Saturday, January 30, 2010

Your money or your (social) life!

If you were a black-hatted hacker, what kind of devious malware would you spend your time writing- a program that cracks my bank account or a program that steals my twitter password? Easy choice, right? It may surprise you to learn that hacker-invented malware programs that steal social networking account information outnumber similar programs directed at stealing bank passwords nearly three to one, and the margin appears to be growing, according to a recent study by Kaspersky Labs.

This makes some sense. Rather than march me to my own ATM at the point of a gun, hackers could pretend to be me and then fleece all 426 of my facebook friends at once. Call it an investment in their future. Dirtbags.

Related story in the New York Times is here.


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Friday, January 29, 2010

January 28, European day of data protection

The EU is increasingly concerned about data protection in the internet. Such is the concern that they have created and promoted a European day to create awareness about this issue. Last Thursday I was reading a European newspaper when I bumped into a banner promoting this event. Following the URL took me to the web below (sorry, it’s in Spanish, but I will lay you out the basic content). The web is structured around 3 main objectives. Inform internet users about their rights, explain them how they can report inappropriate behaviors and give advice about how to manage knew channels(they include, sms, P2P, video and social networks). They provide a 64 page pdf that explains you quite a lot about the issue. It is very good.
I believe that this initiative is pretty cool. People are generally quite illiterate about internet issues, even those we use internet all day. Educate people on how to behave, and let them know what they can expect is helpful, especially when the threats are greater and greater as hackers and other delinquents get more sophisticated.

https://www.agpd.es/portalweb/dia_proteccion-datos_2010-ides-idphp.php

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Here's a solution - Just alter your scandalous behavior

Quit your whining. Eric Schmidt is tired of you complaining about how his company is invading your privacy - He says: "If you have something that you don't want anyone to know, you shouldn't be doing it in the first place." There's some truth to that right?? I mean, it seems fair to say that if you don't want people to know what you're doing, you certainly should not be doing it on the internet. Never mind what came first - the fact of the matter is, what you do every day, on and off the internet can be tracked and if I were you, I'd be flattered that someone found me as interesting.

Before I get to the point of this posting, I wanted to quickly share my definition of "invasion of privacy" - in my world, it is the "aggregation of public information in one neat location". Here's an example that neatly illustrates my point. In 2005, CNET allegedly googled Schmidt and then published what it found.

I strongly feel that the salary information should have been left in solitude in the dark corners of the 10K, free from disturbances from his other equally dull info such as:

He and his wife Wendy live in the affluent town of Atherton, Calif., where, at a $10,000-a-plate political fund-raiser five years ago, presidential candidate Al Gore and his wife Tipper danced as Elton John belted out "Bennie and the Jets."

(FYI - this is old news from 2005, I heard, or more accurately, read on some google search that he's now a big fan of Elton John.)

And it's not as if you have any will power to ditch google if they were to do such a thing.

Anyway, the reason I'm posting this is because last night's privacy discussion made me think of the CNBC Original Series about Google and privacy aired December of 2009.

You can watch it here.

I credit this episode for making me obsessively aware of every word I type into google search.

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Thursday, January 28, 2010

Apple = future. Kindle and Nook, nice try.

There has been a lot of discussion about the iPad and the Kindle, but not much mention of the Nook. Since I'm an owner of both eReaders (long story), I thought I'd provide my two cents on all three devises and why I think the iPad IS a revolutionary devise.

The Kindle did a great job of turning paper into text. The Nook tried to do the same thing, but did a poor job of differentiating itself from every other eReader. The problem: both devises suck.

They both are so poorly designed that they're actually painful to use! Buying restricted content from either Amazon or B&N doesn't really bother me (I used to buy paper books all the time), but what does bother me is that these devises are actually limited by their own design.

iPad has no limitations. It is basically the entry into a worm hole that allows me to consume any format of digital content I want... with joy and happiness. It warms my soul just thinking about it.

Imagine throwing away your stupid Dell and carrying a slim iPad that has your entire life and everything you need... all tied to your own personal cloud that you can sink and access from anywhere. Most people weren't excited about the idea of a "bigger iPhone" because most of the 140,000 "apps" were stupid and a waste of binary code.

However, iPad apps actually have the potential to be useful. I think Apple will either install Snow Leopard or design a whole new operating system that throws out the "windows" experience all together. Also, finger browsing is soooo much faster than using a mouse and has so much more potential to revolutionize the way we interact with a computer.

Apple = future. Kindle and Nook, nice try.











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Is the damage done in revoking an e-offer worth it?

This morning, I received an email from FreshDirect as I always do. Except this one was different from the usual offers. Titled “Email sent in error,” it read:

Dear Anders,

Oops. We sent you an email and offer you should not have received earlier today. That email – titled “What's Good: Get $20 Free Food, Plus New Garlic & Lime Rotisserie Chicken.” – mentioned an offer which, alas, you are not eligible for. We would like to make up for our mistake by waiving the delivery fee on your next order (or adding an extra week to your DeliveryPass). Simply enter code FREEDEL74 when you checkout before February 15.

Our apologies,

The Customer Service Team at FreshDirect

Alas indeed. It was like the e-quivalent of getting un-invited from a party. Imagine opening your (physical) mailbox and fining a note reading “Oops, we didn’t mean to invite you to our wedding – but you can attend the brunch the next day!” It doesn’t happen often in the physical mail world, but accidents like this plague e-marketers all the time – and frustrate consumers. Someone mixes up a spreadsheet and then gets trigger-happy.

From a business perspective, too, FreshDirect’s offer is kind of ridiculous. Delivery costs about $6 – and you can get it waived anyway by running a 5 second Google search for coupons. But say you did get the $6 waived, and FreshDirect saved $14. Is that worth the damage to the company’s brand? Because even a tiny mistake like this leaves a sour taste in the customer’s mouth (and we can just add it to FreshDirect’s sorry display at “lunch” last week, where they served tiny bowls of microwaved food to students who’d been lining up for quite a while after receiving several reminders about this great FREE lunch offer). Customer loyalty is hard to earn, but extremely easy to lose – especially in a market with alternatives. And just because email marketing is easy (in that you can reach out to all your customers with personalized offers) doesn’t mean it shouldn’t be taken seriously.

