Seeing behind the media

By

Blogs are a tool that can help us to see whether and how mainstream media are distorting the news. Anyone who has ever been interviewed by a journalist knows that what’s reported is rarely quite what was intended, with gross distortions through selective quoting commonplace. These misrepresentations are usually not malicious, often simply attempts by the journalist to make comments more “newsworthy”. However now interviewees have a right to reply. Prof. Roger Pielke Sr., a leading climatologist who resigned from the Bush administration’s advisory team on climate change had problems with how this was reported in the New York Times. He posted a blog on how he felt he’d been misrepresented, resulting in an exchange with the journalist. The end result was Pielke’s viewpoint came through as he wished. Our world is still far from transparent, but today, far more than ever before, mainstream media’s distortions – deliberate or otherwise – are becoming more visible.

What’s up with Google Talk

By

When Google Talk was announced yesterday after months of swirling rumors, I decided not to blog about it, as I thought there would already be more than sufficient discussion on the topic. This blog is primarily intended to cover not-so-obvious yet deeply important developments. However a number of people have asked me for my opinion about the announcement, so here’s my take in a nutshell. The main response so far has been “So what?”, as on the face of it the instant messaging and voice capabilities of Google Talk don’t match the competition. However remember that Google’s free email service Gmail has been in Beta for 17 months, requiring a personal invitation to join, and has done well despite this pretty major constraint. Google wasn’t looking to take over the world on day one with free email. Same story with Google Talk. It doesn’t need to be whiz-bang for it to be positioned over time for synergies with other parts of their suite. Which is exactly the point in that Gmail is now open to the public, and having a Gmail account a requirement to use Google Talk. The bigger part of the story is that Google Talk is based on the open-source, open standard Jabber. The refusal of Yahoo, AOL, and MSN to allow interoperability of their instant messaging networks is one of the classic standards battle case studies. Of course, Google adopting an open standard and inviting the other players to interoperate doesn’t change the world. However it’s one of the more powerful single events that is likely to shift the status quo. If Google Talk gets traction, which as it adds features and integration into other Google tools it is very likely to do, the benefits of interoperability may finally shift the IM landscape. As a latecomer to the space, that’s exactly what Google wants.

Newspapers respond to the online onslaught

By

The media landscape is rapidly shifting. Newspapers and magazines have seen the writing on the wall, with over the last six months US newspaper circulation dropping 1.9% and newsweeklies also slipping fast. Classifieds – which represent almost half of newspapers’ advertising revenue – are being assailed by online alternatives. McKinsey & Co executives recently forecast newspapers will lose 20% of their classifieds revenue by 2007. This is undoubtedly too optimistic. Competition is not just coming from the online recruitment sites such as Monster.com and local city classifieds such as Craigslist. An entrepreneurial unit in eBay has established Kijiji as an independent classifieds site, with local operations around the world, including across many Chinese cities. Newspapers have been responding by buying online properties, notably Washington Post buying Microsoft’s online magazine Slate in January, and New York Times acquiring About.com in March for $410 million.

In the next phase media is focusing on the power of social networking technologies. News Corporation spent $580 million last month to buy Intermix, with the youth networking site MySpace the jewel that merited the price. This gives News Corp access to a whole strata of society who are not prime consumers of traditional media. Its Australian rival Fairfax recently spent $A39 million to acquire online dating site RSVP. Google, which is increasingly moving into media space itself, acquired mobile social networking company Dodgeball earlier this year. The future of news media – and especially its revenue models – is increasingly focused on running the networks within which people interact, rather than simply broadcasting information one-to-many. Watch this space.

The gang of four

By

An article yesterday on Bloomberg News (not available on the web) confirmed what a PricewaterhouseCoopers executive told me last week: PwC, Deloitte, and Ernst & Young have all issued instructions to their partners and staff not to denigrate or poach the clients of KPMG. The Bush administration is seeking a settlement on charges related to KPMG’s sale of tax shelters, rather than seeking to press charges. Instead the individual partners are facing criminal charges. It was clear from the start that regulators such as the SEC had no interest in pursuing KPMG in the same way that they hounded Arthur Andersen. Moving from four to three top auditing firms would result in massive reputational damage for the audit profession, forcing clients and regulators to reassess the current cozy oligopoly. So the audit firms are acting extremely differently from when Arthur Andersen was in trouble, when the attitude – and actively encouraged behavior – was kick them when they were down. The question becomes, if neither regulators, clients, nor the Big Four themselves will allow any of them to disappear, what is the moral hazard? I believe the firms understand that they will do the best when their practices are pristine. But knowing you can get away with it is not the best foundation for good behavior.

