Category Archives: news

Templar Treasure Refund?

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The Knights Templar are suing the Vatican to recover the treasure that was taken from them 700 years ago:
http://www.theregister.co.uk/2008/08/04/knights_templar_pope/ (thanks Glenn for the tip!)

Just when you thought Facebook employees were making out like bandits and as if the Catholic Church didn’t have enough economic trouble on their hands, let’s assume a very modest initial value of 10 million in Templar treasure.

Now compound that annually at a modest 7% …  for SEVEN HUNDRED YEARS!

This would be a doubling every 10 years, so we have 70 doublings of the ten million or
10 x 2 to the 70th power =  1.18 × 10 to the 21st power.

Thus we have about 1.18 x 10 to the 22nd power million dollars owed to the Templars since we started with 10 million dollars.

$11 800 000 000 000 000 000 000.00   = Eleven septillion, 800 pentillion dollars.

Wow – since the annual global economy is only about $150 trillion….. I hope the Templars will take a personal check for the rest.

YouTube lawsuits now top YouTube’s total valuation

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When Google bought Youtube for 1.6 billion last year they effectively allocated $400 million of the purchase price towards lawsuits they felt were coming down the pike.   Although both the purchase price and that extraordinary “copyright payoff” of 400 million seemed extraordinary at the time, Eric Schmidt and the Google boys may be wishing they’d allocated a few more bucks to stave off the copyright violation bandwagon, which today solidly topped YouTube’s 1.6 billion price by about 179 million dollars.

Viacom is suing Google for a billion already, and today Mediaset joined the fun with a 500 million Euro ($779 million US) lawsuit.     Interestingly, Mediaset is controlled by a company owned by Italian Prime Minister Sylvio Burlusconi, so the case will likely become fairly high profile in Europe.

So, assuming YouTube is worth the $1.6 billion Google ponied up for the big show, they’ve got to be more than a little concerned that the legal onslaught has only just begun but already is approaching 2 billion.   Obviously neither Viacom or Mediaset expects a full payout but you can be sure many, many others will follow for two important reasons:

1)  Google’s got the money. Deep pockets are a *very* attractive stylin’ feature these days and despite some stock price setbacks Google is still sitting pretty pretty in terms of cash and revenue prospects.

2)  Videos don’t got the money. Monetizing video remains one of the most problematic features of the online world, and it’s becoming clear that no “magic bullet” is out there.   I’ve written for some time that video will not monetize well and I think the jury (that would be millions of us out there in online land) is almost in with the verdict that video simpy will not pay distributors nearly as well or serve advertisers nearly as well as pay per click which remains the most lucrative and effective form of online advertising – probably of any paid advertising for that matter.

Zakaria vs Hannity

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Fareed Zakaria, host of CNN’s excellent new show Global Public Square, is debating Sean Hannity today on Hannity’s America.   The topic appears to be Hannity’s insistence that “America is the greatest country on earth” and as far as I can tell he wants everybody, regardless of nationality, to agree.

I’m a huge fan of Zakaria’s broad, intelligent view of the role of the USA in our complex world and not a fan of Hannity’s sometimes spooky form of “shout down conservatism” where, unlike rounded folks like Zakaria, Hannity simply refuses to discuss or even acknowledge our many USA defects, choosing instead to personally malign many who he sees as standing in the way of his “my country right or wrong and my country is never wrong anyway” naivete.

Hannity correctly notes a lot of the things that make the USA a great country, but his blindness to our defects, especially our massive and irresponsible spending on unneeded military projects and our newfound enthusiasm for mixing fundamental religion and politics does a disservice to the wisdom of the founders who clearly understood how critical it was to think and debate the issues of governance and society far more broadly than most modern conservatives (or liberals) tend to do..

Carl Icahn: Blogger

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There’s a new guy in blog town and he’s shooting from the hip about the defects of the corporate governance models we’ve all come to know and hate over the past decades. His name is Carl Icahn and his blog offers great insight into the mind of one of the most successful corporate raiders in history.

Although it is obviously favorable to Icahn’s bottom line to maintain how incompetent boards are leading to the decline of western economic civilization as we know it, I’m hardly going to disagree with the notion that corporate governance, especially in the technology sector, often seems out of whack with shareholder interests.

