smattering of corporate espionage… my A+ team felt like rebel fighters on a mission to bring the truth to the public. We were the like the Blues Brothers… we were on a mission from God. That’s how big a freaking deal the Macintosh was to each of us personally and to our team as a whole.

And again! This time, it was the LaserWriter a year later. Another product that changed my life… I wrote one of the first books on desktop publishing and was the first one to use it to produce a national magazine (MacUser).

How much was a LaserWriter? A whopping $6,995. But what an amazing value! You’d have to buy a printing press to get similar results, not to mention the typesetting, page layout that involved cutting and pasting with real scissors… talk about labor intensive! I know, because we printed a lot of magazines back then.

When I told the production guys at Ziff Davis that I was going to use desktop publishing to produce MacUser they damned the idea insisting it was impossible. I told them that if they didn’t save at least $1 million dollars in color separation layout charges alone, I would be glad to resign. Thankfully Bill Ziff backed me up and overruled them. And it worked. A few years later I got to see the whole company switch over… loved seeing them haul out the old Atex system from PC Week (the last to go DTP).

Yet again, despite being the most expensive product Apple had ever sold, it was a game changer that caused a huge disruption in the printing and publishing industries. Another product with outstanding innovation that was insanely great. Magical. And a tiny fraction of the cost of what it replaced.

iPod. Boom! Another major innovation that destroys Walkman, cassette players, and portable CD players market. And the beginning of Apple’s locking people into their ecosystem by making switching costs high (investment in iTunes purchases).

Next, the biggest bang of all, the iPhone! It screamed innovation. I got it the first day it came out. It was magical. It was insanely great. It was like something from the future. It could do what no other phone could ever do. The innovation was so great that it completely disrupted and changed the telecommunications industry forever. Another game changer. I felt like it delivered a ton more value than the top-of-the-line Motorola cell phone I had been using.

Steve died. It did make a big difference to Apple. No-one else could ever fill his shoes and drive the company as a united force focused exclusively on innovation. He was unique. Apple will never be the same.

I haven’t seen anything insanely great since Steve died. The Apple watch? This is not a game-changing, magical, insanely great product. No way. And today’s iPhone is still pretty much Steve’s original iPhone with a bunch of iterations.

Without the maniacal drive toward innovation that Steve didn’t just bring to Apple, but demanded from Apple. And got from Apple.

Show me another insanely great product from Apple. Something magical. A game-changer. Immediately recognizable as massively innovative. The kind of thing that Steve did over and over again. Show me that, and I’ll be a believer again. I dare you.

I miss that magic. I want Apple to blow me away like they used to do again and again. The reason I switched to the Moto X from an iPhone 5 last year is because the Moto X was more magical with its voice control and context processor. Apple, I want technology leadership, not a luxury brand (the former CEO of Burberry is now in charge of Apple stores). And I certainly don’t want Beats headphones… yuk. Apple, I want magic again! Please, Apple, please!

The Sony Spyware Scandal

Sony’s attempt to spy on its customers and limit their fair use of the music they buy is outrageous. It speaks to the worst in corporate greed and contempt for the customer – not to mention outright stupidity.

Sony’s bad behavior isn’t just irresponsible and contemptible – it’s also illegal. At least that’s the opinion of the EFF (Electronic Frontier Foundation) and the State of Texas Attorney General’s office – both groups filed lawsuits against Sony last week. A half a dozen other class action suits against Sony are also rumored to be in the works. And Sony’s current legal woes may just be the beginning of a maelstrom of lawsuits, PR nightmares, and consumer alienation.

Here’s what the brouhaha is all about: Sony secretly placed the extremely hazardous XCP software on an estimated 2 to 3 million music CDs and a less dangerous but still problematic MediaMax software on over 20 million CDs. Both of these programs install themselves on your computer without your knowledge when you play one of the infected audio CDs in your computer’s CD drive and they both violate your privacy rights by collecting information about you and sending it back to Sony without your permission.

The XCP program is a type of spyware called a “rootkit” that hides itself on your computer. Not only does it let Sony secretly spy on you, it opens up a gaping security hole that can be exploited by almost any clever hacker to open up your system for nefarious purposes such as vandalism, destruction of data, or stealing your personal information to use for identity theft.

Even the Department of Homeland Security’s US-CERT division, in its self-proclaimed role of “protecting the nation’s Internet infrastructure” and coordinating “defense against and responses to cyber attacks across the nation” slams Sony’s XCP spyware saying that it can pose a significant security threat.

XCP also slows down your system, robbing you of performance in addition to your data. To make matters worse, when Sony provided customers with a program to uninstall the dangerous XCP software the uninstaller opened even more security holes in the systems it was run on. Because rootkit spyware is designed to hide itself from the system it can be almost impossible to fully uninstall – in some cases you have to reformat your hard drive and re-install all your software and data to completely get rid of it. And to top it off, the XCP spyware program illegally stole some of its code from another program called LAME.

