This I want to see.
What Zuckerberg is really up to
Very perceptive post by Felix Salmon. The gist:
Is it too early to declare that Zuckerberg has ambitions to become the Warren Buffett of technology? Look at his big purchases — Instagram, WhatsApp, Oculus. None of them are likely to be integrated into the core Facebook product any time soon; none of them really make it better in any visible way. I’m sure he promised something similar to Snapchat, too.
Zuckerberg knows how short-lived products can be, on the internet: he knows that if he wants to build a company which will last decades, it’s going to have to outlast Facebook as we currently conceive it. The trick is to use Facebook’s current awesome profitability and size to acquire a portfolio of companies; as one becomes passé, the next will take over. Probably none of them will ever be as big and dominant as Facebook is today, but that’s OK: together, they can be huge.
Zuckerberg is also striking while the iron is hot. Have you noticed how your Facebook news feed is filling up with a lot of ads these days? Zuckerberg is, finally, monetizing, and he’s doing it at scale: Facebook’s net income grew from $64 million in the fourth quarter of 2012 to $523 million in the fourth quarter of 2013. At the same time, his stock — which he is aggressively using to make acquisitions — is trading at a p/e of 100. If you’re going shopping with billions of dollars in earnings multiplied by a hundred, you can buy just about anything you like.
Eventually, inevitably, Facebook (the product) will lose its current dominance. But by that point, Facebook (the company) will have so many fingers in so many pies that it might not matter.
Hmmm… We’ll see.
Why Snapchat is interesting
As usual, danah boyd nails it:
Snapchat offers a different proposition. Everyone gets hung up on how the disappearance of images may (or may not) afford a new kind of privacy. Adults fret about how teens might be using this affordance to share inappropriate (read: sexy) pictures, projecting their own bad habits onto youth. But this is isn’t what makes Snapchat utterly intriguing. What makes Snapchat matter has to do with how it treats attention.
When someone sends you an image/video via Snapchat, they choose how long you get to view the image/video. The underlying message is simple: You’ve got 7 seconds. PAY ATTENTION. And when people do choose to open a Snap, they actually stop what they’re doing and look.
In a digital world where everyone’s flicking through headshots, images, and text without processing any of it, Snapchat asks you to stand still and pay attention to the gift that someone in your network just gave you. As a result, I watch teens choose not to open a Snap the moment they get it because they want to wait for the moment when they can appreciate whatever is behind that closed door. And when they do, I watch them tune out everything else and just concentrate on what’s in front of them. Rather than serving as yet-another distraction, Snapchat invites focus.
Furthermore, in an ecosystem where people “favorite” or “like” content that is inherently unlikeable just to acknowledge that they’ve consumed it, Snapchat simply notifies the creator when the receiver opens it up. This is such a subtle but beautiful way of embedding recognition into the system. Sometimes, a direct response is necessary. Sometimes, we need nothing more than a simple nod, a way of signaling acknowledgement. And that’s precisely why the small little “opened” note will bring a smile to someone’s face even if the recipient never said a word.
Snapchat is a reminder that constraints have a social purpose, that there is beauty in simplicity, and that the ephemeral is valuable. There aren’t many services out there that fundamentally question the default logic of social media and, for that, I think that we all need to pay attention to and acknowledge Snapchat’s moves in this ecosystem.
My idea of a perfect blog post. It’s insightful, thought-provoking and beautifully written.
More NSA fallout?
Nearly half the nation’s adults changed their behavior online because of the National Security Agency’s NSA snooping programs, according to a new poll.The Harris Interactive survey found that 47 percent of adults were thinking more carefully about what they do, what they say or where they go on the Internet in light of the spying revelations that began emerging last summer.ADVERTISEMENTMore than a quarter of the 2,000 people surveyed said they were doing less banking online, and 24 percent said they were less inclined to use email.
[Source].
