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The Problem and the Opportunity Of Mobile Advertising

By - November 18, 2011

I hate to pick on the good folks at TextPlus, because I like the service (and my kids do too). But my family recently had an experience that reminded me how stunted the advertising ecosystem remains in the (relatively) new world of apps.

Quite serendipitously, after that experience I had the pleasure of meeting the CEO of Gogii, the company behind TextPlus. More on what I learned from him in a moment. But first, to the problem.

TextPlus is a star in what I’ve come to call “AppWorld,” that Jobsian funhouse mirror universe of apps (TextPlus also on Android, where I’m told it’s growing faster than in iOS). Parent company Gogii is backed by Very Serious Venture Capitalists like Kleiner Perkins and Matrix Partners. Clearly, this is a horse that smart money is backing.

But smart money cannot an ecosystem fix – at least not so far. With some notable exceptions, the mobile advertising ecosystem has been pretty broken. A few reasons why:

1. Every app maker I have spoken to tells me that they mostly rely on third party ad networks. They then complain that those networks “don’t understand our business” and are not aligned with their core interests. These networks provide limited visibility into future revenues, and the ads they deliver are rarely if ever targeted well.

2. These third party ad networks sometimes pay well, but most of the time, they pay very poorly. If an app is going to make it, they have to depend on Apple’s iTunes store and iAds (which brings with it its own set of gordian policy and business strategy issues) or on their own sales force, which is difficult, as most apps don’t have the scale to build and execute salable ad products.

3. Bad actors and practices often creep into how networks execute campaigns on third party apps.

Which brings me to my experience with TextPlus.

I recently helped my daughter set up her TextPlus account. We downloaded and configured the free version (you can buy an ad-free version for a few bucks, more on that later). After about three minutes, my daughter was happily texting my mobile number. It was a cool experience – my daughter doesn’t have a “real phone” yet, but now she can text me just like her older siblings. She proudly held her iPod Touch up to show me her latest text, then asked me why my phone number didn’t have a name like “Dad.” I thought about it for a second and realized she hadn’t set up any Apple contacts yet. So I opened the Contacts app, put myself in there, and reloaded TextPlus. Sure enough, there was “Dad” in the text stream. My daughter was radiant.

As I was about to hand the iPod back to her, however, the entire screen was taken over by an ad for Cadillac. That was bad enough, but to make matters worse, I couldn’t figure out a way to make the ad go away. I had to wait for 15 seconds or so, till the ad cleared. The moment of delight between my daughter and I was ruined (my unscripted burst of expletives probably didn’t help).

In those 15 seconds, my opinion of both Cadillac and TextPlus dropped precipitously. It wasn’t the actual ad – the creative was pretty good in fact (the image at left is not what I saw, but I didn’t manage to get a screengrab). What angered me was the interruption and the lack of fit – why on earth would Cadillac push an ad to a girl who couldn’t even drive yet?  Given I am pretty deep in this industry and aware of the points I made above, I figured it was entirely possible that both Gogii and Cadillac had no idea this experience was happening to me.

Turns out, I was right. And therein lies one of the big problems (and opportunities) in the mobile advertising world.

Rather than bang out a post about how terrible my experience was (I was tempted), I lobbed a call into Gogii to ask if perhaps the ad was a mistake. Over the years at FM, I have had enough experience with similar issues in the HTML web to know it was certainly possible. As it happened, the CEO of Gogii (based in LA), was in San Francisco the next day. We set a meeting.

Scott Lahman is a mobile and gaming veteran, having held senior positions at Activision, EA, JamDat, and now as founder of Gogii. He came by the FM offices and within a few minutes we cleared up the Cadillac ad question – a third party network had “snuck” the ad past TextPlus’s filters. Lahman hates when that happens, but … it happens. He was aware of it (other customers had complained) and he had already addressed the problem.

With that settled, we could dig into the bigger issues of the mobile advertising landscape, from the point of view of a Serious App Maker like Gogii. Gogii has more than 25 million downloads, a very engaged and attractive base of customers (millions of teens), and has begun to build out a content driven social element to its service. It also has some big things planned that I’m not allowed to talk about yet.

While Gogii sells an ad-free version of its app, its future is deeply tied to advertising. This initially seems counter intuitive given you can buy your way out of ads on TextPlus for a few bucks – for life. That’s a pretty low estimate of the lifetime value of a customer. Clearly, something else is going on. At the moment, Gogii has one product that it sells at a premium – essentially a home page skin – but it makes the rest of its revenue from the networks.