The other spyware program Sony snuck onto customers’ systems is MediaMax. This software lets you know that it is being installed, but claims that it will not send any personal information back to Sony – even though it does exactly that. And, like the XCP spyware, if you try and uninstall it using the program provided by Sony you open up your system to hackers and crooks.

In the Texas case, Attorney General Greg Abbott filed a civil lawsuit seeking penalties of $100,000 per violation under the state’s recently-enacted Consumer Protection Against Computer Spyware Act. “Sony has engaged in a technological version of cloak and dagger deceit against consumers by hiding secret files on their computers,” said Abbott when announcing the lawsuit.

The EFF lawsuit, filed in Los Angeles County Superior Court on behalf of California residents, claims that Sony broke several California laws, engaged in unfair and deceptive business practices, violated the stated terms of its own licensing agreements with its customers, and as a remedy demands that the Sony repair the damage done by the XCP and MediaMax.

If you’re in Sony’s legal, marketing, or PR departments you’re already overwhelmed. But wait! There’s more! The Texas and EFF lawsuits are based on state law, but Sony may have also violated federal and international laws as well.

If Sony’s malware made it on to any computers owned by the government, which seems likely, it is in violation of the federal Computer Fraud and Abuse Act which prohibits: “fraud and related activity in connection with computers knowingly causes the transmission of a program,  information, code, or command, and as a result of such conduct, intentionally causes damage without authorization, to a protected computer.” This law has some real teeth, with penalties of up to 10 years in jail for a first offense and 20 years for a second offense.

And across the Atlantic ocean, in jolly old England, customers are also outraged, claiming Sony has violated the U.K.’s Computer Misuse Act of 1990 which states that is an offense to make either an an “unauthorised access” or an “unauthorised modification” to a computer – and Sony is guilty of both.

It’s doubtful that any Sony exec’s will find themselves facing jail time, unlike some hackers and spammers who have been charged under similar laws. We all know that O.J., Michael Jackson, and Robert Blake have shown us the legal benefits of Hollywood connections. But guess what? This isn’t Sony’s first trip to the courthouse. In fact, it almost seems like they are working on becoming corporate career criminals.

Just this past July, Sony reached a settlement with the State of New York where it agreed to end the widespread and corrupt practice of bribing radio stations to play their music, a practice given the well-known nickname “payola.” As Sony knows, payola violates both state and federal laws.

As New York Attorney General Elliot Spitzer said in announcing the settlement: “Our investigation shows that, contrary to listener expectations that songs are selected for airplay based on artistic merit and popularity, air time is often determined by undisclosed payoffs to radio stations and their employees. This agreement is a model for breaking the pervasive influence of bribes in the industry.”

And three years ago Sony settled with the State of California, which had accused it of participating in an illegal price-fixing scheme. Here’s what California Attorney General Bill Lockyer said back in 2002 when he announced the settlement with Sony: “Our antitrust investigation found illegal sales agreements being used to stifle competition and fix the prices of music CDs. Instead of benefiting from a competitive marketplace, consumers looking for music entertainment had their pocketbooks squeezed by these secret deals to artificially inflate prices.”

The supreme irony in all of this is that Sony put the spyware on its music CDs to help stop illegal copying and distribution of its music, and stole some code from another program in the process. But it seems like the ultimate hypocrisy – Sony seems to have a history of breaking serious federal and state laws, and then goes and breaks more laws to go after a bunch of petty theft. It’s almost like the Mafia putting out a hit on someone for stealing office supplies.

Sony has plenty of lawyers and PR people to help it stomp out the current wildfire, but it may take a while to win back the trust of its customers. I’m already hearing disquieting things from Sony customers – most troubling of all are some who now feel that downloading music from an unauthorized file-sharing service is actually safer than buying the CD. Hey Sony, how’s that for backfiring?

Can Telcos Survive the Portal Wars?

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It’s hammer time! And you’ll need a really big hammer to pound the latest giant nail into the coffin of traditional phone companies. The new big nail on campus is the arrival of aggressively priced “Phone In” and “Phone Out” services from the major portal and VoIP players. Phone In service allows users of regular phones to call VoIP users, and Phone Out allows the VoIP users to call regular phones.

These services create a bridge between computer-based VoIP and regular telephones that will allow the VoIP forces to mount a major invasion. Skype was the first to offer this type of service, but Yahoo announced Yahoo Messenger with Voice in November, and Microsoft chimed in last month saying that its Windows Live Messenger would offer Phone In and Phone Out capabilities as well.

