Internet Changes Everything

September 29, 2005

Sub-$100 laptop design unveiled

BBC NEWS | Technology | Sub-$100 laptop design unveiled

Nicholas Negroponte, chairman and founder of the Massachusetts Institute of Technology Media Labs, has been outlining designs for a sub-$100 PC.

The laptop will be tough and foldable in different ways, with a hand crank for when there is no power supply.

Professor Negroponte came up with the idea for a cheap computer for all after visiting a Cambodian village.

His non-profit One Laptop Per Child group plans to have up to 15 million machines in production within a year.

A prototype of the machine should be ready in November at the World Summit on the Information Society (WSIS) in Tunisia.

Children in Brazil, China, Egypt, Thailand, and South Africa will be among the first to get the under-$100 (£57) computer, said Professor Negroponte at the Emerging Technologies conference at MIT.

The following year, Massachusetts governor Mitt Romney plans to start buying them for all 500,000 middle and high school pupils in the state.

Professor Negroponte predicts there could be 100 million to 150 million shipped every year by 2007.

Virtually indestructible

The laptops will be encased in rubber to make them more durable, and their AC adaptors will also act as carrying straps.

The Linux-based machines are expected to have a 500MHz processor, with flash memory instead of a hard drive which has more delicate moving parts.

Mock-up of the sub-$100 laptop
The laptop will be more rugged and flexible than ordinary ones
They will have four USB ports, and will be able to connect to the net through wi-fi - wireless net technology - and will be able to share data easily.

It will also have a dual-mode display so that it can still be used in varying light conditions outside. It will be a colour display, but users will be able to switch easily to monochrome mode so that it can be viewed in bright sunlight, at four times normal resolution.

When Professor Negroponte saw the benefits of donated notebook PCs that Cambodian children could carry around with them, he immediately set about planning the sub-$100 machines.

The project has some big-name supporters on board, including Google, which is working on thin-client applications. Thin client computing means several machines can share programs when linked up to a central "brain", or server.

Making them so cheap would mean that developing nations would be able to afford to bulk-buy them, although Professor Negroponte thinks that even $100 remains too expensive for some.

He said he is committed to the idea that children all over the world should be equipped with technology so that they can tap into the educational and communications benefits of the net.

Power is a big issue for developing nations in particular when it comes to technology, which is why the hand crank will be fitted to supply extra juice when it is needed.

By using innovative technologies, such as electronic ink displays, the MIT team thinks it can reduce power consumption even further on the computers. Such displays require very little power to work.

Image of the Simputer
The Simputer is a handheld solution for developing nations
There have been several projects to build and distribute cheap computers for developing nations in order to close the digital divide.

A sub-£100 box, called Nivo, has been developed by UK not-for-profit group, Ndiyo. It runs on open source software and works as a thin client.

The Simputer has also been developed for developing nations. It is a cheap handheld computer designed by Indian scientists.

September 29, 2005 at 06:25 PM in Consumer devices | Permalink | TrackBack (25) | Top of page | Blog Home

September 28, 2005

Shoppers use blogs for bargains

BBC NEWS | Technology | Shoppers use blogs for bargains

Consumers are starting to use weblogs, or blogs, as guides to what they should and shouldn't buy, finds a survey.

More than three-quarters of those questioned in the research said they had consulted blogs before shopping.

Respondents said they trusted blogs because they were written by real people and based on actual experiences.

The survey suggests that blogs could soon rival other media as sources of trustworthy information about products and services.

Daily data

In the survey of attitudes to blogs most of those questioned, 77%, said they thought the regularly updated web journals were a useful way to get insights into the products or services they should buy.

As many blogs were the work of individuals, many believed that they were more honest and reliable because they were not subject to the same marketing pressures as corporate or commercial websites.

"Consumers are tired of marketing gloss and so the interest in blogs is not surprising," said Paul Halfpenny, product manager at survey sponsor Hostway.

"We all want impartial advice and information, as far as consumers are concerned blogs deliver this," he added.

The messages on blogs about the merits or mistakes in gadgets or consumer goods can reach a huge audience, said Mr Halfpenny.

Those most likely to let opinions on blogs influence what they bought, 83%, were those in the 25-34 age group.

As yet, though, the research found that consumers still thought almost every other form of media was at least as trustworthy as blogs.

Almost half, 49%, thought blogs were as credible as articles in magazines, 46% thought web journals were as trustworthy as newspapers and 40% thought web logs and TV news programmes were just as reliable as each other.

September 28, 2005 at 09:00 AM in Blogging & feeds | Permalink | TrackBack (1) | Top of page | Blog Home

Consumers tune into blogs

Internet Daily: Blogs eat into traditional ads for shoppers - Advertising - Airlines - Electronic commerce - Entertainment and Leisure - Internet Services - Internet Software - Media - Mobile phones - Retail - Travel - Wireless Technologies - Transportation - Internet - Wireless - General

By Frank Barnako, MarketWatch
Last Update: 11:40 AM ET Sept. 27, 2005
E-mail it | Print | Discuss | Alert | Reprint |

WASHINGTON (MarketWatch) - Technology is making it easier to ignore mainstream media advertising. Instead, consumers are using Web logs, mobile messaging, comparison shopping Web sites, and word-of-mouth to make buying decisions, according to Forrester Research Inc.

Date released Tuesday by the firm reported 10% of consumers read blogs at least once a week, compared with 5% a year ago. Really Simple Syndication feeds (RSS) are used by 6%, compared to 2% in 2004.

"Technology has given consumers an option to tune businesses out, and tune each other in," said Chris Charron, a Forrester (FORR: news, chart, profile) vice president, in a statement. "On the flip side, technology has given businesses an opportunity to gain greater customer insights at a lower cost," by monitoring blogs and Web sites and message boards "to uncover consumer insight and accelerate the innovation of products, services, and design," he said.

PubSub begins industry blog rankings

A list of the most "Fashionable Blogs" is the start of an effort by PubSub.com to chart influence and popularity of Web logs catering to special interests and businesses. The first list targets fashion, and has been compiled by a newspaper reporter who ranked what she thought were the top fashion blogs, said Bob Wyman, chief technical officer of PubSub Concepts Inc. If you were an advertiser, and saw which blog was most popular in your product category, you might be interested in using it for your own marketing, he explained. "We hope to do this in the future with PR blogs, law blogs, marketing blogs, as soon as we can find the domain experts who can maintain those lists," Wyman told ClickZ News. Fashionable Blogs listing.

TV still the 800 lb. gorilla

A study of consumers' daily use of media concluded the average person watches television four hours a day and spends two hours a day on the PC. The Middletown Media Studies II, conducted by researchers at Ball State University Center for Media Design, found 96 percent of people spent a third of their day using two or media at the same time, most often the Internet and television. Bob Papper, a co-author of the study, said, "As a society, we are consumers of media. The average person spends about nine hours a day using some type of media, which is arguably in excess of anything we would have envisioned 10 years ago." Television is still the 800-pound gorilla because of how much the average person is exposed to it, Papper said. "However, that is quickly evolving. When we combine time spent on the Web, using e-mail, instant messaging and software such as word processing, the computer eclipses all other media with the single exception of television." For more information about the research.

The MarketWatch Internet Daily podcast is available through the Apple iTunes Music Store. Listen or subscribe here. You can also hear it on the CBS Radio Network.

September 28, 2005 at 08:58 AM in Blogging & feeds | Permalink | TrackBack (5) | Top of page | Blog Home

September 27, 2005

Egg to launch m-banking service with O2

Finextra: Egg to launch m-banking service with O2

UK Web bank Egg has teamed with mobile network operator O2 to launch a wireless banking service over the i-mode platform.

O2 plans to launch a UK version of the i-mode mobile Internet service, which was developed by Japanese mobile operator NTT DoCoMo, in October. The service has over 55 million users worldwide, and over a million consumers use the system to access their Internet banking service every month.

Egg is the first banking provider on the Uk version of the i-mode service. Egg customers with i-mode phones will be able to use their current login to access details of balances, transactions and information on their accounts.

The bank says it may also develop the m-banking service further in the coming months to enable customers to transfer funds to other providers' accounts, or make personal payments via their mobile phones to other i-mode users.

Andy Thompson, director of propositions at Egg, says in-house research shows that over 50% of the bank's customers want mobile access to accounts.

"Consumers do not know at any given time how much money they have available to spend and over half are keen to embrace mobile internet banking as a method of managing their money," says Thompson. "Our service on i-mode is the start of a revolution in how consumers interact with their finances, providing them with immediate, convenient and fast access to their money wherever they are."

O2 says the UK-version of the i-mode service will also include news sites such as Financial Times, The Times Online and Sky News, along with entertainment sites such as Channel 4, the National Lottery and F1-Live.com.

September 27, 2005 at 07:06 PM in Wireless | Permalink | TrackBack (13) | Top of page | Blog Home

Digital Resolve introduces Web site authentication module

Finextra: Digital Resolve introduces Web site authentication module

Digital Resolve, the leading provider of transparent, risk-based authentication solutions, has introduced a new approach to mutual authentication with the addition of a Website Authentication Module to its Fraud Analyst product for online fraud and identity theft prevention for the financial services industry.

With Digital Resolve's Fraud Analyst Website Authentication Module, financial institutions can now provide their customers with the ability to seamlessly determine whether or not they are communicating with their banks' Web servers. This Module is aimed at the detection of fake websites and the prevention of Website spoofing, more specifically Man-in-the-Middle attacks that involve a cyber criminal redirecting the consumer from a bank's Website to the criminal's server. That server then acts as a proxy for communication between the consumer's personal computer and the bank's Website, allowing the attacker to observe all the data passed in between.