Given all that, I wondered how Lanham felt about the three points I made earlier in this piece.

In short, Lanham told me, the mobile advertising industry is about five years behind the HTML web in just about every way. Which is interesting when you think about what was going on in web advertising back in 2006.

Back then, FM was one years old, but our model was gathering steam. Successful websites (the TextPluses of the world) were growing like crazy, but struggling with poor ad network revenue streams. There was a glut of inventory in both traditional media sites as well as “the Independent Web” – sites like Boing Boing, Dooce, NotCot, etc. – but there was no scaleable way to bring truly engaged marketing into the picture. Of course, since then the FM model and many like it have evolved to bring real revenue and relationships to the ecosystem. We’re not where we want to be, of course, but we’ve come a long way.

But at the same time as this progress was beginning, that same glut of inventory was feeding a new set of players – the second-generation ad networks. It was about five years ago that those networks were snapped up in a frenzy of M&A. AOL already had purchased Google bought DoubleClick (and its nascent exchange business). Yahoo bought Right Media. Microsoft bought AdECN. There was a lot of froth in the marketplace, as the major players realized Internet advertising was ripe for consolidation and new business models.

Since then, we’ve seen the rise of exchanges, demand side platforms, and programmatic buying. We’ve also witnessed the attendant response from the publishing world – supply side platforms like Lijit, hand wringing from premium publishers like ESPN, and innovations in ad products like conversation targeting, which can’t be bought on exchanges (at least, not yet.) We’ve seen online advertising split into two large buckets: “Unsold” or remnant inventory, where the networks mainly play, and “premium,” where publishers (or their partners) create more engaging executions that resonate for brands.

Put another way, a lot has happened in the non-mobile web, and it’s all about to happen again, but faster, in the mobile web. There’ll be a lot of consolidation (the firing shots were, of course, AdMob/Google and Quattro/Apple), there’ll be engaging new products (think really new) that scale across federations of quality apps like TextPlus, and there will be new technology solutions that will, more likely than not, be snapped up for prices that don’t seem to make a ton of sense.

Which is all a long way of saying that I think things are about to get far more interesting in mobile advertising, in particular for apps that comprise “the Independent Web” of the mobile world. It’s about time. In a future post I hope to delve into some of the architecture, data, and business model issues that will need to be addressed if we really want to see a truly independent world of apps thrive. I for one certainly do.

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Whisperings of the Future Surround Us

By - November 17, 2011

Yesterday I met with Christopher Ahlberg, the PhD co-founder of Recorded Future, a company I noted in these pages back in mid-2010. Ahlberg is one of those rare birds you just know is making stuff that matters – a scientist, an entrepreneur, a tinkerer, and an enthusiast all wrapped into one.

He ran me through Recorded Future’s technology and business model, and I found it impressive. In fact, I’m hoping I can employ it somehow into my book research. And that conditional tense of “hoping” is the main problem I have with Ahlberg’s creation – it’s a rather complicated system to use. Then again, what of worth isn’t, I suppose?

Recorded Future is, at its core,  a semantic search engine that consumes tens of thousands of structured information feeds as its “crawl.” It then parses this corpus for several core assets: Entities, Events, and Time (or Dates). Recorded Future’s algorithms are particularly adept at identifying and isolating these items, then correlating them at scale. If that sounds simple, it ain’t.

The service then employs a relatively complicated query structure that allows you to project the road ahead for your question. For example, you might choose “Amazon” as your entity, and then set your timeframe for events involving Amazon over the past two months and into the next two months. Recorded Future will analyze its sources (SEC filings, blogs, news sites, etc) and create a timeline-like “map” of things that have happened and are predicted to happen with regard to Amazon over the next eight weeks. You can further refine a search by adding other entities or events (“earnings” or “CEO”, for example).

How does it work? Well, turns out the Internet is rife with whisperings of the future, you just need to learn how to listen. That’s Recordable Future’s specialty. As you might imagine, Wall Street quants and government spooks just love this stuff. I’d imagine journalists would as well, but most of us are too strapped to afford the company’s services. Embedded below is a new feature of the site, a weekly overview of a news-related entity.

Recorded Future’s engine is not limited to the sources it currently consumes. Not only is Ahlberg adding more every month, his customers can add their own corpuses. Imagine throwing Wikileaks into Recorded Future, for example.

