Oddly Together

Someone Should kick Michael Arrington's Arrogant Ass

Sat, 28 May 2011 13:40:00 -0700

A month ago, April, 27, 2011, Michael Arrington posted “An Update To My Investment Policy”, which not surprisingly generated negative reaction from established journalists. I wanted to respond right away, but I’ve been too busy at Betanews, where new editorial responsibilities add to writing.

The issue is a long-standing one of debate regarding TechCrunch’s founder—that he invests in, or has other business dealings with, some of the companies he writes about.

Michael justifies this behavior:

Before TechCrunch I was an occasional angel investor, going back to the mid 1990s…Some people have seen this as a conflict of interest, which it of course is. To counter that I’ve always disclosed investments, and try not to cover these startups myself. Occasionally when news is breaking quickly or for other reasons, I will write about the company, but with the appropriate disclosure.

In 2009 the accusations of conflicts of interest by our competitors became somewhat distracting, and for a couple of years I discontinued investing in startups completely.

That policy has now changed. Over the last several months I have begun investing actively again.

Michael further explains that he can’t write about companies for which investments aren’t public (e.g., there’s some non-disclosure or other legally binding agreement), because he would disclose them first. Otherwise, when able to disclose and write: “I think that this will all be fine. I’ll still be very hard on companies I invest in when they deserve it”.

On the one hand, I laud Michael for disclosing these investments, but that doesn’t remove conflict of interest. What he writes can benefit these companies, even if he’s completely unbiased, or turns a critical eye. Investments’ disclosure is itself conflict of interest. Michael is known to be a successful entrepreneur—TechCrunch is proof of that—and shrewd seer of viable startups. Disclosure of these investments is tacit endorsement, and that can get the startups attention, perhaps needed funding or even eventual acquisition.

A Personal Example
I’ve written plenty of news stories over the years that moved companies’ stock, sometimes unknowingly. For small companies and their investors the results can be rewarding or devastating. One instance still bothers me. In September 1999, Dell briefed me on plans to offer WiFi cards from AiroNet. At the time, no Windows PC manufacturer shipped laptops with built-in WiFi. Dell chose an add-on to the portable’s PC Card slot as its first move into WiFi. The story posted at CNET News on Sept. 15, 1999. I didn’t realize two things, which may have been related: Dell exclusively gave the story to me (without saying so) and AiroNet had gone public a few weeks earlier.

CNET had no comments section on its site back then. Readers communicated by email. I received one from a desperate investor who had shorted AiroNet stock. He pleadingly asked if the Dell deal was true. Turns out that after my story posted, AiroNet shares started rising—up 40 percent over two days. No wonder he was panicked! Sometime later, Cisco bought the WiFi startup.

Suppose, hypothetically, I had been an investor in AiroNet, a new public company. The stock surge likely would have benefitted me, and surely I should have considered the possibility before writing one word. Similarly, any benefit Michael receives from writing about these companies is conflict of interest—plain, pure and simple. If he feels that disclosing investments is being transparent, I challenge him to go further. If there’s really no problem, then he should disclose when he financially benefits from these stories. That would be real measure of conflict of interest, as his critics insist there is.

“Screw Them All” Defense
However, Michael asserts he’s no different from other writers in followup post: “The Tech Press: Screw Them All.” He writes:

We can argue all day about whether or not my policy is a good one. You’ll have your arguments, I’ll have mine. But the really important thing to remember, as a reader, is that there is no objectivity in journalism. The guys that say they’re objective are just pretending. Everyone is conflicted in different ways, and yet the ‘rules of journalism”’don’t require any sort of transparency or disclosure unless it’s a direct financial conflict. I’m going to have to write a longer post about his yet again.

But when you read a tech blogger call a CEO ‘tough and misunderstood,’ should you know that the CEO in question is social friends with that blogger, and leaks confidential information to her? The answer is yes. But you’ll never know. Or when the same CEO is called incompetent by another blogger who was just turned down by said CEO to speak at his conference. Disclosed? No. Conflicted? Yes.

There’s a difference between being friends with a CEO and being an investor in his or her company. I wholeheartedly agree with Michael that conflicts of interest are unavoidable among journalists. But that’s no excuse for engaging them—actively, in this case—nor does the justification address issues of degree. When there are huge amounts of money involved, the difference between investments and accepting a product and reviewing it or having personal political biases simply don’t compare. There simply is no ethical justification for writing about companies in which you invest or have other financial relationships. For the record, I own no stake or stock in any company.

Would it be so hard for Michael to establish a hands-off policy about the companies for which he has financial relationship? What? Are there no other competent writers at TechCrunch, who could report about these companies instead? That Michael has to justify his relationships as disclosure demonstrates there is significant conflict of interest—that he must be concerned that TechCrunch reporting might jeopardize them.

When the AOL Well runs Dry
Surely Michael must already be thinking about the future and his end of days at TechCrunch. In late September 2010, AOL acquired TechCrunch. His site looked like the crown jewel for AOL’s new media empire, but then, in February 2011, AOL bought Huffington Post and put the queen of aggregation in charge of the media company’s editorial content. I don’t see how there’s room for two such large personalities at AOL, and they do have conflicting agendas. While I may gripe about Michael’s personal ethics, I praise what he has created in TechCrunch. Unlike Huffington Post, which lifeblood is aggregation, TechCrunch is nearly all about original reporting—using an effective technique sometimes called “Process Journalism.”

[Edtor’s note: Due to some unfathomable glitch at Tumblr, the post from the paragraph above onward simply vanished and could not be recovered even in browser history. It’s actually the portion of this commentary written first. What follows is a poor reproduction; it’s shorter, and the original impact is gone. I was in the zone when writing and completely lost momentum afterwards.]

TechCrunch not only excels at original reporting, it produces many scoops. By comparison, Huffington Post is a mashup of aggregated, freely-written and occasional original content. Ariana Huffington puts panache, style and hype behind the presentation. Huffington Post may be the Internet’s most successful gossip rag.

One might call Huffington Post and TechCrunch as two sides of a coin. I see them as antithesis to one another. Based on position, style and knack for navigating AOL’s political hierarchy, my money is on Ariana surviving before Michael. Besides, he is known for being gruff and pushy, qualities that won’t hold up long with AOL management. In the war of strong-willed personalities, Ariana is more likely winner. It’s not a question of if Michael leaves TechCrunch but when.

Change, What Change?
So Michael’s start-up company investments and other business dealings are crucial for what comes next, and surely he knows that. From that perspective, there is huge conflict of interest, because of his incentive to protect his on-the-side business dealings. If that’s not the case, then I again challenge him to prohibit himself from writing about these companies or having editorial oversight over the content. See, his argument cuts both ways. If there’s no problem with these business dealings, no benefit from his writing about them, then there should be no problem with someone else writing about them, too.

But there’s no incentive for him to change anything. Journalists can argue all they want about ethics or conflicts of interest, but in the end one thing matters to Michael: TechCrunch is a business. It’s his baby, which he wants to continue succeeding. Post-merger, his job also is to continue making money for the new AOL taskmasters. From a business perspective, this conflict-of-interest stuff doesn’t matter. If it did, TechCrunch would have lost masses of readers or advertisers in the month since his disclosure post, and there is no indication of that. TechCrunch posts interesting and timely content—plenty of scoops and original stories—and the readers are part of the storytelling process by way of comments. It’s not surprising, from that vantage point, Michael can take a “screw them all” attitude to his critics.

Still, someone should kick Michael Arrington’s arrogant ass. His disclosure policy is justification for the most egregious conflict of interest. No journalist should directly profit from his or her reporting.

Tech startups are suddenly hot properties again, and Michael wants some of the action. LinkedIn’s IPO, Twitter’s TweetDeck acquisition and Microsoft’s pending Skype purchase are signs of a new tech bubble forming—and these are all deals that occurred after Michael’s April disclosure post. He just sold TechCrunch to AOL, he has strong ties to venture capitalists and writes about them and startups. Michael knows exactly what the venture capital investment opportunities are shaping up to be as the new bubble expands.

Way I see it, Michael wants to have his cake and eat it, too. Fine, then open and run a TechCrunch public relations agency, Mr. Arrington. But don’t pretend that eating and sleeping where you crap is healthy living.

Photo Credit: Robert Scoble

Do you have a journalism ethics story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

"An investor putting $100,000 into both stocks 10 years ago would now have about $143,000 in IBM..."

Wed, 25 May 2011 14:46:00 -0700

“An investor putting $100,000 into both stocks 10 years ago would now have about $143,000 in IBM stock and about $69,000 in Microsoft stock.”

- Bill Rigby, Reuters story “IBM passes Microsoft’s market cap after 15 years”

I just didn’t know what to do with this great quote. I at first thought to write my own story at Betanews and credit Reuters. But Yahoo Finance actually shows Microsoft capitalization higher than IBM, which likely occurred after Bill’s story posted. The point: Microsoft is a lousy investment¬that I wouldn’t know from personal experience. Because of conflict of interest, I own no stocks.

Do you have a story about a public company that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

Last night I hauled out iPad 2 and opened the Vevo app, finding...

Sat, 21 May 2011 07:32:19 -0700

Last night I hauled out iPad 2 and opened the Vevo app, finding a refreshing video by one of my fav bands—The Airborne Toxic Event. The musical group performs live for its fans on a city bus in their hometown of Las Felix, Calif. I would definitely categorize performing on an exhaust spewing bus as an airborne toxic event. The song is “Changes”

Do you have a live performance story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

Improv Everywhere strikes again. “Gotta Share!”...

Mon, 09 May 2011 11:54:00 -0700

Improv Everywhere strikes again. “Gotta Share!” Perhaps that should be gotta get a life.

Do you have an improvisation story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

Is the Fujifilm FinePix X100 for you?