"There has been an enormous focus recently on one-way security strategies that authenticate customers to financial institutions," Dennis Maicon, executive vice president, Financial Services Solutions, said. "However, most financial institutions are not authenticating their websites to customers and prospects before collecting sensitive information. This is the very reason that phishing, pharming, and now Man-in-the-Middle attacks are successful. Until now, unsuspecting consumers just cannot tell they are being redirected to a spoofed Website during an attack or that a man in the middle has hijacked their session."

Unlike current technologies in the marketplace that incorporate cookies and shared images or watermarks and require active user participation, Digital Resolve's Website Authentication Module is very difficult to defeat and provides protection against phishing, pharming and man in the middle attacks without intervention by end users. Furthermore, other approaches to mutual authentication provide no protection beyond login authentication, as when non-bank customers wish to apply for a bank's services online and as such must provide personally identifiable information.

This fool-proof solution utilizes patented techniques to create a "trusted" server list that legitimizes Websites and verifies that there is no man in the middle for both banking customers and non-customers alike. In addition, the Website Authentication Module's back-end processes use patented methods to build the trusted server list in a secure environment, with constant quality checks to identify any potential list contamination.

"Allowing the customer's computer to determine who it is communicating with is crucial to any mutual authentication strategy. Current approaches using secure cookies and shared images are still extremely vulnerable to these types of insidious attacks. They simply do not provide the necessary - and expected - protection when a man in the middle is involved and do not even address a bank's prospects," Maicon added.

Now in beta, the Website Authentication Module will be generally available in the fourth quarter of 2005.

September 27, 2005 at 07:06 PM in Financial Services | Permalink | TrackBack (4) | Top of page | Blog Home

September 26, 2005

Death to folders

http://www.economist.com/displaystory.cfm?story_id=4368267

Computing: Cheap hard disks and fast search software could change the way we store and find documents on our computers.

ANYONE who uses a personal computer will be familiar with the idea of a “graphical user interface”, which was introduced in the 1980s and became ubiquitous in the 1990s. It did away with the need to type cryptic keyboard commands to manipulate files, making it possible to manipulate them directly instead, using a mouse: double-click on a file's icon to open it, drag it to the bin to delete it, and drop it on a folder to file it away.

All of this made computers far easier to use. But the once-revolutionary notion of files, folders, filing cabinets and other desktop icons is now showing its age. What started out as a helpful metaphor now seems rather limiting. Why hobble digital documents with the limitations of paper ones, such as the need to have a single fixed location? “A lawyer cares about things like dates and cases,” says Thomas Rizzo, the head of Microsoft's next-generation file system project, known as WinFS. How can a lawyer file the same document by both client and by date? He cannot, notes Mr Rizzo, without using unwieldy multiple-location workarounds such as aliases and shortcuts.

Another problem, as personal computers start to fill up with thousands of photographs, music tracks, saved web pages and other documents, is that the file-and-folder metaphor requires users to decide upon a logical filing system, and then stick to it, if they want to be able to find things easily. The only thing worse than creating such a nested hierarchy of folders, or directories, is not creating it. Folders thus saddle computer users with the menial task of keeping the filing system neat and tidy, notes Philip Schiller, Apple's senior vice-president of marketing. “You're the janitor,” he says. But most computer users could not care less about folders, a way of organising digital files that is a relic from computing history.

To further complicate matters, data on personal computers is being Balkanised as different pieces of software circumvent the creaking file-and-folder approach and establish their own structures for organising particular kinds of data. E-mail programs were early examples of this trend: most of them maintain what is, in effect, a database of e-mail, hidden away in its own folder and often inaccessible to other programs. Contact-management, calendar and photo-album programs now do the same. To find all the information relating to a personal contact, you may need to search within a contact-management program, a calendar, an e-mail program and the computer's file system—though filenames do not always contain enough information to connect them to a particular person or project.

Oddly, however, just as it is becoming harder to find things on your computer, it is becoming much easier to find things on the web. Search engines such as Google can search billions of pages in a fraction of a second: if you have a broadband connection, it is usually quicker to look up the phone number of a restaurant via Google than to boot up your address-book software. The desktop-computing metaphor, and the notion of folders in particular, has fallen behind. It is time to shed this relic of the past. It is time for folders to die with dignity—and to yield to a new, more web-like way of storing and finding things.

Never delete

This new approach to organising data is being brought into being by the convergence of two trends: the plunging cost of hard-disk storage and the growing reach of search software. Have you emptied the rubbish bin on your desktop lately? Probably not—unless you edit a lot of music or video, the chances are that you have far more disk space than you need. A typical hard disk on even a cheap computer today holds 40 to 80 gigabytes of information, which is enough for millions of e-mails, tens of thousands of photos, and hours of video. By 2009, a typical PC will have a 160-gigabyte hard disk, and the biggest disk drives will have a capacity of 1,000 gigabytes, or one terabyte, says Dave Reinsel, director of storage research at IDC, market-research firm. Today, he says, most users' hard disks are about 30% full. When storage space is so abundant, why throw anything away?

As storage capacity has grown, however, the ability to search such large piles of data has not kept pace. Until recently, most operating systems, including Microsoft Windows, Apple's Mac OS X and the various versions of Unix had the same search functions they had ten years ago. Only now are they being revamped. Even today, Windows and, until this year, Mac OS X performed the most primitive form of searching by matching a query against filenames one at a time. Searching in this way is akin to looking for a library book by examining every book on every shelf, one at a time. Libraries, of course, have catalogues to make it easier to find books. And now the same idea is being grafted on to computer file systems. The first implementation appeared in Mac OS X, but Microsoft and Google are close behind.

In theory, speeding up search is easy: all you have to do is build a database, akin to a library catalogue, that has an entry for each file, along with information about its content. But for this database to be useful, it must be constantly updated. Every time a file is altered, its corresponding entry in the database, and the various indexes that refer to it, must be updated too. This involves meddling with the computer's operating system at a fundamental level, and has historically been difficult to achieve without a dramatic reduction in the computer's performance.

Apple finally solved this problem this year when it released Mac OS X 10.4, known as Tiger. Every time a file is changed, it is added to a queue for re-indexing by Tiger's built-in search engine, called Spotlight. The re-indexing then occurs when the computer is relatively idle, which ensures that maintaining the file database does not overpower the system. The result is that documents scattered across the hard disk can be summoned with Google-like speed and simplicity.

Microsoft is doing something similar through its even more ambitious (but much delayed) WinFS project. The aim is to build an advanced database, using elements of Microsoft's SQL Server, into the Windows filing system to enable access to files with the speed and complexity of a database query. “We are fundamentally changing the way you store your data inside your file system,” says Mr Rizzo. Project-management software could, for example, call up all files relating to a particular project, or a jukebox program could ask WinFS to retrieve all files of type “music”. But although WinFS was originally intended to be part of Microsoft's forthcoming Windows Vista operating system, formerly known as Longhorn, it was dropped as an integral element when development fell behind schedule. Vista is expected in late 2006, but WinFS will not be released until 2007.

In the interim, both Microsoft and Google have launched Windows-based desktop-search products that lack the deep and elegant integration of Spotlight or WinFS, but do similar things. Microsoft's Windows Desktop Search and Google's Desktop Search are separate, free software packages that must be installed on the desktop, though Microsoft's product will be incorporated into Windows Vista next year. Like Spotlight, both have a variety of plug-ins that let them index common file types, such as Microsoft Office documents and messages inside popular e-mail programs.

By doing away with the main drawback of traditional file-searching—that it cannot see inside the files, only their names—Apple, Google and Microsoft are hammering nails into the coffin of the old file-and-folder approach. As the reach and power of desktop-search software grows, the need to put things in organised folders disappears. With Spotlight, “I just search for everything now—I spend almost no time browsing through folders,” says Steven Johnson, author of “Interface Culture”, a book about computer interfaces.

Let's play tag

That said, search engines cannot reach inside every kind of file: they cannot yet distinguish photographs of one person from another, for example. Many kinds of file, however, incorporate helpful “tags” that describe their contents. Digital cameras attach tags to photographs to record information about the time, date and exposure details; MP3 audio files generally contain tags listing the track name, artist, and other information. “We believe that data is becoming more and more structured. That's good for being able to find things and relate things together,” says Mr Rizzo. Increasingly, users will start to attach tags of their own to files, too.

When saving a document five years from now, rather than naming it and dropping it into a folder, you may well tag it with a few keywords and drop it into a database. “You can just tag it instead of filing it, and you can rely on the search system to quickly find all the things with the same tag,” says Marti Hearst, a computer scientist at the University of California at Berkeley's School of Information Management & Systems. Her tag-based retrieval system, called Flamenco, can be seen online.

Ironically, the search-based metaphor also allows folders to be reincarnated in a new and more useful form. Spotlight has a “Smart Folder” feature that looks like a folder, but is in fact the result of a search. So you could, for example, create a Smart Folder that contains all files, e-mails and other documents mentioning “sausages” that were modified in the last month: the search software then populates the folder with anything that matches these search criteria, and keeps the contents constantly updated. (The name implies that if these are Smart Folders, then existing folders must be stupid ones.)

The idea of establishing relationships between pieces of information, to allow connections to be made and results to be retrieved, is not new. Vannevar Bush, in his famously prognostic and influential essay in the Atlantic Monthly in July 1945, described how adding structured code words to associated microfilm pages in his imaginary “Memex” information-retrieval system would help researchers. “It is exactly as though the physical items had been gathered together from widely separated sources and bound together to form a new book. It is more than this, for any item can be joined into numerous trails,” Bush wrote.

Flamenco, WinFS and Smart Folders allow items that meet particular criteria to appear many times in the same hierarchy, and to move around as their contents or attributes change. Traditional folder hierarchies, in contrast, are rigid structures resistant to updates and multiple views.