Perhaps the coolest aspect of the service is a visualization of how entities relate to each other over time. Ahlberg showed me a search for mobile patents, then toggled into a relationship graph. Guess what entity broke into the center of the graph, connected to nearly everything else? Yup – Motorola.

Did I mention that Google is an investor in Recorded Future?

As I said, I hope to start using the service soon, and perhaps posting my findings here.

Kevin Kelly’s “What Technology Wants”

By - November 09, 2011

It took me a while, but I’ve finally finished Kevin Kelly’sWhat Technology Wants,” first published last year and now out in paperback. Befitting a tome that took five or so years to write, Kevin’s book is not the kind of work that is easily digested – at least for me.

But that’s not to say it’s not worthy. It most certainly is. I worked with Kevin for five wonderful years as a co-founding editor of Wired, and throughout that tumultuous period (1992-1997) Kevin never ceased to surprise me – both with stories of his extraordinary life (after converting to Christianity whilst wandering in the Middle East, for example, he bicycled across the US under the self imposed belief that he would die at the end of his trip), as well as with his boundless curiosity. I was very young when we worked together, to say he had a profound impact on how I understood the practice of writing is an understatement. Together we edited every single word in more than fifty issues of Wired, after all.

With those caveats declared, then, let me get to the book at hand. Some non-fiction books present themselves as lectures or arguments. And still others are very clearly the manifestation of the author’s own unscratchable itch. What Technology Wants is both of these, and more. In the introduction, Kevin pretty much sums it up: “What was (technology’s) essence? If I didn’t understand the basic nature of technology, then as each new piece of it came along, I would have no frame of reference to decide how weakly or strongly to embrace it.”

Kevin’s core question is all of ours: We understand technology seems to have a life of its own, to be rather out of our control. We both love and fear it, and we’re not quite sure whether to embrace it. Is it good, bad, or indifferent?

Kevin’s answer is clear: Technology is not only in the balance good, it’s also far, far bigger than us. He argues that technology is a natural product of evolution – an extension of us – but he also argues that we are an extension of larger forces than ourselves. If that sounds like it borders on the religious, well, it does. Kevin is a religious man, but he’s careful to not let that get in the way of the book’s thesis – too much.

As I read, I sometimes found myself wondering if Kevin wasn’t attempting an elaborate and roundabout proof of God’s existence, and it left me wondering what his unvarnished views were on the subject. What Technology Wants doesn’t quite go there, but it comes close, and I found that lack of directness oddly frustrating. (Reviewers at the Times and the Journal found other frustrations, but I’ll let you peruse those on your own).

What the book does state directly is the existence of what Kevin calls the “technium,” which is a complex of all technology past, present, and future – a living system and process that flows from our own creation, but is not of our own making. If your head’s starting to hurt, you’d not be alone. The technium is a tough concept to internalize, because it challenges the notion that somehow mankind is preeminent. Humans are simply an outgrowth of the technium, a necessary technology that furthers a much grander design. I think many of us sense this could be true, but Kevin insists it is – and then asserts that we needn’t worry, because in the end, technology wants what we want: more freedom, more diversity, more beauty, and more choice.

Where What Technology Wants fails is as a narrative – there isn’t a clear thread pushing the reader forward. It’s utterly packed with interesting stories and anecdotes – a provoking study of the Unabomber, a thoughtful journey into the heart of Amish philosophy, a primer on how life began – but I tend to like books that have a through line.

If there is one, it’s that in the end, we’re all going to be better for the rise of the technium. I want to believe in what Kevin proclaims, because I share his optimistic views. But I’m still unclear on the link to God, and it’s probably that link that I’d most like to explore the next time Kevin and I speak. I’ll be meeting with him soon, and look forward to the conversation, which I’ll report here. In the meantime, I believe that What Technology Wants is an essential read for anyone who wishes to claim both cultural and technological literacy. Highly recommended.

For more on Kevin’s book, including reviews and ongoing thoughts, I also recommend the book’s portion of his site, found here.