Balance as Bias — redux
Apropos the discussion of the latest IPCC climate change report, there was a discussion on Radio 4’s Today programme this morning about the media’s role in public (mis)understanding of the problem. I’m glad to see that the travesty of having Nigel Lawson on the programme recently to ‘balance’ a leading climate scientist was discussed. It was an example of the old “balance as bias” problem.
The guy who really nailed this in words of one syllable is Paul Krugman. When the topic of media bias came up in a session he did with Harvard students years ago, he said something like this (I’m paraphrasing):
Here’s the problem. Dick Cheney [then US Vice President] says that the earth is flat. Here’s how the New York Times reports it: “VP says Earth Flat; Others Disagree”.
This is where American journalism’s concern with not having a point of view becomes pathological. The earth isn’t flat. Never was. And there’s a high probability that human intervention is warming the planet.
Quote of the Day
“At times, the act of following Egyptian politics seems almost cruel — it’s like watching a lightning-fast sport played very badly, with every mistake reviewed in excruciating slow motion”.
Peter Hessler, The New Yorker, March 10, 2014
Michael Lewis on Lightspeed
Michael Lewis is, IMHO, one of the best long-form journalists around and his new book
In this case, the story is basically about the speed of light – or, to be more precise, about how the time-difference (in millionths of a second) that it takes an electronic share transaction to traverse one fibre-optic connection rather than another can provide an exceedingly lucrative trading advantage to those who have the kit and the know-how to exploit it.
In the video clip he explains the nub of the idea but, as always, it’s not so much the story as the way Lewis tells it — which is why his book is a must-read for anyone who cares about this stuff.
Writing about it in Quartz, Matt Phillips quotes from another part of the TV interview
“If it wasn’t complicated, it wouldn’t be allowed to happen,” he says. ”The complexity disguises what is happening. If it’s so complicated you can’t understand it, then you can’t question it.”
“This problem”, Phillips says, “goes beyond stock markets: The US financial system is awash in unnecessary complexity. And the reasons are simple: Complexity is profitable and it keeps regulators at bay. ”The jargon of bankers and banking experts is deliberately impenetrable,” wrote economists Anat Admati and Martin Hellwig in their indispensible The Bankers’ New Clothes: What’s Wrong with Banking and What to Do about It
There are some echoes of the sub-prime/CDO scandal in Lewis’s new book, in that the people who are supposed to understand how the system worked had little or no idea what was going on under their corporate noses. He recounts how the ‘good’ guys in his tale discovered this when they sought to enlighten leading figures in the financial world about flash trading:
The most sophisticated investors didn’t know what was going on in their own market. Not the big mutual funds, Fidelity and Vanguard. Not the big money-management firms like T. Rowe Price and Capital Group. Not even the most sophisticated hedge funds. The legendary investor David Einhorn, for instance, was shocked; so was Dan Loeb, another prominent hedge-fund manager.
This is an indicator of a really serious underlying problem in our networked world — the stupendous power that superior knowledge, IQ and technical understanding confers on some people. We are completely dependent on systems that are so complex that virtually nobody understands how they work — and how they can be manipulated and gamed by those who do understand them. The obvious rejoinder is “twas ever thus”, but I think that’s too complacent. What’s different now is that the level of technical expertise needed is beyond the reach or capacity of almost everyone. Which means that the elites who do ‘get’ it — and those who employ them — have colossal advantages.
LATER The book has made a BIG impact, to judge from the media coverage, and mostly the reactions have been complimentary. But there were a few contrary opinions. And Andrew Ross Sorkin, writing in the New York Times made some good points.
There is only one problem with Mr. Lewis’s tale: He reserves blame for the wrong villains. He points mostly to the hedge funds and investment banks engaged in high-frequency trading.
But Mr. Lewis seemingly glosses over the real black hats: the big stock exchanges, which are enabling — and profiting handsomely — from the extra-fast access they are providing to certain investors.