Sun, 08 May 2011 18:43:00 -0700

Few digital cameras have caused as much stir as the retro-styled compact now available in the United States on a limited basis. The Fujifilm FinePix X100 joins the Leica X1, Sigma DP1x and DP2x, Sony Alpha NEX-3 and NEX-5 and micro four-thirds cameras like the Olympus PEN E-PL2 and E-P2 or Panasonic DMC-GF2 in a newer class of mirrorless digicams. I have owned the DP1, DP2s, E-P1, E-P2, GF1 and X1.

However, like the Leica X1 or Sigma DP series, the X100 is eccentric—the lens is fixed and cannot be changed. Who on earth would buy a digital camera without telephoto? I, for one. Many professional photographers for another. I’m no pro, but I have specific needs as a journalist for which the X100 is ideally suited. The X100 is the only camera I own. I received mine on May 4, 2011, and I love it. In just four day’s use, I can say it’s the right digicam for me, and I’ll explain why in an upcoming review.

Most certainly the X100 isn’t for everyone:

The fixed, 35mm film equivalent lens (23mm digital) won’t appeal to anyone wanting to change lenses or to zoom in and out. With the FinePix X100, you are the telephoto.
The $1,199.95 price will put off other people. For even less, $879.99, Costco sells the Nikon D3100 dSLR, with two zoom lenses, two training DVDs and 4GB storage card.
There aren’t loads of scene modes that appropriately adjust the settings. Fujifilm provides the tools, you have to use them. This camera can produce exceptional photos, particularly in low light, but they won’t come from shooting in auto mode.

I’m suddenly excited about photography. The X100 is why.

Top-Line Benefits
For people considering the Fujifilm FinePix X100, there are 10 benefits you should consideer

1. Retro design. Simply stated, this is one handsome camera that harkens back to 1950’s-era rangefinders. But looks are deceiving. The X100 is no rangefinder and it has new, and innovative tech, inside. “The joke is that you know you are carrying the very latest, cutting-edge, $1,200 semiprofessional camera, but passers-by think you’re the last Luddite film buff in America,” David Pogue writes in his X100 review for the New York Times.

2. Hybrid viewfinder. While the X100 has the typical LCD screen on the back, photographers are more likely to use it to view rather than to take pictures. The X100’s hybrid electronic/optical viewfinder is a marvel of innovation. Photographers can switch between both views, which offer simply shocking advantages for framing—that is composing—the picture. Photographer Sean Reid better explains in his X100 review. It’s worth paying the 33 bucks a year for the one review, if you’re considering buying the X100 (His content is all behind a paywall). You never heard of Sean Reid? Here’s why.

3. APS-C sensor. Like the Leica X1 and Sony NEX series, the X100 packs a full dSLR-size sensor into a compact-size. However, this isn’t as big as the full-frame sensor (35mm equivalent) found on Leica rangefinders or the Canon EOS 5D Mark II. The X100 sensor measures 23.6mm x 15.8mm. By comparison, the hefty Canon 7D dSLR’s sensor is slightly smaller—22.3 x 14.9 mm. The X100 sensor produces 12.3-megapixel images, which is more than most anyone should ever need.

4. Fixed, f/2 lens. I’m a big fan of prime lenses, and you should be, too. A good fixed-lens will provide sharper images with less distortion than any telephoto. Based on the photo pros’ reviews, like this one from Steve Huff, and my less than 24 hours with the X100, Fuji’s lens delivers—and it lets in a whole lot of light for people like me who don’t often use flash.

5. Compact size. The X100 is 26.5mm wide by 74.4mm high by 53.9mm deep and weighs 445 grams. By comparison, the Nikon D3100 is 124 x 96 x 74.5 mm and weighs 505 grams. The D3100 is considered to be a fairly svelte dSLR, but is giant compared to the X100, particularly with lens attached. However, look at the weight, which surprised me when picking up the X100. By comparison, the Leica X1 weighs 286 grams. Still, the Fujifilm compact is the easy carry-along camera compared to a dSLR but with similar, and in some ways better, capabilities.

6. Flash sync. The X100 can flash sync to a shutter speed of 1/4000 sec. That’s not just unheard of for compacts but for most digital SLRs—1/125 sec is more typical. Even the haughty Canon EOS 5D Mark II is 1/200 sec flash sync. I personally prefer to shoot without flash, but for those people who do, this is an outstanding capability to have—and marvelously unique.

7. High ISO. The X100 produces stunning images, even as high as ISO 6400. If you’re an indoor shooter—and I am when covering events—the high-ISO capability means capturing better photos without a flash. That makes the X100 more discreet and less intrusive, too. For some examples of high-ISO performance ahead of my full review, visit the FinePix X100 Flickr group.

8. Silent shutter. The X100’s four-leaf shutter is essentially silent, and I had found the Leica X1 and Sigma DP2s to be unbelievably quiet. Combined with the camera’s compact size and unobtrusive lens, the X100 is a discreet shooter, which makes it highly suited to street photography (other than “zone focus” issues I’ll discuss in my full review). For a sweet taste, visit the Fuji X100 Street Photography Flickr group.

9. External controls. Like with the Leica X1, but placed differently, the photographer uses dedicated dials to change aperture and shutter speed—no fiddling with backside controls required.

10. Fuji color. Some photographers rave about the “Leica look” or “Foveon look” (for Sigma cameras). The “Fuji look” is very much about the warm colors and deep contrast the X100 produces. Photos are smoother than sharp in my early testing—at least compared to the Leica X1—but satisfying.

How I Got Mine
The Fujifilm FinePix X100 is a tough camera to come by. Fuji announced the digicam in September and pricing in February. I put in a preorder with Amazon right away. I chose Amazon because I sold some stuff to a good friend to help fund the purchase, and he wanted to pay by credit card. It was easier for him to send an Amazon gift certificate (I didn’t want PayPal fees, nixing the other option). This gave me about $750 towards the X100 if purchased from Amazon or one of its merchants.

Demand looked to be high, then the devastating earthquake and tsunami struck Japan, stopping X100 production for several weeks. Suddenly everyone wanted a X100, and few people could get it. But then, unexpectedly, the logjam lifted ever so slightly last week. U.S. dealers started shipping the first X100 preorders on April 29. Meanwhile, Amazon was silent about the status of my preorder.

On May 2, around 1:30 p.m. ET, a new merchant carrying the X100 popped up on Amazon selling the camera for a few hundred bucks over list price. The merchant turned out to be a reputable photo shop, and I called to confirm cameras were indeed in stock. “What the hell?” I thought. I cancelled my Amazon order to free up the gift card balance. During the two minutes that passed, the merchant sold out. So not only could I not buy the X100 immediately but I lost my place in the Amazon preorder queue.

For no reason other than solace, I kept the Amazon X100 product page open all day in a browser tab. I occasionally returned looking for some miracle availability and to scold myself for being impatient. Around 11:20 p.m. ET, I was reading Steve Huff’s first impressions review when going somewhere else I clicked the X100 product page tab by mistake. Before my eyes appeared the camera, listed as “in stock” with Amazon and two one-click buying buttons at the top of the page—for next-day and two-day delivery. I immediately clicked the next-day button (available to Prime members). No more than 90 seconds later, I returned to the product page, where the X100 was listed as no longer being available from Amazon.

I received order confirmation at 11:24 p.m. with delivery estimate of May 6. Amazon later revised delivery to May 5 and then to May 4, which is when UPS made late-day delivery. I’m simply stunned.

In an interesting aside, Steve Huff posted at 11:22 p.m. (not sure his time zone) on May 3: “Amazon sold 19 X100s last night at this time in about an hour” and another 13 about the same day he posted. I must have been one of the lucky 19, although given the odds winning the lottery would have pleased me more. If you’re shopping Amazon for the X100, 11 p.m. ET might be a good time of day to stake out the product page. Maybe you can get lucky, too.

Regarding the camera, my first impressions are hugely positive, although I am surprised by the X100’s heft. I created a Flickr set with some first pics of the camera using my wife’s compact—Panasonic Lumix DMC-ZS7—and others taken with the X100.

[Editor’s Note: A slightly different version of this post appeared on Betanews, May 5, 2011.]

Do you have a photo gear or X100 story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

This is How Misreporting Happens

Wed, 27 Apr 2011 10:02:00 -0700

Have you ever played the game where someone whispers in the ear of another person and the information goes down a line of people? What often starts out from the source is different than what comes out at the end.

This little game is good example why bloggers and journalists should do original reporting/sourcing instead of relying on someone else. The problem isn’t just the veracity of the second-hand source but the judgement applied by the blogger or journalist reporting it.

I got an unexpected example this morning. I came across a startling headline in my RSS feeds: “PSN Shut Down for Good by Sony”. Say what? I’ve been reporting on the PlayStation Network outage and don’t recall Sony ever indicating a permanent shutdown of the service. The headline is from a story by Austin Ritchie at IThinkDifferent. The post begins: “In order to better upgrade Sony’s online security, the PlayStation Network, or PSN, has been taken down for good”, linking to a Wall Street Journal story.

The Journal story states that “the Japanese electronics giant said it is keeping its PlayStation Network videogame service offline indefinitely”, linking from “indefinitely” to an April 25 blog post from Sony.

“I don’t have an update or timeframe to share at this point in time,” Patrick Seybold, Sony’s senior director of Corporate Communications & Social Media, states about PSN restoration. “As we previously noted, this is a time intensive process and we’re working to get them back online quickly.” Quickly is a long way from “indefinitely” and even farther from “for good.” Troubling: The IThinkDifferent story later uses the same quote.

More troubling: In a follow-up post, yesterday, Patrick writes: “We have a clear path to have PlayStation Network and Qriocity systems back online, and expect to restore some services within a week”. Really? That’s shut down for good?

Responsible and accurate reporting isn’t a duty. It’s a privilege for being allowed the public’s trust. In this era of aggregation and free content, responsible reporting is too often a rarity. As this example shows, the chain of information can be hugely misleading when published/posted as fact. Original reporting is one way to break the chain of misinformation.

Do you have a journalism story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

So my daughter and I are walking through Sports Chalet yesterday...

