Who's afraid of Google?

The world's internet superpower faces testing times

RARELY if ever has a company risen so fast in so many ways as Google, the world's most popular search engine. This is true by just about any measure: the growth in its market value and revenues; the number of people clicking in search of news, the nearest pizza parlour or a satellite image of their neighbour's garden; the volume of its advertisers; or the number of its lawyers and lobbyists.

Such an ascent is enough to evoke concerns—both paranoid and justified. The list of constituencies that hate or fear Google grows by the week. Television networks, book publishers and newspaper owners feel that Google has grown by using their content without paying for it. Telecoms firms such as America's AT&T and Verizon are miffed that Google prospers, in their eyes, by free-riding on the bandwidth that they provide; and it is about to bid against them in a forthcoming auction for radio spectrum. Many small firms hate Google because they relied on exploiting its search formulas to win prime positions in its rankings, but dropped to the internet's equivalent of Hades after Google tweaked these algorithms.

And now come the politicians. Libertarians dislike Google's deal with China's censors. Conservatives moan about its uncensored videos. But the big new fear is to do with the privacy of its users. Google's business model (see article) assumes that people will entrust it with ever more information about their lives, to be stored in the company's “cloud” of remote computers. These data begin with the logs of a user's searches (in effect, a record of his interests) and his responses to advertisements. Often they extend to the user's e-mail, calendar, contacts, documents, spreadsheets, photos and videos. They could soon include even the user's medical records and precise location (determined from his mobile phone).

More JP Morgan than Bill Gates

Google is often compared to Microsoft (another enemy, incidentally); but its evolution is actually closer to that of the banking industry. Just as financial institutions grew to become repositories of people's money, and thus guardians of private information about their finances, Google is now turning into a custodian of a far wider and more intimate range of information about individuals. Yes, this applies also to rivals such as Yahoo! and Microsoft. But Google, through the sheer speed with which it accumulates the treasure of information, will be the one to test the limits of what society can tolerate.

It does not help that Google is often seen as arrogant. Granted, this complaint often comes from sour-grapes rivals. But many others are put off by Google's cocksure assertion of its own holiness, as if it merited unquestioning trust. This after all is the firm that chose “Don't be evil” as its corporate motto and that explicitly intones that its goal is “not to make money”, as its boss, Eric Schmidt, puts it, but “to change the world”. Its ownership structure is set up to protect that vision.

Ironically, there is something rather cloudlike about the multiple complaints surrounding Google. The issues are best parted into two cumuli: a set of “public” arguments about how to regulate Google; and a set of “private” ones for Google's managers, to do with the strategy the firm needs to get through the coming storm. On both counts, Google—contrary to its own propaganda—is much better judged as being just like any other “evil” money-grabbing company.

Grab the money

That is because, from the public point of view, the main contribution of all companies to society comes from making profits, not giving things away. Google is a good example of this. Its “goodness” stems less from all that guff about corporate altruism than from Adam Smith's invisible hand. It provides a service that others find very useful—namely helping people to find information (at no charge) and letting advertisers promote their wares to those people in a finely targeted way.

Given this, the onus of proof is with Google's would-be prosecutors to prove it is doing something wrong. On antitrust, the price that Google charges its advertisers is set by auction, so its monopolistic clout is limited; and it has yet to use its dominance in one market to muscle into others in the way Microsoft did. The same presumption of innocence goes for copyright and privacy. Google's book-search product, for instance, arguably helps rather than hurts publishers and authors by rescuing books from obscurity and encouraging readers to buy copyrighted works. And, despite Big Brotherish talk about knowing what choices people will be making tomorrow, Google has not betrayed the trust of its users over their privacy. If anything, it has been better than its rivals in standing up to prying governments in both America and China.

That said, conflicts of interest will become inevitable—especially with privacy. Google in effect controls a dial that, as it sells ever more services to you, could move in two directions. Set to one side, Google could voluntarily destroy very quickly any user data that it collects. That would assure privacy, but it would limit Google's profits from selling to advertisers information about what you are doing, and make those services less useful. If the dial is set to the other side and Google hangs on to the information, the services will be more useful, but some dreadful intrusions into privacy could occur.

The answer, as with banks in the past, must lie somewhere in the middle; and the right point for the dial is likely to change, as circumstances change. That will be the main public interest in Google. But, as the bankers (and Bill Gates) can attest, public scrutiny also creates a private challenge for Google's managers: how should they present their case?

