Facebook's Deal with the Devil

The Economist last week recalled a vivid description by Rolling Stone of Goldman Sachs:  "a great vampire squid" that likes to stick its "blood funnel" into anything that can make it money.  So given all of the advantages that Facebook has, why would a smart guy like Mark Zuckerberg subject himself to a bleeding by the many tentacled machine of Wall Street?  

Maybe Zuckerberg knows that there are bad guys in the world and bringing in the firm that is the best at aggressively pursuing its own self interest will equip Facebook to fend off the other bad guys.  In essence, a deal with the devil.  Who are the these bad guys?  One of Facebook's biggest shareholders is Digital Sky Technologies (DST), the firm of Alisher Usmanov, a Russian oligarch with ties to Vladimir Putin and Dmitry Medvedev.  Even executives with ten times Zuckerberg's experience would be worried when considering how to control DST.  With Goldman at the table could the dynamics of the relationship between Zuck and the Russians be improved?

If that is not enough incentive, there could be a bigger one right here in the USA.  Goldman Sachs may be good at the things it talks about on its web site, but they really shine when it comes to manipulating our government.  And Facebook needs all the help they can get controlling the US government. Twitter disclosed last week that the government had requested access to data on Julian Assange and people associated with him.  To Twitter's credit they chose to disclose this request to the public.  We can be sure that similar letters were sent to Facebook, Google, and other service providers.  But we did not hear a word about those.

It is a little spooky thinking about government agencies combing through Facebook data, but we can be pretty sure that Facebook's nearly 600 million users, their relationships with other users, and all of the interactions between them must be irresistible to our many law enforcement and counter terrorism groups.   I know that if I had to figure out how to deal with the FBI or CIA, not to mention the SEC,  having Goldman's muscle to back me up would be quite welcome.  

Could Blackwater or Halliburton be next?

Birds of a Feather

In recent posts here and here I have proposed that Facebook, Google, and Groupon are advertising companies because their clients pay them for advertising.  I argued that they use the Internet and technology to do what they do, but that calling a company an Internet company is soon to seem very old fashioned.  Would you call General Electric an electricity company?  Would you call the New York Times a printing press company or an Internet company, or a news company? (I think news because they still do have subscribers that buy the paper, but advertising is right in there too.)

Where does Twitter fit in?  Right now they don't seem to be getting paid for anything.  It is likely that their monetization scheme will be advertising.  Whatever they pick, I am sticking with my assertion that companies serve the people that pay them.  Before long Twitter will be an advertising company too.  

Here is a post from some time about about Third Party Payers.  True, there are many industries with third party payment systems and most of them are broken.  Companies would be smart to recognize that they serve their true masters -- those that pay the bills.

New Trade Routes

Every so often there is a big enough change in the way business is done to make evolution look like a revolution.  If we are not in one of those times, it is just around the corner.  

The process of evolution may seem slow and hard to follow.  The thing to remember is that no species actually changes during its lifetime.  The adaptation occurs when the combination of two different sets of DNA create a new set that just happens to be better equipped to compete.

The better equipped being lives to reproduce, the others do not, but a single being does not genetically "adapt".

There are many new companies starting right now that may represent a new way of doing business.  Some will create value and survive, others will not.  The result is surely to include new routes to market.  These new trade routes will illuminate the winners and the losers.

So just like the lost city of Petra pictured here, some once prosperous companies formerly on the main trade routes will be long forgotten.

If you want a quick look at a company that drives the point home -- check out Gnip, and Brad Feld's thoughts about Gnip.

Gnip is Twitter's first authorized reseller.  

This is going to be interesting.

Pew Says Tech is less than 2% of Media Coverage

If you are interested in technology media coverage or new media, you should take half an hour and study the report just out from the Pew Research Center.  Here are the main points I took from reading it:

Echo-chamber: Technology coverage in mainstream media is less than 2% of the total.  This just shows how those of us in the industry spend all of our time talking at each other!  Twitter is more reflective of the tech biz with 51% about technology.  So anyone getting their news from Twitter is going to have the bias of a technology insider.  