Tue, 12 Apr 2011 13:12:00 -0700

So my daughter and I are walking through Sports Chalet yesterday when the background music unexpectedly caught my attention—The Divinyls’ 1990s one-hit wonder “I Touch Myself.” You know, about masturbation.

Another parent might have called a manager and complained. I just laughed.

Is it a California progressive thing, perhaps, a song like that playing in a sports shop? Well, what else do people think about on the treadmill? Maybe it’s all subliminal marketing for that endorphin high from working out.

Michael Bay directed the song’s music video (above).

Do you have a shopping story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

The price of gasoline at one of the lower-cost petrol stations...

Tue, 12 Apr 2011 08:35:00 -0700

The price of gasoline at one of the lower-cost petrol stations in my neighborhood jumped six cents a gallon from Sunday night to Monday morning. I grudgingly filled up — $40 for my little Toyota Yaris — on Tuesday April 12, 2011.

Do you have a shopping story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

I'm baaack!

Tue, 12 Apr 2011 08:27:00 -0700

In October 2010, I put Oddly Together on ice. I’m back blogging at Tumblr, and forwarding joewilcox.com to this site (or will be doing so in a few days). This week, posts from that site will show up in my Tumblr stream with the original post dates from “5 Minutes with Joe”.

Quickly stated reasons:

I miss the Tumblr community
I really only have time for shorter-form blogging
I’m ready to start seriously focusing on storytelling
My Oddly Together posts rank higher in search results
I want to avoid brand confusion with the tech blogging I do for Betanews

Do you have a blogging story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

Freely Available doesn't mean Free

Wed, 08 Dec 2010 20:05:00 -0800

I’m used to my stuff being stolen, not that I like it—ideas, analyses, blog posts and news stories. Probably my Flickr photos frequently get lifted, too. I’m no great shakes photographer, so it pains but a little. The writing hurts more. But for good photographers like Thomas Hawk, Flickr theft is a bigger deal. Some people see Creative Commons, even All Rights Reserved, as license to steal; if it’s on the Web and freely available, it must be free.

Thomas’ December 6, 2010, post “You Know How Sometimes Businesses Like to Go on Flickr Trying to Score Photos for Free?” features a comic and snarky exchange regarding photo Aldo’s Night Club. An unnamed iPhone applications developer asked Thomas permission to use the pic. The developer deserves some credit—asking for permission rather than just lifting the photo and for putting up with Thomas’ nasty responses. But perhaps a little snark and bite is warranted. While asking for permission, the developer’s self-described editor doesn’t get Thomas’ point: He should be paid for the photo’s use.

“Would there be compensation associated with this request?” Thomas asks. “If you give us your kind permission to use your photo we’ll provide a link back to your flickr page and credit you fully for the authorship of this photo”, the editor replies. Later, Thomas asks: “Would this permission need to be permanent, or could I just give permission for a period of time, like say 6 months or 1 year, or something?” The response: “This permission need to be permanent, but we’ll use your photo for our tour guide and iPhone application only. We use photos under Creative Commons license. You’ll remain the copyright owner.”

The exchange is much longer, and I won’t recount the fun Thomas has at the requester’s expense. Read his blog post. Thomas makes an important point through the exchange: Businesses using Flickr photos, even when asking permission, expect too much. They want to take something valuable and use it for free, forever. When businesses license photos from agencies they pay for specific usage and/or time period. There usually isn’t carte blanche to reuse the photo everywhere forever.

I’m a huge believer in content being made available for the public domain. I also oppose onerous copyrights that create mini-monopolies over intellectual property’s usage rights. Creative Commons is a great comprise, allowing creators more freedom how they license content. My stuff is freely available to use and remix for non-commercial purposes. If you want to make money off my stuff, I’d like some of that cash, too. Thomas applies similar license to his photos. Based on Thomas’ exchange with the requester, the self-described editor assumed he was dealing with someone unfamiliar with his rights.

That said, he did ask, which means something. The greater problem is people lifting stuff for free, and profiting from it. Freely available doesn’t mean free to use. Books are freely available in stores. Do most people take them without paying? But they do read freely available magazines for free, which bookstores might consider to be stealing; arguably it’s not so far removed from lifting something off a Website.

Looked at another way, my blog, Facebook or Flickr are my online domiciles—and yours. Stealing stuff from my home breaks the laws and defies American ethos about property ownership. Online should be no different. Right?

[Editor’s Note: This post was moved from joewilcox.com to Oddly Together on May 21, 2011.]

Do you have a contents rights story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

What iTunes Really Means to The Beatles

Tue, 23 Nov 2010 10:50:00 -0800

This morning I tweeted: “I put Beatles albums in my daughter’s iTunes library years ago. Suddenly, now that Beatles are top iTunes downloads, she’s listening.” That succinctly explains what The Beatles get from the exclusive distribution deal with Apple. There are millions of Millennials who aren’t acquainted with Beatles music, and they might never be with their parents listening to it. But everything changes if their friends are Beatling.

The “Social Generation” takes cues from its peers. There’s a kind of group think among Millennials, which social networking services like Facebook reinforce. Marketers already are learning that Millennials, also called Echo Boomers or Generation Y, have limited brand loyalty. Product affinity directly relates to the peer group—what friends and other people of similar age are using. According the Australian Leadership Foundation:

While the Builders’ Generation [Gen X] are most influenced by authority figures and Boomers make decisions based on data and facts, post-modern youth are more likely to make a decision based on the influence of their own peers. Our research has further confirmed that the biggest factor determining the choice a teenager will make is the experiences of their core group of 3 to 8 friends. Rather than making independent decisions based on core values, they live in a culture encouraging them to embrace community values, and to reach consensus.

Jeanna Mastrodicasa, University of Florida assistant vice president for Student Affairs, identifies seven traits Millennials share in common:

They feel “special”
They’re “sheltered” by parents
The feel “confident”—empowered
They are “team-oriented” in actions/decisions
They are “conventional” in attitudes about intolerance
They feel “pressured” to succeed or to take certain actions
They make “achieving” a priority, which is reinforced by peer groups

Apple has cued up The Fab Four to benefit from Millennials’ communal consensus attitudes. The Beatles came to iTunes one week ago, in an exclusive digital download distribution deal that ends sometime in 2011. A day later, Nov. 17, 2010, all 17 Beatles albums carried on iTunes ranked in to Top 50 and Beatles singles accounted for about one-quarter of the songs in the Top 200. But The Beatles iTunes reign with Millennials may be short-lived. Today, only seven albums make the Top 50, with “Abbey Road” the highest at No. 18. Only nine Beatles singles are in the Top 200, with “Here Comes the Sun” the highest at No. 66. Once again, the Millennials mob has topped the charts with contemporary artists, like Bruno Mars, Katy Perry, Ke$ha, Rihanna and Kanye West.

Millennials aren’t necessarily fickle, just consensus-oriented. Apple introduced The Beatles to a new generation of listeners. How far The Beatles go with Millennials will depend much on how the mob rules.

Here are some randomly-chosen Generation Y primers:

“Generations Online in 2009”, Pew Internet
“The Millennial Generation”, Jeanna Mastrodicasa, University of Florida
“Millennials will make Online Sharing in Networks a Lifelong Habit”, Pew Internet
“Questions and Answers about Generation X/Generation Y”, Boston College’s Sloan Work and Family Research Network
“Understanding Generation Y”, Mark McCrindle, Australian Leadership Foundation

By far, educators provide the best assessments of Millennials’ character and cultural attitudes.

[Editor’s Note: This post was moved from joewilcox.com to Oddly Together on May 21, 2011.]

Do you have a generational story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

You Can't Trust Most Polls or Surveys

Thu, 18 Nov 2010 15:29:00 -0800

Internet polls are fun but rubbish. Formal surveys conducted by so-called experts aren’t much better. If you disagree, consider this: A poll I conducted for Betanews asking “How would you identify yourself as a computer user?” puts more than 25 percent of respondents as Linux PC users and less than 61 percent as Windows PC users. Do you believe that? I don’t. But I do believe, as early results indicated, that there are more Betanews readers identifying themselves as Linux PC users than Macheads. But more than one-quarter are Linux users? Perhaps in some alternative universe, but not this one./p>

The polling started innocently enough. On November 12th, I blogged: “This film is rated PC: No Macs were used in the making of this video”, praising a Microsoft marketing video. I also inserted the aforementioned poll. Respondents had four choices: Windows PC, Macintosh, Linux PC and Other. Three days later, I awoke to 682 votes, with 507 for Windows PC, 77 for Linux PC, 70 for Macintosh and 19 for Other. That worked out to about 76 percent Windows PC, nearly 12 percent Linux PC and more than 11 percent Macintosh. The Windows PC response was a little lower than I expected, but not by much.

An Unbelievable Result
Linux PC surprised me, so I embedded the same poll in new post: “Do more Betanews readers use Linux PCs than Macs?” I predicted: “This post may marshall the fanboys and skew further results”. That same day, November 15th, a poll commenter simply identified as Jesse responded (comment grammatically corrected):

I have a feeling this poll has massive amounts of bullshit in it, provided by Betanews’s core audience of 13 year-old Xbox Live kids. More people browse the Web on iOS than Linux, so honestly it’s not even a question. Would someone would mark Linux when they’re on Windows just to make Apple look worse? Probably. You people are that sad.

I don’t agree with the “sad” dig at my readers, but Jesse and I are otherwise in agreement about the results being skewed—well, with a caveat I’ll explain in a few paragraphs. As I write there are 1,961 votes:

1,191 for Windows PC (60.73 percent)
496 for Linux PC (25.29 percent)
236 for Macintosh (12.03 percent)
38 for Other (1.94 percent)

That’s a fairly good size sampling, but it’s unqualified. I don’t know who the people responding are. I also don’t have handy information on which Websites or forums link to the poll. Could there be a rallying among Linux blogs and forums? The poll uses cookies to prevent repeat voters, but it wouldn’t take much tech savvy to get around that. PollDaddy provides just basic tools, even with my $200/year Pro account, for analyzing data. IP filtering is revealing. There are 1,807 IP addresses, with the largest number of votes (22) coming from bellsouth.net string. Microsoft.com accounts for another 7 IPs.