One obvious strategy is to allay concerns over Google's trustworthiness by becoming more transparent and opening up more of its processes and plans to scrutiny. But it also needs a deeper change of heart. Pretending that, just because your founders are nice young men and you give away lots of services, society has no right to question your motives no longer seems sensible. Google is a capitalist tool—and a useful one. Better, surely, to face the coming storm on that foundation, than on a trite slogan that could be your undoing.

Source: From The Economist

Media companies have high hopes that hyperlocal news online will bolster their newspapers’ futures.

t seemed like a good idea at the time. With blogging flourishing and citizen journalism just budding, Mark Potts and Susan DeFife thought they had a winning formula for a new kind of journalistic enterprise. One evening in the summer of 2004, they sketched out their common vision: A series of hyperlocal, news-oriented Web sites whose tone and content--news, commentary, blogs, photos, calendar listings--would be supplied primarily by the people who knew each community best, its residents. By May of 2005, the venture, dubbed Backfence.com, was up and running, with sites serving two affluent Virginia towns in Washington D.C.'s suburbs, McLean and Reston.

The idea of virtual town squares seemed so promising that within months Potts (a veteran reporter and editor at the Washington Post and cofounder of its digital division) and DeFife (founder and chief executive of Womenconnect.com for women in business) had attracted $3 million from two venture capital firms, including one headed by eBay founder Pierre Omidyar. The money funded an expansion program that would have made Starbucks proud (see "Dotcom Bloom," June/July 2005). By early 2007, Backfence had grown to 13 sites serving towns around Washington, Chicago and the San Francisco Bay area. The partners began talking about creating as many as 160 sites in 16 markets.

And then? And then the bottom dropped out. Backfence's rapid expansion burned up its $3 million war chest. The partners have split; Backfence's staff, which once numbered as many as 25, was laid off. The company's online communities are largely ghost towns now. "We ran out of money," says a somewhat chastened Potts today. "And we ran out of runway."

The failure of Backfence may offer no greater lesson than the old one about pioneers being the ones with arrows in their backs. New ventures fail all the time. But it could also sound a cautionary note about the present--and immediate future--of hyperlocal news sites. As big-media companies and entrepreneurs alike rush into the hyperlocal arena (see "Really Local," April/May), it's worth pausing and asking: Is there a real business in this kind of business?

So far--and admittedly it's still very early --the answer is no. A few of the estimated 500 or so "local-local" news sites claim to show a profit, but the overwhelming majority lose money, according to the first comprehensive survey of the field. The survey, conducted by J-Lab: The Institute for Interactive Journalism (affiliated with the University of Maryland's Philip Merrill College of Journalism, as is AJR), documents a journalism movement that is simultaneously thriving and highly tenuous. While independent sites such as WestportNow.com (Connecticut), iBrattleboro.com (Vermont) and VillageSoup.com (Maine) have sparked useful civic debates and prodded established media outlets to compete more vigorously, the field as a whole is so far financially marginal. As the report puts it, "their business models remain deeply uncertain."

In fact, many operators don't really have a business model. The first wave of hyperlocal sites has featured seat-of-the-pants operations, staffed part-time by dedicated volunteers, community activists and impassioned gadflies. About half of the 141 respondents to the J-Lab survey said they didn't need to earn revenue to stay afloat, thanks to self-funding and volunteer labor. A full 80 percent said their sites either weren't covering their operating costs--or that they just weren't sure. Only 10 of the 141 said they were breaking even or earning a profit.

This is why industry observers such as Peter Krasilovsky remain skeptical: "I don't really see a model right now that allows [hyperlocal sites] to build up a sales staff and an editor beyond a very limited point," says Krasilovsky, a consultant and blogger (Localonliner.com).

Then again, money isn't necessarily the issue, says Jan Schaffer, J-Lab's executive director and the author of a report accompanying the survey. "When they talk about success, they're not talking about revenue," she says. "They're talking about the impact they've had on their communities." She adds, "I'm not sure in this iteration, these [operators] see themselves as making big salaries and having big offices. I'm not saying it won't happen somewhere down the road, but in this iteration it isn't there yet."

These days, the category's shining star--the anti-Backfence--is Baristanet.com, a scrappy, snarky local-news-and-commentary site that covers the tony New York City suburbs of Montclair and Bloomfield in New Jersey. Co-owned by a novelist (Debbie Galant) and a journalist (Liz George), Baristanet is by all appearances thriving just three years after its founding. Its mix of news stories big (the arrest of a local murder suspect) and small (a debate over artificial turf at a local playing field) as well as reader-supplied commentary and photos attracts about 80,000 unique visitors a month, according to co-owner George. It's also selling ads--to local supermarkets, real-estate agents and restaurants. Baristanet has gotten so much buzz that Galant and George have recently branched out as consultants to other hyperlocal entrepreneurs.

