Entries : Category [ The Internet ]
How the Internet is affected by business and law considerations in practise. Jurisdiction, alliances, and limits to globallization.
[Serving a Market]  [The Value of Brand]  [Globalization]  [The Internet]  [Business Models]  [Media] 

29 August

Impact of Zoning the Internet

Should publishing self-censor to please local jurisdictions

A must read article - "Times Withholds Web Article in Britain". NY Times is patting itself on the back for censoring itself in Britain by applying ad technology.

They are introducing the concept of self-censorship to filter the news product by legal jurisdictions - so that the news fits the legal system of the country you are reading it in. Can this benefit the Times, or is it a costly trap? Read more.

Back when the Internet started, it was like the "wild west" - nobody really knew what you could or couldn't do. Which laws governed a transaction - where it was viewed, or where it was served, or both.

I myself did a legal paper on the subject - "Jurisdiction and the Information Superhighway", which examined a porn case that overreached accross the US. At the time, the argument against self-censorship like the NY Times has chosen to do was that there would be a great cost in negotiating the rules for each readers jurisdiction, so by default the serving jurisdiction should be the only one that mattered.

Thus, a reader was defacto using the Internet as a transport vehicle, reading in the serving jurisdiction, and returning, just as if they'd caught a jet to the Big Apple to read the NY Times.

But for the NY Times this isn't enough. Since they print in Britain and the US, the problem is the extension of publishing onto the Internet - does it run by British or American rules? The answer they've arrived at is that it depends on where the reader is. And advertising tracking information tells them where the reader is.

In the short run this is great for the NY Times, since it doesn't have to fight costly battles with British or American administrations, because it just knuckles under from the start. Savvy readers on the Internet will just be annoyed, because they'll have to track down other news sources elsewhere in the world to read what's been censored, so the NY Times brand will sustain a small hit for its veracity. No matter, a Jason Blair here or there gets ignored.

But here's the big gorilla. Now publishing (as well as other businesses) potentially can be compelled by a judge to use the same technology to require that local jurisdictions all be treated the same, in place of the serving jurisdiction. All it takes is a follow-on case where this technique is used to rewrite recent case law, and then suddenly everyone has to track and deal with local jurisdictions!

Can you see it? All the Chinese needed to be filtered from pro-democracy and anti-PROC stories. Islamic countries not wishing to see cartoons or Britney Spears or anything jewish.

But it would get even bigger. Imagine the boycotts of goods over the internet not allowed to be sold, the additional terms and conditions of sales. Or the clever way local businesses would attempt to pass laws to make it impossible for non-local competitors to horn in on territory.

Truely, the NY Times has pioneered a masterpiece of regulation, and discovered new ways of limiting the use of the Internet. So much for the past, when the rules were fewer and more easy to comprehend.

Posted by william at 17:08 | Comments (0) | Trackbacks (0)
02 January

Microsoft gets into the "giving mood", and how they can give more ...

Paul McNamara catches influence peddling and the power of a "toy" laptop

Paul McNamara had a nice take on a boneheaded MS maneuver - see "Microsoft laptop giveaway gets the Times treatment". I'd just gotten back from a discussion of the XO, from the $100 laptop per child guys spun out of the MIT Media Lab, so I got an idea - check out "A Modest Proposal". Read more ...

Most people don't realize how Redmond works - often its not about the skill but about the numeric impact of your action. In a big company, you get rewarded by doing big things.

So if they can reach 7,290 people with the resources set for 90, it attracts attention. Even more if it causes a cascade reaction in the industry to 127,290.

So what if the main obstacle in doing it is that your core product is totally unusable for the purpose, but your remaining competition is the only possibility!

Such is the case if Microsoft were to approach the problem of legitimately gifting (e.g. under $25) industry wags in their typically overwhelming style. You could just about do it too.

XO is called a toy. So much so, maybe toy manufacturers might be attracted as a base item in many toys, which otherwise depend on PC's. What if they volume produced it? Prices would drop eightfold.

So the upshot is, that simply with Microsoft's indirect push, and the toy industry believing the "toy" claim, it might make such an impact that the "digital divide" might close off of it.

Its the simple things in life that matter. Have a happy 2007.

Posted by william at 09:30 | Comments (0) | Trackbacks (0)
08 March

New York Times: Was YouTube Worth It?