India benefits from Research Process Outsourcing

By

The excellent Knowledge@Wharton site of Wharton Business School has just published an in-depth special edition on What’s Driving India’s Rise as an R&D Hub? (registration required). Motorola, Microsoft and many others are launching R&D programs in India. The real issue is that these are not isolated projects, but integrated elements of global research. The new term for this is Research Process Outsourcing. To do this effectively absolutely requires knowledge-based outsourcing, and harks back to the issues raised by the Harvard Business Review case study I discussed last month. There is no question that the increasing sophistication of the best of the Indian technology companies enables not just participation in global R&D efforts, but also the coordination of international efforts. However despite all the excitement about the potential of the Indian economy, the depth of its lag in education, infrastructure, and health will prove a massive drain on the ambitions of the leading edge of the nation.

The bottom-up collaborative economy

By

I’ve just spotted a recent article in BusinessWeek called The Power of Us that provides a great overview of how mass collaboration is driving the economy. It refers to a number of examples I described in detail in Living Networks, such as Eli Lilly’s Innocentive, which enables companies to draw the best innovators globally into their internal R&D programs. As evidenced again by the references in the article, the success of James Suriowecki’s outstanding book The Wisdom of Crowds has played a powerful part in making people realize that collaboration – if correctly designed – is far more powerful than any other approach. The tools and business models that support that will be central to the next phase of the global economy.

Blogging in business

By

My book Living Networks, which came out at the end of 2002, opened with the words “Macromedia, the company best known for selling Flash software, is blogging,” and went on to describe what blogs were, and how they were just beginning to be used in business. A few years on, and according to the title of a conference I spoke at in New York earlier this year, we are seeing Blogging Goes Mainstream. The week before the conference BusinessWeek came out with a cover story Blogs Will Change Your Business. Indeed, blogs are far more than a social phenomenon. They are playing an increasingly important role in business.

Now, Bill Ives, who formerly ran Accenture‘s knowledge management and portals practice, and marketing consultant Amanda Watlington have just released a new book Business Blogging: A Practical Guide. Not surprisingly, given Bill’s background, it is an extremely pragmatic guide for businesses looking at the applications of blogging. I strongly recommend it for any organization that is considering implementing blogging, either externally for profile-building or customer relationships, or internally for knowledge management and collaboration. The heart of the book is its 70 case studies of bloggers and their experiences, including individuals, consultants, large companies, and not-for-profit, encompassing an extremely diverse range of objectives and design parameters. Every organization should at least consider how they might apply blogs. For those in this situation this book should be considered on a par on quality and value with the ultra-expense reports from the tech analysts – just with a lot lower sticker-price!

The transformative power of e-paper

By

Fuji Xerox has just announced a new ultra-thin electronic paper that doesn’t need electricity to maintain its display. Meanwhile, Sony recently announced flexible electronic paper that can be rolled up like a normal piece of paper. The leader in the electronic paper industry, E Ink, has already announced products that embody aspects of both of these innovations. The vision of e-paper technology is to create a low-cost, thin, flexible screen that has very high resolution and relies on ambient light (i.e. has the same readability as normal print on paper), feels good to the touch and does not require a current to maintain its display. In other words, just like paper, except you can change what’s printed on the paper at will. As a brief overview of the field indicates, this is still a technology of the future. Sony has launched its Librie ebook (which is only available in Japan) using current generation epaper, and has received great reviews for the epaper screen. As we all know, ebooks have not so far replaced the traditional paper variety we still find in bookstores. Yet at a certain point of technological development, epaper will become transformative. The reality is that real books and newspapers are currently far superior to the current digital versions. However when the paper feels, looks, and acts sufficiently like the tree-based material, everything changes. We can then tuck a newspaper under our arm, open it out to peruse in the subway, and when we get bored of the New York Times, turn it into the South China Morning Post. Similarly, we can carry around a book that is nothing like a laptop, but rather – if we choose – is indistinguishable from a contemporary hardcover, including the ability to scribble in the margins. The primary difference being that you can turn it into any book you happen to feel like reading. Another transformative application of e-paper is in large displays. As soon as it is cheap enough, there is no reason every square inch of visible space – table-tops, elevator walls, pavements and more – will not become a screen for news, advertising, and other distractions. No, the technology is not here now. However 10 years is a reasonable estimate these technologies to be commercially viable. At that point, they will completely transform media, publishing, and public-space advertising. More to the point, they will change how all of us interact with information and media.