The biggest threat to the existing phone companies is the aggressive pricing offered by Yahoo and Microsoft that looks like the beginning of a brutal price war. PC-to-PC calls using VoIP have always been free, but that limited you to calling people who were at their computer, and who had the necessary VoIP software and hardware.

Although you have to pay for Phone In and Phone Out services that let you place PC-to-phone and phone-to-PC calls, the price is much cheaper than traditional phone services. Yahoo and Microsoft are offering domestic and international calls for around 2 cents per minute. And, remember that’s the price at the beginning of the price war – penny-a-minute cqalls can’t be far behind.

Another cool feature of these services is the ability to have low-cost virtual local phone numbers in far-away places. For example, you could have a local phone number in London, Paris, or wherever, and people in those cities could place local calls to your number, which would then be forwarded to your VoIP phone, at a cost of only pennies a minute. Viola! A very inexpensive virtual office in another country. The world just got a lot smaller.

But wait! Don’t put your hammer away just yet! Here’s another telco coffin nail: the WiFi phone. To take advantage of most of these free and low-cost VoIP sevices you need to be at your computer using Skype, Yahoo Messenger, Microsoft Live Messenger, Google, talk, or whatever. But what would really accelerate adoption of these services is being able to use them when you’re not at your computer.

The first major player to liberate VoIP users from their computer was Vonage which lets you use a regular telephone to place VoIP calls. Vonage was one of the early nails to get pounded into the telco coffin. But Vonage has lots of limitations compared with the computer-based VoIP services from Skype, Yahoo, Microsoft, et al, and their pricing is more in line with traditional phone companies, which may make it difficult for them to compete in the portal VoIP price war.

So, I’ll give props to Vonage for being a pioneer. And for igniting a bunch of copy-cats and wanna-be’s. AT&T has a similar offering, but it’s not catching on as well as Vonage. And at CES this month, there were several notable VoIP phone products, most notable among them was the Uniden Win1200 wireless phone that is designed to work with Windows Live Messenger.

Ay, and there’s the rub. The Uniden phone (and a similar model introduced by Phillips) are designed to ONLY work with Windows Live Messenger. Nope, you can’t use it to call Skype users for free, or users of any other VoIP service. What we’re looking at here is another messenger mess akin to the IM format wars which have prevented users of one instant messaging service from sending messages to users of another service.

The idea of building proprietary hardware specific to your VoIP service must surely appeal to some greed-besotted Microsoft marketing mucky-muck, but it’s not very customer-friendly. And since customers make markets, not marketers, these early attempts at locking customers into your service are bound to fail.

What will eventually win the VoIP war, and what may ultimately play the ring-tone version of taps for the telcos is the WiFi phone. A few of these were also announced at CES – there was a Skype WiFi phone from NetGear, a Skype box from D-Link that lets you connect regular phones via WiFi, and a Vonage WiFi phone that you can use to place calls from WiFi hot spots.

But all of those are just bumps along the road to the real WiFi phone future. The furthest product along that road announced at CES was UTStarcom’s GF200 cell phone which combines a standard GSM cell phone with WiFi VoIP. This little sucker looks just like a cell phone, in fact it IS a cell phone… but when you’re near a WiFi network, it saves your cell minutes by switching to VoIP. So you get the best of both worlds.

I’m sure this is just the first hybrid cell/VoIP phone we’ll be seeing, and I wouldn’t be surprised if this turns into a standard feature for almost all cell phones before too long. And when and if it does, and if the interoperability problem is resolved, it will be time to start writing a eulogy for the telcos.

Once WiFi is everywhere (Google is working on that one, along with a lot of other companies), and once WiFi becomes a standard feature of both cell phones and portable home phones, placing calss will be so close to free there won’t be much profit left for the old guard telco balance sheet.

Signs of the telcos senescence are everywhere. The market is in a late-stage consolidation phase, as evidenced by SBC’s absorption of AT&T and Verizon’s purchase of MCI. Although both of those companies now have market caps of around $80B, the erosion of profits from the VoIP price wars may send them into free-fall at some point. And then, the big market caps of Google, Microsoft, and the like may lead to those companies buying what’s left of the telcos to help bolster their VoIP offerings.

No, the telcos didn’t eat their young. Their young ate them.

Google’s Plan for Galactic Domination

When mere world domination is not enough, it’s time to take over the universe….

World domination? Nah, too wimpy. How about galactic domination—now, that’s more like it! I guess that’s how you think when you’re a company with a market value of around $90 billion, up from a measly $27 billion just last year. Not to mention just having Wall Street put $4 billion in cash in your pocket, on top of the $3 billion you already had.