But Baristanet (the name was picked to conjure news "baristas" serving up daily scoops) isn't exactly a big business. In fact, it's just barely a small one. The site generated about $60,000 in revenue last year. That's enough for Galant and George to hire a full-time freelance editor and a few part-time employees. Although George projects revenue of $100,000 this year, Baristanet isn't close to generating enough profit to support its owners, who aren't quitting their regular jobs. "As soon as the money's there, I'll commit to it" full-time, says George, a special sections editor at New York's Daily News. "We're growing, but we're not there yet."

Despite such modest returns, mainstream news organizations seem determined to enter the field. Sparked by such early hyperlocal innovators as the Journal-World (www2.ljworld.com) in Lawrence, Kansas, and the Rocky Mountain News in Denver (YourHub.com), established media companies see hyperlocalism as a way to win back lost readers and to target mom-and-pop advertisers who can't afford to, or simply don't want to, reach every household in a region. New entrants include Gannett, the nation's largest newspaper chain, and the Chicago Tribune, which in April launched Triblocal.com, aimed at nine towns in the southern and western suburbs.

The Tribune's foray into the burbs is "a way to make the [paper] more relevant to people who are farther and farther away from the central city," says Ted Biedron, who heads Chicagoland Publishing Co., the Tribune subsidiary overseeing the project. "Every major metro paper," he adds, "has this issue." True, but the Tribune isn't making any bold pronouncements about Triblocal, including revenue projections. The project seems modest so far: Triblocal has hired only four journalists to collect and organize material for the eight towns it is initially targeting online.

But Biedron notes that the project may prove more successful as an offline venture than an online one. This summer, the company will "reverse publish" its hyperlocal content, creating tabloid papers that will be inserted into copies of the Tribune bound for the distant towns.

A more ambitious hyperlocal effort is unfolding in my backyard, via my employer, the Washington Post. A 10-member team at Washingtonpost.Newsweek Interactive, the company's online division, has been working since October on the first of what it hopes will be a series of "microsites" covering the Post's home circulation area. The first such site, scheduled to go up in June, will target Loudoun County, Virginia (population: 255,518), a sprawling, exurban locale about 40 miles from downtown Washington. This is, in many ways, uncharted territory for the Post, which has tended to train its journalistic resources on Washington's government institutions, war zones and exotic foreign capitals.

WPNI picked Loudoun for its first hyperlocal effort because of the county's growth rate and affluence--its median household income of $98,483 is among the highest in the nation--and because Loudoun has just one moderately large municipality, Leesburg. This means that Loudoun's many subdivisions receive services from the county government, giving an otherwise disconnected place a common identity. Or so the folks at WPNI hope.

"What we're struggling with, and every major paper is struggling with, is how to reach our audience on a granular level, in a way we've never reached them before," says Jonathan Krim, WPNI's assistant managing editor for local and a co-leader on the Loudoun project. "People in the community want to know when that danged Dunkin' Donuts is finally going to move in. Or why there isn't a stoplight at the intersection where there have been a lot of accidents. There's a whole range of stories that, let's face it, a lot of newspapers and Web sites aren't engaged in, but that we know are really important to readers."

The Post already prints two Loudoun Extra sections a week with a staff of four reporters. But LoudounExtra.com, as the new microsite will be called, will also rely on its own "citizen army," as Krim puts it--a network of bloggers and amateur contributors who live in the county.

The site will also have several new features that the printed paper can't match. Rob Curley, WPNI's vice president of product development, takes on a nearly evangelical fervor as he talks up what he's got in store. Whipping out his ever-present Apple laptop and clicking frantically, he shows off a database that includes panoramic photos of every high school football field in the county; click on sections of the grandstands and you can see the sight lines to the field. There will be podcasts of some local church sermons, real-time accounts of high-school games and highly detailed restaurant guides, too. "You want to know which [county] restaurants are open after 11 p.m. on a Thursday? Boom! There you go!" he says, triumphantly displaying such a list.

Curley, a much-heralded veteran of similar projects at the Journal-World and at Florida's Naples Daily News, says newspapers can't afford not to add such bells and whistles.

