MediaFile

from Paul Smalera:

Video Transcript: Fred Wilson on Tech Tonic Interface

Below is an unedited transcript of the video interview I conducted with Fred Wilson of Union Square Ventures:

PAUL SMALERA, Technology Editor Reuters.com: Today I had a great chat with Fred Wilson of Union Square Ventures. Check it out.

Let’s start with Bitcoin. It’s captured the imagination of tech blogs, there’s been a big price spike, dozens of posts all over the internet. And your own blog is full of savvy readers; I was reading through the comments on it. One of them said, ‘I haven’t even followed Bitcoin because I don’t really understand it quite frankly.’ Can we start there? Can you just tell us from your point of view what Bitcoin is?

FRED WILSON, Union Square Ventures: Bitcoin is a digital currency.  It’s a currency like the dollar or the euro or the yen. But it’s different in a couple of important ways. One is that it’s not based on faith in a commodity like gold or in a government like the US government. It’s based on faith in a mathematic formula. What underlies Bitcoin is math really and there’s a finite amount of Bitcoin that could be created; 21 million Bitcoin in total. We haven’t created all the Bitcoin yet because Bitcoin gets mined like gold would get mined.

Mined in like a computer has to crunch through a program?

To make it simple, computers are searching for matches of block chains and it takes a lot of processing power to do it and when you get a match you own that Bitcoin. People mine Bitcoins and they either keep them, own Bitcoin, or they sell them, exchange them for dollars or yen or they conduct transactions with them.

from Paul Smalera:

Fred Wilson on Bitcoin, Airbnb and immigration

This week Fred Wilson of Union Square Ventures sat down with me for a video interview (part of Reuters' Tech Tonic: Interface series) to talk about a wide variety of topics: Bitcoin, wireless spectrum auctions, Airbnb, immigration, the New York City mayor's race, even his wife Joanne (the Gotham Gal), and a few others. Why so many topics? Fred’s simply one of the most thoughtful technology investors working today, and peppering him with as many different questions as possible can help us learn how he thinks.

Fred often cites “pattern recognition” as the main job of a venture capitalist, and I think I got a pretty good sense of Fred’s pattern: he understands the mechanism behind a company or technology, and figures out whether his firm can help that company grow. In this interview, he's an insightful and persuasive defender of the interests of the tech industry, because he very sincerely believes in its ability to do good for people.

Do you think Fred's take on technology's promise is accurate? Watch and share the interview and let me know in the comments.

from Paul Smalera:

In Amazon, Wall Street worships a disruptive god

Why does Amazon please Wall Street so much? The company treats shareholders with a disregard that borders on contempt. (CEO Jeff Bezos is "willing to be misunderstood" which means he really doesn't care if investors understand the business, as we'll see.) Yet when it announced that profits last quarter fell 45% year-over-year, the stock price saw a healthy bump. Meanwhile, many tech companies, like Apple, which had a high-profit, high-margin quarter, found their stocks punished. Perhaps this is a sign that Wall Street is finally embracing the idea that, for tech companies, growth comes first, even at the expense of profit.

If that’s what’s going on then the Street has started to adopt the ethos of the Valley, specifically of one its most prominent sages: Harvard Business School professor Clay Christensen. The godfather of disruptive innovation, Christensen is often quoted chapter and verse by technology company founders and venture capitalists alike. Christensen studies how established, high-flying technology companies like Amazon and Apple conduct business, to determine if they are ripe for attack from low-margin, startup competitors. His thinking can help shed light on why the market loves Amazon, which is, after all, a barely profitable conglomerate of loosely related businesses that is growing at a bonkers rate. But basically, his theories all comes down to profit margins, and how companies spend their money.

Amazon’s razor-thin margins -- just 1.9% for all of 2012 -- are, according to Christensen’s theories (and some other Amazon watchers), the company’s key weapon defense against disruptive competition. Not just in defending itself from whatever competitors exist today, but also from competitors that might exist tomorrow. Christensen writes in his seminal book, The Innovator’s Dilemma, that disruptive companies generally start at the low-end of the market, serving customers with cheap, low-margin products that established companies have neglected, in their endless quest to move upmarket, increase profit margins, and please investors.

The New York Times and print pressures

In a moment of dubious etiquette, venture capitalist and Netscape co-founder Marc Andreessen said at a New York Times conference this week that the company should dismantle its print operations not in ten years, or five, but “as soon as possible.” Cue print lovers’ outrage.

Marc Andreessen, co-founder and general partner of venture capital firm Andreessen Horowitz, speaks at the Iab Mixx Conference and Expo in New York, October 2, 2012. REUTERS/Mike Segar

Of course, those paying attention to the newspaper business shouldn’t be surprised to hear anyone, let alone Marc Andreessen, speculating on the eventual or imminent demise of print. At least 14 metropolitan dailies have closed since Newspaper Death Watch (a sobering site if ever there was one) started keeping track in 2007, and another 10 are working on a digital-only or digital-print hybrid. In May, New Orleans’ Times-Picayune said it would be reducing its frequency to three times a week. Gannett and McClatchy are both struggling with falling ad revenue and rising pension costs, and earlier this week, the Tribune Co. – in its fifth year of bankruptcy – announced plans to sell off some or all of its papers.