So, how big a hole does $7 billion burn in your pocket? How about a million square feet. That’s the size of the new research center that Google plans to build as part of its newly announced partnership with NASA. And what will these starry-eyed lovebirds do in their new nest? Well to start with, collaborate on large-scale data management and data-mining and on massively distributed computing.

Sure, that fits in with Google’s business. But wait! There’s more!

There’s also bio-info-nano technology convergence; development of new sensors and materials; improved analysis of engineering problems; earth, life and space science discoveries; and promoting the entrepreneurial space industry. Wow! That makes the halcyon days of Xerox PARC sound like it was just a bunch of narrow-minded geeks trying to design a better slide-rule.

And galacto-maniac Google CEO Eric Schmidt tips you off as to just how big he is thinking by saying “…this collaboration could help broaden technology’s role in making the world a better place.” And who doesn’t want to make the world a better place? Especially when small-minded companies like Microsoft are merely trying to build a better operating system and develop a bunch of computer programs.

Google obviously thinks that one way to make the world a better place would be to get rid of Microsoft. That’s the not-so-thinly-veiled motive behind Google’s Icarus-defying decision to fly next to Sun and attempt to put some wings on OpenOffice. It’s enough to send Steve Ballmer into another apoplectic fit.

How else does Google plan to make the world a better place? Well, Eric Schmidt has said that company’s goal was to create a “Google that knows you.” Here’s a rundown of some other facets of Google’s getting-to-know-you strategy:

Google Wi-Fi—right on the heels of announcing the NASA partnership, Google said it would offer free Wi-Fi service to everyone in San Francisco. Rumor has it that this is part of a plan to offer free nationwide Wi-Fi service, which could take more than just a bite out of the ISP market. Today SF, tomorrow the world! And next Thursday the Galaxy!

Google Mail—we all know about Gmail, the first free email program to break the gigabyte-for-free barrier. Now it’s been upped to 2 gigabytes for free, with promises of increasing that number faster than most people could ever fill up their mailboxes. What do you do with all that space? Hackers have already figured out how to turn your Gmail box into a virtual hard drive.

Google Talk—this is Google’s entry into taking on instant messenger software today, and the phone system tomorrow. EBay paid $2.4 billion for Skype, but Google is quietly brewing its own VoIP solution at home.

Google Desktop—Google doesn’t want to leave your computer to Microsoft or Apple. No, they want in! Google Desktop is the first foothold in a full-scale invasion. Launch your programs, search your files and email, keep track of every webpage you’ve ever looked at. For starters.

Google Library—Google plans to digitize everything ever printed, starting with major libraries including the New York Public Library, and collections at major universities such as Harvard, Stanford, Oxford and the University of Michigan. Sure, the Authors Guild is suing the company, but why let some writers stand in the way of making the world a better place? (What are they going to do, lie down in front of the scanners?)

YouTube and Google Video—Google wants to “make the world’s video content accessible and useful to users worldwide.” To get started the company has talked UPN into letting it upload some TV shows to Google Video. Next came the billion-dollar plus buyout of YouTube. And Google invites everyone to upload any videos they want to either of their video sites with the promise that Google will host the video and allow anyone to play it back for free.

Google Earth, Google Maps, and Google Local—this trio is Google’s literal world domination scheme. “Wheee! We’re flying around the world! Now we’re swooping in on Silicon Valley! Look, Wendy, there’s the Googleplex! And over there, that’s Eric Schmidt’s house! And what’s that? Oh, a pop-up ad for Spago’s in Palo Alto…. I’m hungry already! Let’s pull up the map and drive right over.”

Froogle—want to buy something? Google wants in on the sale, and Froogle promises to help you find what you want for the lowest price. Personally, I find better deals on eBay and PriceGrabber, but you can’t blame Google for wanting a piece of the action!

Blogger and Google Blog Search—use Blogger to express yourself on the web, and use Blog Search to find out what everyone else has to say.

OK, are you getting the picture? The really big galactic picture? With Gmail the folks at Google know what we’re writing; with Google Talk they know what we’re saying; with Google Desktop they know what we have on our computers; with Google Library they will know what we’re reading; With YouTube and Google Video they’ll know what we’re watching; with Google Earth they’ll know where we are, where we’re going, and what we plan to do once we get there; with Froogle they’ll know what we’re buying; with Blogger and Blog Search they know how we’re trying to express ourselves; and with Google Wi-Fi they have a pipeline into everyone’s computer and Internet usage.

What’s next? Google Mind Probe? Maybe that’s why they want to explore that bio-info-nano technology convergence stuff at their new NASA lab. George Bush has said that he wants to put a man on the moon by 2018. At this rate I expect Google will already have research labs there by then and regularly scheduled flights on Google Spaceship. Maybe they weren’t kidding about the Google Copernicus Center after all.