Other books I’ve reviewed recently:

Alone Together: Why We Expect More from Technology and Less from Each Other by Sherry Turkle (my review)

The Information: A History, a Theory, a Flood by James Gleick (my review)

In The Plex: How Google Thinks, Works, and Shapes Our Lives by Steven Levy (my review)

The Future of the Internet–And How to Stop It by Jonathan Zittrain (my review)

The Next 100 Years: A Forecast for the 21st Century by George Friedman (my review)

Physics of the Future: How Science Will Shape Human Destiny and Our Daily Lives by the Year 2100 by Michio Kaku (my review)

You Are The Platform

By - November 08, 2011

A funny thing happens to me after each Web 2 Summit – I tend to curl up for a week or two and shut down my idea receptors. It takes a ton of output to curate the show, and then running it for three straight days is rather like running an intellectual and social marathon. You’re “on” the whole time, scrambling backstage, pretending to have it together onstage, greeting amazing minds, cheering them on, delivering what I hope will be thought provoking interlocution, and, of course, remembering to thank everyone for giving so generously of their time and treasure.

So when people ask me what I thought of the show, or what the key themes were, I usually have something of a blind spot. I can remember everything up to the start of the event – all the preparation, preproduction interviews, the endless research, etc. But once we kickoff (in this case, with an interview with Sean Parker), it goes kind of black. My next memory is usually the final cocktail party on day three. I know my Dad and my wife are usually there, and I know I have a fine bourbon in my hand. And I’m happy. And I want to sleep.

Which I’ve done a lot of these past two weeks. But this last show was too rich to not review a bit, in particular for themes that should inform our collective decisions as we move our industry forward. In this post and I hope in others this Fall, I hope to outline some of those themes.

The first one that really jumps out at me is one I’ll title “You Are The Platform.” That phrase was used by Mitchell Baker, Chair of the Mozilla Foundation in her talk at Web 2, and echoed by Jeremie Miller, founder of Singly and the Locker Project. But before we get to those two, I want to start with Chris Poole, founder of 4Chan and, where he outlines a problem with how we currently think about who we are online.

Poole argues that identity is prismatic, and that both Facebook and Google force a “fast food” approach to identity – one size fits all. “They shouldn’t set the bar” for what identity is, Poole argues, “we should.” (Each of the videos below are just five or ten minutes).

How do we do this? Baker argues we have to take control of our data, away from a “20th century factory model,” where the platform for our data is highly centralized (IE on Google, or Facebook, Amazon, or Twitter). She asks us to think differently about managing our data:

In short, Baker suggests that we should each be the platform for our own data, determining how it’s used and in what context, depending on the kind of data (health, social, family, interests, etc).

Sounds great, but how do you operationalize such a concept? It sounds like a lot of work. That’s where Jeremie Miller comes in. His company, Singly, and associated Locker Project is an audacious attempt to “put the person at the center of the data.”

Singly and the Locker Project are in the early days, and the chances they won’t work are probably high. But the approach they augur, I believe, must ultimately become reality. This concept of “you are the platform” is really, really important, not just technologically, but socially, politically, and culturally. Watch this space.

Brands as Publishers

By - November 07, 2011

This week Ad Age published All Brands Are Publishers, Learn How to Be a Good One, by yours truly. In it I summarize six or so years of work I’ve done outlining terms like “conversational media,” which I first outlined on this site, “brands as publishers,” also written about first in these pages and at FM’s home, and of course the Independent Web (again, here).

But I hadn’t really pulled all of it together in short form, till now. So give the piece a read, if you’re so inclined. It’s written for the print version, so there are no links. (Old school!). From it:

It’s illuminating to remember that five years ago, Twitter was three months old, and Facebook had just opened to non-students. Neither company had a business model. Oh, and Digg was considered the pre-eminent social news service.

Over the next half-decade, of course, Twitter and Facebook have become huge forces, driving the rise of what I then called “conversational media” as opposed to “packaged-goods media,” where marketers just send a message to consumers.

I laid out five “golden rules” of this new media in several blog posts, and over the years, I’ve come to believe that it comes in two distinct flavors: independent and dependent.

“Dependent web” platforms such as Twitter, Facebook, Google and Yahoo are where people go to discover and share new content. Independent sites are the millions of blogs, community and service sites where passionate individuals “hang out” with like-minded folks. This is where shared content is often created.

Marketers need to play in both spheres to effectively build their brands. ….

Read the rest here.

Video as Grammar: The Supercut

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As early as 2003, which was the first year I began writing this site, I wrote about the idea of “video as grammar.” By this I meant (and mean) that I foresaw a day when our culture communicated with itself using video much as we currently use text.