So what should FreshDirect have done instead? Bitten the bullet and learned from its mistake, I think. Direct online marketing tries hard to build relationships with customers. Companies pay copywriters to write snappy, friendly text. They pay designers to create a clean, appealing image. To lose it all over $14 just doesn’t seem worth it.

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Sixth Sense: Augmented Reality?

Can you think of a situation when your five senses did not allow you to make an informed decision? Well, I can... and thus heavily rely on my iPhone to provide me with additional information every day.

Ever heard of Sixth Sense?
Pranav Mistry, from MIT, developed a revolutionary device for augmented reality.
The concept is simple... wear the interface around your neck and use simple hand gestures to interact - in a very natural manner - with the information projected on any surface of your world to augment it with all the relevant information.

There are many applications, among which:
Need the time? Lift your arm, the way you would do to look at your watch, draw a circle on wrist, and Sixth Sense projects a clock.
Don't know which brand of soap to purchase at the supermarket? Lift the product, and Sixth Sense will project a green, yellow or red light, based on your own purchasing criteria.
Catching a plane? Bring your plane ticket out, and Sixth Sense automatically retrieves updates such as delays or gate changes.

For more information, visit the website: http://www.pranavmistry.com/projects/sixthsense


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Bookstores don’t live here anymore

A recent article on CNN.com mentioned that Laredo, a city in Texas of 250,000 people, has been left without a bookstore. On January 16, Barnes & Noble closed their store in Laredo’s Mall del Norte. Despite the Laredo store being profitable it was closed as part of Barnes and Noble’s nationwide strategy to shut down their chain of mall based stores.

Laredo, the city with no books. Is that what future holds for this city? Will no one be able to buy or borrow a book?

Sure, you can always find some books at a supermarket or a drug store. Nowadays who doesn’t use the internet, or particularly Amazon to buy books? In addition, the article claims that the city of Laredo has two public libraries with a catalogue of 20,000 books. But is that enough?

In the last couple of years, with the widespread adoption of internet shopping online retailers like Amazon have gained ground versus traditional bookstore chains. Borders and Barnes & Noble have been forced to close down stores all over the world. For instance, just before Christmas the headline in The Sunday Times “Borders bookstore to close in its final chapter” highlighted the closure of all Borders stores across the UK.

Nevertheless, online retailers are not the only threat to brick and mortar bookstores. With the rise of the Kindle and the launch of the iPad, it seems like massive adoption of e-books is just around the corner and in a few years time everyone will be running around with a portable e-reader device instead of a bulky book.

I admit it; I will probably be one of those carrying a Kindle or an iPad. But I also want to be able to walk up and down the aisles of a bookstore before buying a book. I wonder if this is too much to ask, or if the internet will gobble up all retail stores as we know them.

All I know is that I don’t want my town to become another Laredo.


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What is the right social media presence for you: Facebook v. Twitter?

On Tuesday, Silicon Alley Insider had the following headline: "Facebook Finaly Lands 'The World's Biggest Marketer.'" P&G to open a Silicon Valley office; spending princely sums on Facebook. Yawn -- Interesting but hardly a shocker.

What was more interesting were statements P&G made, demonstrating how it--and, if we can extrapolate, big brands, generally--thinks about the differences between various forms of social media. The article quotes someone at P&G as saying "And while P&G's thought leaders expressed some skepticism about the efficacy of Facebook's 'engagement ads,' they certainly view Facebook as a must-have for digital advertising and brand building." A paragraph later, another quote:

Mr. Hornik contrasted the enthusiastic outlook on Facebook to a less-enthusiastic one by P&G executives toward Twitter. "They described Twitter as 'much more like television than one might think.' To P&G, Twitter is a great broadcast medium -- it is best for one-to-many communications that are short bursts of timely information," he wrote. "P&G folks do not view it as particularly relevant to what they are doing on the brand-building and advertising side. ... They do not believe that Twitter will ever approach the value they can get out of a Google or Facebook."


I am one of the two people in class who raised his hand to the "how many of you aren't on Facebook?" question. I used to be on Facebook, but commited FB Suicide last summer upon realizing that it felt not that fulfilling and rather like a ball and chain. By contrast, I am on Twitter, and find it fascinating how varied are people's understanding of Twitter. Some view it merely as a stand-alone "What are you doing?" box (a la Twitter), and indeed I think that's how many people begin to use it initially. However, there are a number of vibrant communities on Twitter self-organized around topics of mutual interest. I, for instance, follow a lot of local tech entrepreneurs and VCs and love the news-sharing, idea bouncing, and collective creativity that goes on. I think these communities and this usage pattern is less prevalent on Facebook (though I'd be hard-pressed to *prove* this to someone who disagrees).

From the perspective of the advertiser, this is an interesting difference. My working hypothesis is that Facebook probably offers advertisers more structured data with which to target ads toward certain demographics. However, as an entrepreneur trying to find customers who love my product and get their feedback and turn them into advocates, the other half of my working hypothesis is: Twitter is where more substantive conversations happen, and is therefore a better means for: (1) learning what customers think about you, and (2) discovering early-vangelists.

If my working hypotheses are true, so what? Implications: (1) Facebook is a great place for big brands who have found their footing, understand who is their target customers, and need targetted reach. (2) Twitter is a great place for fledgling ventures in search of product-market fit, still refining their offering, trying to discover their ideal customer, and looking for people to evangelize them in substantive conversations (vs. "friending" Pringles...).

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Television is the key competitor for Digital Ad Dollars

In response to the post below, I found the following excerpt from Cynthia Turner Cynopsis- Digital (a great trade that goes out via e-blast http://www.cynopsis.com/content/view/2271/80/). It seems that Yahoo executives are now looking at Television as it's number one competitor for Ad Dollars, given that is where advertisers spend most their money.

I find it fascinating that digital Search is now strategically looking at taking market share from TV. Not so long ago digital advertising was fighting tooth and nail to carve out a piece of newly created digital spending budgets for major advertisers.