"As my publisher in Lawrence used to say, 'Newspapers have to start driving with their brights on,'" he says. "My gut feeling is that a lot of newspapers aren't doing that right now.

I don't know what it is about the newspaper industry, but it has a way of taking great ideas and making them into OK ideas."

But let's get back to the bottom line again and ask a simple question: Will initiatives like LoudounExtra.com have much of an impact on a newspaper that generated about

$675 million last year from print and online ads? Will such efforts add up to much for an industry that seems to be grasping daily for the lifeboats?

Krim is hesitant. "We don't really know yet," he answers.

Still, he adds, "It's important to do this, even if it isn't a panacea. No one thing is going to change [the newspaper industry's] future. But a lot of things might. That's why we have to do this, even if we can't say for certain what kind of business success we might have. It's part of our mission. It has to be part of our mission in serving our readers and our communities. Do we hope, at the very least, that people looking at LoudounExtra.com will give the Washington Post a second look? Sure we do."

There are, of course, some good reasons for modesty. The Post, after all, isn't the first media company to discover Loudoun County. In addition to a local radio station, Yellow Pages publishers and coupon mailers, LoudounExtra.com will have to compete for local advertising with no fewer than 11 weekly newspapers, says Paul Smith, the executive editor of the county's biggest weekly, the Loudoun Times-Mirror.

Smith points out that most of the weeklies have larger editorial and sales staffs than the Post in Loudoun (the Times-Mirror has 15 full- and part-time newsroom employees). What's more, the weeklies have an unquantifiable advantage over the big-city paper: local brand names and strong ties to the community. The Times-Mirror, for one, can trace its founding to 1798.

"The Washington Post is a great paper," says Smith. "I love to read it every morning. But sometimes when you're a little bigger, you think bigger is better. It's not necessarily so." Online restaurant guides are nice, but Smith says bread-and-butter news still sells: "Can they cover the school board meetings?" he asks. "Can they go to local sporting events? Because people still want to read about those things."

Mark Potts, late of Backfence.com, can tell you all about the pitfalls of hyperlocal journalism. Although Backfence had its internal stresses, with the partners clashing over strategy (DeFife eventually resigned because of them), the company had two basic structural problems: getting the word out and getting the money in.

Raising awareness among residents of a community was a constant challenge, he says, particularly since Backfence's competitors were reluctant to sell advertising to a would-be rival. So, Potts and DeFife tried grassroots promotion, such as handing out flyers at civic events and speaking to community groups. But such efforts are difficult to sustain. "Where we fell down was getting the initial traffic in," he says. "When it works, it's mind-blowing. But it takes time to build, and it's difficult if you don't have a big media organization behind you."

Attracting local advertisers wasn't really an issue; Backfence had more than 400 of them on its many sites. "We were happy with the advertising we got, but it didn't grow as quickly as we thought it would," Potts says. Some ads sold for as little as $50. Laments Potts, "Small businesspeople just don't have a lot of money to spend" on advertising. (Indeed, Krasilovsky, the industry consultant, estimates that two-thirds of small businesses don't even advertise in traditional Yellow Pages books, let alone online.)

But Potts remains optimistic. "I believe there's huge pent-up demand for this," he says. "It's still a good idea. And it's going to happen. It's just a question of where and who and how all the pieces come together."

He thinks hyperlocal news sites will succeed if they can keep operating costs to a rock-bottom minimum, and if the sites are clustered--that is, strung together over a wide territory. That way, he says, a publisher won't be dependent on ads from just the local pizza parlor or the neighborhood dry cleaner. With enough "mass," a hyperlocal publisher might even attract regional and national advertisers, too.

It's a paradoxical notion, one that seems to strike at the whole notion of "hyperlocal" journalism: To stay very small, you may have to get very big.

Citizen journalism works best when it has a good story to tel

Way back in 2005, when the Web 2.0 boom was just beginning, a number of new ventures were launched under the rubric of "citizen journalism" and "hyperlocal publishing”. While the details differed greatly, all these companies aimed to build new types of publications by encouraging citizen participation and providing online information and services that were not readily available on the local level. My company, NewWest.Net, was among that generation of start-ups. So was a company called Backfence.com, which announced last week that it was shutting down.

Backfence attracted a fair amount of attention in its brief life, mainly because it raised $3 million in venture capital and counted a well-regarded Washington Post editor as one of its founders. Now that it's failed, it's also attracting a lot of attention from people who are trying to figure out what's working and what's not in this new area of media. Some say Backfence was a good idea that was badly executed; others say it's proof that there's no money in local online media, or that the sector isn't appropriate for venture capital funding structures; still others suggest it's proof that citizen journalism doesn't work.