Geographic analysis is surprisingly useful. Only 958 responses are from the United States. Nearly 64 percent for Windows PC, about 19 percent for Linux PC and 14.5 percent for Macintosh. Canada: 158 responses. United Kingdom: 132 responses. If you believe the Netherlands’ 16 votes, then an equal number—43.75 percent—of people identify themselves as Windows PC users and Linux PC users. Bulgaria’s 59 votes come out to 83 percent Linux PC users (I just might believe that). To my surprise—and I see this as good finding—people from 94 countries responded to the poll.

Questioning Polls and Surveys
Now for that caveat: I didn’t ask which PC operating system people use but how they identify themselves as personal computer users. The poll is specifically meant to measure sentiment, which is about the only value I see coming from any poll or survey. The results reflect respondents’ attitudes rather than what they actually use. But sentiments of whom? That’s the data problem with this poll and many others like it.

Internet polls are suddenly the rage, and the results are easily shared on social networks (yeah, yeah, Facebook). Just click “Like”. The results are too easily believed as they spread. But the data isn’t necessarily representative of anything, and results can be manipulated. Take this post. Based on the data I could have written here or at Betanews something sensational about the surprisingly large number of Linux users or dwindling number of Windows users. I’ve got the data, backed up nearly 2,000 respondents from more than 90 countries. That makes the poll seemingly credible. But it’s not. I know from my everyday dealings, where I often either observe or ask what operating systems businesses or consumers use, the majority run Windows. Virtually no one uses Linux. If by some strangeness, I’m wrong, I just passed up one of the biggest tech stories of the decade. But I’m not wrong, because the data is incomplete and respondents haven’t been properly vetted.

I see poll or survey data being manipulated or misreported nearly every day. Sometimes the fault is the interpretation (by the pollster or people reporting/blogging about it) or the actual poll or survey (Web metrics data is among the most problematic). For online polls, people self-select to take them. Good pollsters weight the data to compensate for how self-selection skews the data, but if the data is relatively clean why should math massaging be necessary? Phone polls/surveys can be fairly random in their representation of the target populace, unless the respondents have been prequalified. Sentiment is another problem, because it can change, sometimes dramatically. Imagine a poll taken about Americans’ attitudes towards muslims on Sept. 10, 2001 and one taken two days later.

CBS News’ Airport Scanner Poll
On November 15th, CBS news posted story “Poll: 4 in 5 Support Full-Body Airport Scanners”. The headline actually misstates the data. CBS News asked 1,137 U.S. adults by telephone: “Should airports use full-body airport scanners?” Eighty-one percent said yes. But agreeing that airports should use the scanners isn’t the same thing as supporting them. It’s this kind of nuance that a comprehensive survey would seek to reveal. For example, I may believe that Barack Obama should be president but not support all of his agenda. You might answer a poll saying the government should use whatever means necessary to fight terrorism, but that wouldn’t necessarily mean supporting surveillance of you or your neighbors.

Timing is important, too. CBS News conducted the poll November 7-10, just as full-body scanners were coming to major airports—San Diego’s scanner(s) arrived in August, among 11 airports planned for this year. Presumably, most respondents haven’t been through a full-body scanner. How would they answer if asked November 29th, right after the busy Thanksgiving travel weekend?

CBS News’ poll result is startling. For most of November there have been news stories every day regarding conflict and controversy about full-body scanners (Then there was the high-profile incident here in San Diego just last week). The U.S. Senate held hearings on airport scanners just two days ago. Has CBS News uncovered some media conspiracy? The news stories suggest people are pissed about the scanners. In contrast, the poll indicates most Americans believe that airports should use the security devices. A broader, well-crafted survey might sniff out the differences and truly be newsworthy. So there remains uncertainty between the poll and the news about the extent of Americans’ outrage or acceptance of full-body scanners. That the poll raises the question but offers no real answer makes the findings unreliable.

Can you really trust polls or surveys? My answer is no for the majority of them. In a future post, I’ll offer tips on how to conduct reasonably reliable polls or surveys.

Photo Credit: Greg Grieco/Penn State University

[Editor’s Note: This post was moved from joewilcox.com to Oddly Together on May 21, 2011.]

Do you have a story about polls, pollsters and survyes that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

Banks Play the Foreclosure Blame Game

Wed, 17 Nov 2010 18:45:00 -0800

Big business plays the kind of blame game that makes four year-olds crying “He made me do it!” seemingly mature. So, I’m not surprised that yesterday before the US Senate Committee on Banking, House & Urban Affairs, Bank of America’s Barbara Desoer blamed investors for the financial institution’s inability to modify more mortgages. It’s not her fault!—she claims. She makes a strange distinction between investors and shareholders, in the process casting blame as misdirection from a much larger problem: Banks and other lenders mishandling mortgage/foreclosure paperwork.

I’m a longstanding critic of public companies, because of conflicting ethical objectives. It’s the great American contradiction: U.S. law treats businesses like people, but the organizations don’t share the same moral objectives as the human beings they represent. The “good of all” is the shareholder, not humankind. This moral difference is one of the major reasons some businesses egregiously act against the common good of all people—some of whom are their customers.

There is in business no moral high ground. The high ground is quagmire, because all public companies share a single, moral objective—to make profits for stockholders. By that measure, any action that undermines making money for shareholders is immoral. Similarly, investment banks and other Wall Street entities represent investors with the same moral objective and another: For those individuals servicing investments to make as much money as possible. Their self-serving objective often puts individual gain ahead of the good of investor customers.

I’m making a distinction between company shareholders and investors with broader portfolios, because Desoer does. From her prepared testimony:

Many investors limit Bank of America’s discretion to take certain actions. When working with delinquent customers, we aim to achieve an outcome that meets customer and investor interests, consistent with whatever contractual obligations we have to the investor. Duties to investors add complexities to the execution of modification programs and can result in confusion for customers.

Desoer isn’t talking about casual investors but the U.S. government. She explains that BoA only owns 23 percent of the loans it services. Of the remaining 77 percent, “Fannie Mae and Freddie Mac are the investors on 60 percent of these loans,” she blithely asserts, adding:

Treasury, investors and other constituencies often change the requirements of their modification programs. HAMP [Home Affordable Modification Program] alone has had nearly 100 major program changes in the past 20 months. Fannie and Freddie, as investors, have layered on additional requirements, conditions and restrictions for HAMP processing. When these changes occur, we and other servicers have to change our process, train our staff and update technology. These changes can also affect what is required of the customer, for example the need for new or different documentation.

Talk about playing the blame game. Desoer basically blames the government, creator of the HAMP program, for BoA’s inability to modify more mortgages. In making such audacious claim she shifts the focus away from the reason for the Congressional hearings—industrywide, pervasive mishandling of mortgage and foreclosure paperwork. Asserting that “changes” necessitate customers providing “new or different documentation” distracts from Bank of America’s mishandling of foreclosure paperwork, which by far is the greater problem.

Mortgage holders and servicers are sitting on a powder keg of toxic mortgages, potentially much greater than already revealed. Some of the mangled paperwork reveals that somebody awarded mortgages that home owners weren’t qualified to receive, such as “liar’s loans”. These risky mortgages were later bundled together as investment packages given AAA-ratings. That’s fraud, by several legal measures, securities and/or tax fraud depending on how the mortgages were packaged as investments.

In making such accusation and misdirection, Desoer is acting on behalf of BoA shareholders and their short-term interests. There’s the distinction between investors and shareholders—the latter being in Bank of America. Her first moral objective is to her shareholders, by using tactics to minimize risks that BoA’s mortgage portfolio will explode into financial hardship if not disaster. She has no incentive to be truthful or forthcoming.

That’s the problem unraveling foreclosure fallout resulting from the housing bubble collapse. Government agencies, Congress, aggrieved mortgage holders and many other outsiders expect one kind of behavior when they’re confronted by another. The highest moral objective of these investment banks and other mortgage holders or servicers is money—if not making it then not losing it. Journalist Matt Taibbi has recognized much of the behavior for what it is: Scamming. I highly recommend his book Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America and regular writings for Rolling Stone.

By the way, Desoer’s investor accusation/misdirection is itself a scam. A lie. A cheat. From a story yesterday by Karen Weise in ProPublica:

Desoer’s testimony echoes what homeowners have long heard, that investors are frequently denying them help from federal program created to foster loan modifications. But as ProPublica has reported, that’s simply not the case. Investors rarely have a say in loan modifications or block such modifications.

Something else revealing in Desoer’s testimony: “Of the nearly 14 million loans in our servicing portfolio, 23 percent of the portfolio is owned by Bank of America.” That’s a stunning figure. More than three quarters of the loans being serviced by BoA belong to some other organization. That’s another context from which to look at her investors accusation/misdirection, as it’s essentially the 77 percent she uses to protect 23 percent obligation to her shareholders.

The investor blame game is but one tactic. Another is to blame homeowners for not paying their bills. Blame, blame, blame is meant to distract from the real problem. The mangled paperwork. In the latest Rolling Stone, issue 1118, Matt Taibbi writes in “Courts Helping Banks Screw Over Homeowners”:

Why don’t the banks want us to see the paperwork on all these mortgages? Because the documents represent a death sentence for them. According to the rules of the mortgage trusts, a lender like Bank of America, which controls all the Countrywide loans, is required by law to buy back from investors every faulty loan the crooks at Countrywide ever issued. Think about what that would do to Bank of America’s bottom line the next time you wonder why they’re trying so hard to rush these loans into someone else’s hands…

That’s why one banker CEO after another keeps going on TV to explain that despite their own deceptive loans and fraudulent paperwork, the real problem is these deadbeat homeowners who won’t pay their fucking bills. And that’s why most people in this country are so ready to buy that explanation. Because in America, it’s far more shameful to owe money than it is to steal it.

Photo Credit: Jeff Turner

[Editor’s Note: This post was moved from joewilcox.com to Oddly Together on May 21, 2011.]