Looking further ahead, the combination of databases, tagging and search will make it possible to navigate large numbers of documents in all kinds of radically new ways. David Gelernter, a computer scientist at Yale University, imagines searching using time and space axes: imagine picking New Haven, Connecticut, on a map and then zooming back to 1701 to see information about its founding. Ben Shneiderman of the University of Maryland has devised a new way to display search results in which data appear as concentrations of information in a “tree-map”: the colour, position and size of thousands of results can then be taken in at a glance. As folders fade away and search software evolves, it seems that we may, at last, be able to find what we're looking for when we need it. With the death of the folder, perhaps we can finally get some work done.

September 26, 2005 at 02:17 PM in Internet evolution | Permalink | TrackBack (16) | Top of page | Blog Home

Google beats Microsoft, and MIT beats Harvard, at least in one war game

"Battle for Clicks" War Game - MIT Sloan School of Management Newsroom

MIT Sloan Fellows assume identity of Google in an all-day "Battle for Clicks" war game

CAMBRIDGE, Mass., April 27, 2005 — Google's high-tech sparkle was on display at the all-day "Battle for Clicks" war game between students from MIT Sloan School of Management and Harvard Business School on Sunday, April 10. MIT Sloan Fellows who assumed the identity of Google overcame strong challenges from a Harvard team representing Microsoft, as well as student teams representing Yahoo! and AOL/Time Warner to win the game and capture the $5,000 winner prize.

The game was run by Fuld & Co., a Cambridge-based strategic intelligence consulting firm, which typically conducts such games for corporations in private, closed-door sessions. This is the first time such a game has ever been run in public, and the first such competition involving students from these two world-class business schools. A war game is neither a war nor a game, but rather an enlightening analytical exercise that often leads to truly creative business strategies.

The MIT Sloan Fellows team that represented Google was well prepared. "The competition focused on strategy development," said Brian Courtney, one of the MIT Sloan Fellow participants. "Our current classes in technology and marketing strategy gave us the confidence to debate anyone."

The Google team pushed a strategy of global growth, deepening penetration into the enterprise, spreading search technology beyond computers into other electronic devices, and developing more partnerships. A panel of judges from Forrester, IDC, MFS Management, and Jefferies & Company rated the teams and had Google first, Microsoft second, AOL/Time Warner third, and Yahoo! fourth.

"I believe we won because we competed as a team," said Courtney, "We worked together studying the materials and we shared all relevant research so we were all equally prepared. We also brought a great deal of work experience to the table. Because of this we weren't tempted to overreact to the fictitious market changes that the game presented."

The Google strategy impressed a Google associate product manager in attendance, Enrique Muïoz Torres. "I was impressed by the depth of analysis that went on," he said.

Torres pointed to comments from some team members as to the importance of Google maintaining technical superiority: "In competing with Microsoft, having the highest quality product isn't enough."

The competition, which lasted all day Sunday, was a see-saw battle. At the event's midpoint, TimeWarner held first place, focusing on its 22 million AOL users, 19 million of whom use Instant Messaging. Since users are abandoning dialup for DSL and Broadband, the TimeWarner team focused on strategies to keep its Instant Messaging users as well as users who want a "clean experience" (no spam or viruses) and no adult-rated material.

As part of the competition, Fuld & Company challenged the students to deal with a series of plausible political events that would have severe repercussions for each of the companies. For example, Mike Sandman, the Fuld facilitator, fired this scenario at all four teams:

Taxing the Internet: The Federal Communications Commission enacts regulations enabling states to collect sales taxes on e-commerce based on where the buyer lives, not where the company is based. These events are expected to dampen online sales and online ad revenues. Consumer cost would be an average of 67 cents a month for AOL users and $1.57 to $1.98 a month for DSL and Broadband users.

All four teams shifted gears to strategize their survival. The company teams made offers for mergers or licensing agreements with each other, with all of them pursuing Time Warner and its highly prized print and broadcast content.

Throughout the War Game, teams had to focus on economist Michael Porter's Four Corners Analysis — drivers, assumptions, current strategy, and capabilities — before developing future strategies. The teams claimed their major benefits to customers were as follows:

* Yahoo! has the most eyeballs, with users willing to pay for personalized content.
* Microsoft has the most cash, owns the desktop platform, MSN and Hotmail.
* Time Warner has content, print and broadcast media venues for bundled advertising, and the most popular instant messaging service.
* Google has a worldwide consumer market with 30-plus percent of its revenues coming from outside the U.S., content in 100 languages, and the most ubiquitous search engine.

"The game ended with the same excitement and strategic inventiveness with which it began," concluded Leonard Fuld, president and founder of Fuld & Company. "All four teams described plausible yet innovative strategies that were applauded by both the panel of judges and by Mr. Torres, the observer from Google. While the MIT Sloan Fellows team representing Google won, the arguments and counter-arguments flying across the room added to everyone's strategic knowledge. This was the ultimate benefit from this and every other war game — both this unusually public session, as well as the more typical private forums."

Said Courtney, "MIT won because we worked together to understand the market and the companies involved. Without the team effort in preparation, I do not believe we would have done as well. Because we prepared as one, we won as one. "

Fuld has conducted War Games and competitive intelligence assignments for more than half the Fortune 500 and Global 1000 and looks forward to having these students meet in another similar war gaming encounter next year.

September 26, 2005 at 02:06 PM in Portals | Permalink | TrackBack (24) | Top of page | Blog Home

Bubble 2.0

Bubble 2.0 | Economist.com

Sep 22nd 2005
From The Economist print edition

As Microsoft discusses buying a big stake in America Online, a spate of expensive internet deals is creating a sense of déjà vu

NASTY memories have been stirred up by this week’s reports that Microsoft is in talks to buy a big stake in America Online. After all, the last time that AOL was involved in a big deal—its $150 billion acquisition of Time Warner, a media giant, in January 2000—it soon came to symbolise the madness of internet-company valuations, during the turn-of-the-century dotcom bubble. Nobody expects Microsoft to repeat the near-suicidal folly of Time Warner. But if there is any truth to market rumours that its purchase will value AOL—now a shadow of its old self—at over $20 billion, or about $1,000 per AOL subscriber, then the deal would certainly fuel fears that irrational exuberance is returning to the pricing of internet-related firms.

A Microsoft stake in AOL—which it would merge with its MSN portal—would come hot on the heels of last week’s purchase of Skype, an internet-phone company, by eBay, an internet-auction site. There is no doubt that there is huge commercial potential in internet telephony. But how that potential will come to fruition—and whether Skype will be the company that benefits—are very much open questions. Look at the raw numbers, and this seems like a deal with strikingly bubble-era economics: a price of at least $2.6 billion for a loss-making firm with unlimited ambition but expected revenues this year of only $60m.

Such a high price is hardly unique. Among other richly priced deals contributing recently to the bubbly mood are Barry Diller’s IAC/InterActive’s $1.9 billion acquisition of Ask Jeeves, a search engine, in July; News Corporation’s purchase of IGN, a video-gaming site, this month, and Intermix Media, a social networking site, in July, for a combined $1.2 billion; and Yahoo!’s $1 billion purchase in August of a stake in Alibaba.com, a Chinese internet site that actually prides itself on its lack of a clear business model. Speculation that they will be gobbled up next has lifted shares in several other internet firms, including The Knot (an online wedding planner) and CNET Networks, a news site—both up by over 50% in the past six months.

“The Skype deal is absolutely a return to the 1999 mentality,” says Pip Coburn of Coburn Ventures, a technology-strategy firm. It and many of the other recent and mooted internet deals seem to be based on little more than the belief of management that everything is going to change dramatically in the next few years, in highly unpredictable ways, and so all options need to be covered. Given that mentality, says Mr Coburn, a manager “can pretty much justify paying any price”.

Valuing a firm is tricky at the best of times (as is making a success of a merger), but it is especially hard for a young firm. The rationale of Rajiv Dutta, eBay’s chief financial officer, for the firm’s valuation of Skype does little to inspire confidence. He first compared Skype with eBay’s previous biggest acquisition, of PayPal, an online payment system that is not obviously comparable to a phone service (and which, unlike Skype, eBay knew intimately before the acquisition). PayPal cost 8% of eBay’s market capitalisation in October 2002, said Mr Dutta, whereas Skype cost only 4.8% of eBay’s current market cap. But is that the right measure? Skype’s revenue growth in the 12 months in which it has charged for some of its services, he noted, was faster than eBay’s at a similar stage in its development. Again, why is this relevant? Skype and eBay have completely different business models. Finally, its current losses notwithstanding, Mr Dutta thinks that Skype will have a long-term operating-profit margin of 20-25%—apparently for no other reason than that eBay also assumed that PayPal would achieve that same margin.

While Skype and eBay may yet develop lucrative synergies, the deal does not impress Hal Varian, an economist at Berkeley and co-author of an influential book, “Information Rules: A Strategic Guide to the Network Economy”. Skype’s technology is not hard to replicate, and internet telephony is becoming highly competitive, he says. Skype’s founders, Niklas Zennstrom and Janus Friis, were smart to take the money—just as earlier AOL’s then boss, Steve Case, was wise to exchange his firm’s hugely overvalued shares for Time Warner’s undervalued old-economy assets.

Déjà vu or not, even the greatest pessimists do not think that history is simply repeating itself. Share prices today are nothing like as crazy as they were in 2000, at least in America. (To relive the full dotcom bubble experience, try China instead, where America’s erstwhile “internet queen”, Mary Meeker of Morgan Stanley, has just been anointing her local favourites.) American investors no longer have much appetite for initial public offerings of shares in firms with nothing more than a bright idea and half a business plan. The price-earnings (p/e) ratios of shares in some of the best-known internet firms are certainly high—Google’s is 90, and eBay’s is 54, compared with a p/e of 18 for the Dow Jones average. They need to boost profits spectacularly to justify these prices; but at least nowadays there are lots of earnings to include in the p/e ratio.

Google is so highly priced in large part because of its mastery of one of the few truly profitable internet business-models: the sale of effective online advertising. But its striking success is alerting rivals to the dangers that Google and other peddlers of online advertising pose to their businesses—which is prompting them to explore how to fight back, which in turn could hurt the now thriving firm’s profits, and expose any overvaluation.