But I don't think any of these are exactly the right lessons. I think the problem with Backfence, and with a number of the other early experiments in online community journalism, is that they aren't quite "about" anything. They have no editorial angle on the world, no story they are trying to tell, and thus they become a boring hodge-podge of information titbits. In the rush to reinvent local journalism, the journalism piece is getting lost.

To back up for a minute: Backfence.com aimed to build local sites in mostly suburban towns around the country, beginning with two in Virginia. Local citizens would be invited to submit stories about the happenings in their town – things too small to command the attention of professional journalists, perhaps, but important enough if you live in the town. Local businesses would have an easy, low-cost way to advertise, both via Yellow Page-style listings and traditional web banner ads. Local residents could find the Little League scores, or share their photos of a family wedding, or gossip about the city council, or opine about which businesses served them best. The problem was that Backfence put up the sites – and nobody came. As it turned out, it's hard to get people to write stories or even share gossip on a local website. They certainly won't do it if there is no audience, creating the classic chicken-and-egg dilemma. Plus, people who are already active participants in online conversations already have their own communities – be it on Facebook or MySpace or Yahoo! Groups or the local biking club's list serve. People who are not active online take a lot of convincing.

The "if you build it they will come" approach most definitely does not work when it comes to local online media and citizen journalism.

Furthermore, Backfence and others were oddly positioned in that they were trying to do several very different things from the outset. They were trying to compete with Google, the Yellow Pages, and scads of other directory, classified and search services in helping people to find an apartment or a pizza joint or a plumber. They were trying to compete with the Facebook and MySpace and a flood of specialised social networking sites and blog communities in helping people to connect with one another. And they were trying to compete with newspapers and local TV and radio in reporting news in their communities.

It is possible to do several of these things at once – but only if one of those things is initially drawing the audience that might then be interested in the other things. The reason newspapers became the source for classified advertising is because they had the distribution to get the ads in front of people; they had the distribution because people wanted to read the news.

Virtually every successful web media business, even ones that are now very broad, got to where they are because they had a strong editorial proposition that drove readership and created a community. Craigslist was originally about finding apartments in San Francisco. Facebook was about learning more about your college classmates (in case you wanted to date one of them.) Daily Kos was about Democratic electoral politics. Gawker was about Manhattan media gossip. And so on.

Journalists are often the first to forget that creating community via publishing is not something that came with the internet era, or something that requires cutting edge Web 2.0 tools. It's something that great magazines and newspapers have been doing for 100 years – by having an appealing and unique editorial proposition.

NewWest.Net is about growth and change in the Rocky Mountain West in all of its dimensions: political, cultural, social and economic. We have hyper-local sites in seven towns, and while they offer many different things they are all informed by our over-riding interest. That editorial proposition – which we pursue via a hybrid of professional and citizen journalism – is what motivates people to be a part of NewWest.Net. And once you've got people involved, there are lots of ways to "monetise" (hint: it's not all about advertising).

I always appreciate people taking a swing at things and I think Backfence was a brave pioneer. But let's not learn the wrong lessons from its demise. It's not enough to give people a place to talk. There has to be something to talk about.

By

Jonathan Weber is the founder and editor in chief of NewWest.Net, a regional news service focused on the Rocky Mountain West in the United States. He was previously the co-founder and editor in chief of the Industry Standard

MSNBC buys Newsvine as a route into citizen journalism

News company MSNBC (which is owned by Microsoft and NBC Universal) has bought Newsvine, its first acquisition after 11 years in business. According to MSNBC's own reporter, Newsvine is "a small but innovative player in what is known as 'participatory journalism'."

Rex Sorgatz, Executive Producer of MSNBC.com, writing on his personal blog, says:

the gist is this: we plan to leave Newsvine alone -- learn from it, integrate little pieces of it, watch it grow. The site will continue to run independently with Mike at the helm; meanwhile, we will incrementally find sensible ways to integrate the "social thinking" of Newsvine into the "big media thinking" of MSNBC.com.

I'm convinced that Newsvine represents a different way of thinking about traditional media -- as merger of gathering, interacting, and consuming. By positing news as an ecosystem rather than a hierarchy, the philosophy of Newsvine is actually an old one. News has always been conversational, but only recently have we begun to rediscover the tools to bring it back to its networked mode. Mike and his team have built an amazing site, and we are excited to turn some of our large audience onto it.