The fact that they are now looking to take TV head on, should send up red flags for broadcasters and cable alike. I worked in the Cable Ad Sales side for past few years, and with a major decline in ratings (specifically on the broadcast side) and fewer saleable impressions/CPMs television networks should be worried.

As Yahoo and Google ramp up their video offerings and start offering advertisers solid metrics on the number of viewers (accompanied with demographic data), then dollars will invariably start moving even more quickly to digital.

However, I think it is VERY important to note that Television will always drive a larger reach than any one digital site or new media platform. Until a new media platform evolves that can deliver reach in the millions, TV will still hold onto a majority of the market.

Yahoo CEO Carol Bartz identified television as its biggest competitor in its battle to attract ad dollars in a conference call with analysts on Tuesday. "That's where advertisers spend most of their money, and where we're taking share," she said. Ms. Bartz also mentioned that video content like Yahoo's "Prime Time in No Time" TV recap show is attracting larger audiences; the show peaked one day in Nov. capturing 12 million viewers. Premium brand display ad revenue is also on the upswing, she said, and offering advertisers the ability to buy "specific targeted audience" at scale will be the company's focus this year.

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Thoughts on Mobile Advertising

With an increase in network speed that has pushed major mobile carriers to provide 3G and now 4G communications, the amount of smartphones sold globally has expanded tremendously. Faster speed and a large diversity of mobile applications and mobile web use have prompted companies to move their advertising spending from traditional channels to this new field. The Kelsey Group, a provider of strategic research and analysis, found that mobile advertising in the United States had grown to $160 million in 2008, and is expected to increase to $3.1 billion in 2013, with a CAGR of 80.9%.

The Kelsey Group also considers that, as more people move to smartphones, revenue from mobile advertising will be concentrated in search, with 73% in 2013, and display, with 18%. With respect to the breakdown by operating systems of the market, Canalys research found that in the US, the iPhone’s market share had increased from 7% to 23% in the space of one year (as of October 2009). At the same time, Research in Motion, the market leader, has lost almost more than 4% market share (now at 52%).

The expected growth of the mobile advertising market is further underlined by Google's $750m acquistion of Admob, a leading provider of mobile ad technologies, and Apple's $275m acquisition of Quattro Wireless in response.

Being in the process of developing a location-based application for the iPhone and subsequently other smartphone operating systems, this topic is of great interest to me. While there seems to be no doubt that there will be a lot of growth in the value of the mobile advertising market, I believe that it is still more than unclear on how to effectively unlock this value and how to advertise effectively. The experience with internet advertising, which in my opinion is still largely inefffective, lets me believe that it will take some time until a successful model will be found. In the meanwhile, I am hopeful that various successful niche solutions will emerge, which will be integrated in various individual mobile applications.


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iPad may just be revolutionary

I think the iPad is great and with the power and vision of Apple, it may just revolutionize the way some things are done. I know there are many posts on the iPad but the thing that really impresses me is its ability to really make this a paperless world.

I know the Kindle is already out there but I think that the iPad may be able to achieve more with its offerings.

Here is a blog on the release of the iPad...

What really impressed me was this line - "It uses the ePub format. Not just popular books, but textbooks are coming as well."

I remember when I was in school (well even now) and having to lug around tons of heavy books. If Apple is going to put textbooks on the iPad and if they can reach schools all over the country, they can really change the way schools operate and kids are taught. This may just be the start to a paperless world (very truly green).

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Marketing & Social Search

Just as the marketing community begins to digest the notion of search engine optimization and the need to game Google's master algorithm, it seems that search as we have come to know it is about to change again, and quite dramatically so. By combining the realms of traditional search and social media, a new phenomenon is emerging: the "social search".

The idea is simple: Google is great, but it still only ever delivers the result that is most relevant on average for all users -- it almost never generates the ideal result for any individual user. And how could it? After all, it has little user- and situation-specific context to draw on. But what if via Facebook, Twitter, blogs and your Gmail account they knew who your social circle was and what your friends were talking about? Then, the theory goes, the engine would be able to deliver more personalized, relevant and specific results.

So with Google developing its social serach product and Bing announcing deals with Facebook and Twitter, where does that leave SEO and digital marketing? At the very least, it elevates the importance of a brand's presence in the world of social media. While in the past "social" was just another channel in which to disseminate a message, it now could become the very heart of any digital campaign. Without a carefully managed online "social footprint," a brand or organization could become increasingly limited in its ability to reach its target audience. On the other hand, the more people in my social circle talk about a brand, the more likely I am to see it, click on its listing, become a client, and further the conversation.

Search is evolving. Now marketing departments need to evolve in order to effectively follow, influence, and take advantage of their social media and social search presence.

Patrick Busse
Marketing & the Internet
Based on an article in Adage
http://adage.com/digitalnext/post?article_id=141737

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Flash of Genius/Ploblems for Advertisers

http://adage.com/digitalnext/post?article_id=141779

So the one thing Apple's iPad cannot do is show Flash web ads. Instead, a chunk of white space shows up where smart ads would be. The same is true of my Google phone, though banners do appear above some YouTube videos. I don't understand the logic in releasing a smartphone that cannot handle Flash, only because it is a basic technology with capabilities well beyond the interactive ad spot.

I was shown a preview of the upcoming Bloomberg fantasy baseball site. ( I don't know who plays fantasy baseball. Perhaps it's just a term for steroid free batting, but that might just be wack.) The site is now advertising a preview demonstration this Sunday at Bloomberg - http://www.bloomberg.com/promo/Jan/37422165/index.html - but the technology behind this site inspires a future of web concept. A vast universe backdrop and floating pages that you flip through. The black space background could be come a permanent or long term billboard that an advertiser owns that a web user must view no matter which page the user flips to. (If only I had a site to link to demonstrate the concept...)

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Differentiating Soap?

Soap is soap is soap is soap...right? That's what I thought, but boy was I wrong. I was at CVS a couple of days ago trying to buy soap - something my wife usually does for my family. As I scanned down the soap shelf, I was amazed at how many different product types and price ranges there were in the soap market. Sure there is bar soap, liquid soap, and even soap that has some kind of scent, but at the end of the day, they're just all soap. How can one soap product be priced at $4.00 and another soap product of similar size and volume sell for $12.00? The answer is aggressive marketing.