In order for this to happen, a number of things had to fall in place. First, we needed tools that allow for quick and easy “video processing” – we need the Microsoft Word for video.

Second, we need access to a large “vocabulary” of video that we could annotate, cite, cut, paste, and repurpose.

Third, we needed what might be called cultural resonance – a reason for folks to want to communicate using video.  We have a remix culture, but it’s still pretty much the domain of obsessives and professionals. For now.

And fourth, we needed a legal framework that didn’t sue everyone into oblivion for simply expressing themselves.

It’s clear we’ve passed the first two hurdles – there are tons of great video editing suites, and YouTube et al pretty much took care of the second issue.

In the past week or so, Andy Baio and Kevin Kelly have pointed out what might just be the glimmerings of how we are going to address the third: The Supercut. From Andy’s post announcing his new site,

For the last few years, I’ve tracked a particular flavor of remix culture that I called “supercuts” — fast-paced video montages that assemble dozens or hundreds of short clips on a common theme.

Many supercuts isolate a word or phrase from a film or TV series — think every “dude” in The Big Lebowski or every profanity from The Sopranos — while others point out tired cliches, like those ridiculous zoom-and-enhance scenes from crime shows.

Since 2008, I’ve added every supercut I could find to a sprawling blog post. With nearly 150 of these videos, and more being added weekly, it’s turned from a blog post into a minor obsession.

Thank God for Andy Baio’s obsessions, is all I can say. The Supercut is an extremely powerful form of speech, and I can imagine it evolving into our cultural vocabulary in any number of ways. One to watch.

What Role Government?

By - November 04, 2011

(image) As I begin to dig into the work of my next book, I’ve found myself thinking about politics and government far more than I anticipated. (For initial thoughts and stats, see Government By Numbers: Some Interesting Insights).  While the body politic was always going to be one of the main pillars of the book, I didn’t expect it to push itself to the foreground so quickly. Certainly the Occupy Wall St. movement is partially responsible, but there’s more going on than that.

Well before #ows became shorthand for class disparity in the United States, I began to formulate a hypothesis on the role of government in our lives. (I focus on the US for this exercise, as I am writing from my own experience. I’d be very interested in responses from those living in other countries).

The headline: Over the past five or six decades, we’ve slowly but surely transitioned several core responsibilities of our common lives from government to the private sector. Some shifts are still in early stages, others are nearly complete. But I’m not sure that we have truly considered, as a society, the implications of this movement, which seem significant to me. I’m no political scientist, but the net net of all this seems to be that we’re trusting private corporations to do what, for a long, long time, we considered was work entrusted to the common good. In short, we’ve put a great deal of our public trust into a system that, for all the good it’s done (and it’s done quite a lot), is driven by one core motivation: the pursuit of profit.

A corollary to this hypothesis is that this shift has been made – and possibly engendered – by the ever increasing role of digitized information as the central driver of our society. But that’s probably another post.

Now before you start calling  me an aging, anti-corporate hippie, remember that I’ve started several companies, consider myself a free market capitalist, and I’ve done pretty well so far. I’m simply pointing something out here, not making any judgements (at least, not yet).

So let’s consider some key areas:

Identity. We are increasingly going to the Web/Interent as the platform for our lives. There, our identity is not managed by the government. It’s managed – in the majority – by Facebook. When we buy things, our identity is managed by PayPal, Amazon, and Amex/Visa/Mastercard, not to mention a raft of pretenders to our identity throne, including Facebook, Google, and startups like Square. All of these are private corporations. None of them ask us for our government issued identity cards before allowing us to make a purchase. Some do ask for our SSN, of course. But online, the “government layer” is melting into the background of our identity – rather like DOS melted into the background of Windows 3. I expect this to be the source of some serious conflict in the coming decade(s).

Control. It used to be the only entity that was legally allowed to track citizens on a regular basis was law enforcement – agents of our government. Now, of course, we happily leave digital breadcrumbs everywhere, and private corporations, driven by profit, are far more advanced than the government at profiling and tracking us. Again, I expect this fact to be a source of conflict in the future.

Delivery/Communication. For most of the past couple of centuries, you’d use a government agency if you wanted to get something important – either information, goods, or money – from one place to another in our country. That agency was called the United States Postal Service, and it worked really, really well, considering all it had to do. Now, the Postal Service is broke, and we use  UPS or FedEx for physical goods, and the Internet for information. While the government built the infrastructure for all these companies (airports, roads and Interstate highways, DARPAnet, commonly owned airwaves), it has now receded DOS-like into the background, and we now entrust the function of delivery to private corporations driven by profit.