Newspaper, television and radio companies, for instance, have all recently started to understand the threat posed to their traditional advertising revenues by online advertising. A speech by Rupert Murdoch earlier this year on the need for media firms to embrace the internet showed that the industry is not willing to give in easily to its new enemy. The traditional telecoms and cable companies have also started to wake up to the potentially massive threat posed to their revenues by cut-price internet telephony of the sort offered by Skype. They, too, are looking for ways to fight back.

Lottery fever

As these industries and firms collide, it is far from clear which firms will emerge on top, and how profitable they will be. That makes valuing their shares extremely hazardous. In January 1999, asked to sort out the hype from the fundamentals in internet shares, Alan Greenspan, the chairman of the Federal Reserve, compared owning shares with buying a lottery ticket. Each share had a small chance of securing a great reward, but a high probability of failure. “What lottery managers have known for centuries is that you could get somebody to pay for a one-in-a-million shot more than the value of that chance,” observed Mr Greenspan. Hence, the more volatile the business outlook, the more likely “you will get a lottery premium in the stock”.

One difference between today and the late 1990s is that today many of the fancy prices of internet firms are being paid by companies buying them, rather than by investors merely buying their shares. Their motives are understandable: to protect themselves from the potential risks and position themselves for the potential rewards of a maturing internet. What remains to be seen is how much some of these embattled firms will pay in their pursuit of the winning lottery ticket.

September 26, 2005 at 01:49 PM in Internet evolution | Permalink | TrackBack (5) | Top of page | Blog Home

September 25, 2005

Ask Jeeves decides to axe Jeeves

BBC NEWS | Technology | Ask Jeeves decides to axe Jeeves

Search site Ask Jeeves is getting rid of the iconic valet that has been its companion since its earliest days.

Citing "user confusion" over what the butler character represents the search site has said that Jeeves will soon be phased out.

There is no firm date for when the character will disappear from the Ask site, but it will soon stop being the brand's most prominent icon.

No decision has been made about a new name for the Ask search site.

Butler begone

The decision about the axing of the Jeeves valet character was revealed in a Goldman Sachs investor conference by Ask owner Barry Diller.

Mr Diller's Inter-Active Corp bought the Ask Jeeves group in May 2005 for $1.85bn (£1.03bn).

In a statement Ask said that over the last year it had been investigating user perceptions of the Jeeves character.

Jeeves is named after the extraordinarily knowledgeable and helpful valet character created by celebrated comic novelist P G Wodehouse.

However, Ask's research revealed that Jeeves was getting in the way of people realising that the search site had changed and that it can handle many more types of queries than just straightforward questions.

"As a result," said the Ask statement, "the character may be phased out as the prominent icon of the brand, although no timeline or details have been determined."

In line with a series of changes made to the Ask site last year, Jeeves got a makeover which saw him get slimmer and more tanned.

In its statement Ask said that no decision had yet been made on the new brand name it will adopt to show how the search site had evolved.

September 25, 2005 at 03:17 PM in Portals | Permalink | TrackBack (47) | Top of page | Blog Home

September 24, 2005

Google branches out into television

Google branches out into television

By Nick Farrell: Friday 23 September 2005, 07:20
GOOGLE is apparently branching out into television.
here
A few bloggers have apparently seen an advertisement for a full time project manager for GoogleTV in Mountain View.

According to the blogs the job called for experience developing/launching products in one or more of the following areas: interactive TV, set-top-boxes, personal video recorders, video-on-demand, IP TV or cable TV technologies.

Unfortunately, as word of the ad got out, Google pulled it from the site so we have to take the bloggers' word for it.

Google spinsters do quite well at generating rumours. The IT press had shed loads of hints before GoogleTalk was announced so this could be another one.

More here.

September 24, 2005 at 05:46 PM in Portals | Permalink | TrackBack (13) | Top of page | Blog Home

Battling Google, Microsoft Changes How It Builds Software

WSJ.com - Battling Google, Microsoft Changes How It Builds Software

Delay in New Windows Version
Drove Giant to Develop
Simpler, Flexible Product
Engineers Get Trip to 'Bug Jail'

By ROBERT A. GUTH
Staff Reporter of THE WALL STREET JOURNAL
September 23, 2005; Page A1

REDMOND, Wash. -- Jim Allchin, a senior Microsoft Corp. executive, walked into Bill Gates's office here one day in July last year to deliver a bombshell about the next generation of Microsoft Windows.

"It's not going to work," Mr. Allchin says he told the Microsoft chairman. The new version, code-named Longhorn, was so complex its writers would never be able to make it run properly.

The news got even worse: Longhorn was irredeemable because Microsoft engineers were building it just as they had always built software. Throughout its history, Microsoft had let thousands of programmers each produce their own piece of computer code, then stitched it together into one sprawling program. Now, Mr. Allchin argued, the jig was up. Microsoft needed to start over.

Mr. Gates resisted at first, pushing for Mr. Allchin's group to take more time until everything worked. Over the next few months, Mr. Allchin and his deputies would also face protests from programmers who complained he was trying to impose bureaucracy and rob Microsoft of its creativity.

"There was some angst by everybody," says Mr. Gates of the period. "It's obviously my role to ask people, 'Hey, let's not throw things out we shouldn't throw out. Let's keep things in that we can keep in.' "

Ultimately, Mr. Allchin's warning proved cathartic and led to what he and others call a transformation in Microsoft's most important product. A key reason: the growing threat from rivals such as Google Inc., Apple Computer Inc. and makers of the free Linux operating system. In recent years these companies have been dashing out some software innovations faster than Microsoft. Google has grown particularly effective at introducing new programs such as email and instant messaging over the Internet, watching how they perform and regularly replacing them with improved versions.

Microsoft's Windows can't entirely replicate that approach, since the software is by its nature a massive program overseeing all of a computer's functions. But Microsoft is now racing to move in that direction: developing a solid core for Windows onto which new features can be added one by one over time.

As always, Microsoft's great fear is that it will lose its near-monopoly on computer operating systems and basic office software. In the short term, there is little danger of that. But the more Google and other software makers encroach on Microsoft's turf, the greater the chance that someday computer users will wake up and find Microsoft Windows superfluous.

"What happened when the American car companies failed to update their manufacturing lines? There was a more efficient way to bring cars to market for a lower price and they lost their market," says Microsoft Vice President Chris Jones. "We're in a little bit of a different industry but it's the same thing."

Microsoft's holy grail is a system that cranks out a new, generally bug-free version of basic Windows every few years, with frequent updates in between to add enhancements or match a competitor's offering.

The Longhorn crisis helps explain the sweeping restructuring that Microsoft Chief Executive Steve Ballmer announced this week to organize the company into three major business units. A key goal is to force Microsoft to be more nimble in producing and delivering software.

Mr. Allchin's reforms address a problem dating to Microsoft's beginnings. Old-school computer science called for methodical coding practices to ensure that the large computers used by banks, governments and scientists wouldn't break. But as personal computers took off in the 1980s, companies like Microsoft didn't have time for that. PC users wanted cool and useful features quickly. They tolerated -- or didn't notice -- the bugs riddling the software. Problems could always be patched over. With each patch and enhancement, it became harder to strap new features onto the software since new code could affect everything else in unpredictable ways.

The 53-year-old Mr. Allchin, who joined Microsoft in 1990 and is now co-head of the Platform Products and Services Division, says he always disdained the fast-and-loose culture of PC software. The holder of a doctorate in computer science, Mr. Allchin craved discipline in code writing. But in the booming 1990s, when it seemed Microsoft could do no wrong, there was little Mr. Allchin could do. As soon as Microsoft was done with one version it pushed on to the next. Mr. Allchin was haunted by what he calls his "little demons."

In 2001 Microsoft made a documentary film celebrating the creation of Windows XP, which remains the latest full update of Windows. When Mr. Allchin previewed the film, it confirmed some of his misgivings about the Windows culture. He saw the eleventh-hour heroics needed to finish the product and get it to customers. Mr. Allchin ordered the film to be burned.

When the Longhorn project to build an XP successor got started, teams of engineers set off to develop it as they always had. Mr. Gates was especially eager for them to add a fundamental change to Windows called WinFS that would let PC users search and organize information better. One goal was to let users scour their entire computer for work they had done on a subject without needing to go through every individual program or document.

Mr. Allchin says he soon saw his fears realized. In making large software programs engineers regularly bring together all the new unfinished features into a single "build," a sort of prototype used to test how the features work together. Ideally, engineers make a fresh build every night, fix any bugs and go back to refining their features the next day. But with 4,000 engineers writing code each day, testing the build became a Sisyphean task. When a bug popped up, trouble-shooters would often have to manually search through thousands of lines of code to find the problem.

Mr. Gates's WinFS project was so troublesome that engineers began talking about whether they could make the "pig fly." Images of pigs with wings started appearing in presentations and offices.

And Microsoft's culture was facing a new threat. The mass of patches and agglomerations that made up Windows turned it into an easy target for viruses and other Web-based attacks. Mr. Allchin had to divert top engineers into the effort to fix security problems in existing versions of Windows. "The ship was just crashing to the ground," Mr. Allchin says.

In late 2003, Mr. Allchin called on the help of two men. The first was one of Microsoft's best-known "shippers," people known for their ability to turn around troubled software projects. Windows veteran Brian Valentine had a reputation for booming motivational speeches, beer bashes and stunts like showing up to work functions as Elvis, the Easter Bunny or even once a hula girl with a coconut bra.