Microsoft is in the back of the media bus:  Of companies featured in the media it was 15% to Apple, 11% to Google, and Microsoft comes in at 3%.  Jay Rosen and Dave Winer had an interesting take on it on Rebooting the News this week.  They proposed that Google and Apple are fighting on purpose just to suck all of the oxygen away from Microsoft and everyone else.  Whatever the reason, it is apparent to people on the inside and the real world that Microsoft is not making the news these days.

Keep it Simple:  If you want to get into the main stream media, keep your story simple.  The study has a stark example comparing policy coverage on texting while driving to policy coverage on net neutrality.  Texting got 12% and net neutrality got 2%.  If those of us in the industry cannot form a clear description of what net neutrality is:  how is anyone in the real world going to become interested?

No matter your take on the results, we are lucky to have a quality organization like Pew to do a study like this.

Thoughts on Blogging After Six Months

This is my first post for the second half of the year.  So far I have made 170 entries to this journal and have really enjoyed the process.  I stopped a few months ago to reflect on the first 100 posts and the thoughts there are still central to my work on this blog.  My numbers have gone up and down a bit, but overall, I have now had over 2,000 unique visitors view over 7,000 pages on my blog.  I still have not many comments -- so if you have a thought, don't hesitate to contribute.  

Blog = Organize my Thoughts

The one thing I appreciate most about the process of writing is it forces me to think through my ideas.  It is pretty easy to throw out an idea in a conversation at a party and much harder to think it through enough to craft it into a blog post.  Also, I have found very interesting reading on the web that I never would have found otherwise because I make it a habit to search for thoughts similar to mine while writing.  I do want to contribute some original thinking -- not just say the same thing everyone else does.  When I find a piece that says everything I want to say, I just link to it.

Twitter = Keep Track of Links

I also make some entries at Twitter @jcleon.  These are links to articles I find that I want to go back to later.  Sometimes I will add bit of an intro, other times not.  I think I will be using Twitter more and more -- particularly after the World Cup is over.  I use backupify to back up my Twitter entries. This is a great service and gives me the ability to get the full list of links without being subject to Twitter's ups and downs.

So it has been a great six months and I am looking forward to hitting over 300 posts before the end of the year.  If you want me to write about something in particular, don't hesitate to put it in the comments.

Are You Twittering or Communicating?

During the Channel Management Summit this week it was no surprise that we ended up talking about social media.  It was interesting that we got onto the thread of how we talk about what we are doing in social media.  When using Twitter, we have a tendency to think of our activity as using Twitter, or Twittering, or Tweeting.  In fact we are really communicating with our followers.  

This tracks back to an earlier concept I wrote a post about:  The difference between the How and the What.  In this case the what is:  communicating, the how is using Twitter.

When we insert this concept into the context of channel marketing, we would do better to talk about what we are doing more than the how we are doing it.  Marketers have always had multiple ways to communicate with their customers or partners -- many hows.  Twitter is just one of those hows.  

Credit due:  Axle Shultze of the Social Media Academy deserves credit for bringing up this point.

Reports of the death of email...

It is hard to believe but the fax machine that runs over a telephone network has been around for about 50 years.  We still have them in our offices.  In 1996 I was president of a Rotary club in Seattle with a membership of mostly downtown professionals (architects, lawyers, CPAs...) and we distributed our weekly newsletter by fax because only 30% of our members had email addresses.  

Soon after that however, email took off and within a year or two everyone I wanted to reach by email had an address.  Spam was not really a problem yet. It was the golden age of email.  Not only that but we were the email welcoming committee because we wanted more people to do business by email -- so we all promoted it all of the time.

With email on the scene no one defended the fax machine.  The paper rolled up, you had to be there, your document was exposed to anyone that happened by... there was a lot to hate about faxes.  Of course when you needed a signature by 5 pm and it was 4:45 pm -- everybody was glad the fax machines were there.  In fact, all of the real work still came in over the fax machine.  When a fax arrived on my desk -- I paid attention.

