IBM, patents, wikis...

IBM, like many similar companies, is frustrated with the long patent process in the US. (IBM is the nation's largest patent holder.) The Company will begin to publish its patent filings on the Web for public review. "It also asserts that so-called business methods alone — broad descriptions of ideas, without technical specifics — should not be patentable."

"I.B.M. used Internet collaboration to develop its new patent policy. More than 50 patent and policy experts from the United States, Europe, Japan and China exchanged views for two months in May and June on a wiki, an online site that can be added to and edited collectively. The resulting document is posted on www.ibm.com/gio/ip. "

This has many implications:

• for patents and the US patent process, which is a long one and not suitable for technology companies.
• legal issues
• competition will be able to see its patents immediately
• opens up their technology to a large community that will be able to work with it and improve it.

I wonder what the long-term ramifications of this policy are. I think that it's innovative of IBM to take this move and shows the confidence that the company has in its product and brand - or its naiveté that it can't be improved upon, made better and make their brand less strong.

Here's a link to the article:

http://www.nytimes.com/2006/09/26/technology/26patent.html?_r=1&ref=technology&oref=slogin

Orchestras and Podcasts

An article on BBC News website highlights the Birmingham Symphony Orchestra (in the UK) and talks about how they are pioneering regular podcasts in the field of orchestra administration. Other orchestras (notably the Boston Symphony) have produced podcasts before, but mostly for special events. This article raises the question of how any company with limited resources, non-profits in this case, should decide which of the myriad of new content mediums they should pursue.
I worked in the marketing department at the New York Philharmonic this summer and one of my projects was to explore new media and what would be worthwhile. Initially I recommended that the Philharmonic take some video content that they currently film for their website and recycle it for regular podcasts. The Marketing Director later informed me that he had taken that idea to the Executive Director and had been turned down. The Executive Director felt that if they were to put out podcasts, these podcasts would need to be very sophisticated with all kinds of bells and whistles. Of course the marketing department didn't have the budget or the staff power to pursue the podcast any further, so the idea fell by the wayside.
Should the Philharmonic have put out their video content and taken the opportunity to reach some of their dedicated subscribers as well as a potential new audience or should they hold out and not risk damaging their brand with lower quality content?
I would have been interested to pursue the podcasts further, maybe doing some in house research to find out what segments the podcasts would go to and how many people they would actually reach before canning the idea completely.

NY Video 2.0 Meetup This Thursday at Columbia Business School

I received the email below from the Center on Global Brand Leadership, and I thought some people in the class might be interested in attending. As we've learned, Broadband video is currently the hottest trend on the Internet. It will be interesting to preview some of the sites and functionalities that these techies/entrepreneurs have created.



Forum on the Future of Broadband Video

Join the FREE NY Video 2.0 Meetup This Thursday at Columbia Business School

Online marketing and consumer generated content were among the most critical topics discussed at the 2006 Innovative Marketing Conference and broadband video is the fastest growing space on the Internet today.

Join us as the Center on Global Brand Leadership hosts the next meeting of the NY Video 2.0 Group.

Discuss the future of broadband video with members of video startups, media companies, content producers, advertisers, techies and investors on the cutting edge of broadband video trends.

About NY Video 2.0

The NY Video 2.0 Group is a monthly gathering of NY-based Broadband video startups, media companies, content producers, advertisers, techies and investors. Each meetup includes demos by companies and/or content producers. Demos are 5 minutes, followed by another 5 minutes of Q&A with the group. Past presenters include blip.tv, veotag, Dragonfly, Rocketboom, Motionbox, Cruxy.com and Phanfare. We will also invite guest speakers from the new media industry. We're fortunate to have a front row seat here in NYC to not only watch but to directly impact the digital media revolution. We share ideas and help/inspire each other to achieve our respective goals. If you're passionate about new media and finding better ways for people to create, distribute, monetize and consume video in an IP world, or just want to learn about it, come hang with kindred spirits.