The second man Mr. Allchin tapped was Amitabh Srivastava, now 49, a fellow purist among computer scientists. A newcomer to the Windows group, Mr. Srivastava had his team draw up a map of how Windows' pieces fit together. It was 8 feet tall and 11 feet wide and looked like a haphazard train map with hundreds of tracks crisscrossing each other.
[Amitabh Srivastava]

That was just the opposite of how Microsoft's new rivals worked. Google and others developed test versions of software and shipped them over the Internet. The best of the programs from rivals were like Lego blocks -- they had a single function and were designed to be connected onto a larger whole. Google and even Microsoft's own MSN online unit could quickly respond to changes in the way people used their PCs and the Web by adding incremental improvements.

In April 2004, Google, seemingly out of nowhere, introduced its Gmail service, competing with Microsoft's Hotmail program. Tiny Internet browser maker Mozilla Foundation beat Microsoft to market with browser features planned for Longhorn.

Most alarming: By July 2004, it became clear that Google was working on a "desktop search" tool for finding information on a PC -- offering some of the features that Mr. Gates's WinFS program was supposed to bring to Longhorn. Google, previously focused exclusively on the Internet, was now stepping onto Microsoft's turf as the creator of software inside the PC.

While Windows itself couldn't be a single module -- it had too many functions for that -- it could be designed so that Microsoft could easily plug in or pull out new features without disrupting the whole system. That was a cornerstone of a plan Messrs. Srivastava and Valentine proposed to their boss, Mr. Allchin. Microsoft would have to throw out years of computer code in Longhorn and start out with a fresh base. It would set up computers to automatically reject bug-laden code. The new Longhorn would have to be simple. It would leave bells and whistles for later -- including Mr. Gates's WinFS, Messrs. Srivastava and Allchin say.

Mr. Allchin signed on to the plan and broke the news to Messrs. Gates and Ballmer. Mr. Allchin remembers that Mr. Gates pushed him to keep going with the original version of Longhorn, saying if the software writers needed more time Microsoft could ship a scaled-down version in the interim. The executives agreed to reserve a final decision until Mr. Ballmer returned from a business trip, according to Mr. Allchin and Mr. Valentine, who was also present.

Over the next few weeks, Mr. Gates expressed frustration. At one meeting on Aug. 17, he berated Longhorn engineers for the mess, say people familiar with the meeting. (Mr. Gates says he doesn't remember it.) Afterward, Mr. Srivastava says he called his team together, acknowledging that he had underestimated the scope of the challenge they faced in fixing Longhorn, though he was heartened by the group's apparent willingness to change.

As Microsoft's chief software architect, Mr. Gates says that his role is "almost paradoxical" because he has to push for innovation while being the "ultimate realist" when problems arise on that quest. In this case, he says he and Mr. Ballmer needed to make sure that the recommendations from Mr. Allchin's group were sound.

On Aug. 27, 2004, Microsoft said it would ship Longhorn in the second half of 2006 -- at least a year late -- and that Mr. Gates's WinFS advance wouldn't be part of the system. The day before in Microsoft's auditorium, Mr. Allchin had announced to hundreds of Windows engineers that they would "reset" Longhorn using a clean base of code that had been developed for a version of Windows on corporate server computers.

As he started to learn more about Mr. Srivastava's broader plan, Mr. Gates was concerned that the unproven tools for keeping the Windows core clean would levy a "tax" on engineers -- in other words, that they would spend so much time trying to meet Mr. Srivastava's standards that they wouldn't be able to devise innovations for Windows users. At a meeting on Sept. 8, Mr. Srivastava's team was walking Mr. Gates through the plan when he challenged them. Why, he wondered, weren't the reformers asking the mass of Windows engineers for their view of the changes?

"It was all just, 'Hey, bless this process,' which I was unwilling to do," Mr. Gates says. "They're just talking about process and I'm frustrated we're not talking about how the teams are responding to it."

By late October, Mr. Srivastava's team was beginning to automate the testing that had historically been done by hand. If a feature had too many bugs, software "gates" rejected it from being used in Longhorn. If engineers had too many outstanding bugs they were tossed in "bug jail" and banned from writing new code. The goal, he says, was to get engineers to "do it right the first time."

Recognizing Mr. Gates's concerns over the impact on programmers, Mr. Srivastava hit on a plan to win their hearts and minds. On Nov. 5, he visited the computer-filled office of Dave Cutler, a revered elder statesman among Windows engineers and a stickler for good code writing. Would he publicly throw his weight behind the new approach? Mr. Srivastava asked.

On Dec. 1, Mr. Srivastava escorted Mr. Cutler to Microsoft's auditorium where the software guru told 1,000 engineers that he had used the tools to build Windows code that was nearly bug-free. That Mr. Cutler -- famous for never attending meetings -- would emerge to back Mr. Allchin's revolution helped persuade some engineers to drop their objections.

Others weren't so easily convinced. Responding to an attendee questioning the merits of the new regime, Mr. Valentine, the enforcer, shot back, "Is your code perfect? Are you perfect? If not, you should shut up and support this effort," according to one of his team members, G.S. Rana. (Mr. Valentine says he doesn't remember the remarks but doesn't dispute Mr. Rana's recollection.)

As engineers began cooperating and Mr. Srivastava's team worked overtime to refine the tools, the quality of the code flowing into Longhorn began to improve. The time to create a new "build" fell to just a few days, allowing a faster cycle of writing and testing new code. After the Windows group was able to install a workable version of the system on their PCs four days before Christmas, Mr. Srivastava says the group celebrated by not working over the holidays.

Not everything went so quickly, as engineers grappled with the challenge of making Longhorn more like Lego blocks. Microsoft missed its June deadline for the first "beta" or test version of Longhorn. On the Fourth of July Mr. Srivastava monitored the progress on his wireless laptop, set up next to his grill as he cooked veggie burgers and teriyaki chicken for family guests. Mr. Srivastava was so preoccupied with Longhorn that he inadvertently agreed to his wife's plan to remodel their bedroom. He recalls that when he protested, she joked, "You got the Windows job. I get this. It's a small price to pay."

On July 27, Microsoft shipped the beta of Longhorn -- now named Windows Vista -- to 500,000 customers for testing. Experience had told the Windows team to expect tens of thousands of reported problems from customers. Instead, there were a couple thousand problem reports, says Mr. Rana, the team member.

And last month, Microsoft delivered a test version of Mr. Gates's WinFS idea -- not as a part of Longhorn but as a planned add-on feature. Microsoft this month said it would issue monthly test versions of Windows Vista, a first for the company and a sign of the group's improved agility.

It could take years before Windows can be as flexible as Microsoft needs it to be to pump out new features quickly. But the cultural shift is in swing. Hours after showing off Windows Vista to software makers this month, Mr. Gates in an interview noted how Microsoft's Office group is now using some of Mr. Srivastava's tools to improve its code. "It's amazing the invention those guys have brought forward," he said. "I wish we'd done it earlier."

This week Mr. Allchin announced that as part of the restructuring he will retire next year after Windows Vista is in customers' hands. In a recent interview he said his demons aren't fully exorcised. "There're weaknesses in everything we're doing today," Mr. Allchin says. "But it's such a huge step up from where we were."

Write to Robert A. Guth at rob.guth@wsj.com

September 24, 2005 at 01:52 PM in Microsoft | Permalink | TrackBack (18) | Top of page | Blog Home

It's Not TV, It's Yahoo

http://www.nytimes.com/2005/09/24/technology/24yahoo.html?ex=1285214400&en=2baa0d1a8a9617c1&ei=5088&partner=rssnyt&emc=rss
By SAUL HANSELL
Published: September 24, 2005

As Discovery orbited the Earth in early August, millions of people visited Yahoo, which runs the most popular news site on the Internet, to see the nail-biting conclusion to the troubled shuttle mission. Could NASA find a way to bring the astronauts home safely?

Despite the drama and the huge number of people flocking to the site, Lloyd Braun, the television impresario hired last year to oversee Yahoo's media operation, was not satisfied. All Yahoo was offering its users, Mr. Braun fumed, was a white page filled with links to other sites on the Web.

He made his frustration clear to Scott Moore, who had defected from Microsoft to run Yahoo's news operation. Within a few hours, Mr. Moore orchestrated a quick fix to make the shuttle page comply with Mr. Braun's mantras: "more immersive," "more engaging," and most of all, more original programming.

Mr. Braun's handiwork is just starting to be seen at Yahoo. And as he increasingly puts his stamp on the company, the rest of the media - both old and new - are watching carefully, if not nervously.

As chairman of ABC's entertainment group, Mr. Braun had a penchant for big offbeat concepts like "Lost," which won the Emmy for best drama. At Yahoo, why not create programs in genres that have worked on TV but not really on the Web? Sitcoms, dramas, talk shows, even a short daily humorous take on the news much like Jon Stewart's "Daily Show" are in the works.

There will be elaborate attention-grabbing events and video-heavy programs in nearly every category of content Yahoo offers, from sports to health. The first is called "Kevin Sites in the Hot Zone," an audio-video-photo-blog-chat room, run by Mr. Sites, an experienced foreign correspondent, who plans to visit multiple war zones over the next year.

All this Hollywood frenzy still skirts a question: Is Terry S. Semel, Yahoo's chief executive and the former co-head of Warner Brothers, trying to turn Yahoo into the interactive studio of the future?

The short answer is yes, but Mr. Semel's ambitions are far bigger and more complex than that. He wants Yahoo to be seen as more akin to Warner's parent, Time Warner, which mixes content like Warner and CNN with distribution, like its cable systems. Yahoo is both of those and a lot of software, too.

Mr. Semel describes a strategy built on four pillars: First, is search, of course, to fend off Google, which has become the fastest-growing Internet company. Next comes community, as he calls the vast growth of content contributed by everyday users and semiprofessionals like bloggers. Third, is the professionally created content that Mr. Braun oversees, made both by Yahoo and other traditional media providers. And last, is personalization technology to help users sort through vast choices to find what interests them.

Madison Avenue's rush online is feeding this activity, both the simple but highly specific-target text ads that flash on Web searches and the Internet versions of TV commercials.