Do you have a mortgage or foreclosure story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

Toilet Training

Mon, 08 Nov 2010 19:25:00 -0800

If you’re one of those offensive people who talk on the cell phone in bathrooms—particularly public loos—your behavior stinks more than your poop. There may not be more appropriate place to assert that you’re on my shit list, bud. Bathroom phone calling is bad etiquette by just about any measure.

I cringe when walking by a public toilet stall and hearing someone talking into their cell phone. I’ve heard men taking what clearly are business calls. Oh, please! I’d fire your ass, for sitting it on the toilet seat and talking to me (your client or boss). Could toilet talking be the real reason for noise-cancelling cell phones or Bluetooth earpieces? Surely someone will hear you doing your toilet business—or that of the person in the next stall—while you’re taking the call.

Perhaps the problem is an old one, and I am naïve about it. Cordless phones predate cellulars. I would never use a cordless phone in the bathroom, but many other people surely have. Perhaps you? Hotels encourage bathroom calling by often placing phones within reach of room toilets. What’s different now: Calling in public restrooms. What next? Hotels adding fold-down desks to public stalls, so that patrons can set up temporary toilet offices? “Our stalls are soundproof and comfy with free Wi-Fi should you want to make video calls”.

Bad Phone Behavior by the Numbers
Today, Microsoft released results from a survey conducted by Harris Interactive spotlighting bad phone behavior. Harris telephoned 2,024 Americans over age 18 between Oct. 6-17, 2010, about their mobile phone usage. Forty percent of respondents admitted to using cell phones in the bathroom—55 percent of 18-34 year olds. Among 18-24 year-olds, 19 percent admitted to dropping cell phones in a toilet—6 percent of respondents 25 or older.

What I wonder: How many people were too embarrassed to admit bathroom calling or mishaps? I wouldn’t be surprised if the overall percentages aren’t higher, particularly when weighing an important group not included in the survey: 13 to 18 year-olds. Mobiles are so common, maybe 10-18 year-olds would be more sensible. What? You think teens and tweens don’t phone from the throne?

The Harris survey suggests people aren’t being totally honest: “72 percent identified bad mobile phone behavior as one of their top 10 pet peeves, but only 18 percent of mobile phone owners admit they are guilty of displaying such behavior.” But what is bad phone behavior?

When Is It Rude to Use Your Mobile?
Well, hell’s bells, I’ve got a personal list of bad phone behavior. In order of offensiveness or dangerousness:

Texting and driving, which isn’t just rude, it’s dangerous. Last year, I nearly had an accident with some guy texting while riding a motorcycle.
Retrieving data and driving. If you’re lost or looking for the next Starbucks, pull over. Don’t use Bing or Google search or maps from a cell phone while driving.
Driving one-handed talking on a cell phone. Hands-free, baby—it’s the law in California and some other states.
Toilet talking. There’s no reason to do your business while, ah, doing your business.
Talking while waiting in line for service. Are you bugged as much as I am by people blabbering on their mobiles while paying for groceries, fast food or other goods? It’s obnoxiously rude to everyone waiting behind you and to the cashier most of all.
Obsessively texting in the presence of others. Have you never heard Stephen Stills song “Love the One You’re With”? Be present with the people who are with you, not the ones somewhere else. There’s time for those other folks when you’re alone.
Cell phone ringing in movie or meeting. You were told to turn it off. Nearly one-quarter of 18-24 year-olds acknowledged disrupting an “event such as a wedding, religious service or play”.
Texting or gaming while walking in public places. It’s rude and dangerous. Forty-nine percent of 18-24 year-olds admitted to having “tripped or walked into something while walking and texting or emailing on their mobile phone”.

There is a real mobile phone etiquette problem, for which Americans’ lack of proper toilet training is evidence. According to Harris: “Less than half (48 percent) of adults believed talking on a mobile phone in a public restroom is inappropriate phone behavior, and two in five (43 percent) believed texting, emailing or surfing the Web in a public restroom is inappropriate.” Cough. Cough.

Illustration Credit: Microsoft infographic

[Editor’s Note: This post was moved from joewilcox.com to Oddly Together on May 21, 2011.]

Do you have a mobile etiquette story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

Was MSNBC right to Suspend Keith Olbermann?

Sun, 07 Nov 2010 16:43:00 -0800

On Nov. 5, 2010, Keith Olbermann essentially got the boot from MSNBC for making three undisclosed political contributions—or that’s how I interpret suspended without pay. The donations violated MSNBC policies designed to prevent any apparent (or even actual) conflict of interest. For someone who does cover politics (Hey, wasn’t that Keith headlining election-night coverage?), it’s not unreasonable that there be no apparent bias.

Bias, eh? Don’t make me laugh. In some mythological land existing in some news management’s imagination, there is unbiased reporting. In the real world, there is no such thing. Good journalists may strive for objectivity, but there is always some slanting influence, even nothing more than culture, experience or personality. News reporters are as opinionated as anyone else. They have their favorite brands and political leanings that can be tough to set aside, even unsconsciously. Then there are factors going on behind the scenes, like the quest for ratings, subscriptions or pageviews.

Keith’s show long ago moved from news to opinion. A real peacock (not the NBC mascot) couldn’t bluster more colors than KO’s liberal primping. For example, on October 27th, Keith opined: “If the Tea Party wins, America loses”.

[polldaddy poll=”4051223”]

Keith pontificated:

Vote backward, vote Tea Party. And if you are somehow indifferent to what is planned for next Tuesday, it is nothing short of an attempt to use Democracy to end this Democracy, to buy America wholesale and pave over the freedoms and the care we take of one another, which have combined to keep us the envy of the world.

That’s a fairly strong opinion. So, what? NBC brass is shocked that one of its star anchors has liberal political leanings? I mean, c`mon now. That said, MSNBC does have policies in place governing political contributions. Keith violated them, and, strangely, fairly late in the election process. I guess someone put the fear of Tea party into him.

Keith donated 2,400 bucks to each of three Democrats: Jack Conway in Kentucky and Gabrielle Giffords and Raul Grivalva in Arizona. Those aren’t exactly huge sums of money. But any one of the contributions would violate NBC news rules prohibiting political donations without special exception. This kind of restriction is common among reputable news organizations, and KO has been in the business long enough to have known better. Bias considerations aside, he broke the rules.

[polldaddy poll=”4051794”]

Did Keith think that perhaps he was above the rules? After all, he is among MSNBC’s most popular anchors, if not the most. I’m much more bothered by attitudes of entitlement than political contributions. Quite possibly Keith is the news because he believed he was above the news.

This afternoon, KO thanked his fans, whose support perhaps he hopes will get him off the hot seat and back into the anchor’s chair. He tweeted: “Greetings From Exile! A quick, overwhelmed, stunned THANK YOU for support that feels like a global hug & obviously left me tweetless XO”. Exile? Yeah, I’m bleeding for you (of course, that’s sarcastically meant!). No doubt, the headhunters are banging down the door with job offers. No one should feel sorry for Keith Olbermann.

But you should feel, or think, something about his self-described exile. Was MSNBC right to suspend him? Please answer the simple poll above.

[Update: About 30 minutes after I posted, MSNBC announced that KO would return on Tuesday (November 9th). So I’ve added a second poll, to supersede the first. Did MSNBC do the right thing? Also, I corrected the time stamp. Looks like my Webhost failed to turn back the clocks. I hope that won’t cause other problems.]

[Editor’s Note: This post was moved from joewilcox.com to Oddly Together on May 21, 2011.]

Do you have an ethics story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

MacBook Air is Netbook Enough for Me

Fri, 05 Nov 2010 19:54:00 -0700

Last week, at the suggestion of Betanews founder Nate Mook, I asked question: “Is MacBook Air a netbook killer?” I first posed it to Betanews readers who responded by email to an earlier post and then to some analysts. The majority of folks emphatically said, “No”. I was surprised because my answer would be something like: As a pair iPad and 11.6-inch MacBook Air are netbook killers. I put aside my own opinions and let the reporting lead the story. As I explained later, in “MacBook Air will redefine personal computing”, Apple’s little laptop—and its itty-bitty tablet, too—are category redefining products because they share so much in common with consumer electronics devices.

On November 1, 2010, I received a custom-configured 11.6-inch MacBook Air, which I ordered from Apple (upgraded to 1.6GHz processor and 4GB of DDR 3 memory). A day later, the tiny computer—0.3-1.7 cm high, 29.95 cm wide, 19.2 cm deep and 1.06 kg weight—replaced a 13.3-inch MacBook Pro. I can’t imagine being much more satisfied. MacBook Air is netbook enough me, despite the price gulf separating it from category-defining devices from manufacturers like ASUS and Acer. I would never buy a traditional netbook. There are too many sacrifices for the size and price. Also my priority is probably different from many other buyers. Based on analyst surveys, most netbook purchasers use their tiny weeny computer as adjunct to a more powerful PC. I want a thin-and-light laptop that’s enough to be my full-time machines.

Every sub-$400 netbook I’ve handled feels cheap and the screens lack something, starting with lower resolution. In a compact portable with small display, screen resolution, contrast and viewability from sharp angles are important usability benefits often missing, presumably to meet lower price points. I see traditional netbooks as lacking:

Adequate screens
Acceptable performance
Robust graphics capability

Apple resolves all three problems—granted for higher price points—by providing:

High-resolution display
Speedy , solid-sate storage
256MB nVidia graphics chip

I would recommend the 11.6-inch to anyone looking for the benefits of a traditional netbook without the baggage, assuming they can justify the higher price. I wouldn’t pay what Apple charges ($999-$1,399, depending on 11.6-inch model configuration) for a small companion computer. It’s either good enough for full-time use or it’s not good enough at all.

