The Great Debate UK

A new challenge for Zuckerberg

By Kathleen Brooks. The opinions expressed are her own.

Who wouldn’t want to have been an early investor in Facebook? The graffiti artist who spray painted the walls of Facebook HQ decided to take stock rather than a paycheck and will be $150 million dollars richer as a result.

Facebook is one of the biggest ever IPOs in the U.S. and at the end of last week it even managed to knock Greece out of the headlines and was credited with boosting market sentiment.

The IPO road-show generated larger than expected demand for FB stock, which was met by willing Facebook employees and investors eager to sell. The hype didn’t end there; the stock price was priced higher than expected at $38 per share, valuing the company at $104bn! No wonder Facebook co-founder Eduardo Saverin has renounced U.S. citizenship to sell his Facebook stake and avoid capital gains tax. But the vast bulk of analysis in the lead up to the sale has been Facebook negative: it doesn’t have a sustainable business model, it doesn’t generate enough cash per user (approx. $5 per year, per user), too many insiders are too eager to sell, the price will crash…

But if there are so many reasons to sell, why are people queuing up to fill their boots with red hot Facebook stock?  I think the reason is Zuckerberg, and investors in Facebook are chasing his next great idea. The first thing he could turn his attention to is marketing and advertising. After saying that advertising isn’t cool (or maybe that was Jesse Eisenberg in the film The Social Network…) it’s wrong to write Zuckerberg off as a sell-out now that ad revenue will most likely be FB’s largest source of cash flow.

Let’s face it – online advertising in its current form is far from a success. Ad’s that pop up and block the view on your screen are not only uncool but boring and annoying. The advertising world hasn’t really got on board with the smartphone, either. Although we spend more of our time online than we do watching TV these days (and probably a lot of that time on Facebook), revenue from online advertising has been extremely slow to grow. It is expected to overtake newspapers as the second largest U.S. advertising medium behind television in 2014, however the growth rate of the internet is far superior to the declining newspaper business, which highlights the problem with online ads: they don’t create enough money.

Compared to TV ads, online ones look like their poor cousins. My favourite TV advert is still the Volkswagen ad with the little kid dressed as Darth Vader, which was first played at the Super Bowl a couple of years ago. It was genius, and I still remember it today. Now that he is an official billionaire (well, on paper anyway) Zuckerberg will no doubt need a new challenge. If he wants ads all over Facebook then he needs to make online advertising “cool”. He changed how we communicate – can he make online marketing more effective? If yes, then he could help other struggling industries like the newspaper business that have found online advertising to be a paltry pay master.

Heavy traffic on the information superhighway

– Jeff Smith is Senior Director Infrastructure Services, Global Crossing EMEA. The opinions expressed are his own.–

For many years now, number crunchers have obsessed over the growth of data, marvelling at the way that the computer age has generated enormous amounts of content and IT types have speculated as to how disks, tapes and other storage devices would need to evolve to accommodate this. Now, however, the problem has spread and the new fear is greater: could the digitisation of the world’s information lead to catastrophic communications breakdown?

Consider this head-spinning set of numbers. According to EMC, the data created in 2010 would be 1.2 zettabytes, the equivalent of 75 billion 16GB iPads, filling Wembley Stadium 41 times. And in the age of the Internet a lot of that data doesn’t just reside on physical media but instead gets repeatedly shunted around the globe. On mobile networks alone, 8,000 petabytes will be sent in 2011, says a May 2011 report by ABI Research, and that figure is set to grow by about 50 per cent annually for the next five years. Overall, IP traffic will grow to 767 exabytes in 2014, according to Cisco. A petabyte is over one million gigabytes and an exabyte is 1,000 petabytes.

This data growth is part of a broader picture of non-stop innovation that characterises the technology sector. The situation is exacerbated by the ease with which files can be exchanged using social networks, email, instant messaging and other systems.

However, there’s no need for panic and despair and it’s worth remembering that concerns over the Internets ability to withstand wave after wave of demand are nothing new. The Lawrence Berkeley National Laboratory newsletter reported that in October 1986 the net suffered a “congestion collapse” and “slowed to the pace of the telegraph” with emails taking a day to deliver. This was in spite of the fact that at the time it hosted only about 10,000 users sending data at up to 56 kilobits per second.

Even legends of the industry are not immune to spurious predictions of an apocalyptic meltdown. One of the founders of computer networking, Bob Metcalfe, once predicted in a magazine column that the Internet would “go spectacularly supernova and in 1996 catastrophically collapse”. Metcalfe had the self-deprecating grace to later blend that article and eat it in front of an audience. The scares have continued with think tank the Internet Innovation Alliance predicting Internet brownouts by 2012.

Certainly it’s true that additional network capacity is taken instantly, as soon as it is available, but there are many causes for optimism. Content delivery networks have proven effective ways to organise the Internets traffic by storing data where it is needed so that it does not have to take the long way around. ‘Fatter pipes’ (faster networks capable of carrying more data, faster) and sub-sea links have given us all more breathing space while compression techniques crunch data more effectively than ever and private networks offer back roads that take the weight off the main information thoroughfares.

from The Great Debate:

Why the Internet is everybody’s business

By David Barroux The opinions expressed are his own.