Investment. Do any of you remember when your grandparents would give you a government bond as a birthday gift? Or when people actually believed that they could retire on the government-mandated benefits of Social Security? I do. I have two parents who are drawing on those programs right now. But as the economy has turned to one driven by information and financialization, we’ve entrusted our retirement and our investment to private corporations as well.

Education. Once almost entirely the realm of the government, we’ve watched our public education system crumble, and we’re still not really sure what to replace it with. However, one could reasonably argue that private companies will take this over in due time. Some – like Edison and Phoenix – are already well on the way.

Healthcare. The US has always shied from government-run healthcare, and some might say “Obamacare” is proof we’re moving in the opposite direction from the other trends I’ve outlined. But I’m not so sure. I have a gut feeling the numbers – in terms of Medicare etc. – may prove something different, and as I understand it, the recent legislation was, in the main, about regulating the private industry, not creating a government alternative. I have a lot more to learn here.

Security. This is the one area of government that we all seem to agree should stay in government hands. However, even this realm has been increasingly privatized – from private prisons to vast armies of outsourced mercenaries and support teams for our military.

I could go on, but instead I’d rather that you do, in comments. What other aspects of our lives did we once entrust to government, but now entrust to private corporations?

No matter what your politics, it seems clear to me that most of us no longer trust our government to do anything particularly well. In short, as a culture we seem to be punting on doing anything well if it doesn’t have a profit motive. We are very good at is making corporations that are very good at making money. Is that enough? I don’t  know.

I am not judging this trend, but rather pointing it out. It’s something I plan to lean into as I write the book, and I am simply a curious amateur when it comes to understanding the space of government and the commons. To that end your input and suggestions as to sources and readings are gratefully welcomed.

Government By Numbers: Some Interesting Insights

By - October 28, 2011

As part of the work I’m doing for my book, I’ve been working with my research manager, LeeAnn Prescott, staring at various charts and graphs related to how we’ve funded our “Commons” over the past half century or so. I’ve got a working hypothesis that we are in the process of transitioning very important portions of our “public lives” to private corporations, and that this transfer is related to our adoption of digital technologies and platforms. Examples include identity (from driver’s licenses and SSNs to Visa, MasterCard, Amex, and Facebook), delivery of important information and items (from the Post Office to Telcos, Internet, and FedEx and UPS), and protection (outsourcing both prisons and military jobs to private companies). Not to mention retirement (from Social Security to 401ks, etc.).

Of course, were such a hypothesis true, one might imagine that the over percentage of GDP represented by government workers would have gone *down* over the past few decades. However, as this chart shows, that’s not the case:

If we’re depending on government less and less, as I hypothesize, how on earth could government employees go *up* by ten percent in the past six decades?

Either my hypothesis is wrong, or there are devils in the details. And indeed, as you drill down further, some interesting things start to pop up.

For example, check out this chart of what’s growing in our government, and what’s not:

Aha! Turns out, the Federal Government has actually shrunk by more than half, but we, as a society, have simply moved the burden to State and Local Governments. I wonder how the folks at the Tea Party HQ would respond to this data: They spend an awful lot of time talking about Big Government, but they seem overly focused on the Big Bad Feds. They might take aim at their own backyards instead.

Let’s take a look at some detail:

Ahh….Education. Very interesting. As local governments have taken over the once Federally run education system, payroll there has skyrocketed (has performance? Nope. But that’s another story).

Also interesting to note how dramatically our Military spending has dropped, but, given we’re comparing to Cold War, Korean War and WWII eras, that’s not too surprising.

Now let’s compare Government as a percent of GDP to private Industry. If my hypothesis is to hold water, I’d wager that private industry is taking over more and more of our GDP over time. Is it? Yep.

As one might expect, the numbers show the rise of the services industry, and the decline of manufacturing in our economy. But they also show a rise in percent of GDP by government, due in the main to state and local increases.

Here is more detail by industry on what’s growing and shrinking:

Check out that first item: Financial services has nearly doubled and now leads our nation in terms of contribution to GDP. No wonder 2008 was such a (continuing) disaster.