Increasingly, Mr. Semel and others are finding that the long-promised convergence of television and computers is happening not by way of elaborate systems created by cable companies, but from the bottom up as video clips on the Internet become easier to use and more interesting. Already, video search engines, run by Yahoo and others, have indexed more than one million clips, and only now are the big media outlets like Viacom and Time Warner moving to put some of their quality video online.

"The basis for content on the Internet is now shifting from text to video," said Michael J. Wolf, a partner at McKinsey & Company. "This allows advertisers to take advantage of the kind of branding advertising they are used to on television."

Mr. Semel thinks that his approach combining content and technology could well make Yahoo the place people go first when they decide what to watch, as well as where to surf.

"You are not going to have 1,000 channels, you will have an unlimited number of channels," Mr. Semel said. "So you aren't going to use a clicker to change channels."

Yahoo has no shortage of competitors. Google and Microsoft are aggregating video content of others, but not making their own. Big media companies are starting to package and produce online video programming, like new offerings from MTV, owned by Viacom, and ESPN, a unit of Disney.

Time Warner's AOL unit is Yahoo's most direct and ambitious competitor in video programming. AOL attracted a lot of attention with its interactive presentation of the Live8 concerts, and it is developing offerings, including a reality show about the music business and an entertainment news show. Indeed, Mr. Wolf predicts that Yahoo may face difficulty in competing with the integrated media companies, like Time Warner. "The television programmers now have the upper hand because they have a great deal of content they can use for a variety of purposes and promote it on their existing programs."

So Mr. Braun's job is straightforward: invent a medium that unites the showmanship of television with the interactivity of the Internet. Find a way to combine the best of Hollywood's talent with the voice of the masses. And do it all before the biggest media and technology companies get there first.

The afternoon after Mr. Braun complained about Yahoo's shuttle site, Mr. Moore was able to show his colleagues the fix at a brainstorming retreat at a resort in Santa Barbara: he had replaced Yahoo's trademark spare white graphic design with a deep-space gray page. And instead of just links, the top of the page had a big box containing Yahoo's own video coverage of the shuttle right at the top. When the feed was live, a big headline trumpeted the action.

Mr. Braun was grateful for the fast action, but he spent much of that afternoon pushing his team to think of how Yahoo could cover future space missions, once his Media Group team and the software they are writing is fully in place.

"I said if we would do this six months from now, think of all the things we could have done," Mr. Braun recalled, at a recent breakfast at the Viceroy Hotel in Santa Monica.

"Should we have shown the launch from all these different camera angles?" he said. "Should we have the user go on the space walk with the astronauts so we literally watch live what they see, monitoring their vital signs? Should we be a fly on the wall monitoring the conversations back and forth?"

Throwing out ideas a mile a minute, he talked about ways to bring in more information about the personal lives and families of the astronauts "so we are really connected to these people." And he looked for ways that Yahoo users could add their own views and other content to the package.

Mr. Braun's boundless energy and creative enthusiasm was the hallmark of his time at ABC as well.

"Lloyd was all about there are no rules," said Thom Sherman, who worked for Mr. Braun as the head of ABC's drama programs. "He was all about the big idea, not about things down the middle."

Michael Davies, the executive producer of "Who Wants to Be a Millionaire," said: "Lloyd has no creative restraint whatsoever. He is almost creatively reckless."

Mr. Braun, 46, grew up amid some of the most creative personalities of the 1960's and 70's. His father, David Braun, a leading music lawyer, would invite clients like Bob Dylan, Neil Diamond and George Harrison to his home in New Hyde Park, N.Y. Mr. Braun initially followed his father into entertainment law, but ultimately found contract negotiations too confining and moved into production, first at Brillstein-Grey, where he helped create "The Sopranos," and then at Disney and its ABC network.

Mr. Braun's fondness for expensive, quirky ideas caused frequent conflicts with Disney's management, co-workers said.

Disney management's "style was to put the pressure downward, and Lloyd felt a lot of that," Mr. Sherman recalled. Mr. Braun tried to fend off what he saw as meddling and create space for his team to work independently. "He said let me try it," Mr. Sherman recalled. "If I fail fire me, but let me have the reins."

In April 2004, Michael D. Eisner, then Disney's chief executive, called Mr. Braun's bluff, firing him and Susan Lyne, the entertainment unit's president.

While Mr. Braun's willingness to fight for the ideas of his creative colleagues won him loyalty at ABC, Mr. Braun's image at Yahoo is decidedly more mixed. Some inside and outside Yahoo criticize him for a slow start. And there have been complaints as entrenched Yahoo workers in its Sunnyvale headquarters were ordered to move to Santa Monica and report to newly hired bosses, plucked from AOL, CBS and Fox as well as Microsoft. Several executives quit and others asked to be reassigned.

"Sometimes you have to take a step back in order to take three steps forward," Mr. Braun said. Yahoo, he said, was organized around running discrete sections of its vast site and had no process for developing creative ideas. "At ABC, if I had an idea, like 'Lost,' the moment we decided to do it, we knew the process to take it to writers, get a pilot, ba da da. Here none of that exists. The whole infrastructure has to be created."

When he arrived at Yahoo, Mr. Braun immediately bonded with Bharath Kadaba, an engineer who leads Yahoo's media technology group. Mr. Braun, hardly a techie, asked Mr. Kadaba to explain the history of the Internet, how computers work and to show him what Yahoo's programmers were actually doing.

Mr. Braun has never been shy about reaching out for help, like the time he hired Fred Silverman, the programming master who propelled ABC from last to first place in the mid-1970's, with shows like "Starsky & Hutch," to teach him the black art of network scheduling.

These are lessons he says he is applying at Yahoo. Indeed, he is planning a schedule of programs next year, much as a network might think about a fall season.

For this year, a handful of programs will emerge, in addition to the Kevin Sites site. Mr. Braun's group has introduced "Blog for Hope," a series of celebrity blogs about coping with cancer.

And later this year it will introduce an adventure travel program with Richard Bangs, a self-styled trip leader, who had worked for Mr. Moore at MSN.

"I come from a medium which allows you to represent a pretty static linear picture," Mr. Braun said. "It's very passive." At Yahoo, he does not plan any half-hour or hourlong programs, but shorter segments that users can assemble into longer experiences of their own choosing.

The Internet reflects what Mr. Braun calls "the A.D.D. generation," where people watch TV, read something online, chat on a cellphone and send instant messages - all at the same time. He talks of short, frequent video segments, surrounded by other information that users can interact with in their own way and contribute to as well.

One of Yahoo's secret weapons, Mr. Braun says, is that it can personalize information for the interests of each user, such as its My Yahoo page and the song recommendations provided to users of its music service. Mr. Braun is weaving this technology into a video player Yahoo will introduce near the end of the year.

"It will almost be like a television set," Mr. Braun said, except as people watch one program, on the center of the player, other areas will offer additional programming choices, based on their past viewing habits. It will let them use Yahoo's video search to find programs from amateur videographers and video bloggers. And it will, of course, promote the glitzy shows Mr. Braun is creating.

"People want the freedom to do exactly what they want to do," he said. "But they also like to be programmed to and reminded of the different things that exist. Yahoo is in a position to do both of those."

September 24, 2005 at 09:24 AM in Portals | Permalink | TrackBack (11) | Top of page | Blog Home

September 21, 2005

Women rule the internet roost

At home, mum's the word
http://www.theregister.co.uk/2005/09/21/family_net_aol/
By Lucy Sherriff
Published Wednesday 21st September 2005 10:35 GMT
Get breaking Internet news straight to your desktop - click here to find out how

Suspension of internet privileges has become the new way to discipline a unruly children, AOL UK has found, following a six month anthropological study of five British families.

The research, which was backed with a quantitative poll of more than 4,000 net subscribers, reveals how the PC is affecting family life in the UK.

AOL says that mums in particular are emerging as the new guardians of the internet, with almost half of those surveyed moving the PC into the family room, and a third spending time online with their children. Four fifths said they used the PC as a substitute for the phone, to help them keep in touch with family and friends.

Two thirds of women are also using the net to research and diagnose family illnesses. AOL cites a case of one man who went to hospital with notes and observations compiled by his wife, that suggested he was suffering from a particular form of heart arrhythmia. The researchers do not say whether the at-home diagnosis was correct.

Slightly more worryingly, a fifth of women report getting up in the middle of the night to check things online, and half report logging on before breakfast. Checking auction sites and keeping up with gossip are to blame for this slightly obsessive behaviour.

John Craig, author of the Demos report, argues that ordinary people rather than geeks are now shaping the internet, and that computers are becomming less important than the connections they enable. ®

September 21, 2005 at 03:50 PM in Internet evolution | Permalink | TrackBack (8) | Top of page | Blog Home

05 Bank Strategies - US

The Lehman Brothers 2005 Financial Services Conference was held earlier this week and many banks participated with updated presentations on their strategies, etc., courtesy of Payment News.

September 21, 2005 at 07:54 AM in Financial Services | Permalink | TrackBack (6) | Top of page | Blog Home

September 20, 2005

Brits still visiting bank branches

http://www.finextra.com/fullstory.asp?id=14283
Over half of UK consumers still visit a bank branch each month, according to a study from Forrester Research, which also shows that ATM and Web banking growth has slowed in the past year.

The research shows that UK consumers are among the most frequent branch visitors in Europe, with 55% of the 2000+ customers surveyed visiting a branch each month, mainly for routine tasks like depositing cheques and withdrawing cash.

Furthermore, while self-service channels like ATMs and Internet banking have been growing fast, Forrester says this growth appears to have slowed in the past year.

Benjamin Ensor, senior analyst, financial services at Forrester Research, says: "Although two-thirds of UK adults are online regularly, just one-quarter of adults bank online. Some net users have little confidence in online banking security, but many others are simply content with traditional channels and see no reason to change."