How the United Nations could ruin the Internet

The Internet has sustained some pretty intense assaults in the past couple of years. There was the heavy-handed attempt to stamp out content piracy with SOPA/PIPA, the Federal Communications Commission’s Net neutrality ruling, which many saw as splitting the baby, and that whack job who claimed to own a patent on the World Wide Web.

It is again open season on the Internet in Dubai, where the International Telecommunication Union, a United Nations agency ‑ whose mandate includes global communications ‑ is weighing proposals from many of its 193 member nations. Some of these proposals ‑ such as decentralizing the assignment of website names and eliminating Internet anonymity ‑ would make enormous changes to the organization and management of the Internet.

The ITU meeting, which began on Monday, runs through Dec. 14. Its agenda, and even the fact the proceedings are taking place at all, set off alarms among the Internet’s guardian angels.

The irrational imitation of the online news industry

All across Europe, journalistic online startups are launching, aiming to produce and disseminate news in new ways. In our brave new world, the nimble startups of tomorrow were supposed to be overtaking the lumbering dinosaurs of yesterday online. But nearly all of these startups, even the most impressive and innovative sites, are struggling to survive because they face structural and strategic challenges that are not always recognized upfront. To succeed, European journalistic startups need to recognize these challenges, move beyond simply imitating others and find their own paths ahead.

The structural challenges for European journalistic startups have to do with the competition they face in content and advertising.

Startups are trying to establish themselves in a market for online news that is dominated by legacy media like newspapers and broadcasters. New journalistic ventures, such as Netzeitung, Rue89 and Il Post, are competing not only with other startups but also with the popular online offerings of news organizations like Spiegel, Le Monde and La Reppublica. These incumbents, and others like them, have built their digital strategy around their well-known brands and content from their existing newsrooms. They fund them with profits from their (generally declining) offline operations. Together with a handful of aggregators and portals, such legacy players dominate online news provision in most European countries.

Cisco tries to free up internet traffic jam

There is nothing more infuriating than a slow mobile connection. With people bringing their own devices to  workand everywhere else, wireless networks will be working hard to accommodate the mobile traffic flood.  

Here’s where Cisco comes in: On Tuesday, it unveiled a wireless access point called the Aironet 3600 Series, which can increase the speed of connection by up to 30 percent on any kind of mobile device no matter how weak or strong the network is. 

According to Cisco, it is the first company to offer access points with four antennas and three spatial streams. What does it mean?  Essentially more people have more range to use their devices, even if there is more traffic.

SOPA, the Internet, and the benefits of a mutual enemy

That giant sucking sound you hear is the life being drained from SOPA and PIPA.

In an astonishingly effective campaign, a number of prominent websites decided on Jan. 18 to act as though they were being censored. SOPA — the House Stop Online Piracy Act , and PIPA, the Senate’s Protect IP Act  — would, in fact, have little or no impact on U.S. sites but the message was clear: The Net is one seamless organism. An attack on my friend, or even my enemy, is an attack on me.

The big players that made a big show of support for the anti-SOPA/PIPA cause included Wikipedia, which completely shut down its U.S. site, and reddit.com and wired.com (I work for the latter, and both are owned by Condé Nast).

Some big players did not get involved in the protest, including Twitter (which even belittled Wikipedia’s demonstration as “silly”) and Facebook.

Tech wrap: Yahoo to cut Asian stake

Yahoo is considering a plan to unload most of its prized Asian assets in a complex deal valued at roughly $17 billion, sources familiar with the matter said.

The former Internet powerhouse’s increasing difficulty in competing with heavyweights such as Google and Facebook have forced it to explore proposals to revamp its business.

Weakening economies and falling prices of rival smartphones are hurting sales of Apple iPhones across Europe, data from research firm Kantar Worldpanel ComTech showed on Thursday.

And the Grammy goes to — Steve Jobs!

First it was a bronze statue in Hungary. Now it’s a Grammy.

The accolades for the technology icon who died Oct 5 are still pouring in.

While Jobs is not a musician, his influence on the music industry — good or bad — cannot be denied. And for this, the National Academy of Recording Arts and Sciences is giving the co-founder of Apple Inc a Grammy at an invitation-only ceremony on Feb 11.

A formal acknowledgment of his Grammy — part of the 2012 Special Merit Award — will be made during the regular 54th annual Grammy Awards, to be held on Feb 12 at LA’s Staples Center.

“As former CEO and co-founder of Apple, Steve Jobs helped create products and technology that transformed the way we consume music, TV, movies, and books,” the academy said in a statement.  ”A creative visionary, Jobs’ innovations such as the iPod and its counterpart, the online iTunes store, revolutionized the industry and how music was distributed and purchased.”