LES ECHOS/Worldcrunch -- The first-ever E-G8 summit, beginning Tuesday in Paris with a notable lineup of government leaders and a “digital Who’s Who,” has been hit by a range of criticisms, from political hijacking to state censorship. But these attacks reveal only part of the truth. Sure, Nicolas Sarkozy, struggling in the polls, sees this as a chance to “presidentialize” his image while attempting to make his mark on this subject so attractive to the younger generation. But the self-interest driving his approach doesn’t necessarily mean it is uninteresting.

Long considered a free space that could develop on principles of self-government, the Internet has become so crucial to democratic life and economic growth that today it is legitimate for political players and large industrial groups to be involved in its management. States and multinationals would be wrong to want to plan and regulate everything, but that doesn’t necessarily mean that they should simply stand back and watch.

Working in tandem, states and businesses can first act on the infrastructure. In past centuries, states financed the construction of roads or railways. Today, mechanisms should be found that allow private actors to invest in indispensible broadband information superhighways.

Faced with a global online market, governments will also have to set up rules to allow competition among actors from different countries to be as fair as possible. On subjects such as management of personal data, taxation and geo-localization, they will have to reach agreement on a lowest common denominator.

Finally, it is good that heads of state are becoming aware of the importance of the digital economy. Rather than focusing on filling their coffers by taxing this booming sector, public authorities must support the digital world, a veritable motor and accelerator of economic growth. And so much the better if the foundations of this new dialogue are laid in Paris.

from Environment Forum:

Pure water from solar power; will it catch on?

 Remote villages in developing countries might benefit from these twin 40-ft long containers (left) -- a water purification system driven by solar power -- as a substitute for noisy diesel-powered generators, trucks bringing in water or people spending hours every day walking to fetch water.

That's the hope of the makers, environmental technology group SwissINSO Holding Inc. The small company has recently won its first contracts to supply the systems to Algeria and Malaysia and is aiming to sell 42 units of what it calls the world's "first high-volume, 100 percent-solar turnkey water purification system" in 2011.

The system, an interesting-sounding technology in a world where more than a billion people lack access to fresh water, could also have extra uses from disaster relief to construction sites or to helping armies stay healthy in remote regions.

Chief Executive Yves Ducommun (below right) says that the machines, housed in the two containers, can pump 100,000 litres of drinking water per day for 20 years at a price of less than $0.03 per litre, including running costs. The system costs between $800,000 and $1.2 million up front, depending on factors such as how many solar panels are needed to drive the purification, which filters out dirt and toxins, or salt from seawater, through a membrane.

That is a lot of money for a village in sub-Saharan Africa -- but water is often a huge cost over 20 years and governments or aid agencies might be interested: the makers reckon it supplies enough water for about 5,000 people. Freeing people from walking miles to collect water allows them to do other things, like work or study.

"It's a cost, but if you think of the cost of carrying water by tanker or truck to remote places, or a unit powered by diesel you are in a better position with our system," Ducommun told me. And climate change may make water supplies less predictable in coming decades with effects such as floods, heatwaves, drought and desertification.

It's a bit like long-life lightbulbs: the up-front costs are higher but they last far longer: but it's hard to convince people with the counter-intuitive idea of saving money by spending more now. Investors have not flocked to the idea -- the rarely traded shares fell after a major investor pulled out last year, Ducommun said. They last traded at $0.42 against a high of $1.75 in early 2010, giving the company a market capitalisation of about $30 million.

Seeking solutions for IT firms during economic crisis

-Steve Wagner is Managing Director at Fair Web Solutions. The opinions expressed are his own.-

There can be no doubt that the recent global financial crisis has affected all areas of the economy and even though initially the likes of manufacturing companies and property development companies appeared to be the most affected, every business has had to take notice and consider what initiatives they can put in place to minimise the damage.

So what impact has this had on both internet and software development? And should businesses be scaling back investment in these areas or be looking to make strategic advances through continuing investment?

Since the dot-com bubble burst the internet has enjoyed continued growth in both technological advancements and global exposure with more people than ever having access to fast internet via broadband.

Further to this, data on browsing habits has demonstrated that consumer confidence in all the key demographics has also grown to the point where internet banking, social networking, streaming media, blogging, podcasts, mobile applications and wireless have embedded themselves firmly into many consumers everyday lives.

This transition from traditionally offline to online transactional activities has resulted in continued growth in demand and remuneration for web-based professionals such as developers, designers and marketing specialists (SEO, PPC, etc.) which has seen little impact to date from the current economic climate.

Whether this continues remains to be seen but, given that the evolution of the web is showing no signs of slowing and is instead enjoying one of the most exciting periods of transition, there is justifiable evidence to be positive.