It is important not to confuse Icahn’s critiques with the whacky ones of many who suggest the corporation itself is a bad model and should be replaced by outmoded socialistic and centralized approaches that brought economic ruin on an entire generation of eastern Europeans and helped bring genocidal regimes into power in asia.    On the contrary Icahn’s point is more that we need to make sure the corporation model can thrive by insisting on better governance for struggling companies.

In the case of Yahoo, Biz Doctor Icahn’s prescription is to buy up a huge share, then throw the corporate board bums out and sell the company to Microsoft.  The stakes here are so high for Icahn (he could see over a billion in profit if his plan works), that he’s hardly in a position to entertain alternatives that might be better for Yahoo, but I think most shareholders already are rooting him on in the hopes of salvaging the $11+ per share lost when Microsoft withdrew from the bidding for Yahoo last month.

Disclosure:  Long on YHOO

AP Retreats from the North Bridge, but the shots were read around the world

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The AP’s tiny battle with Rogers Cadenhead over copyright issues appears to have ended with a whimper and no bang as the AP met with Cadenhead and has issued a vague statement about upcoming standards.

Rogers noted today:

I think AP and other media organizations should focus on how to encourage bloggers to link their stories in the manner they like, rather than hoping their lawyers can rebottle the genie of social news.

He’s right regardless of how the courts will be interpreting upcoming cases of copyright infringement.   Unlike the music industry where a case can be made that bootlegging leads to lost revenue, blogging AP stories arguably *improves* APs distribution and presence in journalism.   AP is shooting itself in the foot, if not the head, when it fights bloggers with copyright lawsuits and takedowns.

Obviously blogging has a long way to go before it will have the mainstream respect typically reserved for mainstream journalism.    Part of gaining that respect will be bloggers taking on more responsibility and accountability with respect to attribution and quoting.  Meanwhile the legacy news industry must come to grips with the fact that blogging isn’t just news and analysis, it is a dynamic and powerful global conversation that will throw off any chains as fast as they can be applied.

Philadelphia Wireless Resurrection and the Philly Cheesesteak Connection

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The largest city wireless project in the USA (and the world?) is in Philly, and was just revived by an investment consortium after being nearly abandoned by Earthlink due to poor signal quality and only 6000 subscriber signups (despite the zero cost where profits will come from advertising).    Google’s Mountain View project never took off the way people thought it might.  

Attribution for story idea goes to Reuters.   Hey, wait, I don’t have to give attribution for a story *idea*, but I’m trying to provide extra attribution in line with my concerns that the AP boycott is distracting bloggers from their responsibility to stop doing so much leeching of stories from AP, Reuters, and other mainstream legacy media outlets not to mention other bloggers. 

So, I’m linking AGAIN to Reuters and AGAIN!  BAM!     BAM!   
HA!    AP – NO LINKS FOR YOU! 

My gut take on citywide WIFI is that a good quality signal with good bandwidth is the key, along with a *single* really good advertising salesperson who is also an internet evangelist.   Once local businesses wake up to how much most of them are missing the boat on the internet marketing (preferrring to squander too much on yellow page and other print ads), city WIFI ads should practically sell themselves. 

 People don’t mind advertising all that much – look for example at pretty much all internet, all broadcast TV, and much of Cable TV right now.    PBS doesn’t have advertising?   Nonsense!   Those interminable and lame pledge breaks and increasingly aggressive “not advertising” sponsor bits are the equivalent of advertising to anybody but the most nitpicking PBS volunteer.     Not to mention that the specials shown during the pledge sessions are often specifically designed to get more pledges. 

Citywide WIFI?   Free.   Advertising Philly Cheesesteaks on Philadelphia’s Citywide WIFI?    Priceless.

 

 

 

AP News Boycott is the News

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There is a huge story brewing that covers the intersection of mainstream news and blogging. Associated Press (AP) decided to crack down on what they felt were copyright violations by blogs quoting AP stories. Spoof site “The Drudge Retort” is under legal fire from AP, and this has prompted action by other blogs that coudld become one of the most interesting developments in the history of blogging and news. AP has backed off somewhat from its initial reaction and is now offering guidelines for blogs using their stories, but this is too little too late in the eyes of many prominent bloggers.