But it’s clear to me we have an education and healthcare problem on our hands (quite a surprise, eh?). Now, education is, in the main, a government enterprise. Healthcare, not so much (Obama’s plan is in essence private, folks). So the question then becomes, will education make the transition from public to private sector in the digital era, and might Healthcare move the other way? I can imagine an argument for both. I post these charts not to draw conclusions, but to open debate.

One last chart of detai on how our Federal Government spends money:

Huh. Social security has risen a lot. So has Treasury and Health. One might reasonably conclude that 1. Our population is aging, creating the demand for more Social Security services. And the two dominant private industries in our country – finance and health – require significant regulation, hence the rise of Treasury and Health.

But I’m not a government economist, so I’m just guessing. I look forward to interviewing many of them as I dig in. Meantime, I just thought it’d be fun to share these data points with you. Enjoy.




Only Connect: Facebook, From The Eyes of an Old Newbie

By - October 27, 2011

I recently joined Facebook. Have you heard of it?

I know, I know, that sounds crazy, given that I’m “an Internet guy.”  If you search for me on Google, say “John Battelle Facebook,” you see that I am already there, and that I have nearly 5000 “friends.” (The interplay between Google search and Facebook is worthy of an entire treatise, I’ll leave that for later). You’ll see I also have a fan page, which has about 5400 “fans” – I think that’s the terminology, though now I think Facebook has turned those fans to “Likes.”

But as many of you know from reading my past posts on the subject, I’ve been essentially “Facebook bankrupt” for years. The service has never been of much value to me, in the main because I made an early and fatal decision to accept any and all folks who asked to be my friend. (For details on that, see this post: I Blew It On Facebook.)

So this week, as both research for my next book and because I’ve been meaning to do it for more than two years, I re-joined Facebook under a slightly different name. I created a new account from scratch, and I promised myself I’d really curate this one so that it’d be meaningful to me personally.

It’s not turning out to be easy.

I’m sure this process will yield more posts, so consider this the first chapter. What I’ve experienced so far, however, only strengthens my belief that Facebook hasn’t even crawled out of the sea when it comes to understanding the nuances of how people communicate with each other. Sure, it’s an extraordinary service and platform, etc. etc. And I know and respect a ton of people who work there. But it’s a testament to how utterly thirsty we are to connect that Facebook, in five short years, has captured the attention of nearly everyone in the online world.

Because, let’s face it. The initial experience with Facebook is pretty bad, from a social point of view.

Here’s why I feel that way.

First is what I’ll call The Guilt of Not Connecting. When you sign up for the first time, Facebook bludgeons you relentlessly to connect to others. It’s beyond irritating – a newcomer to the system (like me) gets constant reminders to find friends before you even get a page going. And once you do, it continues, like an irritating beep in the background – all over your page. “People you may know” stare out at you on the right side of my page, forlorn, as if to ask “How could you NOT want to be my friend?!” Large ads at the top of my page, replete with beckoning profile pics, ask “Are They Your Friends Too?”

And you know what? These are certainly people I know. But being forced to chose if you care enough about them to add them as friends is an intrusion at this early point. I’m just figuring this thing out, Facebook. There’s gotta be more to it than just adding friends, right? Right?!

The second thing I’ve noticed that feels broken is The Forced Rudeness. When I set up my page, I did add a few friends – mostly family members. I added my wife, my kids (the ones who are on the service), and my Dad, who recently joined. Come to think of it, I think I started this whole process because my Dad joined and tried to “friend” my old account, the bankrupt one. I knew if I accepted his request, his voice would be lost in the cacophony that was my old identity.

I also searched for a few folks who came to mind – really close and true pals of mine. All in all, I think I sent out about ten “friend requests” under my new name (which is pretty much the same as my old name, I just added my middle initial). I’m pleased to report that everyone accepted my request pretty much on day one, which I kind of expected (I would have grounded my daughter if she refused, after all). But as soon as the first few folks added me as a friend, the Facebook friend machine went into overdrive, and all of a sudden, I began to get new friend requests. From people I know. But…not that well.

And here’s where Facebook utterly falls down. Because while I do know these people, and I even like them, I may not want to connect with them right now. I have my reasons as to why, and I’d sure like to explain myself to these folks.