Market disruption hits media

In the NY Times Dealbook (see "Was YouTube Worth It?") Eric Schmidt flippantly says its just about monetizing eyeballs.

He's clearly annoyed by those absolutely desperate to label the deal a failure, so they can go back to the old media business, with the situation unchanged. Like the way the newspapers acted just before the bottom dropped out in 2005.
Read more ...

Market disruptions change value propositions, business models, and revenue channels all at once. This occurs while the prior industry is still hanging on to the older versions, so the two perfectly overlap. As a result, chaos ensues because no one knows which of these will dominate when.

I wrote earlier about this in many publications, and have spoken on this to many business groups - but many still don't get it. Just as web ads and web news/blogs haven't entirely erased print/broadcast versions, they have made substantial inroads on killing the future growth potential of print/broadcast industries.

The new balance for web/print/broadcast will sort itself out over as long as 5-10 years. During this time, the value of web media will rise from zero approaching a significant share of past broadcast/print, while broadcast/print will decline to a fraction of its past value. Because web is rising from zero, there is no way that revenues will be stable or predictable, because no one will be comfortable with the loss of the old value and the undervalue of the new value. E.g. when you disrupt, all values drop due to uncertainty. Get it?

In the short term, neither web or print/broadcast is a good investment. In the long term, web media will have a tremendous profitability - as long as its costs are low, and its reach is vast.

So how long will this take? Look at text ads as a predictor. Less than 5 years ago, you couldn't get an advertiser to touch them. Now they are hot, with 88% of online advertising done by four companies.

So in 5 years, I predict that Google will have a similar, perhaps larger share of the business stolen from broadcast that they raided from the newspapers. By then the remaining print/broadcast reporters won't be annoying Eric Schmidt with this question anymore.

Posted by william at 22:15 | Comments (1) | Trackbacks (0)
10 April

Twinkie badges from Web 2.0 world

Tim O’Reilly and Jeff Jarvis at odds over "code of conduct"

Hot boil over blogs given the Kathy Sierra fiasco.

Tim senses a branding opportunity that pisses off Jeff, who'd rather deal with the real world, warts and all.

So whats the deal here? Well, this has come up a lot recently, including at a Social Media Club event at a local TV station. The issue was around collaboration between professional media outlets and hyper-local web video that could share story assignments. Read more ...

Strange for me - don't usually get caught between such personalities, as I'm more of a financial geek than rabid opportunist.

Jeff's clearly right about Tim's motivation, and that given the ways blogs work now, its a dismal approach - but its one that sells with the press right now, who are angry about bloggers they perceive as killing newspapers that keep them alive.

ironically, Tim's not doing them any favors - but of course, "the enemy of my enemy is my friend". The press is stupid, both in enemy and in friend. Craigslist took the classifieds, and that was the real newspaper "killer".

This came up at Social Media Club's event, which lead with Craigslist killing the papers, so why not avoid this with local TV by forming a partnership between in community web video news/content providers where story assignment could return a product that both web and TV could vend.

In this case, standards of conduct make it possible to cross over a similar work product, while branding this conduct allows the growth of a category of local journalism of a common, dependable quantity. Unlike Tim's idea, the scope was intentionally narrow, simply to address a necessary business need so as to allow a potential partnership.

But as Jeff points out, by its existence, such a code of any sort can be used as a weapon, even if unintended.

So if the web is to retain its varied color and form, what do we do to span the gap between traditional media and web media? Can we just make for intentionally narrow branding and bull ahead, or do we end up unintentionally backing Tim 's view and bringing down the walls.

Don't doubt that Jeff Jarvis is right about control of the uncontrollable, which is why Tim's proposal is impossible. He's done a disservice in the appearance of doing a service, because by placing something unworkable on the agenda, other approaches lose out without examination.

Won't try to speak to this, because the issue is dead. But the "wild west" nature of the web, with its uncontrollable disruption kills also emerging business opportunities that help to sort out the economic relationship between traditional and web media - which can't be good for any.

But forcing incompetent standards to take advantage of a tragedy certainly won't go anywhere either.

Posted by william at 21:57 | Comments (0) | Trackbacks (0)
11 April

Jurisdiction and the Information Superhighway, Continued

Gay couple's suit against Adoption.com

In allowing the lawsuit to go to trial, Judge Hamilton also dismissed the company's claim that California anti-bias policies did not apply because Adoption.com is based in Tempe, Ariz., where state laws don't bar discrimination on the basis of sexual orientation or marital status.