Newsvine is rather small -- half a dozen people -- so I reckon it will need to keep its distance to avoid being crushed

You Tube and my Space where are they heading for??

In a matter of months, this online phenomenon went from zero users to millions. It was hugely popular with media-loving teens and young adults, whose participation drew in even more people. And for many, it became a daily obsession.

In 1999, the phenomenon was called Napster, a service that allowed users to swap songs through the Internet. Two years later, a pair of competing file-sharing networks -- Morpheus and Kazaa -- enjoyed a similarly meteoric rise. In 2005, a new version arrived -- this time in the form of the social-networking site MySpace (and, in a more modest way, Facebook), which allowed people to post profiles to the Web and communicate with friends through them. This year's model is the video-sharing site YouTube. As of October, MySpace had almost 50 million users, according to Nielsen//NetRatings, making it the runaway king of social networks. YouTube, meanwhile, had 30 million users, making it the most popular user-generated video site.

The two companies differ in fundamental ways from their file- sharing predecessors, but their popularity flows in part from the same source: a supply of free media contributed by users. On YouTube, it is video clips; on MySpace, it is clips (often provided through links to YouTube) and music. In fact, the two sites each show more videos than any Web site except Yahoo, according to a recent study by comScore Media Metrix, which tracks online activity.

And now, with both sites drawing flak from copyright holders, the question is whether they'll follow their predecessors' rapid path downward too. The descent of the file-sharing companies was fueled mainly by their inability to satisfy the demand for free downloads that they had stoked. When the courts ordered the original Napster to prevent users from downloading copyrighted songs, for instance, it lost more than 60 percent of its audience in five months, according to comScore Media Metrix. It never recovered.

MySpace and YouTube are in a different position legally and economically. They're Web sites, not software programs designed to copy digital files (so the companies can argue that they are protected from liability by special rules for Internet providers.) And their owners -- News Corp. and Google, respectively -- have very deep pockets and can afford to fight any challenges.

Still, the communities they have created rely to a great extent on users' ability to express themselves through media, and frequently the copyrights to that media are owned by a major music company, TV network or studio. While arguing that they aren't liable for their users' infringements, the companies also have tried to placate copyright owners by striking deals to share revenue with them (e.g., YouTube's deals with Warner Music Group and Universal Music Group) or sell their content (e.g., MySpace's deal with Snocap to help sell songs from unsigned artists). But the major labels and studios have not been mollified and have continued to press the companies to block copyrighted works from being posted on their sites unless specifically authorized. YouTube is developing technology to do just that.

Depending on how restrictive copyright owners decide to be, MySpace and YouTube could face a Hobson's choice. If they accede to the demands of Hollywood and the record labels and allow only a fraction of their works to be posted, users might be driven away because they can't express themselves the way they want to. And as their audiences thin, so will the glue that binds many users. It's the "network effect" in reverse: As users leave, the sites' breadth diminishes, prompting more people to go elsewhere.

Alternatively, MySpace and YouTube could refuse and continue letting users post whatever songs or clips they please, removing material only if the copyright holder complains. Some copyright specialists argue that MySpace and YouTube are shielded by the 1998 Digital Millennium Copyright Act, which exempts Internet service providers from liability as long as they remove infringing material when asked. But other experts disagree, saying the exemption doesn't apply to MySpace and YouTube. Universal Music Group, among others, doesn't believe it does; it sued MySpace and News Corp. for copyright infringement Nov. 17.

It's ironic to see News Corp., whose 20th Century Fox movie studio helped bring the lawsuits against Kazaa, Morpheus and numerous individual file-sharers, on the defensive. At the same time, it's refreshing to see an important copyright-law case litigated by parties with comparable resources on both sides, rather than having the entertainment industry pound away at much smaller figures.

The best result would be for Universal and its entertainment brethren to work out a way with MySpace and YouTube to turn people's enthusiasm for posting songs and clips into a robust revenue stream - - assuming that the sites can gin up enough money to make everybody happy. In another parallel with the original Napster, MySpace and YouTube haven't found a way yet to generate much revenue from advertisers or users. And the longer that remains true, the greater the chance that the companies will meet the same fate.
by
John Healey is an editorial writer for the Los Angeles Times

Maka-Maka is Google's Answer to Face Book After Failure to Acquire It

Google may have lost the bidding war to invest in Facebook, but it is preparing its own major assault on the social networking scene. It goes by the codename “Maka-Maka” inside the Googleplex (or, perhaps, “Makamaka”).