Ensor says many banks don't offer alternatives to branches for depositing cash and cheques so customers have to go to branches to carry out these transactions.

"Banks need a mix of incentives and barriers to drive routine interactions to self-service, thus releasing customer-facing employees to focus on more valuable interactions," he says.

But Forrester says frequent branch use doesn't necessarily mean that customers buy products or talk to advisors. The research shows that just over a third (34%) of UK consumers never speak to a branch advisor.

Ensor says banks' desire to turn their branches into retail shops won't materialise if they can't entice online customers back into branches to do more than deposit cash.

September 20, 2005 at 08:55 AM in Financial Services | Permalink | TrackBack (9) | Top of page | Blog Home

Deconstructing the Conversation Part 0

Ok, this, from Horsepigcow is something I will need to spend more time on. I appreciated this book enough to make it a category, and now its being "de-contructed"!

Dave Rogers has published 'Deconstructing the Conversation Part 0' as a follow-up to his original, discussed by both Dave Weinberger and Doc Searls (and me).

September 20, 2005 at 01:10 AM in Cluetrain | Permalink | TrackBack (37) | Top of page | Blog Home

Google to scan books online

This will be revolutionary. There is a generation who read "on-screen" and the fact they are predominantly out of print books, could make Googles work the more powerful.

Under the publishers' program, Google has deals with most major U.S. and U.K. publishers. It scans titles they submit, displays digital images of selected pages triggered by search queries and gives publishers a cut of revenues from accompanying ad displays.

But publishers aren't submitting all their titles under that program, and many of the titles Google wants to scan are out of print and belong to no publisher at all. Jim Gerber, Google's director of content partnerships, says the company would get no more than 15 percent of all books ever published if it relied solely on publisher submissions.

That's why it has turned to libraries. Under the Print Library Project, Google is scanning millions of copyright books from libraries at Harvard, Michigan and Stanford along with out-of-copyright materials there and at two other libraries.

September 20, 2005 at 01:07 AM in Portals | Permalink | TrackBack (14) | Top of page | Blog Home

September 19, 2005

Blogs: Foundational Tools for Network Building

Monday, September 19th, 2005

By Elizabeth Albrycht, Blogging Planet | weblog: CorporatePR
EDITORS’ CHOICE | Building Blogging Communities
http://www.globalprblogweek.com/2005/09/19/albrycht-blogs-network-building/

There has been much written about blogs since Global PR Blog Week 1.0 as they pertain to public relations: their attributes, their strengths/weaknesses, their power to persuade and their risks, to name a few subjects (check out the New PR Wiki for a plethora of links and resources). What I’d like to do here is to look at blogs a bit differently: to discuss how they are foundational tools for network building.

Over the past year I have become increasingly convinced that the primary function of corporate communications/public relations today is network building. By that I mean that all of our strategies and tactics need to be focused on building, extending and nurturing the entire universe of connections (by which I mean people) possible for an organization. You could argue, of course, that this has always been the function of communications, and you’d be right – to a point. When we identified our key audiences and decided upon the strategies and tactics to use to influence them, we were indeed nurturing a network, but a decidedly lopsided one in which all of the power resided with the organization (at least in its own “mind”) and the audiences existed to passively consume the information we provided them with. Now, I don’t want to endlessly parse this portrait of traditional command/control communications here. Rather, I want to explore how blogs, in particular, and participatory communications tools in general, can be powerful tools for building more complex and more effective networks.

First of all, why this focus on networks? What is so special about them? The way I usually explain it is this: By investing in, building or hosting the connections, links or pathways between and among your key audiences, you will be well positioned to use these networks over time to persuade people to action, to respond to a crisis, to leverage current market conversations and to improve your business overall. To put it in slightly more technical terms, I am relying on interpretations of Metcalfe’s Law and Reed’s Law. The former states that the value of the network is the approximately the square of the number of users. The latter states that when you enable connections between nodes on the network to take place, the value of the network grows exponentially. What that means for our subject is that you should be motivated to grow your network in terms of numbers of connections as well as to enable members of that network to communicate with each other as well as with your organization. Participatory communications tools like blogs are particularly well designed to help you do both of these things.

By focusing on network building, we move away from the hyperbole of BLOG and begin to think about how to use blogs pragmatically, as powerful communications tools. A prime reason blogs are such good tools for network building is that they are link-heavy, and the link is the core technology for making networks visible. I believe the visibility of a network contributes to its effectiveness because that very visibility reinforces its presence and influence to its members.

There are already tools available to help you visualize the network of connections an organization, or a person, has. For example, there are a variety of sites in which you can type in a url and immediately receive a graphical representation of its links (e.g., Opte Project, MyDensity.com) or track online conversations (Blogpulse, Technorati, PubSub). By examining these links, nodes and connections, a professional communicator can quickly grasp where the most influential connections lie. As time goes by, and these tools become more sophisticated, they will become ever more important to the public relations function.

In the past, it was much more difficult to see your network, as connections had little sharable physical manifestation. A business card sitting in a rolodex on your desk is a far more difficult to assign value to vs. a visible link on a website or blog. One of the implications of this visibility is that it makes the results of our work more easily measurable, making our work more justifiable (always nice at budget time).

To restate then, blogs are important tools for network building because they give you a place to generate visible links, both incoming and outgoing. By enabling comments and encouraging trackbacks, you are creating visible links. By commenting and trackbacking yourself to other blogs, wikis, websites and so forth, you are also creating links. That is why it is so important that, beyond just producing a blog yourself, you are contributing to others.

We can find another argument for using blogs as network-building tools in the social networking concepts of strong ties and weak ties. According to Wikipedia, “Strong ties are those such as kin relations and close personal friends,” and weak ties are “loose acquaintances such as those connections made at a party.” Mark Granovetter, in his groundbreaking article, “The Strength of Weak Ties” (The American Journal of Sociology, Vol. 78, No. 6., May 1973), argued that “weak ties…are more important for personal advancement, such as getting good jobs, than the strong ties of family and friendship.” Robert Putnam developed this theory a bit further in his book, Bowling Alone, where he surmises that weak ties act as “bridging social capital”. A bridging form of social capital is “outward looking and encompass[es] people across diverse social cleavages.” (Bowling Alone, New York: Simon & Schuster, 2000, 22) Furthermore, “bridging networks…are better for linkage to external assets and for information diffusion…Moreover, bridging social capital can generate broader identities and reciprocity…” (ibid, 23)

My argument is that as professional communicators, we need to focus on building these weak ties via online networks. This doesn’t mean abandoning the activities we already pursue via in-person and other forms of communications, of course, but we should start viewing these activities as part of our overall network-building objective.

The challenge with this objective is that it is extremely tricky to build the social capital needed to nurture network building online. People are very quick to point their virtual fingers at corporations who misstep, and they are not inclined to believe anything corporations say these days. We have witnessed a mass breakdown of social capital between corporations and people over the past couple of decades, and that will not be overcome easily or quickly. However, the consequences of this breakdown can be severe (decreased share price, talent recruitment problems, over regulation, etc.) and it would well behoove corporations to begin mending these bridges sooner rather than later. Blogs represent a new, powerful tool for doing just this. As I have written before, it isn’t as simple as just launching a blog. Rather, corporate representatives have to be active contributors to the conversation.

One of the core mantras of public relations is that having someone else speak credibly (and positively one hopes!) about your organization and its products or services is more valuable in terms of persuading people to take positive action than a corporation speaking for itself. This remains true in the blogosphere. The challenge is to first find the influential people (not tremendously difficult) and to enter into an ongoing conversation with them (the hard part for corporations). A lone PR person trying to speak on behalf of his or her corporation isn’t enough. Rather, one should consider viewing his or her entire organization as full of spokespeople: employees, partners, customers – in fact, all relevant audiences. These people are already talking to each other at meetings, tradeshows, on the phone, and at the local pub. They talk about your organization, make recommendations and offer criticisms. Increasingly, they are doing it online, where they can easily link up, driving increased visibility of corporate issues (and, sometimes, dirty laundry). These people already have weak ties/bridging social capital with other individuals and groups. Isn’t it better to engage with them, so you can gain access to these bridged networks vs. trying to create the bridges yourself (which, in some cases, may not be possible)? These audiences also represent scale. Their sheer numbers can be a tremendously valuable asset when you are trying to grow a broad network! Companies like IBM and Sun have recognized this and embraced employee blogging.

Network building requires communications professionals to acquire new skills and utilize new tools. Given how new some of these are many of their longer-term implications are difficult to predict. Furthermore, fast and furious changes in technology and social practices increase the challenge. The good news is that there is a strong group of worldwide professionals, represented here, who are working very hard to understand this new world and share our thoughts and experiences with our colleagues. I can’t think of a more interesting time to be a professional communicator!

As always, I am very interested to hear you reaction to the ideas presented here. Please feel free to comment or contact me directly at ealbrycht at gmail dot com.

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About the author

Elizabeth Albrycht is a 15-year veteran of high technology public relations practice and co-founder and co-producer of the New Communications Forum, a conference series designed to bring journalists and marketing and PR professionals together to learn how to use participatory communications tools. She has authored articles on blogging, RSS and other new tools for PRSA’s Tactics magazine, the IABC’s CW Bulletin, and the Future of Work eNewsletter, and has presented teleseminars and in-person seminars on new communications tools for PRSA. She is a member of the Future of Work, PRSA and the IAOC, and an alliance partner at Blogging Planet. She blogs at CorporatePR and is the editor of Future Tense, a Corante blog that explores the future of work.

September 19, 2005 at 08:33 PM in Blogging & feeds | Permalink | TrackBack (23) | Top of page | Blog Home

CNN Hacks New TV Technology

By Xeni Jardin | Also by this reporter
http://www.wired.com/news/politics/0,1283,68859,00.html

02:00 AM Sep. 19, 2005 PT

Your impression when tuning in to CNN's The Situation Room for the first time is likely to be, "Geez, there's a lot going on here."