I actually identified my answer to the above posed question, while on Yahoo checking one of my email accounts. It was a banner advertisement for Dove Soap. This particular advertisement was complex and interactive and stressed, "The truth is clear." The ad starts with a vivid dramatization of multiple soap bars sweeping across a wet surface. One of the bars was a Dove bar of soap. Amazingly, the competition soap left soap scum while Dove did not. The ad ends by reminding viewers that, "Soap leaves scum, Dove does not," and invites the viewer to play an interactive soap toss game to win free Dove soap. I went on to research Dove and found that they have used an extensive marketing campaign to differentiate its product by using both traditional advertising as well as Internet marketing channels such as Facebook, websites, media displays, and banner ads.

I never expected that a simple trip to CVS to buy soap would produce this much excitement and awareness. Ultimately, this example is truly the power of marketing and advertising. Dove is taking something as simple as soap and turning it into something that is complex and differentiated. I invite all of you to take the soap toss challenge to win free Dove by going to Dove's webpage. But, does aggressive advertising really work? Are we more induced to pay a premium of like 3x to buy Dove instead of another soap product? Maybe. For me, I just couldn't justify spending that much more for Dove, and I ended up settling for scum.

Tyan Muckensturm
Blog #2
Marketing & the Internet
B8699-025

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Bzzz - Check out this new product . . .

“New Product Development”, a paper by Columbia’s very own Olivier Toubia, addresses the product launch problem by framing launch strategy as a choice between two approaches: traditional and non-traditional.



Traditional marketing includes radio and television commercials, billboards, internet advertisements, etc. Non-traditional marketing includes product placement, branded entertainment (Burger King’s subservient chicken – you’ve got to check this out . . . so weird / creepy), and of course, buzz marketing.



Buzz / Viral Marketing can be thought of intentional word-of-mouth marketing. In other words, individuals’ existing social networks are leveraged in order to promote a product or brand. There is an obvious potential for conflicts of interest in this strategy, most humorsly addressed, I believe, in this 2005 Onion Article on the subject. Simply put, how can I actually trust your opinion on this soda if Pepsi is paying you to like it?



Social media is clearly a useful tool for buzz marketers, but how is it being used and what are the results? A few sites (referenced by Prof. Toubia in the paper) are briefly reviewed below:



SheSpeaks

A self-described forum for women to share opinions on products they care about. Members provide detailed information on tastes and preferences, receive free products, test them, establish credibility through their reviews, and are presumably invited to test more products the more credible they become.

The site seems to have rated a few hundred products, and most ratings are either 4 or 5 out of 5 stars . . . hmm . . .bias perhaps? Some of the ratings have enough fluff to make a sandwich, but I suppose the real opportunity comes from the surveys sent to the manufacturers and not the public ratings as I doubt many shoppers use the site to actually evaluate products.



Tremor

A bit weird this one. It’s owned by Proctor and Gamble and aims to use the latest in cognitive science to influence word-of-mouth marketing campaigns. Claims to have an army of 500,000 moms who are ready and eager to market your product. It’s not as user-driven as SheSpeaks and not entirely clear how one joins the mom-army.



Bzzagent

Just signed up. Username “Riptide”. Site seems targeted to a wider demographic than either Tremor or SheSpeaks and does the best job integrating Facebook with the platform. I sign in using my Facebook id and presumably my Buzz marketing posts go directly to my wall. I like the survey they made me fill out to join. First question was, “Do you like visiting Casinos and gambling”, I guess we see who some of their best clients are . . .



In summary, these are cool ideas and to some extent I’m surprised I haven’t seen more flagrant product placement on my friend’s Facebook pages. Maybe that’s the downside to all this. Has advertising made as cynical enough to doubt even seemingly sincere advocacy of any product? That said, let me tell you about this great toothpaste I just found . . .


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Video content for health web pages?

At least venture-backed companies like 5minutes Ltd. are betting on it. A new partnership between this instructional-video-syndication venture and health magazine Prevention will allow 5min to distribute its collection of health videos on topics including fitness, healthy living and lifestyle. 5min will syndicate that content using technology that enables publishers to automatically match videos with article topics. The new relationship is aimed at increasing viewership and brand awareness for Prevention, while adding to the video health library 5min can tap into to lure publishers and advertisers.

5 min business model relies on consumers looking to watch a video in addition to reading an article. This trend brings huge advertising opportunities in areas such as health, where pharmaceutical advertisers will pay higher rates to reach targeted audiences. In only seven months, health category became 5min's second largest category after food. The growth ties in with 5min's goal to create a huge content network for advertisers, bolstered by its $7.5 million Series B round last year through Globespan Capital Partners and Spark Capital.

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When the Internet Knows Too Much

I was just thinking about how targeted internet marketing is becoming and wondered if targeting could be dangerous. From what I gather, the more I use the internet, the more the internet knows about who I am. Apparently, something called cookies keeps track of where I’ve been, what I’ve looked for, what I might want in the future, and who knows what else. It’s just like I’m building an online identity over time! Creating an identity is probably a fairly harmless activity considering it’s what you and I have done over time since we were born. But can it be a problem if the internet knows who you are too well?

Often times, when I do a search, I can type in a few letters and the search bar will guess the rest of what I’m looking for. The website thinks it knows me. And maybe it does. In real life, my identity consists of what I choose to show others. But the cookies in some mysterious folder on my laptop might know some things about me that I would not even tell my best friends, parents, siblings, or even my dog. The situation reminds me of what I envision would be the relationship I might have with a shrink.

(In theory,) We are supposed to be able to disclose private information to professionals like psychologists, doctors, or lawyers with a certain amount of assurance that those disclosures will be kept confidential. Confidentiality serves an important purpose in such relationships because the information can be crucial to effective servicing. Given the importance of such services to society and the importance of confidentiality to the effectiveness of such services, there are regulations in place to ensure that the privileges of information are not abused.