A social media vox populi experiment

The BBC World Service tested its capacity to produce large-scale social media events by hosting an ambitious global conversation in multiple languages from Shoreditch Town Hall in London on Thursday.

For the six-hour event, billed as “Superpower Nation Day“, the public broadcaster used television, radio and the Web to connect with people around the world.

Contributors answered the question “Is the Internet a right or a luxury? by typing into a social media platform that used Google’s translating tool to interpret comments.

Other events included live music and a reading of scenes from William Shakespeare’s play “Romeo and Juliet” in multiple languages.

Mark Sandell, the editor of  “World Have Your Say”, spoke to Reuters about the event.

Watch the video clip below or click on the headline of this post to view it if you can’t see it.

Rory Cellan-Jones on virtual democracy

Direct, real-time communication among politicians and the public through social media platforms is reshaping democracy and the news media, but questions remain about how the fabric of society might change as a result, argued a panel at an event hosted by the BBC on Tuesday evening at Westminster.

The Web provides a de-centralised opportunity for users to communicate from various points on the political-economic spectrum, but gatekeepers are emerging who try and curtail the dissemination of information they find objectionable, suggested panellist Aleks Krotoski, who recently completed work on the BBC series “Virtual Revolution“.

“Innovative social-media platforms start off being interactive, but then they can become broadcast tools,” cautioned Rory Cellan-Jones, the BBC’s new digital election correspondent.

The panel was chaired by Peter Horrocks, director of BBC global news, and included Pooneh Ghoddoosi, a presenter with BBC’s Persian service and Peter Barron, director of communications for Google in north and central Europe. BBC is producing a series about the Internet titled “Superpower“.

Cellan-Jones spoke to Reuters after the panel discussion about social media and the upcoming UK general election. You can watch the video clip below or if you can’t see it, please click on the headline of this post to see it.

A brave new Google-ized world

- Mia de Kuijper is CEO of de Kuijper Global Partners , author of Profit Power Economics and the Co-Dean of the Duisenberg School of Finance. The opinions expressed are her own.-

I have developed a practical approach to competitive success that defines strength not in terms of market share, but in terms of what I call “profit power.”

Profit power is your ability to hold on to your own profits and defend them against competition. Our information-loaded world is creating new sources of profit power.

You could argue that this is an age of “perfect information” – but crucially not one which has delivered perfect markets – because perfect markets would compete away profits and could not explain the popularity of one search engine over another.

Rather, this age of perfect information has given rise to new market dynamics that I call “hub-dynamics.” Being a “Hub” is one of the key modern-day sources of profit power.

So what is the source of Google’s profit power?

Google’s secret is that it’s the beneficiary of such hub dynamics – because it is such a “Hub”. Hubs can be people or products, assignments, clients, buyers or users that have self-reinforcing popularity. When hub dynamics are at work, products or ideas that are ahead stay ahead for a long time.

The 2010 general election and new media

Matthew McGregor is the Director Blue State Digital’s London office. The opinions expressed are his own.

The 2010 general election will be the first closely British election in which the internet will be an important factor. The last truly close election in 1992 was fought in a way unrecognisable to campaigners today. In 1997, most of us had yet to use email. In 2005, YouTube was barely three months into its existence.

So how will new media impact on the contest between the parties — and how will independent organisations use the potential of online media to insert themselves into the process?

Perhaps the most obvious difference for members of the fourth estate will be the encroachment of bloggers on the “old” media’s hallowed turf as the arbiters of what constitutes the news of the day.

Blogs are increasing the echo chamber through which the most actively engaged voters will get their news and opinion from, and bloggers are increasingly confident in their ability to break news stories that the old media will follow.

It will be interesting to see the extent to which the media cycle is affected by the blogging cycle. The impact on the media itself is likely to be the bigger factor, with no blog in the country yet commanding a sufficient readership to be a player on its own. We won’t see an “It was Iain Dale wot won it” headline in this election at least.

Politicians can now communicate directly with their constituents more effectively and more easily than ever before. The number of politicians using Facebook, YouTube and Twitter has exploded over the last year – and some are even pulling it off. The jury is out on how genuinely effective this is. While most MPs would be delighted to have 800 people come to hear them at a public meeting, having that many views on a stilted to-camera video is unlikely to become the brave new internet world that some seem to hope.

Remembering how to forget in the Web 2.0 era

Amid ongoing debates over the hazards of excessive digital exposure through such Web 2.0 social networking platforms as Facebook and Twitter, a new book by Viktor Mayer-Schonberger extols the virtues of forgetfulness.

Since the emergence of digital technology and global networks, forgetting has become an exception, Mayer-Schonberger writes in “Delete”.

“Forgetting plays a central role in human decision-making,” he argues. “It lets us act in time, cognizant of, but not shackled by, past events.”

Mayer-Schonberger shared his theory on how to fight back against the digital panopticon with Reuters before giving a lecture at the Royal Society for the encouragement of Arts, Manufactures and Commerce in London.