NY Video 2.0 Meetup Date: Thursday, September 28 Time: 7:00 - 8:30 p.m. Who: NY Video 2.0 Group, hosted by the Center on Global Brand Leadership Where: Columbia Business School, 142 Uris Hall

Don't Believe Everything You Read (on the internet)

People obviously have a lot of time on their hands to create and update not only their own profiles, but to create fake profiles of some high-powered executives and professionals. An abuse of this system, people are putting up phony information with pictures, etc. for people like Martha Stewart and Bill Gates. While some people may think this is amusing, those professionals who are involved don't find it so funny. They are working with MySpace to get them removed asap. I guess social networking is just the next way of giving people a means to scheme...

http://www.azcentral.com/business/articles/0925Fake-CEOs-ON.html

And for those reading the profiles, who would really believe that Warren Buffett would have time to create a profile on MySpace anyway?

Microsoft Office Online?

Some sources report that Microsoft may migrate its office products off of the personal computer to the Internet (see article here). This would likely be a strategic response to Google which continues to encroach on the Microsoft-dominated productivity market through the use of web-based applications.

While this microcosm is in itself interesting, this may be the sign of a larger market trend. Consumer applications are increasingly moving out of laptops and PCs and into the internet in order to capture ad revenue, take advantage of increased community interaction and provide consumers with increased flexibility. Wouldn't it be nice to be able to change computers and continue editing your PowerPoint presentation?

The implications of this trend are far reaching. Software developers will need to respond to this virtual migration or be left behind. These companies should also be prepared to swap in their subscription business models in exchange for advertisement revenue models. However, the implications of this go even beyond the software market; hardware manufacturers should also be aware of this trend. As services increasingly go online, one has to ask, "will the PC become just a terminal? Will people continue to buy expensive multi-gigabyte hard drives or will they save personal files online? Will prices for these stripped down terminals squeeze margins even further? Will commonly held files (e.g., music) be stored on thousands of hard drives, or will one server house one file to which access will be sold to millions?" As bandwidth becomes more accessible and more robust, the way that we compute is evolving - and with change comes oppotunity.

A Virtual World: Second Life

Sorry for another post on Second Life, but I had written this earlier and was having internet connection problems, so was just going to post now when I saw Chris’ blog. Here’s my reaction to it…

There is a new online virtual reality site that has hit the scene in June called Second Life. It is a virtual world simulation game that includes interactive communities and islands where more than 700,000 players or “residents” build homes and run businesses. The virtual businesses create and sell products and services for real money, including real estate, clothing and (this killed me) “entertainment activities like club entry.” So while the products and services are virtual, real money is required to purchase them, and the creators take a cut of the transactions.

Fashion has emerged as the most popular category, and real clothes manufacturers including American Apparel and Adidas sell items in Second Life that are intended to look like actual items they currently sell in the real world. So players can express themselves by dressing their characters in the same clothes that they actually wear… and the clothing labels get advertising out of it. Given the exposure that the fashion label gets, the game has actually attracted new aspiring designers. I suppose they are hoping to launch a name for themselves by getting rave reviews in the Second Life in-world fashion magazine, Second Style.

One Second Life customer apparently “got hooked on the game while recovering from knee surgery.” “It was the painkillers,” she jokes. Another Second Life online fashion critic comments, “My wife totally makes fun of me. I don’t like to shop in real life.” Hmm, not to judge, but doesn’t it seem a bit bizarre that these folks are more concerned with their second life than their first REAL life. The power of the interactive web where the virtual world is setting trends for the real world…

Make Real Money in a Virtual World

This Friday’s edition of WSJ featured an article about how SECOND LIFE – a virtual 3D world created by Linden Lab with 100,000s of players (Second Life claims 300,000+, WSJ mentions 700,000+) – generated a market for virtual goods which are sold for real dollars. The article focuses on virtual fashion sold in SECOND LIFE and introduces people making a living as fashion designer working on virtual collections to dress the “avatars” as virtual characters are known. Even real-world retailers and brands such as American Apparel and adidas already have setup their presence in SECOND LIFE’s virtual world. The creative process of virtual fashion design is related to real fashion design and considerations such as intellectual property protection become increasingly involved when real money is involved.

Another example for real money in a virtual world is CYWORLD, a social network site which has been widely successful in Korea. More than 90% of Korean residents in their twenties signed up to the site. Many of them actively maintain their “minihompy” – an individual homepage setup as a virtual 3-D world which can be populated with virtual characters (“minime’s”) and other gadgets. To customize their individual homepages with design features and functionalities, users pay small amounts comparable to the cost of downloading wallpapers, games, and ringtones for mobile phones. Outside of Korea, CYWORLD has launched in Japan, China, Taiwan, and the U.S.A.