Back in 1995, did a legal paper Jurisdiction and the Information Superhighway, examining the scope of law on the Internet - guess what, its still not sorted out. Read more ...

Adoption.com attorney Glen Lavy said he was surprised by the judge indicating California law could decide "what an Arizona company publishes on its Web site that is based in Arizona, that someone from California cannot visit without asking for the information from an Arizona server."

The earliest example of this was porn from a California server viewed from Tennessee, where there were very different rules governing such content. What makes this an interesting case is that Adoption.com's lock on this niche market is being used as a way to pull it out of a narrowly defined jurisdiction, and pull it into the greater context addressing non discrimination.

The judge seems to say that you can't have it both ways - live in a restricted jurisdiction, but have a global business at the same time - as if the whole world works by Arizona rules.

With the "Amateur Action" case, the issue was that client jurisdiction couldn't restrict California content, since by use of the net one was intentionally "traveling to California" to obtain the materials, thus the Tennessee laws didn't apply. Here, Adoption.com expects that by its terms of use, you first agree to be bound by Arizona laws, and then can make use of the site. Any first-year law student knows that you can't bound jurisdiction by contract, anymore than you can define up to be down and have that be effective. This is confusing the contractual accepting of authority of dispute as Arizona courts, who might then need to decide which jurisdiction to be applied, with that of actual statue as well.

I think that Internet law is about to be redefined yet again. I've written before how these decisions were made in light of the technical inability to manage thousands of different jurisdictions back then. But now, given that firms like the New York Times have produced same content differently for jurisdictions, the courts may choose to force a more involved approach onto Web businesses than before.

Posted by william at 01:33 | Comments (0) | Trackbacks (0)
30 May

Internet Security Market takes the next step...

Interoperable Standards created by Open Source

Two years back Dan Lynch asked the panel of Internet Experts at Stanford's "Internet: Today and Tomorrow" about interoperable security standards. Last week at InterOp, the trade show he invented, OpenSEA was announced, taking 802.1x into that arena using open source as the active means to that end. It almost exactly matched what he asked for.

[Disclosure: Dan's a friend, and led the finance of one of my ventures. His son, Zack, was in today's SF Chron promoting NeuroInsights, and it's a great read on both of them.]

It occurs to me that people don't get the elements of how this all works together, so I'll break it down into details. Read more.

Lets take an accepted success - Internet Explorer and Firefox. IE overtook Netscape to dominate the browser client space a decade ago. Firefox, the reinvention of the bones of Netscape, is an open source rival that pushes innovation beyond IE in innovation (tabbed browsing, integrated spell checking, new standards integration, ...).

The key to the success of Firefox is the way it works leveraging a common product and development base with a component/services framework that pushes other products and partners. Meanwhile, even Microsoft finds it hard to catch up - they are late with poor quality new browser versions (IE7), they unfavorably compete with their own older versions (IE6 is *still* king, albeit an addled one), and Active-X, their component software play, is falling apart with security issues, stability, and standards challenges galore. In essence, the tiny little flyspeck of Firefox runs circles around the Goliath Microsoft perpetually.

This is soon to become the rule and no longer the exception. And no, it's not just Microsoft as the target, but any large company with a non-competitive product offering, trying to ride a platform sell. This is what the OpenSEA announcement is all about.

So the formula is this - your open source client module/application/library displaces the platform one, and forms a new cross platform "platform", and in lieu of plug-ins, has a external service architecture over the network (or web) that it leverages for advantages the embedded one can't provide. Since open source means that best of breed features constantly, cheaply, and reliably show up ahead of the stolid embedded one, competitive position is easily maintained given a broad base. Revenue from the external service architecture partners moves the client further down the field.

There's a lot more about this I'm not saying, but you get the drift on how the basics work. In addition, proprietary competitors, platform owners, and support providers can attempt to damage or severely redirect these opportunities, but they would do so at the risk of killing product sales opportunities themselves, so there's no obvious "knockout strategy" to be employed.

Use your own imagination to discover the latent possibilities of this approach - but here's a hint - there are more of them than popular open source projects available today. Just takes a little "initiative".

Posted by william at 00:17 | Comments (0) | Trackbacks (0)