Maka-Maka encompasses Google’s grand plan to build a social layer across all of its applications. Some details about Maka-Maka have already leaked out, particularly how Google plans to use the feed engine that powers Google Reader (known internally as Reactor) to create “activity streams” for other applications akin to Facebook’s news and mini feeds. But Maka-Maka goes well beyond that.

Maka-Maka will be unveiled in stages. The first peek will come in early November. As we reported previously, Google is planning to “out open” Facebook with a new set of APIs that developers can use to build apps for its social network Orkut, iGoogle, and eventually other applications as well. To recap what we wrote earlier:

Google will announce a new set of APIs on November 5 that will allow developers to leverage Google’s social graph data. They’ll start with Orkut and iGoogle (Google’s personalized home page), and expand from there to include Gmail, Google Talk and other Google services over time.

On November 5 we’ll likely see third party iGoogle gadgets that leverage Orkut’s social graph information - the most basic implementation of what Google is planning. . . . Google is also considering allowing third parties to join the party at the other end of the platform - meaning other social networks (think Bebo, Friendster, Twitter, Digg and thousands of others) to give access to their user data to developers through those same APIs.

We’ve now learned that the original November 5 date Google is shooting for may be delayed. “They need more time,” says one outside developer working on the project. “It is a challenge for them,” confirms another. Still, the expectation right now is that some announcement will be made the week of November 5 (perhaps the 8th or the 9th), and will most likely be limited to Google’s existing social network, Orkut. The APIs will be announced, along with as many as 50 partners that have created applications on top of the APIs. (Most of the top app developers for Facebook will be included—think RockYou, Slide, iLike, SocialMedia, etc.—and a few new ones as well).

All eyes will be on Google, but don’t expect anything too earth-shattering straight out of the gate. Many of these apps will be copycats of what is already available on Facebook (just as the very first apps on Facebook were ported over from other parts of the Web). This first go-round, Google will just be trying to match Facebook’s ante. Remember, even on Facebook, the best apps didn’t emerge on Day One. And now Facebook has a six-month lead.

The bigger challenge for Google in the U.S. is Orkut itself. While there may be 24.6 million monthly visitors to Orkut worldwide, only 500,000 of those are here in the U.S., according to comScore. Cool social apps aren’t much good if none of your friends use them.

That’s where the bigger plan for Maka-Maka comes into play. Maka-Maka is very strategic for Google. Responsibility for it goes all the way up to Jeff Huber, the VP of engineering in charge of all of Google’s apps. Huber is on record as saying that the way Google plans to compete is by using the Web as the platform instead of trying to lock developers into Google’s own platform. One way it will do that from the start is by creating two-way APIs so that any app created for Google can be taken to other Websites. (Whether this will extend to actual user profile data within Orkut or elsewhere inside Google remains to be seen because of privacy issues, but the apps themselves will be portable). And data from other social sites will be able to be imported into Google’s social apps as well.

The bigger vision is to combine all of Google’s apps and services through Maka-Maka. Google already has so much data on you, depending on how many Google apps you already use. It just needs to bring everything together. Your contacts are in Gmail. Your feeds are in Google Reader. Your IM buddy list is in Gtalk. Your upcoming events are in Google Calendar. Your widgets are in iGoogle. And don’t forget about your search history. Overtime, Google will connect all of these together in different ways, along with data about you from other social services across the Web, and give developers access to the social layer tying all of these apps together underneath. The real killer app for Google is not to turn Orkut into a Facebook clone. It is to turn every Google app into a social application without you even noticing that you’ve joined yet another social network

Murdoch, a Folk Hero in Silicon Eyes on Future of Media

At the Web 2.0 Summit a few weeks ago, MySpace held an after-party at the San Francisco Museum of Modern Art. With a guest list of Silicon Valley luminaries and a party room redone in white — carpet, chairs, table and yes, mostly people — it was a very post-modern indication that MySpace, the social network owned by the News Corporation, was ready to engage with its brethren to the north by opening an office here.

Half an hour into the party, there was a ripple of excitement, and people started murmuring and pointing toward the door. When the crowd parted, I expected to see Mark Zuckerberg, the young overlord of Facebook, or Steve Ballmer, the battle-hardened Microsoft veteran. Then again, this is a MySpace party, so maybe Britney Spears or Lindsay Lohan? Instead, it was Rupert Murdoch — old school, old media, and at 76, just plain old.