I am thoroughly delighted by MacBook Ar, starting with the crisp , clear screen and zippy performance. In my forthcoming Betanews review I’ll more specifically assert why Apple’s little laptop offers similar benefits as netbooks—small size, light weight and long battery life, among them—without sacrificing performance or usability. I wouldn’t have believed that a tiny computer running a 1.4GHz or 1.6GHz Intel Core 2 Duo processor could be sufficient for daily, demanding tasks. For nearly everything I do, including photo editing using Adobe Lightroom 3.2, the 11.6-inch MacBook Air responds better than the 2.53GHz MacBook Pro, which my wife inherited.

Giving Up Old Habits
My site redesign came to a screeching halt this week, because of the thinner Air I breathe. There is still much work to do here at joewilcox.com, following my official November 1st relaunch. Adopting Air means changing habits, in part to accommodate smaller hard drive (128GB vs 256GB) and slower Intel Core 2 Duo processor (1.6GHz vs 2.53GHz) compared to MacBook Pro. I’m running fewer apps and doing more in the browser. The change, which probably is unnecessary for nominal tasks, has disrupted my workflow; I am, like most people, a creature of habits. For creative work, habitual disruption is burdensome.

Change is good. New habits are good. I typically find disruptive environmental or computing changes bring unexpected long-term benefits. Rather than subsist by well trodden habits, I make changes that should eventually enliven the creative process and open up other areas of thought and inventiveness. Short-list of changes:

Working more in the browser. I’ve abandoned apps like NetNewsWire and Tweetie for Google News and Twitter Websites, among others. I had wanted to use Web-based mail but found Apple’s service too unacceptably sluggish. Although I’ve had no performance issues, they may come as I do more video editing. I can easily kill and relaunch browser apps in two clicks. I’m enjoying the different way of working, although it’s fresh, not new. I’ve merely increased the amount of productivity done in browser.
Kissing off Adobe Flash. Not that anyone reading Betanews would know, I agree with Apple CEO Steve Jobs that Flash is a resource hog. My Air’s Safari browser came Flash-free, and I’m going to keep it that way. I may use a Flash-to-HTML5 video extension or plugin, but there’s no rush. Two reasons: I’m rather enjoying not being assaulted by Flash ads on many Website, and I’ve observed that this Air and other 11.6-inch models tested at Apple Store won’t play YouTube embedded HTML5 videos. I want to know why. If Apple is touting HTML5 standards, but not conforming to them, there’s a story there.
Using lighter applications. This is future task. Sometime in early 2011, Apple will launch an application store for Snow Leopard. I’m assuming many of them will be lighter apps like those available for the iOS App Store.
Pushing up external storage. Even with a beefier hard drive, I always use an external disk for my music library, which is closing in on 100GB in size. I had been using a 500MB LaCie Little Lisk. I moved up to the Rikiki Superspeed 1 TB USB 3.0 external hard drive, which backward compatible with USB 2.0.
Getting out more. I want to do more storytelling about people, and that means getting out easily and processing and posting content quickly. MacBook Air is perfect compliment to my Leica X1 and Olympus LS-10 digital audio recorder.

As I will later explain in my review, MacBook Air isn’t for everyone, and many people will buy the little laptop as companion to a bigger machine. The littler Air is exactly what I’ve searched for in, light, lithe and lively laptop.

[Editor’s Note: This post was moved from joewilcox.com to Oddly Together on May 21, 2011.]

Do you have a portable computing story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

Foreclosure Fallout will Last 9 Years

Sat, 30 Oct 2010 18:35:00 -0700

Wall Street Journal’s number of the week is startling. “107: How many months it would take to sell banks’ current and shadow inventory of foreclosed homes.” If Journal reporter Mark Whitehouse is right, banks will need 9 years to clear their foreclosure inventory. But I wonder. Could it be longer?

The problem is this: Foreclosed homes typically sell for much less than their value—or at least as measured by what someone owes on the mortgage. Foreclosures, which in recent months accounted anywhere from 25 percent to one-third of home sales, pull down existing values. Homes in neighborhoods with foreclosures lose value.

Two Post-Bubble Disasters
For homeowners (let’s ignore investors, banks and other post-bubble casualties for now), the housing bubble’s collapse is not one but two disasters. The first is the subprime mess, where homeowners borrowed more than they could afford, something many folks didn’t understand until their ARM (adjustable-rate mortgage) or, worse, principal payments kicked in; many late-bubble borrowers took loans for which they only paid interest up front. Years later, principal payments drove up monthly mortgage obligations by double or more. This phenomenon precipitated the foreclosure problem, with millions of homeowners defaulting on their mortgages and rapid decline in home values (if there’s no demand for something, prices tend to fall).

The second disaster is foreclosure fallout’s ongoing impact on home values. In July 2009, I likened the econolypse to an atomic blast, with fallout, mainly in the form of debt, spreading across the American economy. Foreclosure fallout is devastating. As foreclosures continue, they push more homeowners underwater, meaning they owe more than the property’s value. Already, according to combined analyst estimates, one in four US homes is worth less than the mortgage note. As foreclosure fallout spreads and drives down existing home values, more homeowners are either forced to default or do so voluntarily, putting even more foreclosed properties for sale and further driving down existing home values. Its a vicious, virtuous cycle that must someday reach equilibrium, but the US housing market hasn’t yet achieved that state.

According to RealtyTrac, in September, the average foreclosed home sold for $170,814. One in every 371 homes received a foreclosure notice during the month. By comparison, the average selling price for new homes was $257,500, according to the US Census Bureau. A year earlier: $290,300. Additional Context: For 10 of the 12 months in 2007, average selling price was over $300,000. Inventory is another measure of the problem, and these figures often don’t account for the full load of foreclosures. According to the Census Bureau, there was eight months of new home inventory in September.

Healing is Risky Business
Foreclosure is exerting some negative pressure on house pricing, although it’s not the only factor at work, just the most recent with influence. Home prices have fallen 25 percent in many US regions from housing-bubble over-inflated values; it’s a necessary correction. Fundamentally, there is a problem of too much debt. Thirteen days ago I asked question “Should Barrack Obama bail out Americans?“—to which I answered “Yes.” The American government should aggressively intervene, buying up consumer credit card and mortgage debt for pennies on the dollar. This debt is a cancer, or you could call it cholesterol blocking consumer spending, which is the lifeblood of the American economy. A false, credit-driven economy created the debt but no longer exists to purge it. Drastic action is necessary.

America should look to Japan’s decades-long economic problems and learn lessons about what not to do. Perhaps the US government would have chosen a different stimulus package if more economists also were sociologists. Too much economic theory is too far removed from human behavior or that of companies, which reflect the human beings who run them. Companies exhibit greed and self-preservation behavior that defies some economic math. Any stimulus package that fails to account for corporate or individual human behavior won’t be effective enough.

But the statistics, and even my intervention recommendation, simplify something complex. The housing market isn’t an independent entity, even though yo-yo “it’s better, no it’s worse” news reports take too narrow and too singular a perspective. A sick or injured person is one way to look at the housing market. A change in temperature or blood pressure can have disastrous effects on someone seriously ill, and medicine or other interventions to heal can cause these or other side effects that might set back recovery or even kill. The housing market is that sick person.

For example, underwater mortgages partially explain why unemployment remains near 10 percent and more than 20 percent when adding underemployment. Fluidity, Americans’ ability to flow from a city with high unemployment to another where there are jobs, is a characteristic common among recent economic downturns. Fluidity stimulates recovery. People stuck in their homes, unable to sell, can’t easily move to localities where there are more jobs; underwater home owners have little to no fluidity. Freeing people to move would likely help reduce national unemployment but have negative effects on some localities from which people flee, such as less money for public services and schools because of lower tax base. The point: No matter what the cure, negative effects are likely somewhere else and any attempted cure could easily set back recovery or kill the patient.

It may be that the cure will require 9 years of rehabilitation. If so, the US economy will limp along for some time. Meanwhile, China’s economic miracle will increasingly define commerce and global politics. From a purely political protectionist perspective—the desire to keep America and its citizens safe—there is no Homeland Security agenda more important than economic recovery.

[Photo Credit: Charles Zoller; courtesy of the George Eastman House Collection]

[Editor’s Note: This post was moved from joewilcox.com to Oddly Together on May 21, 2011.]

Do you have an econolypse story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

Should Barack Obama Bail Out Americans?

Sun, 17 Oct 2010 19:49:00 -0700

My answer is yes. Artificially created debt is cholesterol clogging the arteries of consumer spending. The economy that created the debt is gone. Only by surgically removing debt can Americans freely spend, thus pumping fresh blood to the heart of the U.S. economy. But, hey, I’m no economist, although in 2005 I rightly predicted the housing bubble’s collapse and much of the aftermath. Surely such insight is worth something.

TARP (Troubled Asset Relief Program) succeeded in bailing out the rich and made them richer—six days ago Wall Street Journal reported that “about three dozen of the top publicly held securities and investment-services firms—which include banks, investment banks, hedge funds, money-management firms and securities exchanges—are set to pay $144 billion in compensation and benefits this year.” The paper describes the amount as a “record high”. The rich are richer, while most other Americans are poorer: At least one in five homes is worth less than the mortgage value; unemployment is stuck above 9 percent (not counting another 10 percent to 12 percent underemployed); and consumer spending spurts and sputters month-to-month.

The problem is this: Between 2002 and 2007, Americans amassed huge amounts of debt spurred on by an artificial economy sustained by greed and fear. While mortgage lenders and investment banks bear much of the responsibility, they’re not alone. Many Americans treated rising home equity values as ATMs. They cashed out equity to buy new cars, big-screen TVs and smaller items. Between 2001 and 2005, for example, consumer spending (spurred on by home equity ATMs) and new construction accounted for about 90 percent of U.S. GDP growth. More typically, consumer spending accounts for 60 percent to 70 percent of US economic activity, depending on which analyst does the estimates. A family that cashed out $50,000 in equity from their home during the bubble years contributed to economy-lifting consumer spending, but from debt. Since the bust, their $400,000 home might be worth only $300,000. Not only is the equity ATM gone, but they owe more than the property is worth.