You may disagree with the analogy, and confidentiality alone is not a complete solution, but I think similar concerns about abuse apply to information collected through our use of the internet. I’m not trying to make any apocalyptic suggestions about the effects of the under-regulated collection of personal information, but I think we ought to consider the responsible use of information collected on the internet more. As the ability to target an audience on the internet gives rise to opportunities for marketing, it would be in the interest of opportunity seekers to prevent abuse lest the internet-users become wary of sharing their information at all.


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An avatar for me please

It is January 2010 and a little over 10 years ago, we thought the world was going to end because of some glitch in the universe of bits and bytes. Here I am, still alive and thinking that the artist formerly and the recently known as Prince should release another song about 2029 or some distant time in the future. By now I was supposed to be living a life where computers and robots did everything for me. Indeed, there are people who live the virtual life, not going to stores or leaving home for anything including work. But it still isn’t main stream and there has to be a reason why.

Perhaps it is because we are people, and we like human contact. We want to walk down the street to the local grocery store and smile at the attractive cashier as we check out three items, two of which we didn’t come to the store for but decided we “needed” them. Or maybe it is because some of the things we do need us present, like trying on those really tight pair of jeans and having the sales person say they make you look sexy. Amazon.com has done a lot to close the online retailing gap by offering unlimited free shipping with their Amazon Prime service ($79 annual fee). Yet, there is still something missing.

Sitting in a seat at my local IMAX theatre at 1:30am (all other show times were sold out) I took in the 3D experience that is the movie, Avatar. I tried to understand why it has been so popular, along with social media such as Facebook. The answer is simple. That is what people like. We want to be able to engage with others in a virtual world. We like technology’s ability to enhance our experience. I want an avatar, a real life version of me online, along with websites where I can interact within 3D worlds.

My avatar would have to be me in all senses. It would have to look like me, think like me and feel like me. When I buy a plane ticket, I won’t have to ask for extra legroom or a non-middle seat. The airline would be able to see my representation online and ticket me accordingly. I will be able to try on clothes and see how they really fit in 3D, not like the forced paste-on version I see on sites like Zugara.com. Best of all for online marketers, my avatar will hold a complete list of all my preferences so they can provide me with specifically what I need when I turn the permission marketing button on in front of the virtual mall.

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iPad vs. the Kindle

On Wednesday, Apple unveiled its much anticipated tablet device, the iPad. At first glance, I thought it was a glorified iPod touch. It has many of the same features - just a larger screen. After learning more about it, I became very curious about the iPad's iBook application, which seems to be taking Amazon and its Kindle device and the e-reader market head on.

This immediately made me think of the iPod and the iTunes store when they were first launched. The iPod really wasn't much of a device until people could easily download content to their devices. The record companies only offered to provide content after they felt comfortable with Apple's DRM content protection. After that, the rest was history.

The iPad and related iBook application seem to be the same hardware and application pairing as was the iPod and iTunes. The only question is, will the book publishing companies feel comfortable giving Apple access to their content. Even if Apple gets access to the content, will consumers actually like reading content on the company's high tech device? I think Apple will have difficulty for a few key reasons listed below:
  1. Apple does not necessarily have a stellar reputation dealing with the record labels. The company exerted considerable power over the record companies and book publishers may be wary of dealing with the tech giant.
  2. Even if Apple gains access to the content, the device seems to be not as optimal as the Kindle for e-reading. First, the Kindle has a very long battery life. Next, the Kindle probably is not as harsh on the eyes as the iPad will likely be.
  3. To a lesser extent, Amazon already has relationships with nearly all the book publishers in the world, which should make it difficult for Apple to capture a substantial market share. Consumers are already accustomed to Amazon for the book needs and it will be harder for consumers to switch to the iPad if they already own the Kindle.
I will be very interested to see how this plays out and if Amazon can stave of Apple's market entry. I am looking forward to trying out the new iPad device at the Apple Store when it becomes available - but I definitely won't be pulling out the plastic to pay for it!

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What Facebook needs to know about Japan

Facebook recently announced that it will launch "Facebook Japan" targeting 20 million SNS users in Japan. Will they be successful? Well it will first need to understand the unique user preferences.

Mixi (pronounced "miku-shee"), the most popular existing Japanese SNS with 18 million users, is very different from Facebook. When you log in, you will first notice that Mixi is completely anonymous. Most people (in my experience more than 95%) do not use their real names. Also, they do not use recognizable pictures of themselves as their profile pictures. Instead, they pick pictures of their dogs or some funny pictures they randomly found on the internet. Mixi even has a feature called “Footprint” which tracks people who "mixi-stalked" you when and how many times.

All of this is very different from Facebook. In Facebook, users not only publish their real names and email addresses but also choose to disclose their phone numbers and real addresses and regularly put up pictures and tag themselves. While Facebook tries to differentiate themselves with this sense of reality, the same concept may not be accepted in Japan. Only with the features that make Mixi highly private, Japanese users feel safe to use SNS. Facebook needs to understand that Japan is a very small community. When you disclose just a little bit of information of yourself- whether it's where you went to college or what neighborhood you live in- you will easily be spotted. Japan is about the size of California with 70% of the land covered with mountains and rivers. Nearly 1/2 of the US population living in 30% of California's land- that is how small Japan is and how closely people live with each other.

I do believe, however, that Facebook has an opportunity for a very different reason. Japan is extremely fast-changing in any industry. You never see people wearing clothes from last year on the streets in Tokyo. People renew their cell phones when newer models come out. We get bored so quickly so being new is always good. In fact, it was reported that many mixi users have been visiting the site less than they used to. They are getting bored. If Facebook can capture the bored crowd in Japan while providing enough security, it maybe able to grow quickly by cannibalizing mixi users.


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Wednesday, January 27, 2010

The End of the Web is Near - Enter the Splinternet

As a new breed of of internet enabled devices emerge, 15 year old web-based standards are quickly breaking down. Proprietary platforms are being developed to explicitly exclude technologies from other vendors (i.e. Google and Apple). If this trend continues, the internet experience could dramatically change and we may lose many of the cross platform capabilities of a common web browser. Mobile platforms like the iPhone, Android and Blackberry all have unique development requirements. There are also eReader devices like the Kindle and the Nook that also require content in there own specific format.