There is. And much of it involves technologies familiar to internet regulars, but mostly unheard of in the context of TV newscasts.

Throughout the daily, three-hour show, a split video wall behind host Wolf Blitzer displays up to six separate feeds, often topically unrelated to each other.

Then -- bam! Time for an iChat AV interview with "Interdictor," the blogger holed up in a New Orleans data center, or blogger Joi Ito, live from Japan with a Borglike headset.

Now we jump to RSS feeds trickling in from newspapers. Blitzer surfs the headlines, just as you might skim an RSS reader on your laptop. Next, "internet reporters" Abbi Tatton and Jacki Schechner read excerpts from selected blogs.

Launched in August and modeled after the White House Situation Room -- where presidents confer with advisers on fast-moving matters of utmost importance -- CNN's Situation Room has become something of an R&D lab for news-gathering technology.

"It's like bringing viewers inside our control room and allowing them to move through all of that raw, incoming information with us," Blitzer told Wired News.

"We go to a helicopter flying over New Orleans, where they're narrating what they see -- there are people trapped on a roof somewhere. Then we bring in Tom Forman, who used to be a reporter in New Orleans. We're looking at satellite maps of the city, comparing this with video feeds that come in, then we'll zoom in on Google Earth, see what's nearby -- a university, Lake Pontchartrain -- and all of this together delivers the story in a richer, more immediate way."

Some critics cry "buffer overrun" -- that all these overlapping sources, some of which are provided by way of unorthodox tech, add up to an unpleasant overload.

But Blitzer counters that similar criticism bubbles up any time something new is added to a familiar medium. Remember the outcry over screen crawls when they first hit the bottom edges of our TV sets?

"We try to use all of our resources without making it too busy or crazy out there," said Blitzer. "I'm sensitive to how this is going to play in Peoria, how average viewers -- say, my uncle, who may not know what Google is -- might respond."

The show owes much of its future-forward feel to CNN Washington bureau chief David Bohrman, whose tech credentials include having served as CEO of Pseudo Entertainment. Founded by internet wild man Josh Harris, the New York-based interactive media company was among the first to produce internet TV shows, amassing a wide online audience in the late '90s dot-com boom years. Situation Room's Schechner is also a Pseudo alum; she was a former "EJ" at the network, hosting show-related chat rooms.

In January 2000, Bohrman left an earlier stint at CNN for Pseudo, which was known at the time for surreal, Warholian mega-parties that defined the Silicon Alley scene.

"The party stuff was interesting, but what lasted is that we defined a new form of participatory programming that fused TV and internet," Bohrman told Wired News. "That's what I brought back with me when I returned."

After coming back to CNN, Bohrman produced presidential convention coverage for the network in 2004.

"We had Wolf walking out on the convention floor, paying attention to what was circulating on the blogs, and we tried an experiment with (blog search service) Technorati," Bohrman said. "Not everything worked perfectly, but we learned a lot."

For election night coverage in November 2004, the network rented out Nasdaq headquarters in New York, and displayed data on a wall of screens throughout the broadcast.

"It worked, and that taught us something about spatial display of information -- it's possible to do things that aren't linear," said Bohrman.

Newly appointed CNN President Jonathan Klein, who joined the network that same month, later asked Bohrman to help him revamp the network's daytime roster with those election-season tech lessons in mind.

"OK, let's bring on the bloggers," Bohrman recalled thinking at the time. "But what became apparent after a few of those is that putting bloggers on TV to talk about bloggers blogging on blogs doesn't work. The whole reason they're blogging is because they're not on TV. I said OK, gimme a week, and I'll come up with something."

After borrowing furniture from other shows' sets and throwing together a proof of concept, Bohrman came up with a set of ideas that eventually became part of the Situation Room. Among them were plans to bring in otherwise-inaccessible voices by way of webcam interviews. Bohrman set up a pair of workstations in the studio that were capable of hosting up to six guests simultaneously using iChat.

"The first thing that goes wrong in TV is always sound," Bohrman said. "Figuring out how to make the right blend of sound to go back into the computer, sorting out which video source is displayed with sound -- those were challenges. Over time, we figured out how to blend environments without feedback or delay."

Blitzer believes much of what's considered new on the program really isn't.

"Thirty years ago, we used to do MOSes -- man-on-the-street reactions -- for big stories. This isn't all that different," said Blitzer.

"We don't want to put false or libelous things on air, so everything goes through an editorial filter," he added. "It seems inevitable that at some point we're going to get burned and something ridiculous will come across, and we'll have to apologize for it. But we're trying to make things relevant to viewers in a new way, and that's one of the risks."

Bohrman says next steps for the show will likely include ratcheting up corresponding online components, and upping the interactivity ante.

"One e-mail question of the day isn't enough, we're not doing enough web chat.... We need to dabble in audio and podcasts, and we need more information coming through web portals," Bohrman said.

"But this is the most existential program ever. It exists for right now. Everyone working on the show makes plans for what we're going to do early in the day, but I tell them -- I expect you not to do the program you planned because things change constantly.

"Life happens. Remotes come up. News happens."

September 19, 2005 at 08:31 PM in Internet evolution | Permalink | TrackBack (3) | Top of page | Blog Home

Intelligence in the Internet age

Published: September 19, 2005, 4:00 AM PDT
By Stefanie Olsen
Staff Writer, CNET News.com
http://news.com.com/2100-11395_3-5869719.html

It's a question older than the Parthenon: Do innovations and new technologies make us more intelligent?

A few thousand years ago, a Greek philosopher, as he snacked on dates on a bench in downtown Athens, may have wondered if the written language folks were starting to use was allowing them to avoid thinking for themselves.

Today, terabytes of easily accessed data, always-on Internet connectivity, and lightning-fast search engines are profoundly changing the way people gather information. But the age-old question remains: Is technology making us smarter? Or are we lazily reliant on computers, and, well, dumber than we used to be?

"Our environment, because of technology, is changing, and therefore the abilities we need in order to navigate these highly information-laden environments and succeed are changing," said Susana Urbina, a professor of psychology at the University of North Florida who has studied the roots of intelligence.

If there is a good answer to the question, it probably starts with a contradiction: What makes us intelligent--the ability to reason and learn--is staying the same and will never fundamentally change because of technology. On the other hand, technology, from pocket calculators to the Internet, is radically changing the notion of the intelligence necessary to function in the modern world.

Take Diego Valderrama, an economist with the Federal Reserve Bank in San Francisco. If he were an economist 40 years ago, he may have used a paper, pencil and slide rule to figure out and chart by hand how the local economy might change with a 1 percent boost in taxes. But because he's a thoroughly modern guy, he uses knowledge of the C++ programming language to create mathematical algorithms to compute answers and produce elaborate projections on the impact of macroeconomic changes to work forces or consumer consumption.

Does that mean he's not as bright as an economist from the 1950s? Is he smarter? The answer is probably "no" on both counts. He traded one skill for another. Computer skills make him far more efficient and allow him to present more accurate--more intelligent--information. And without them, he'd have a tough time doing his job. But drop him into the Federal Reserve 40 years ago, and a lack of skill with the slide rule could put an equal crimp on his career.

Intelligence, as it impacts the economist Valderrama, is our capacity to adapt and thrive in our own environment. In a Darwinian sense, it's as true now as it was millions of years ago, when man's aptitude for hearing the way branches broke or smelling a spore affected his power to avoid predators, eat and survive.

But what makes someone smart can vary in different cultures and situations. A successful Wall Street banker who has dropped into the Australian Outback likely couldn't pull off a great Crocodile Dundee impression. A mathematical genius like Isaac Newton could be--in fact, he was--socially inept and a borderline hermit. A master painter? Probably not so good at balancing a checkbook.

What's undeniable is the Internet's democratization of information. It's providing instant access to information and, in a sense, improving the practical application of intelligence for everyone.

Nearly a century ago, Henry Ford didn't have the Internet, but he did have a bunch of smart guys. The auto industry pioneer, as a parlor trick, liked to claim he could answer any question in 30 minutes. In fact, he had organized a research staff he could call at any time to get him the answer.

Today, you don't have to be an auto baron to feign that kind of knowledge. You just have to be able to type G-O-O-G-L-E. People can in a matter of minutes find sources of information like court documents, scientific papers or corporate securities filings.

"The notion that the world's knowledge is literally at your fingertips is very compelling and is very beguiling," said Vint Cerf, who co-created the underlying architecture of the Internet and who is widely considered one of its "fathers." What's exciting "is the Internet's ability to absorb such a large amount of information and for it to be accessible to other people, even if they don't know it exists or don't know who you are."

Indeed, Doug Engelbart, one of the pioneers of personal computing technology in the 1960s, envisioned in the early '60s that the PC would augment human intelligence. He believes that society's ability to gain insight from information has evolved with the help of computers.

"The key thing about all the world's big problems is that they have to be dealt with collectively," Engelbart said. "If we don't get collectively smarter, we're doomed."

The virtual memory
According to at least one definition, intelligence is the "ability to reason, plan, solve problems, think abstractly, comprehend ideas and language, and learn." Yet intelligence is not just about book learning or test scores; it also reflects a deeper understanding of the world. On average, people with high IQs are thought to live longer, earn more money, process information faster and have larger working memories.

Yet could all this information provided by the Internet and gadgets dampen our motivation to remember anything?

Working with the Treo handheld computing device he helped create, Jeff Hawkins can easily recount exactly what he did three years

ago on Sept. 8, factor 9,982 and Pi, or describe a weather system over the Pacific Ocean. But without his "smart" phone, he can't recall his daughter's telephone number offhand.

It's a familiar circumstance for people living in the hyper-connected Internet age, when it has become easier to program a cell phone or computer--instead of your brain--to recall facts or other essential information. In some sense,