The world’s top tech blog, TechCrunch, has called for support of the boycott of AP stories – telling bloggers to stop linking to AP stories until they change the new policy and stop threatening to sue blogs.

Here’s a somewhat different perspective from Jeff Jarvis who probably did more to get the ball rolling on this than anybody.   His concerns seem to be more that AP is hypocritical and opportunistic about copyright and linking.  I do like Jeff’s idea that the key metric for compliance with good practices in blogging and journalism should be a *link* to the original material along with reasonable other attribution.

Although the story is interesting from the perspective of the changing interpretations of fair use and copyright legalities, this also represents what I think is the first large scale test of the influence of blogging on mainstream news outlets. If the boycott catches on the effect on AP will be very interesting to watch, and probably costly enough for AP in terms of stunting traffic and incoming links that they will revise the policy very quickly. The big winner here will probably be Reuters which will see a huge swell in links from high authority blogs. This has the potential to have a very positive long term affect for Reuters, especially with respect to Google rankings for very valuable technology news terms but also for the Reuters site in general.

It will also be interesting to watch how AP covers the story of its own decisions. I need to read up more before forming an opinion on this but I’m guessing AP’s guidelines are not all that excessive or unreasonable, rather AP is just missing the point that the benefits to AP from new media news and blogs far outweigh the challenges they will face from copyright violations.

As usual the blogging community is quick to attack attackers without giving enough thought to their reasonable concerns about flagrant copyright violations with no attribution to original authors or sources. It would be nice if in conjunction with the AP story boycott bloggers would work *twice as hard* to give MORE attribution to original sources. I’ve found myself in disagreement about this with other blogs but I continue to think the solution is to make it standard form to provide a link to original material you reference in your blog. This was standard practice in the early days, but as links became the key currency of the web people stopped using them as much, and started using them more strategically.

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The huge wait over approval for the Sirius XM Satellite radio merger is almost over as FCC staff has recommended approval of this action making approval very likely.

In my view the merger will have a positive effect on the profitability of the combined companies because it will effectively increase the reach of the advertising offerings dramatically while eliminating upper and some mid-level management positions.   Unlike small terrestrial stations (which are quickly falling under national networks anyway), satellite radio is very capital intensive but relatively labor NONintensive.  e.g once established the satellite network can scale to millions more subscribers without a lot of extra labor or infrastructure costs.    The XM Sirius merger is the logical extension of those technological and labor efficiencies in a market where technology forces are a lot more determinative than normal market forces.

To the extent the merger helps the combined company by increasing their share of the radio advertising market it is likely to have some negative impact on terrestrial radio stations, though I think most of this damage has already been done.  Also, I see the key negative pressure on radio advertising as coming from the growth in online advertising and the merger is unlikely to have much affect on the online advertising market.

Following are notes from the XM / Sirius press release describing the advantages of this merger.

PR info is in italics, [my comments are bolded and bracketed]:

The combination creates a nationwide audio entertainment provider with combined 2006 revenues of approximately $1.5 billion based on analysts’ consensus estimates. Today the companies have approximately 14 million combined subscribers. Together, SIRIUS and XM will create a stronger platform for future innovation within the audio entertainment industry [skeptical – this is a profit move not an innovative one] and will provide significant benefits to all constituencies, including:

* Greater Programming and Content Choices — The combined company is
committed to consumer choice, including offering consumers the ability
to pick and choose the channels and content they want on a more a la
carte basis. The combined company will also provide consumers with a
broader selection of content, including a wide range of commercial-free
music channels, exclusive and non-exclusive sports coverage, news,
talk, and entertainment programming. Together, XM and SIRIUS will be
able to improve on products such as real-time traffic and rear-seat
video and introduce new ones such as advanced data services including
enhanced traffic, weather and infotainment offerings. [theoretically reasonable statements, though I’m skeptical they’ll work hard to innovate, choosing instead to reap the increased profits from the merger efficiencies]