Better matchmaking

By

One of the most successful business segments on the Internet has been matchmaking. People are prepared to pay to get in touch with potential mates. We probably all know people who have met their partners online (whether they admit it or not). Yet the way matchmaking is usually done is incredibly crude, based on checking a series of boxes, and being matched with people who check the same boxes. An advance on this science has been made by OKCupid, which among other approaches allows people to specify their own questions, rate the importance of these, and uses people’s matchmaking behaviors to assess their personal characteristics within defined confidence levels. To boot, the service is free. As a newly-married man I’m certainly not in the dating scene. However I do think it’s an important social function to enhance a key promise of the Internet: to be able to draw on the entire world in finding our perfect mate, as opposed to being limited to who we happen to bump into along the way. Business matchmaking is equally important. How do we find the people or organizations that we can create unique value with? There are a host of event-based matchmaking systems to enable conference attendees to hook up with interesting people. (More on this another time.) One of the most sophisticated is IntroNetworks, which asks people to position a whole range of business and personal topics along a spectrum of how interested they are in them. This enables them to identify with great accuracy the other people at the event who have the closest match of interests. Check-the-box profiling is so last century!

Update August 19: A CNN news article quotes a Jupiter Research analyst who forecasts 9% annual growth in online dating revenue this year to US$516 million. The story is focused on the slowing in growth of the sector after a massive surge. However part of that has been due to the relative lack of innovation in the sector, thus the story above. Still, 1% of all Internet activity is attributed to online dating, which is pretty hefty. Social networking software such as Friendster and Google’s Orkut cross boundaries, including both dating and other personal networks. The story of Ruper Murdoch’s News Corporation recently acquiring the popular social networking MySpace shows that mainstream media are recognising the power and potential of social software. News Corp’s Australian media rival Fairfax recently paid A$40 million for Australia’s premier online dating service RSVP, demonstrating that this truly is a convergent media space.

The third phase of outsourcing

By

A recent survey by TPI shows that 81% of large UK companies expect to increase their offshoring activities over the next 2-3 years, with just 4% saying they will decrease it. Other recent stories have focused on the woes of outsourcing. While these stories seem to be contradictory, the reality is that companies are not usually responding to outsourcing problems by stopping the practice. Rather they are working out how to do it better. This is reflected by another major finding of TPI’s survey: companies are tending to offhsore with wholly-owned subsidiaries rather than contracted providers. This relates to my current work on the rise of “knowledge-based” outsourcing. The global outsourcing business is rapidly moving into its third phase. In the first phase of outsourcing, organizations paid companies to take over selected business processes. In the second phase, clients became more sophisticated, specifying in detail how the companies would create results. The emerging third phase of outsourcing is “knowledge-based” outsourcing, in which organizations develop deep mutual knowledge, design knowledge transfer, and integrate their business processes so that the outsourcing companies are in a situation to effectively “lock-in” their clients. In some cases, in order to get that level of integration, you want the offshoring company to be owned by you. However this means far less flexibility on many levels. Ultimately you do want an external provider that can provide a high-level of knowledge-based integration. This relates to the rapidly increasing quality of offshore service providers. Another finding of the TPI survey is that 60% of UK companies believe that Indian companies match local UK providers on quality, irrespective of cost. Indian outsourcers, which for now are in the vanguard, are very actively focusing on building effective knowledge-based relationships. I featured Infosys as a major case study in the second edition Developing Knowledge-Based Client Relationships for some of the great work they’re doing on this.