I defined the situation in July 2009 post “Reich’s Right: No Economic Recovery in Sight”:

The boom gone bust left many, perhaps most, Americans in some kind of debt. Equity and billions of dollars in mortgaged-back spending are gone. Here’s the problem: The bubble was an artificial construct that created real debt. The equity and investment tools were mirages. They didn’t exist, because their values were arbitrary and not fixed to real assets. Yet they left behind real damage—economic devastation on the order of atomic blasts, with radioactive fallout continuing destruction. Recovery can’t come while fallout continues to spread across the economy…Americans have so much debt, and no longer the means to repay it.

The fictitious economy that created the debt is gone. The U.S. economy will limp along as long as Americans, whose spending is the country’s lifeblood, are burdened by debt.

The Foreclosure Bubble Deflates
Worse, there’s a bill that the United States has yet to pay for half a decade of debt-driven consumer spending and housing bubble mortgage lending. The housing market’s collapse has yet to exert its full impact on consumer spending, because millions of Americans in foreclosure stopped paying their mortgages, which freed up cash to spend on consumable goods and frivolities. But when forced out of their homes into the rental market, these people will suddenly have to pay for someplace to live (assuming they don’t end up homeless). Many of these foreclosure loafers will see their monthly expenses increase by one-third or more. Multiply the added monthly spending burden to millions of Americans and tepid consumer spending suddenly retracts; bad could be way worse.

How soon the remaining foreclosure loafers will be sent packing from their residences is ever-more uncertain. There is a sudden row of controversy about a September surge in repossessions and mishandling paperwork for many foreclosures. According to RealtyTrac, 1 in 371 homes received a foreclosure notice in September. Total number of homes currently in foreclosure: 2,021,675. The number of repossessed homes topped 100,000 for the first time in any month. However, the number of actual repossessable homes is likely much higher, with banks throttling back. Too many repossessed homes coming onto the housing market too fast could overwhelm it with cheap inventory. Such circumstance could further drive down housing prices and make even more neighborhoods undesirable to live because of the number of empty homes. From that perspective, non-paying residents are more desirable than vacant houses.

However, banks and other mortgage lenders may have other reasons for letting foreclosure loafers stay rent free: Fear and denial. Two years following the stock market’s tumultuous atomic blast, no one can safely say how much toxic fallout remains among mortgage-backed investments. The more banks dig into their foreclosure paperwork, the more debt fallout they are likely to find. There is fear of the unknown. It’s sadly ironic. Credit counseling services help consumers get over denial. Often consumers get into real financial problems after ignoring letters and other communications from their creditors. They pretend the debt problem doesn’t exist. Banks’ behavior is about denial, too. Attitude: They can be most hurt by what they know.

All this leads to the expanding controversy about the foreclosure paperwork trail, or lack of it. Major banks and other mortgage lenders suddenly are conceding there are lots of problems with their foreclosure paperwork. What’s disturbing is how endemic are the problems. Besides shoddy paperwork—an unsurprising circumstance considering how often these mortgages changed lenders—many foreclosures were processed by unqualified “robo-signers”. The situation suggests banks wanted to process the foreclosures as cheaply and as efficiently as possible, but I see something else: A lack of desire to thoroughly review the documents, which could reveal the extent of financial exposure everyone wants to deny. Repeated: Banks can be most hurt by what they know and must publicly disclose. Suddenly, economists and other informed onlookers (yes, even journalists) realize that banks might carry many more bad mortgage investments than even the most bearish onlookers considered—right, the same debt banks psychologically sought to deny.

Bank of America and JP Morgan Chase are among the institutions putting temporary holds on foreclosure sales. The suspensions are bags of mixed troubles:

The actions give a temporary reprieve to people awaiting eviction. Their spending can continue much the same, which in aggregate is good for the U.S. economy.
However, housing sales could suddenly stall; in any given month, foreclosures and other so-called distressed properties account for up to one-third of home sales.
Banks are likely to lose millions, perhaps billions, from lost home sales, lawsuits for foreclosure fraud and declining valuations, as shareholders sell bank holdings.
Banks are likely to reveal millions, more likely billions, in bad mortgage investments that had been obscured by or purposely hidden in shoddy paperwork.

October 14th New York Times editorial “The Foreclosure Crises” nails it: “This latest foreclosure crisis should settle one issue once and for all. The banks that got us into this mess can’t be trusted to get us out of it. The administration and Congress need to act.”

There’s a Bailout that Matters More
The impending crisis is opportunity for the Obama Administration to bail out the rest of America—its citizens. The rich got their bailout and in process kept thousands of fat cat banks from exhausting their ninth lives and clawing down the U.S. and other economies when dying. It’s time for the government to step in and buy up consumer debt for pennies on the dollar. My proposal:

The Obama Administration, with support from the post-election lameduck Congress, should empower the Consumer Financial Protection Bureau to aggressively intervene in Americans’ debt crisis.
The new agency then should put a temporary suspension on all consumer mortgage and credit card payment obligations acquired before a set date, such as January 1, 2010 or October 1, which is the start of the government’s fiscal year.
Banks and credit card holders should be given 60 days to produce documentation on all outstanding consumer debts greater than $5,000 for purchase by the Consumer Financial Protection Bureau. Any debts not produced by the set date would have their interest owed voided, including mortgages.
During the same time period, consumers could apply to have reduced any debts greater than $5,000 to any institution.
The new agency would buy back debt from banks and credit card holders for 10 cents on the dollar. For credit cards, the government would purchase debt accumulated as interest; citizens would still be responsible for principal payments; option for account suspension would allow reasonable payment plans interest free. For mortgages, the government would assume accumulated interest and lost value, meaning the difference between the home’s market price and amount owed against the title.
Government-backed Fannie Mae would assume responsibility for purchased mortgages, much as it has done during the bail out. However, banks demonstrating they can accurately manage paperwork could retain title on the mortgage, which would be refinanced for reasonable interest rate 10 percent below market value (as buffer against continued housing price declines).
The U.S. government should recover the 10 cents on the dollar from U.S. consumers, or simply forgive the payment obligations.

The proposal may seem to some people as extreme, but I say no less outrageous than the bank bailout (e.g. TARP) was viewed in late 2008. If not this intervention, the Obama Administration should consider doing something to achieve the same objective. Aggressive action is necessary because the artificial credit economy that produced the debt no longer exists and likely won’t for decades (hopefully never). By bailing out Americans, the Obama Administration can surgically remove artery clogging debt, shock the economy’s heart and start pumping the consumer spending lifeblood. If consumer spending accounts for as much as 70 percent of consumer spending but consumers can’t spend because they’re burdened by debt, how can the economy recover without changing the dynamics—either removing the debt or shifting the economy to another driving force?

Of course banks and credit card companies will balk at such drastic intervention. But it’s to their benefit, too. Banks would perhaps benefit more, by unloading toxic mortgage debt, whether securities or title holdings. By removing their debt and the fear that other banks and investment institutions have hidden liabilities, the Obama Administration could clear the arteries blocked from lending. For all TARP’s claimed successes, it’s marred by one glaring failure: Two years after the crash, credit markets are still largely blocked. Uncertainty about hidden debt and fear over taking on collateral damage has caused banks to withhold credit, even with the Federal Reserve holding interest rates near zero. Banks are unwilling to take the risk but are all too willing to reap other investment-related benefits from the Fed’s low-interest lending policies.

What About Moral Hazard?
Aggressive intervention on behalf of debt-ridden Americans also is a way of imposing some accountability on banks even while liberating them from consumer debt burden. Perhaps such action could address the problem of moral hazard, which contributed to the housing bubble and continues in other facets because the instigators got bailed out by the U.S. government rather than suffering financial ruin. In Cato paper “Moral Hazard and the Financial Crisis”, Kevin Dowd offers definition: “A moral hazard is where one party is responsible for the interests of another, but has an incentive to put his or her own interests first: the standard example is a worker with an incentive to shirk on the job.” He adds:

Many of these moral hazards involve increased risk-taking: if I can take risks that you have to bear, then I may as well take them; but if I have to bear the consequences of my own risky actions, I will act more responsibly. Thus, inadequate control of moral hazards often leads to socially excessive risk-taking—and excessive risk-taking is certainly a recurring theme in the current financial crisis…

Measures that rein in moral hazard are to be welcomed and will help to reduce excessive risk-taking; measures that create or exacerbate moral hazard (such as massive bailouts?) will lead to even more excessive risk-taking and should be avoided. In short, a key yardstick that should be applied to any proposed reform measure is simply this: Does it reduce moral hazard or does it increase it? The bottom line? If someone takes a risk, someone has to bear it. If I take a risk, then we want to ensure that I be made to bear it. But if I take a risk at your expense, then that’s moral hazard and that’s bad.

Fear that the U.S. government might someday intervene again creates risk that could help check bad behavior. I agree with Kevin. The major objective of any future financial regulations should be to decrease moral hazard. In the not so distant past, banks lent money solely from their own funds and typically held mortgages to maturity. They assumed the risk. But once banks could tap into outside capital to lend and they could sell off mortgages as investments, risk passed on. Strange, it seems, that one institution passing off risk to another failed to realize that the other institution might act similarly, by unloading risk in equally questionable mortgage investments.

There remains one question: What about Americans’ responsibilities? Should they be so lithely set free from their debts? If the U.S. government hadn’t let off the major instigators of the econolypse, I might answer no. But the rich got their bailout and now huge post-econlypse paydays by earning fat bonuses. They live in lofty cloud homes far above the economic fallout. Jack and Jane American deserve something, too, particularly since they can’t easily or quickly work off their debts given current circumstances. Meanwhile, their inability to spend hurts the entire American economy. It’s time for a bailout that matters at the supper table.

Photo Credit: Chuck Kennedy, courtesy The White House

[Editor’s Note: This post was moved from joewilcox.com to Oddly Together on May 20, 2011.]