The list of technologies that have threatened to do to email what email did to fax is long.  Most recently we have Linked In, Facebook, and Twitter.  And each time the welcoming committee moves to the newest and greatest thing and we all heap scorn on the last thing.

True there is plenty to hate about email.  All of the newsletters (most of which I somehow signed up for), the spam that my IT guys block, the rest of the spam that the junk mail filter traps, the cc's of stuff I will never read, the notifications of changes to online things, the phishing attempts and on and on.  

Twitter on the other hand is just as great as email when it was new.  There is not much spam, everyone is positive about using it, and the welcoming committee could make a Republican feel comfortable in San Francisco.  Mostly however, we all love Twitter because no one expects us to read anything there!  Glance at the stream if you want, but there is no social contract forcing you to read anything or respond.  

The email camp is pretty lonely by comparison.  No housewarming gifts and piles of useless junk and also things that people actually expect me to read and think about.  I don't think anything is even close to displacing email as the medium of real work for a very long time.

Lessons from IBM

I pointed out the other day that IBM's stock outperformed Google's over the past 4 year period.  There are many things we can learn from the granddaddy of all technology companies.  In its 130 year history, IBM has had more "eras" than most tech companies have had years.  In fact, IBM tangled with the Justice Department before Bill Gates was even born.

The one thing that has always impressed me about IBM is how they seem to be playing on an entirely different level than anyone else.  Real companies count on IBM to give them real solutions to real business problems.  Every time I find myself in a conversation with a senior exec at IBM I am reminded that they have managed to continue to operate at this level regardless of the headlines of the day.  

Somehow I just don't see IBM burning R and D budget on a Twitter clone.

Curiously, IBM also does a great job with its ads.  They come up with fun and memorable ways to make the point that they are serious about business.  Here is my favorite one: which is probably 10 years old now but it still resonates.

Respecting Followers

True leaders respect their followers. I have always been struck by celebrities that disdain their audience members.  "Followers" has an updated meaning now that we call the people that follow us on Twitter followers.  

Maybe David Letterman started it, but the number of celebrities that are plainly complaining about their fans really makes me scratch my head.  If fans or followers make the celebrity, wouldn't the celebrities customer be the fan?  Without customers...

Politicians are really the neediest of celebrities when it comes to followers because they need their followers to vote. Another thing that struck me about Game Change (see my review yesterday) was the way some of the candidates do not respect their constituents at all.  At times they plainly showed how little respect they had for them.  John Edwards really took the cake in the book when we went from saying "They love me!" to his staff after a good speech to "They looooove me!" with an eye roll.  

The idea with a brand is to build a relationship with a customer that is larger than a single transaction.  Brands have followers just like celebrities and politicians and just as strangely, some customers continue to buy from brands even when they are showed no respect at all.

Yesterday I was listening the Advertising Show podcast where Rose Cameron, Euro RSCG Strategy Chief, was asked about the difference between the US and British advertising markets.  Her answer?  In Great Britain advertisers have a "real respect for the intellect of their audience".  In America we continue to buy from companies that have little or no respect for us or our intelligence.  

When it comes to politicians, celebrities or brands there are plenty of strange things to marvel at, but for me the strangest is how people continue to follow those that clearly have no respect for them.

The New Reply All

Today Google launched Buzz -- its new addition to Gmail that is predicted to be killing everything in its path from Twitter to SharePoint.  That is right, just read these articles and you will see that the Google steamroller is destined to crush at least a dozen companies with the announcement alone!

Mashable

PC Mag

ZD Net

I went to try it today and did not see it in my gmail account -- maybe I will get it tomorrow.  Either way, from what I have read and seen on the video it could in fact be pretty cool.  It would be nice to wrap some of these things that we do in different places into one place.  

On the other hand, anyone who has ever accidentally hit the Reply All button will want to be very careful.  I gather Buzz will enable you to broadcast messages to just a few people, or your entire network, or maybe even anyone.  That is going to be some sinking feeling when you realize you accidentally hit that button.

Stay tuned for more Buzz on Buzz tomorrow.