These cross platform development issues will ultimately cause a what Josh Bernoff of Forrester Research calls "a splintering of the the internet". He was interviewed on Marketplace by Kai Rysdall and made the point that content developers may need to return back to square one, and start making decisions on which devices they can or will support. Whole markets may be excluded from certain content formats or applications based on the devices people use. Unless device standards emerge soon we may find ourselves in a tangled web of content and applications.

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Is Google Nexus One a threat to wireless operators?

Nexus one is the latest unlocked phone with Android operating system from Google. Before its announcement, when initial specs and information leaked there was a huge hype that it will be a game changer in the US wireless telecom industry because it is offered as unlocked. However in the first couple of weeks its sales are lagging and it is far from being a game changer.
Although I currently use and believe in the future of Android operating system, there are major obstacles in US wireless sector that would be too costly for Google to overcome in the short term. These are;

In US market operators have the control because they use different frequency bands and technologies switching is difficult and offering a phone that would work in all of the operators is both not an easy and a costly task.

Subsidization is a standard in US wireless market. That is why Nokia and Sony Ericsson have tried selling high-end devices direct to US consumers online and struggled to enter in the US market while they are highly popular in other parts of the world. They failed because consumers used to sign long term contracts and operators offer no discount in their plans in case they do not sign one which is making buying a phone from another channel meaningless.

Advertising : The reason why phone manufacturers work directly with carriers is to take advantage of their massive advertising spend. Motorola Droid is the most successful Android phone probably because of Verizon’s support.

In order to fully utilize smartphone’s all features consumers need to subscribe for a data plan. US MVNO market is very small and users have no option except going for big four operators.

I think Google is also aware of these obstacles and thinks it is a long term game. For this reason Google probably choose a divide and conquer model and favoring T-mobile. Google is collaborating with T-mobile because it is the smallest operator of four and the most aggressive one struggling to gain market share. Therefore they are the first one who launched no more plans which are offered without a contract. But their plans are still not significantly cheaper and they do not have enough cellular coverage. Moreover operators are more concerned about the threat from Web more than anyone else and it is highly unlikely that they will do anything that decreases their average revenue per user significantly in the short term.


Ugur Bozkurt

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“Nothing except the mint can make money without advertising.” -1st Baron Macaulay


Despite growing concerns about privacy, identity, and security on the Internet, there are a number of online products that succeed in developing a great deal of trust from consumers. These products manage to market themselves using the same channels as their competitors, yet they achieve much more. In particular, Mint.com is a success story.

If you’re not familiar with Mint.com, it’s more closely related to a facility for manufacturing coins than an aromatic herb. Mint started in 2007 and it’s a website that requests all your personal banking usernames and passwords, and then provides you with a dashboard to view a summary of all your assets and liabilities. This includes savings accounts, checking accounts, credit cards, loans, 401(k)s, and other investments. With greater visibility, you may be able to create better budgets, save for retirement, pay student loans, pay off debt, etc.

A few months ago, Intuit completed the acquisition of Mint.com for $170 million (a valuation of 17x annual revenue according to thedomains.com). Intuit’s name will add an element of credibility to the website, yet over one million consumers had already handed over their most valuable online information to Mint.com Even if Mint’s intentions were sound, the company’s servers carrying customers’ usernames and passwords could have been hacked, or more realistically, this sensitive information could be sold to Intuit for roughly $100 per registered user.

To bring this back to marketing, Mint’s revenue model is based on lead generation within the product. Thus, Mint’s task is to acquire users (Challenge #1) and then recommend relevant, targeted financial products that its users will want to try (Challenge #2).

Challenge #1: Getting Visitors & Users

Mint employs an assortment of common online marketing strategies. Here’s one of their AdWords campaigns:

Free Finance Software

Manage Your Financial Expenses with
100% Free Mint 2010 Software!
Mint.com/Free-Financial-Software

Additionally, Mint has benefited from a lot of free advertising in the form of publicity. The company was funded through venture capital (which tends to bring certain press opportunities), picked up by many bloggers, and attracted large media companies based on a surging user base growth.

Challenge #2: Generating Revenue

Mint’s revenue model is based on lead generation for financial services. Within the product interface, Mint displays a ‘Ways to save’ link. According to the management team at Mint.com, 20% of users who view this savings page ultimately click-through to a partnering bank’s site. In comparison, traditional display banner ads are considered successful if they reach a 1% click-through rate. This means that Mint.com has found a way to show customers a group of financial products precisely when they’re in the market to purchase financial services. And that captivated audience is worth about $100 per user.


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Today Social, Tomorrow Identity

Recently I've been thinking a lot about online identity & facebook. I've seen a lot of people complain about facebook changes over the past few months. There's issues with privacy. There's the flaws in usability. Lastly, there's the ever increasing flood of crap that facebook continues to force into the user experience. If facebook continues to overwhelm the user, and under deliver on the necessities such as usability and privacy- what will be their enduring value proposition?

As facebook becomes more and more common on a myriad of sites, I think facebook (along with google) is vying for what will be the next major advancement in social media- Identity. Currently on the web you need little more than a fake name and picture cut from a magazine to register an account as someone entirely different from yourself. While the loose structure of current online identity begets many of the things techies adore about the internet, it also creates serious cases of virtual identity theft.

In past years, defense of one's personal identity had to be carried out on a case by case, site by site basis. This has created back breaking work for the user and made it nearly impossible to verify identity across sites. Then came open authentication and suddenly a login to facebook/twitter/google could be used to register on various other social sites. Thus the identity is verified across sites under a single username. This make protection and isolation of identity a single step rather then several.

My prediction is that facebook's oauth capabilities are the beginning of their attempts to carve out a identity niche. Sure, I bet they have plans to stay a top ranked social site, but just in case they're making sure they survive by initiating the process to create cross site identification. While facebooks friend connect isn't anything new, the developing concept of verified virtual identity is. With google also on the oauth train it will be interesting to see who develops a full virtual identity management system first.