Do you have an econolypse story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

Non-Top-10 List for Journalists

Tue, 05 Oct 2010 07:43:00 -0700

I’ve come to loathe top-10 lists, and I have stopped writing them. They are a sucker’s play for pageviews, although I have always used top-10s mainly for their presentation value. Now that they’re everywhere and displacing original content, I’ve got something of a personal boycott going (hence, why there have been none from me recently at Betanews). It’s with that introduction I come to maim a top-10 list posted last week. “The truth about the newsroom—straight-up!” offers 10 things reporters “want from [public relations] pitch to coverage”.

Deanna White tweeted about the post, to which I responded after reading: “My list would look nothing like this. If that’s what my peers want, someone pull out journalism’s obituary & run it” (News organizations generally keep prewritten obituaries ready to run the second someone famous enough dies).

I laughed at Deanna’s list, which I at first put in this post but later removed before publishing. Click through the link in the previous paragraph to read her list, if you want. I picked just one of the 10 to flame here: “Make it easy for me to cover your story—send me multimedia that will add to your news.” PR people want you to cover their story and to cover it as pitched. By making it easy and by the journalist being lazy, that outcome is more likely than when journalists do their own reporting. By the way, I make a distinction between PR pitchers and season spokespeople. The latter often is more useful to the organization represented and to the reporter.

Pitches and Lies
My list is succinct: Don’t pitch me. If I want something I’ll ask for it, and usually you the PR rep are in the way of my getting it. My experience is this: Most PR people lie to me most of the time. I make the assertion with no malice or resentment. It’s simply true.

Perhaps other journalists look for pitches. If your writing depends on PR pitches or, worse, rewriting press releases, then by my definition you aren’t a journalist. That’s fine by the PR pitchers, who want you to turn their story into a home run. In the PR business, three pitches and they’re out—not the journalist.

Confession: Yes, as a younger reporter I accepted some PR pitches, mainly because that’s what my employers’ expected. There’s no one holding that over me now, and I’ve come to distrust PR pitchers over the years. I’ve been lied to far too often, which isn’t surprising. PR reps are paid to protect their clients’ image and to promote its brands.

I do occasionally respond to company employee blog posts, as I did yesterday at Betanews about Microsoft bringing back the Windows 7 Family Pack. I make exceptions for blog posts because:

They aren’t pitched directly to me
The writer is a person I can track down for follow-up questions
Post authors often work for the organization rather than outside PR agency
I can quote a person who is identified rather than an unnamed spokesperson

Granted, many corporate bloggers are marketers, but I can see more what I’m getting from them.

Helpful Advice
For my fellow journalists, I offer a few tips for wringing out the truth from marketing professionals and, more importantly, media-coached executives:

Be polite. I hear many journalists describe PR reps as flaks. I don’t. My goal is to be polite but aggressive. Flak makes the PR person somehow inhuman. Hey, they’re people trying to do a job, too. Friendliness will get you more cooperation, and that goes for all your reporting interactions. PR reps aren’t your enemies, but they’re not your friends either.
Record everything. If it’s an in-person interview audio record the conversation. Emailing or, better, instant message conversations are another way to keep a record. The recording prevents there from being lasting accusations of misquoting or quoting out of context later on, plus you’ll get better quotes. Additionally, over time, by reviewing the interviews you’ll better discern when people are lying or being truthful.
Interrupt often. As soon as your eyes roll upwards, the spokesperson isn’t giving what you need or, worse, is working to prevent your getting it. So cut off the person talking. Interruption allows you to take control of the conversation and even fluster the spokesperson into revealing something truthful.
Look for signs the response is prepared or canned. Coached executives or prepared PR reps tend to speak clearly and stick to a single topic. Someone keeping constant or near-constant eye contact is lying. Your questions are getting somewhere when the ahs and pauses interrupt the answer’s flow. That’s when the chance of getting honest answers is greatest.
If you ask a question and get an answer to a different one, ask again—and again and again. Media-coached executives will respond with prepared talking points that have nothing to do with your question. Rephrase and ask until you are answered. Interrupt if necessary, so the deflected answering doesn’t exhaust your interview time.

Enough with the pointers. If I don’t stop, the advice will turn into a top-10 list.

[Editor’s Note: This post was moved from joewilcox.com to Oddly Together on May 20, 2011.]

Do you have a journalism story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

'The Social Network' ignores the Network

Mon, 04 Oct 2010 16:18:00 -0700

On Friday, I wrote a review of “The Social Network”. Harvard law professor Lawrence Lessig did one better for The New Republic: “Sorkin vs. Zuckerberg—‘The Social Network’ is wonderful entertainment, but its message is actually kind of evil”. Lawrence is insightful as always, although he expects too much of the film’s writer and director. Nevertheless, he makes spot-on observations about what Facebook represents for future entrepreneurs like co-founder Mark Zuckerberg. The film is seemingly a morality tale about moral ambiguity. What’s lost is Zuckerberg’s ingenuity and the network that allowed it to flourish.

A Troubled Tale
Lawrence describes “The Social Network” as “deeply, deeply flawed”. His reasons include:

Perspective—”Imagine a jester from King George III’s court, charged in 1790 with writing a comedy about the new American Republic.”
The Net—screenwriter Aaron Sorkin “simply hasn’t a clue to the real secret sauce in the story he is trying to tell…Sorkin boasts about his ignorance of the Internet. That ignorance shows.”
Legal narrative—”Did [Mark Zuckerberg] steal any other ‘property’? Absolutely not—the code for Facebook was his, and the ‘idea’ of a social network is not a patent.
Storytelling—”What’s important here is that Zuckerberg’s genius could be embraced by half-a-billion people within six years of its first being launched, without (and here is the critical bit) asking permission of anyone.”

The latter point is the crux of everything and goes back to my Nov. 6, 2005, post “The Web Miracle”. Writing about World Wide Web creator Tim Berners-Lee:

The conception was unique, because of Tim’s decision to use open-standard technologies that no single entity controlled. Its execution is amazing…Tim’s no-patent, no-royalty approach imbues the highest aspirations for what real research is supposed to be about. The patent frenzy of the last 10 years is phenomenal and antithesis of Tim’s approach.

The Web is an open platform, and a hugely disruptive one at that. I got on the Web in 1994, recognizing it would change publishing. Recently, that disruption has brought chaos to my field of journalism. But that’s OK. The network is everything, and Lawrence rightly observes how it’s missing from “The Social Network”: “The real hero in this story doesn’t even get a credit. It’s something Sorkin doesn’t even notice.”

Lawrence uses the founding of Nantucket Nectars as vehicle for comparing the old and new worlds. He writes:

At each step after the first, along the way to giving their customers what they wanted, the two Toms had to ask permission from someone. They needed permission from a manufacturer to get into his plant. Permission from a distributor to get into her network. And permission from stores to get before the customer…

Zuckerberg faced no such barrier. For less than $1,000, he could get his idea onto the Internet. He needed no permission from the network provider. He needed no clearance from Harvard to offer it to Harvard students. Neither with Yale, or Princeton, or Stanford. Nor with every other community he invited in. Because the platform of the Internet is open and free, or in the language of the day, because it is a ‘neutral network,’ a billion Mark Zuckerbergs have the opportunity to invent for the platform.

Think about what Facebook has become in six years, and, yes, all without asking anybody’s permission. As I explained in June 21, 2009, post “Iran and the New Democracy”: “The Internet is tearing down monopolies of power and empowering individuals and smaller groups. The Internet is the new democracy.” Nearly all the most potently empowering technologies now in the mainstream—Facebook, Twitter and YouTube, among others—weren’t publicly available before November 2005. Facebook and Twitter weren’t publicly availability until 2006, although college students could access the social network starting two years earlier.

However for all my enthusiasm: “I’m not convinced this Internet democracy is sustainable in a free market. The free market really isn’t free. Capitalism favors the creation of monopolies of power. From the ruin will rise new monopolies, I fear.”

Keep the Net Open
Lawrence and I worry about the same thing: Ending of Net neutrality that allows so much freedom and innovation around the “neutral network”. I expressed my first concerns on this blog in April 26, 2006, post “Keep the Net Open”. Lawrence worries that people watching “The Social Network” will miss what Aaron Sorkin and director David Fincher did: The network’s uncredited and largely ignored starry role. Lawrence writes:

That is tragedy because just at the moment when we celebrate the product of these two wonders—Zuckerberg and the Internet—working together, policymakers are conspiring ferociously with old world powers to remove the conditions for this success. As ‘network neutrality’ gets bargained away—to add insult to injury, by an administration that was elected with the promise to defend it—the opportunities for the Zuckerbergs of tomorrow will shrink. And as they do, we will return more to the world where success depends upon permission. And privilege. And insiders. And where fewer turn their souls to inventing the next great idea.

In August, Google and Verizon made a heinous Net non-neutrality proposal that I characterized in a Betanews post as “worse than evil”. As I expressed earlier, in April 2006, policymakers—and even Net non-neutral supporters—miss the broader restrictions network providers could impose:

What is a competing service? How about you and me…Big Net providers would just as easily compete with their customers. I’ve got email running off my own domain. What would prevent my provider, Verizon, from favoring email routed through its servers and putting the breaks on email sent off my domain? The competitor pushed to the slow lane would be me, or you.

You could be asking Verizon permission to send email in the Net non-neutral future the company envisions. How much harder would it be for Mark Zuckerbergs to innovate?

All that said, Lawrence Lessig misses something important in his commentary. Facebook is a closed network. The entity is as much a threat to the open Web as policies affecting Net neutrality. There is little open about Facebook other than its access, whether that’s subscribers coming in adding content and connections or developers accessing APIs (application programming interfaces). Facebook is in many ways a closed book, at least compared to the otherwise openness of the residing network.

With 500 million users, and growing, Facebook increasingly is the repository for photos, movies and online communications—displacing blogs, chat services, email, photo-sharing sites and even YouTube. Facebook is disruptive, too, to the very network that makes it possible. The Internet and Facebook are stories still unfolding. So I wonder: What tale will the sequels tell?

[Editor’s Note: This post was moved from joewilcox.com to Oddly Together on May 20, 2011.]

Do you have a movie story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.