With social networking sites establishing as the most important channel for interaction for the young generation, I would expect to see more virtual marketplaces like the examples discussed above. Bold fashion statements suddenly become mainstream…

Link to Article:

• http://online.wsj.com/article/SB115888412923570768-search.html?KEYWORDS=second+life&COLLECTION=wsjie/6month

More information:

• http://secondlife.com/
• http://lindenlab.com/
• http://us.cyworld.com/
• http://en.wikipedia.org/wiki/Second_Life
• http://en.wikipedia.org/wiki/Cyworld

YouTube to copyright holders: "Let's Share"

Okay, so we know that movie studios and record companies are worried about their copyrighted material ending up on YouTube for free. They've got the lawyers geared up and ready to go!

So YouTube announced that they will roll out a technology to automatically identify copyrighted material that is uploaded to their site. Once they identify this material, they will share the revenue with the copyright holders.

So after I got up off the floor from laughing, I seriously thought about what's right/wrong with this proposed solution. (By the way both Warner Music and NBC Universal have signed content deals with YouTube.)

wrong: Keep in mind, YouTube is already bound by the Digital Milennium Copyright Act which means they must pull down that video I posted of last week's Grey's Anatomy (at the request of ABC)

right: What about that video of the Asian kids singing Backstreet Boys? The actual Backstreet Boys didn't see a cent from that. Well now they can

wrong: Now, every customer generated clip could require a percentage for the consumer that generated it. I assume this would destroy YouTube's revenues.


And as you know, two wrongs don't make a right. Let's see how far this thing really goes...

YouTube Model Is Compromise Over Copyrights, WSJ

Click Fraud

Click fraud is becoming a huge headache for online advertisers and companies that facilitate these ads (e.g. yahoo and google). This week's (October 2nd, 2006) business week cover story is on this very same topic. It is interesting that some people believe that companies like yahoo and google passively profit from click fraud and therefore in theory have an incentive to tolerate it. However, I believe that this logic is completely flawed.

Click fraud is a serious problem that is shaking the confidence of customers in online advertisements. This could mean serious trouble for Google, Yahoo and any other internet company (whose revenue model is ad based). First, customers will move away from this form of advertising and secondly, they will apply a "click fraud" discount to the amount of money they are "willing to pay" for these ads. Moreover, if customers aren't sure about what they are paying for, the industry cannot grow and thrive. We all know what consumer confidence can do to products and the economy in general. So, it is in Google or Yahoo's best interest to make these clicks reliable and restore confidence in advertisers that pay for these clicks. I will not be surprised to see Google or Yahoo come up with innovative ideas to address this issue very soon. There is already some talk about moving to a cost-per-action (CPA) model instead of cost-per-click (CPC). Implementation challenges still remain but there will be increased pressure on companies to do something about it soon. The stakes are huge.

Movies and tagging Content

Here's an interesting service called MovieTally. It is essentially a Flickr for movies.

It is Web 2.0 because multiple users can "tag" movies and make them searchable. For example, you'll get the movie "Ocean's Eleven"action, heist, thriller, suspense, casino, crime, money, gambling, robbery, or georgeclooney". Thus, users can find movies they'd like to see based on their own criteria.

Users can also add recommendations, which as we know, people find more helpful in the purchase decision than "official" recommendations (look out Roger Ebert!)

Of course, the success of this will depend on network effects. If enough people start using it, it becomes more valuable.

The thing I found interesting though is that the major studios aren't making more use of sites like this. Studios (and record companies too) own huge catalogs. Shelf space for DVDs is limited, so they must make decisions on which titles to pull out and package and sell.

Imagine being able to really capture the "long tail" though a service such as this. For example, Disney is making a ton of money off of moveis about pirates lately. Imagine all the other movies about pirates that are sitting in a catalog collecting dust. Now all the new pirate enthusiasts have a way to find every single swash-buckling epic out there. The demand is there, so the studios can sell it, no need to remaster or add special features.

Sounds like good way to make use of that catalog. I suppose the only hurdle is finding a more direct distribution system. But that's a whole different issue.

MovieTally
http://www.movietally.com/

Blog about how this relates to Web 2.0
http://opengardensblog.futuretext.com/archives/2006/09/movietally_and_understanding_web_20_design_.html

Will TV remain a push medium?

An article in the Chicago Tribune covers the issue of whether TV lineups even matter anymore.