But Facebook doesn’t really enable me to do this. In the email notification, I can’t even say no. It’s either “Confirm” or “See All Requests”, which forces me back to Facebook to manage my next steps. Since I don’t want to connect, I pick the second choice. On the site, I am given the choice of either accepting, or pushing a button that says “not now” or somesuch. I have *no idea* what that rejected friend on the other end of this transaction is told once I hit “not now.” And that’s a big problem – is the person notified that I’ve said no? How? If not, I’d like to know that – and ideally, before I see them in real life. These kind of nuanced signals are pretty much table stakes in a “real” relationship. But on Facebook, you get black or white. And that’s just not good enough.

Unlike with a real email request from a real person (not the service), or a phone call, or a face to face conversation,  there’s no simple way to respond to the friend request with a short note like “Hi (name) – Thanks for reaching out to connect with me. I’m restarting a new Facebook account, and for now, I’m limiting it to family and a very small group of really close pals. As I figure out how to navigate the service, I’ll be sure to add you. For now, I want to make sure I don’t overshare!”

Now, my messaging would change depending on the recipient. That one above might be for a business colleague who found me through my close friendship with someone who also happens to be in my industry. But I’d modify my message for the mother of my son’s high school pal. This is a person I see at school functions from time to time but who, to be utterly honest, isn’t someone with whom I’d otherwise spend much time (or share personal experiences with via an online platform). I’d wager she feels the same way about me (but I don’t know! It’d be nice if Facebook allowed her to explain why she’s friending me, but … it doesn’t!) We like each other, we’re cordial when we see each other, but why is Facebook forcing me to be rude to her by telling her “not now” (if, in fact, she’s even told – which I don’t know!).

This is going to make for a pretty awkward soccer party next month, I can tell you that.

Because, really, that’s what it feels like should I decide not to accept her request. It’s rude. So I am going to go out on a limb here, and say that Facebook seems to be counting on this fact to drive connections. And you know what? That’s a house of cards. It insures a lack of truly honest social instrumentation when it comes to building your “social graph,” and down the line, I’m going to predict that will come back to haunt Facebook, if it hasn’t already.

Now, I know many of you are snickering at this post, because most of these issues have been raised and settled, so to speak, over the past few years. Heck, I’ve even made similar points on this site from time to time. But through the fresh eyes of my recent experience, I sense something far deeper is at work. Most folks only take one run at crafting their digital identity on Facebook. I’d reckon most of us don’t want to spend hours going back to rejigger our “graph” once it’s created. That’d be way too much work.

But that graph is based on a extremely rudimentary set of social rules that break down over time, and will fail to reflect our true selves as we extend our identity online. And as Facebook moves to leverage that identity through the Open Graph to nearly every action we take online, I can’t help but think the brittleness of this system will be exposed. It then becomes a race – between Facebook’s ability to reverse engineer more nuanced social interaction back into its platform (and it is, I can see attempts in the interface already), and some new startup (or, OK, maybe Google) that allows us to do the same with far less work.

Of course, Facebook has what amounts to a “moat” around social platforms due to its network effects – as Sean Parker pointed out in our conversation at Web 2 last week. It’s really hard to leave, because you want to bring your “real friends” with you, and asking them to step over to a new service is too much of an imposition. If they leave, they will want to bring their friends, and now you have a real shampoo problem on your hands.

But I predict that we’re racing headlong into a cultural moment when we realize we need more control and nuance in our lives when it comes to what Facebook currently represents for us (if you think this isn’t related to #occupywallstreet, it is, in a really interesting way. That post is coming). Facebook works really well for folks who are just beginning to define who they are in the world, like my kids, or college kids just learning what it means to be out on their own. But those kids ultimately grow up, and become deeply refined social creatures. The question is, can Facebook?

I’m not sure. The DNA and core driving principles of the company have been set. The entire system seems driven by the maxim “only connect.” I wonder how our culture will interpret the first word of that phrase, and whether Facebook, as it’s set up today, has the capacity to redefine it.

There’s so much more to say, but I’m pushing two thousand words. Best to press “publish,” and hear from you.

Slice – A Step Toward Metaservices That Matter

By - October 25, 2011

Readers will recall my multiple calls for “metaservices” that begin to unify our disparate online worlds of data. Today’s announcement of Slice, which does just that for online purchases, albeit through an email hack, is a step in that direction. Readers will also recall that “Purchases” are one of the key fields in my “Database of Intentions” graph. I wish Slice worked because Amazon and others provided us our data easily through an API, but hey, that will come, I think. For now, the email approach is an elegant workaround.

More at TNW. Interesting to note that Eric Schmidt, Exec. Chair of Google, is an investor.