As social media continues to cater to the niche, whoever presents a way to verify a virtual identity is set to score and score big.

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Rent the Runway

Building off of an established business model familiar, even to those not-so-interested in fashion, (think Netflix) the basic premise of Rent the Runway is that women want -- but cannot often not justify purchasing -- the newest, trendiest, most beautiful dress for whatever special occasion is up next in their social calendar (best friend's wedding, birthday party, etc). Here is where Rent the Runway comes in. Here's how it works:
  • Rent a designer dress for $50-$200 for 4 nights (most would sell retail for well in excess of $500)
  • Product shipped directly to customer's doorstep
  • Upon wear, one drops the dress in a prepaid envelope (dry-cleaning is included in the price) -- though extra insurance will run you $5 and if destruction of the dress should occur, the wearer must bear full replacement cost
Immediately, however, this should raise some key questions/concerns for an fashion-conscious lady! How do I know if it will fit? What if I don't like this dress when it arrives? What if it needs a little alteration? Importantly, RTR seems to have thought of just about everything:
  • On-call stylists are available -- both via chat and telephone
  • An extra size is added in, free of charge, and, should neither fit, there is a 24-hour return policy
  • An extra style may be added in for a bargain $25 additional cost
  • Finally, all dressed come with a garment bag and a "fit kit" (double-sided tape, bra strap adjusters, deodorant remover)
While, as a girl interested in fashion, I have long followed businesses of this nature, a few things really stood out, regarding RTR:
  • Started by 2 recent, young, female Harvard Business School graduates
  • Attained early financial backing from Bain Capital
  • As of the end of their testing phase in November 2009, claimed 20,000 interested members (as of now, a visit to their site shows that one must "request membership" as a waiting list still exists)
  • An extensive list of perks (see above!) that seem to have taken the best-of-the-best from similar, tried-and-true business models and really demonstrated their understanding of the target market
  • Finally, impressive (and positive) press coverage for such an early-stage company ... from the New York Times and ABC News to the Daily Grommet and a variety of coverage in blogs/Facebook/YouTube
Despite the tough economic times, it is interesting to think about similar companies that survived the downturn (think BagBorroworSteal or I'mOverIt). A sample of two articles below, one from the WSJ and the other from BusinessWeek, profile several of these companies circa 2007 -- and a quick web search reveals that the vast majority of them are still around.
http://www.businessweek.com/the_thread/techbeat/archives/2006/03/bag_borrow_or_s.html
http://online.wsj.com/article/SB118661263001392292.html

Finally, I will be interested to see how the membership aspect plays out for RTR. The air of exclusivity is interesting but, as other businesses have done, it may be eventually attractive to move to a cheaper "base" membership while also developing a more expensive option to begin "up-selling" loyal, established customers. Regardless, I am looking forward to signing up and hopefully getting off the waitlist in time for summer party and wedding season :) !!!

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Local Twitter Trends

Regardless of whether you love it or hate it, Twitter is becoming an increasingly useful tool for marketers. Most people have heard about celebrities sending out product endorsements via the service and some may follow a couple corporate tweeters (e.g. Whole Foods’ CEO), but it is important to that that both of these interactions with customers entail the Company reaching out to customers and telling them what they should be interested in.

Today Twitter released information on “local trending topics”- a service that allows Companies to see what “followers” in specific areas are talking (or tweeting) about before they initiate communication. Twitter spokesperson Jenna Sampson wrote “The big events that come up around the world will always become a global conversation, but what about the big events that only happen in your world that only matter to those around you? Or the slight differences in the way Californians perceive an event, like Obama’s election victory, versus those São Paulo, Brazil?”

The Company is currently offering information on 24 locations and expects to expand the service over time. This tool could be extremely useful in helping companies better understand similarities and differences between local markets and keep up with real-time changes.

http://digital.venturebeat.com/2010/01/26/twitter-trending-topics/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+Venturebeat+%28VentureBeat%29

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Back to the future? Return of the voice message


Pana.ma

I just got off the phone with a friend Matt Kweder in San Francisco. Matt has been working on an iPhone app for the last year with Pana.ma, Inc. I was interested to see what he’s doing and get his impressions of the application launch process. The app Pana.ma created allows iPhone users to send voice and text messages combined in SMS text format in a single conversation.

In his blog, Pana.ma founder David Hayden states:

“We started Pana.ma in early 2009 with the idea that voice could become a major new development in the mobile communication trend of messaging because it does something entirely overlooked — it adds the tone, texture, emotion and meaning we hear in others voices back into a social web inundated with text and emoticons. Pana.ma challenges how we use SMS, but it also challenges the clunky experience of voice mail, of being ’screened’ when we call, and then going through the endless routine of listening to computer voice tell us what we can do, and then all we can hope for is a call back, which we ourselves will screen followed by the eventual exchange of text messages. We set out to eliminate that experience from the culture, entirely.”


Sounds like a simple enough idea. Pana.ma works like text messaging over the iPhone, but you have a voice recorder to add to messages, which appear with text headlines if the sender chooses to add them.

The best way to get a feel and understanding for the product is to check out this video here.

According to Matt, there are a few thousand users since their launch two weeks ago, a relatively small user base, but Matt says the app still has bugs that engineers are working out, I asked him if Pana.ma would be in perpetual beta, and he said that they plan to be in beta mode for the foreseeable future as they will be launching apps for Blackberry, Google Android, and Microsoft Mobile… These operating systems, plus Apple, cover virtually the entire smartphone market. The Blackberry app comes out next and should launch in the next few months.

Regarding Pana.ma’s strategy, Matt says photo and video have been done to death, but nobody has focused on voice. That’s where Pana.ma comes in. The main form of competition comes in the form of Google Voice, Apple’s Voice Memos, and WhatsApp but none offer exactly what Pana.ma offers.

Feedback on the app has been mostly positive. Lots of users appreciate the ability to combine voice and text in the same messages and send voice recordings with text headlines. So far, users think the app could be quicker, and they wish it were easier to find their friends.