Network suits spend weeks, if not months, agonizing over which shows will go where on their fall schedules. But by 2010, according to the consulting firm the Yankee Group, 48 million American homes will have DVRs, which allow viewers to watch shows they've recorded whenever they choose. And then there are options such as online streaming, on-demand viewing and buying episodes via iTunes, all of which have exploded in the past couple of years.

I would argue that the TV lineups still add value for many consumers. In a world of unending choices and an increasing emphasis on information pull, I believe many people will welcome the choices being made for them. Choices can be exhausting. Audiences will thank the big networks for deciding what they are watching on a certain night so they don't have to make the choice themselves. I also think when it comes to TV news, people want more of a push model because they still value the aggregation that news programs do for them. It'll be interesting to see who becomes the most trusted aggregator in online video in a Web 2.0 world (or should I say TV 2.0)?

Additionally, for those of us who are addicted to certain shows, we can appreciate the excitement around a show's original airtime. I know I personally will still be in front of the TV watching American Idol every Tuesday night at 8 pm next year (or catching it on my DVR as soon as I can that night).

I would say, however, that TV may lose audiences as our entertainment and news options expand into the unimaginable. This is a good thing for advertisers because they are realizing new advertising channels that provide a better ROI (but that is a whole other conversation - maybe I'll cover that in my next post). Overall, I think these trends are a big win for most of the players involved, including consumers, advertisers and content creators. TV networks have the most to lose here. The ones battle that is hard to predict is whether traditional networks will take the lead in online video or whether an internet company will do the honors.

A Marketplace for Predictions

Online trading exchanges (TradeSports, Betfair) differ from more traditional sports betting websites (Sportsbook.com, Bodog) in that there is no "house." That is, the exchanges are clearinghouses for buyers and sellers to trade with each other at prices set by each other, whereas the traditional betting websites are owned by casinos that are in business to rip off their customers.

While casinos attempt to post odds at a market clearing price, the exchanges offer "live" pricing. For example, Bodog might offer me static, pre-game odds of Jacksonville over Indianopolis at 3-to-1 on Sunday (implying JAX has a 25% chance of winning); TradeSports shows me the price throughout the game. So, the JAX contract starts the game at $0.25, with the price moving up or down depending on how the game is going. If JAX scores an early touchdown to go up 7-0, the contract might rise in value to $0.50, at which point I can sell for a profit of $0.25 ($0.50 market value less $0.25 cost) or hold it in the hopes that JAX wins and I collect a profit of $0.75 ($1.00 less $0.25).

The price of the contracts on these exchanges are determined not by casinos, but rather by users. By offering better pricing, more liquid markets, and a superior customer experience through user involvement, online trading exchanges are a good example of how Web 2.0 capabilities compare to the old Web (in this case, online casinos).

The potential for online exchanges is limitless, and one wonders if and when established exchange companies (NYSE, Nasdaq) will react or intervene. The most active online trading exchange markets are sporting events, but contracts in financial markets and other events ("When will Brangelina get divorced?") are also quite liquid. TradeSports has even applied to the Commodity Futures Trading Commission (CFTC) to open a regulated futures exchange in the US.

Wikipedia does a better job of summarizing than I can...

WARNING: This blog does not contemplate the legality of transacting on these sites, and I certainly do not wish to suggest any activity that will get readers fined or thrown in jail.

Free Online Classes - Yale Goes One Step Further than MIT and Princeton

With the help of a $755,000 grant, Yale University will be making 7 courses available online for free. What makes this different from similar initiatives by other top universities like MIT and Princeton, is that Yale will be including videos of each class along with transcripts and syllabi. While it seems very generous to allow the world inside their prestigious classrooms for free, you have to wonder how classes like "Introduction to the Old Testament," "Fundamentals of Physics" and "Introduction to Political Philosophy" were deemed to be important enough to be part of the select seven.

http://go.reuters.com/newsArticle.jhtml?type=technologyNews&storyID=13549044&src=rss/technologyNews

Eons: 'MySpace' for the boomer set

Although most older Americans could care less about MySpace and social networking, that hasn't stopped people from trying to reach them... from the Christian Science Monitor.

Like some 300,000 others in recent weeks, they have logged on to a new website, Eons.com. The site is banking on a digital awakening among recreation-minded boomers and matures, a growing and increasingly active demographic - online and everywhere else.