While the big Wall Street banks may have invented high-speed trading, it has gained widespread use because it has been encouraged by stock markets like the New York Stock Exchange, Nasdaq and Bats, an electronic exchange that was a pioneer in this area. These exchanges don’t just passively allow certain investors to connect to their systems. They have created systems and pricing tiers specifically for high-speed trading. They are charging higher rates for faster speeds and more data for select clients. The more you pay, the faster you trade.
That is the real problem: The exchanges have a financial incentive to create an uneven playing field.
Footnote: Readers on IoS devices may not be able to see the video clip, for reasons best known to the late Steve Jobs.
Lessig on Equality
Larry Lessig is the most compelling lecturer I know. Here he is talking about equality and the dysfunctionality of the US political system.
Quote of the Day
“Technology is everything that doesn’t work yet”.
Danny Hillis
Money for old Roper
I’m reading this strange collection of 100 letters written by Hugh Trevor-Roper to various people. I’ve always been intrigued by Roper: he’s such a strange mixture of cleverness, wit, combativeness and ludicrous snobbery. This last characteristic was much on display in his sycophantic correspondence with Bernard Berenson, the art historian and general-purpose rogue. It’s also much on display in the present volume: some of the letters are suffused with nauseating sucking-up to folks who have hereditary titles and grand estates. But here and there there is an absolute gem.
In February 1952, for example, while lying in bed, he composed an astonishing letter to the publisher Hamish Hamilton, who had asked him whether it would be a good idea to commission a biography of Frederick Lindemann. In addition to being one of Churchill’s closest advisers during the war, Lindemann (“the Prof”) was also a Professor of physics at Oxford and a member of Christchurch, Roper’s own college.
Roper knew Lindemann as well as anybody and got on well with him. “I like the old wretch myself”, he writes,
“because I like wicked men (others pretend to like him because they like to know powerful men), but I can see why those who don’t share my perhaps curious taste regard him as a real menace, especially if they dislike his politics – which indeed are the blackest reaction.”
But despite (or perhaps because of) the fact that Roper was on good collegial terms with Lindemann, in six devastating pages he lays out the most economical and penetrating profile of an individual I have ever read (with the possible exception of Keynes’s savage pen-portrait of Lloyd George).
Because of my interests in technocracy, one passage in this profile really stood out. Lindemann, says Roper,
has no interest in tradition, and no liberal ideas, – none whatever. He does not even allow that liberalism is a cheaper and more efficient system of government than despotism, as some illiberal political thinkers would nevertheless reluctantly concede; for as a trained scientist and bureaucrat he believes that really scientific despotism could be made cheaper and more efficient still, without any of that waste of energy which toleration, liberalism, and such untidy systems necessarily entail and which exact scientists almost deplore.
He goes on.
It is fundamental to the Prof’s political views that this ruthless mechanical bureaucracy must be run in the interests, and by the agents, of the classes, not the masses. The Prof’s attitude towards the masses is quite clear: he hates, despises, and – above all – fears them. His insulation from their world is complete. The Churchillian idea of ‘Tory democracy’, of sharing any of their emotions (he has no emotions) or enthusiasms (he hates enthusiasms) or pleasures (he despises their pleasures) is incomprehensible to him. His only contact with the lower classes is with butlers. He only moves in limousines. He has never been seen walking in the street. His life is spent, carefully secluded from the tiresome evidence that humanity exists, in luxury-hotels, great houses, carefully-run laboratories, and his own inaccessible rooms in college. These rooms are of an indescribable hideousness (for the Prof is an utter Philistine), furnished like a first-class steamship saloon, along with endless photographs of views available to rich tourists travelling by that line.
Enough said?
” I hope I have convinced you,” Roper concludes, “that the Prof has fundamentally a dull mind and that no biography of him could be interesting”.
It seems that Hamish Hamilton took this advice, but in the end several biographies of Lindemann did emerge. The Earl of Birkenhead (one of Roper’s chums) published the ‘official’ biography in 1961. Two years earlier, another one of Roper’s Oxford mates, Roy Harrod, published a “personal memoir” of Lindemann. And in 2003 Adrian Fort published a rather good biography.