Pana.ma launched two weeks ago, and Matt says some of the Pana.ma engineers working with Apple’s App store found the process frustrating. Apple starts software developers off with a trial period where an app is available to 100 users. These 100 users are usually the engineers themselves, and potential partners and investors. After a month or two in this trial period, Apple apps store will launch the app to the general public. Matt says the team is working on bugs and other issues, smoothing out the user experience before they embark on a significant marketing campaign planned for later in the year.

Matt started working on Pana.ma with founder David Hayden and two others about a year ago in Marin County, California. At the time, everyone was working for free. Matt waited tables to make ends meet. As of January 2010, Pana.ma has 11 full time salaried employees, office space in downtown San Francisco, and Matt is no longer waiting tables. We’ll see where this goes. I asked Matt how they plan to eventually monetize Pana.ma, which launched as a free app. Matt says although the app is free; they intend to offer premium services in the future with monthly payment plans.

If anyone's interested in getting the app, go HERE (best to pull it up on your iPhone for quick download)

You can also pull them up on the App Store by typing 'Panama' into search.

Contact Matt at matt.kweder@pana.ma if you want more info or have feedback to offer.

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The future of Netflix

Netflix announced today its earnings for Q4, which fulfilled its high expectations reporting $444.5 million in sales. The movie-renter finished 2009 with 12.27 million subscribers. Its addition of 17,000 streaming titles via Sony's PlayStation 3 helped reach these figures and give Netflix a great deal of attention as more than half of its subscribers reportedly use the 'Watch Instantly' feature.

Being a big movie fan and a Netflix subscriber, I can tell you however, that out of those 17,000 titles are very few that you might actually want to watch. Even though 17,000 titles might seem like a lot, I can't help but wonder why Netflix doesn't shift its whole business to video streaming.
It seems inevitable given the fact that it takes two days to receive a DVD and that by that time the desire to watch it is often gone.
And while I'm drifting away in my thoughts, why don't they make it free with commercials or commercial-free for paying customers?

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I just dont get the Ipad

I don't claim to be very up to date on all of the latest innovations from Apple, but buying the IPad I don't really get (leaving aside the terrible name.) It is clear that we are back at a tablet, which failed the first time around, and that ultimately the kindle and sony e-reader were destined to become portable computers. What I don't get is why consumers keep buying the latest Apple product when Apple has a history of releasing version 2 not long after the 1st version comes out. They will add things like a camera, a phone feature that you can connect to your iphone, ect... They did this with the ipod and then the iphone. Why not wait until the 1st version has passed, the ipad has proven its worth and then buy? I wouldn't be surprised if the next version has gaming capability 10x better than ps3. They will add features and get money from consumers twice. I understand the strategy from their point of view, but fail to understand the mass need to get whatever they put out right away.

As Apple makes its way through all consumer electronics including TV's, videogames, down to micro-waves, I can't help but feel that they will end up becoming Sony and taking their power for granted, and ultimately allow new Apple's to pop up. Of course, I may just be bitter that my I have the old Ipod and all of this is non-sensical.

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The iPad is Finally Here

Finally it is here! The long waiting for the Apple iPad is over; but is it all that it says it is? I will tell you that when the iPhone came out I was very excited to get it and then I learned the bad news; AT&T would supply the phone service. With much resistance and aversion I finally caved in and purchased an iPhone and I have to say it has changed my life. As a busy business school student, the iPhone helps organize me and always prevents me from getting lost. Not to mention it is very user friendly.

Now, I have to admit that I do have an alternate Verizon phone as the iPhone's voice service is not dependable; though it has gotten better over the years. As you can tell I am a notorious early adopter and lover of technology so the coolness and newness of anything Apple gives me joy.

Though I have never thought about purchasing one of those archaic looking readers from Amazon or Barnes and Noble, the iPad has caught my attention and I just signed up to purchase one once they are available. The graphics, applications, sleekness and mobility make it a great buy. But wait, are you ready for this....it has a full size keyboard dock! This means that you will be able to enjoy all your MS apps... So check it out http://www.apple.com/ipad/design/
It is definitely cool!

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Crowdsourcing for Social Good



I recently came across a really interesting use of crowdsourcing by way of an iPhone app. Through "The Extraordinaires" app you can perform tasks that have been parsed into small elements for not-for-profits. These small individual efforts then accumulate to produce a larger result.

An example of the work that is being done on The Extraordinaires is shown at left where iPhone users can help scan pictures of individuals that are missing in Haiti. You can check out this and other similar apps on mashable and read up on other uses that The Extraordinaires are finding for crowdsourcing on their blog.

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Spam lives on through our best intentions...

Dilbert.com

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Online Privacy: Will Self-Regulation Keep Regulators At Bay?


The New York Times just published an article detailing the online advertising industries solution to online privacy concerns. The solution? A small blue icon with the letter "i" that will inform consumers that their personal information is being harvested and used to deliver online ads. Phrases such as "why did I get this ad?" will also be used to help consumers understand the meaning of the icon. When someone clicks on the blue icon, they will be taken to a page detailing what information is being collected and how it is being used. The article suggests that this disclaimer will be written in easy to understand, non-lawyer, English, instead of the overly complicated privacy policies that websites currently use. Major advertising groups are expected to begin using the icon by mid-summer, but the adoption of the icon is voluntary. There is no legal obligation to use the icon, or make information collecting practices on the internet more transparent to consumers.
The icon is the outcome of the major advertising industry groups' July 2009 statement over stricter self-regulation. The new head of the F.T.C.'s Bureau of Consumer Protection does not seem to be fond of the current practices of marketers on the internet. His interview with the NY Times clearly showed his support for consumers, and distaste for the current information collecting practices.
So, will the little blue "i" be enough to keep the F.T.C. and Congress quiet? Because this is going to be an optional tag, many will choose not to adopt this new symbol. Besides, it will have to take up a spot of valuable real estate that many won't want to part with. Many laws are regularly ignored and broken by people on the web already (spam and music come to mind), so I don't have a lot of faith in everyone volunteering to self-regulate. What will be interesting to watch is how many people react when they finally realize that information is being collected when they surf the web. I think if you said cookie to most people they would say "chocolate chip or oatmeal?"

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