While the numerical arguments are persuasive due to the amount of seniors coming online, their numbers belie the fact that older Americans search for information online, not social stimulation. And since the basis of social networking sites is having your friends on them, it doesn't seem likely that enough of any boomer's 'posse' would be on the site to make it worthwhile.

On the other hand, boomers and older Americans have two strong votes in their favor: a desire to meet new people with common interests, and the time to participate in online communities. In this respect, 'Empty nesters' are very similar to the children they just dropped off at college: Starting a new phase of their life and eager to meet friends, to spend their new-found free time with.

TIme will tell, but web publishers have found that older folks have different goals than younger ones online. They seek information, and tend to cluster around investment and health related sites. Perhaps most amusing:

And a feature called cRANKy is "the first age-relevant search engine," says Natansohn. When its research showed that senior users were frustrated by enormous, largely irrelevant yields found by major engines, Eons built in a vetting process that pulls down top sites based in part on its own editors' reviews and previous users' ratings.

A Little Class on the Internet

Venture Capital Funds in Web 2.0

This is an interesting article about how much funds Web 2.0 companies are raising in the venture capital markets.

VentureOne, a research firm, has recently come up with a succinct definition of Web 2.0 including companies using rich Internet applications such as AJAX or those developing services related to podcasting, tagging, blogs, social networking, mashups and wikis.

http://seattlepi.nwsource.com/venture/286088_vc22.html?source=rss

Podzinger: Another Way To Search Media Online

One problem that scientists have been trying to tackle for some time is how to search non-text data on the Internet. Traditionally, that has been done by looking at meta-data (ex: tags) or by trying to divine meaning through filenames or the context of the HTML page.

However, a new web application called Podzinger allows you to search within audio and video by doing audio recognition. I especially like it because it comes from BBN, which practically invented the Internet in the late 1960's when they created the first network: DARPANet.

Top Execs Using Social Networks for Recruiting

Online social and business networks are becoming valuable resources for recruiting and customer service intiatives for major businesses at the mid and upper executive level. Not only can they locate possible candidates, more so, they can help in sales and marketing, performing background searches on candidates, and maintain contact with former co-workers. With precaution, all can be new components to the HR process.

http://www.businessweek.com/technology/content/sep2006/tc20060911_414136.htm

While major privacy issues exist, the benefits to the hiring party can be great. To be able to verify the validity of the a potential candidate is tremendous, and can help ensure good hiring decisions are made in return saving time and money. The network will only be as worthwhile as the time and effort the execs put into them.

Ethics and Internet 2.0

If the Internet is the new frontier (the the wild wild west of cyber space if you will)... then the requisite ethics are certainly uncharted territory as well. Some now argue that with all that has happened in the 10 years since the inception of the Internet that a new ethical standard is need to match the countless uses and applications that have arisen with Internet 2.0

http://www.duke.edu/~wgrobin/ethics/faq.html#EandI20

Battle for Positioning: Apple and MSFT

http://www.nytimes.com/2006/09/13/technology/13apple.html?ex=1158984000&en=eafe723d4a773175&ei=5087%0A

A movie player to complement Apple’s movie downloads? Why not?

The living room space is Apple’s next obvious frontier. MSFT has already put its stake in the ground with their XBox gaming console and Windows Media Center products; and is now positioning itself to challenge Apple’s iPod dominance with its recently announced Zune music service. Why is all of this happening? It’s a race to integrate products and services throughout the consumer’s digital experience.

Here’s a great article that provides a look at MSFT’s positioning.

http://www2.cio.com/higher/report4267.html

MSFT and Apple are now fighting battles on a few non-computing fronts. Zune will attempt to take on iPod and iTunes’s positive brand image with a more consumer/community friendly music service that they are building from scratch. Apple’s mission, on the other hand, is perhaps more tactically sound. They are planning to invade the living room space with a product that’s an extension of their already successful iTunes service.

Apple’s baby steps or MSFT’s all out blitz? It’s hard to bet against either of these companies.

When Search Engines meet Social Networks

Following the web 2.0 trend, some companies are now attacking the multi-billion dollars search engine market via the social network angle.

www.wink.com

Wink is a Social Search Engine that uses people’s contributions and feedback - like bookmarking and tags - to make it easier to find and share current, relevant results. Instead of a robot crawling over the web to index the zillions of pages outthere, your friends and buddies do it for you.