* Accelerated Technological Innovation — The merger will enable the
combined company to develop and introduce a wider range of lower cost,
easy-to-use, and multi-functional devices through efficiencies in chip
set and radio design and procurement. Such innovation is essential to
remaining competitive in the consumer electronics-driven world of audio
entertainment. [Again in theory true, but the radios are already subsidized so I see prices stable or higher after merger.  Innovation will happen as necessary to maintain market]

* Benefits to OEM and Retail Partners — The combined company will offer
automakers and retailers the opportunity to provide a broader content
offering to their customers. Consumer electronics retailers, including
Best Buy, Circuit City, RadioShack, Wal-Mart and others, will benefit
from enhanced product offerings that should allow satellite radio to
compete more effectively. [Auto space – lots of potential as drivers expect more amenities and are willing to pay for them and these partnerships are a very natural win-win for autos and XM Radio.   Retail – skeptical of more than current levels of subscriber increases via this market.]

* Enhanced Financial Performance — This transaction will enhance the
long-term financial success of satellite radio by allowing the combined
company to better manage its costs through sales and marketing and
subscriber acquisition efficiencies, satellite fleet synergies, combined
R&D and other benefits from economies of scale. Wall Street equity
analysts have published estimates of the present value of cost synergies
ranging from $3 billion to $7 billion. [Absolutely yes, though my gut doubts the 7 billion number without having done any financial research.  If this 7 billion efficiency is realistic this appears to be a good stock buy as it could catapult the bottom line of the combined companies, which now have a combined market cap of only about 7 billion]

* More Competitive Audio Entertainment Provider — The combination of an
enhanced programming lineup with improved technology, distribution and
financials will better position satellite radio to compete for
consumers’ attention and entertainment dollars against a host of
products and services in the highly competitive and rapidly evolving
audio entertainment marketplace. In addition to existing competition
from free “over-the-air” AM and FM radio as well as iPods and mobile
phone streaming, satellite radio will face new challenges from the rapid
growth of HD Radio, Internet radio and next generation wireless
technologies. [Maybe, but I think for at least the first few years the focus will be on more efficient delivery of the existing niche networking, news, shock and political talk shows, and other existing products.   I do not see XM and Sirius as major content innovators.   Rather they have been innovative in the distribution space.]

Summary:

Look for the merger to be approved, to bring cost efficiencies, and to breath life into the stock of the combined company.     Do not expect significant other impacts in the radio or other sectors.   Merger = more of the same, more cost-effectively delivered by the combined company.

WSJ Reports

Fareed Zakaria’s GPS on CNN

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There’s a new show on CNN called GPS for “Global Public Square” and despite the dumb name the show, hosted by Fareed Zakaria of Newsweek, is brilliant – exactly the kind of dialog Americans need to hear as we face the complex challenges of the coming years.

Schedule

NOTE: This is NOT a blog by Mr. Zakaria: Go HERE For official CNN show site: http://www.cnn.com/CNN/Programs/fareed.zakaria.gps/

Frankly I’ll be surprised if the show can last for long – the Larry King demographic is not going to tune this in, even if they jazz things up as Anderson Cooper has effectively done with AC360 in an effort to pull in younger viewers and a more mainstream news audience.    In fact the weakest part of the show was the clever but insulting “GW Bush as idiot” sketch to close, effectively undermining the show’s (correct) contention that it’s going to bring together insiders and ask them very good questions.   Note to Fareed – you’re a great example of a respectful but edgy correspondent.  Don’t allow others to violate the trust this inspires in your interview folks.   I noted that Doug Fieth, an excellent spokesperson for the neoconservative cause, hardly spoke or was severely edited.   This was unfortunate as he was the only person on the panel with complete insider knowledge of the situation in Iraq.    Don’t let your guests and their *opinions* undermine interviews with people who were the architects of the still-active Iraq policies.

Zakaria is one of the best observers of the global state of affairs.   He balances the open, democratic, globalized, and entrepreneurial sensibilities we enjoy in the USA with the fact that most of the rest of the world does not share those sensibilities and in many cases *does not want to share them*.  This simple realization separates his views from the more common, and naive, idea that everybody wants to be … just like us.