From the reaction of the crowd, it might as well have been Lindsay Lohan. He was overwhelmed by an immediate onrush of hospitality as the geekerati lined up to get a word with him.

Back East, the elites generally regard Mr. Murdoch, most especially with his purchase of The Wall Street Journal, as if a particularly unpleasant coup was under way. He is treated much the way he is in London (where he has owned The Times for more than 20 years), as an immigrant, a man of suspect values and provenance, even though he runs a $70 billion diversified media company.

In the United States, Mr. Murdoch’s appeal is thought to work in the heartland, where Fox News takes aim. But on the left coast, Mr. Murdoch is truly among friends. The attendees at the Web 2.0 conference know him as the ultimate market timer, the guy who swooped in out of nowhere and bought MySpace for $580 million two years ago, before its audience doubled and before social networks became the platform of the future. And this was before Facebook got a valuation of $15 billion via an investment from Microsoft on Wednesday.

“This is not just another rich guy — there are a lot of those around here,” said John Battelle, one of the summit’s hosts. “He built News Corp. from not much, with his own two hands, and this is a room full of entrepreneurs. The other thing this room respects is intelligence, and they can tell he is smart, really smart, not just from what he says, but what he has done with MySpace.”

The same characteristics that make Mr. Murdoch a nonmember of the club in the East — a lack of correctness and, occasionally, business civility — make him something of a folk hero in the context of the new economy, which is peopled by insurgents who see him as a fellow pirate, even though he already captains a giant ship.

In a joint interview on the stage of the summit with Chris DeWolfe, a MySpace founder, earlier that night, Mr. Murdoch brandished both humility and hubris. He said that the folks at News Corporation were “trainees” when it came to new media but added elsewhere that CNBC was “half dead,” that MySpace was probably worth 30 times what he had paid for it, and he all but licked his lips when he responded to a question about whether he would like to use The Wall Street Journal to “kill” The New York Times.

“That would be nice,” he said.

At a conference where most chief executives proceeded with euphemistic elegance — Mr. Ballmer stonewalled questions about negotiating for a piece of Facebook even as the deal was being consummated and gave a long answer to a question about Google without mentioning its name — Mr. Murdoch answered almost every question put to him, often naming names and frankly laying out his ambitions. He was a hit in the room and the belle of the ball afterward.

And in a move that plays like raw meat in this lion’s cage of developers, Mr. DeWolfe and Mr. Murdoch said MySpace would open the platform to applications or so-called widgets from outside programmers, a decision Facebook made in the spring.

“He is candid and he is aggressive,” said Jason Calacanis, who sold his start-up, Weblogs, to AOL for a reported $25 million two years ago. “He said during the discussion that he basically wanted to crush The New York Times and crush CNBC. When do you hear somebody in that kind of position being so candid?”

It’s not just Mr. Murdoch’s aggression the audience responds to. In a speech to the American Society of Newspaper Editors in 2005, Mr. Murdoch suggested that newspapers were “immigrants” to the digital space who needed to learn from “natives.”

He seems to have gotten the hang of things pretty quickly, telling the Web 2.0 crowd, “No one delivers huge audiences anymore.” One of the conference’s themes was that advertisers, who will finance things as diverse as cellphones and desktop applications, are no longer after just eyeballs, but consumer behavior, too.

For a so-called old media company, News Corporation has done significant work to move from taking orders for mass inventory to offering focused buys with specific audience characteristics. Mr. Murdoch recently bragged at a conference about being able to deliver, say, all the optometrists in the London area — which is very Web 2.0, as they say.

I waited my turn in the queue at the party, and Mr. DeWolfe, who had just signed a deal for two more years with News Corporation, made an introduction. Amid the throbbing house music, Mr. Murdoch and I chatted briefly about his purchase of The Wall Street Journal, which will be completed in December.

Perhaps in an effort to keep cognitive dissonance at bay, the journalists I know at The Journal have changed posture from doomsaying to a growing curiosity about what it will be like to work for someone who actually wants to invest in newspapers. I mentioned as much to Mr. Murdoch. “That is the sense I am getting,” he said.

I also joked that he might have to cut a lot of checks to compete with my employer for national and international news, adding that this has been a tough business of late. But he insisted there was “plenty of room for growth” in the newspapers.

“We can’t wait to get started,” he said.

Others can’t wait either. “Who isn’t interested in seeing some other newspaper people who want to fight and do bold things?” Mr. Calacanis observed. “Murdoch is someone who is actually investing in newspapers. Even you have to be rooting for that.”

Source :nytimes.com