News, media & communications

Online exhibitionism

‘Social curation’ is one of the latest buzzwords online. Pininterest is one of the latest websites to tap into people’s desire to show the rest of the world what they like. Pininterest is essentially a website that allows users to ‘pin’ digital images on themed ‘boards’ under such heads as ‘my dream wardrobe’ or ‘my ideal kitchen’ Other users are then able to ‘re-pin’ images to their own boards (80% of images on the site are re-pinned, which says something about convenience, laziness or a general lack of imagination and originality).

The site isn’t unique, Houzz does much the same with architecture and design while Polyvore is similar within the world of fashion, but the rapid rise of Pininterest, and where it has come from, is unusual. The site effectively took off in the US midwest (Iowa) and was initially adopted by soccer moms rather than geeks or hipsters. This is possibly because the idea of the site chimes with scrapbooking trends, which is very Middle America. Whatever the reason, the site is growing fast, with 18 million unique visits in February 2012, up 50% on the month before.

But does the site have a future and a profitable one? It is too soon to tell. The site does align with a number of key web trends, most notably the way subjective search is shifting away from search engines, such as Google, to social and niche networks. It also meshes with people’s desire to broadcast (although not necessarily to receive) information about who they are, where they are, what they are doing and what they like.

The other parallel trend is the diminishing half-life of online networks in general and fashion items in particular. Users of these sites have short attention spans. They are restless and fickle and have historically left sites when something more up to the minute and fashionable comes along. Think of Friendster, Bebo, MySpace, Sixdegrees and Tribe, to name just five. This turnover is amplified by the way, online, many traditional barriers to entry are diminished or vanish altogether, so blocking potential competitors is almost impossible.

Making money out of users or viewers is even harder. At the moment most sites are focusing on online advertising revenue. A few are also trying to tap into the revenue created when someone moves from viewing or ‘liking’ something to buying it online. So far this is proving much easier said than done. (It’s a lot like window shopping – you like what’s in the window, but you might not buy it.)

Ref: Financial Times (UK) ‘March of the tastemakers’’ by R. Waters. See also New Scientist (UK) 18 February 2012, ‘Steam Engine Time’ Anon.
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Search words: Social networks, interests, scrap booking
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The future of email

Email was invented in the mid-1990s. There are now 3 billion email accounts globally. Some 107 trillion individual emails are sent every year, of which 73% is spam (down from 89% two years ago according to Symantec). But for how much longer will we be sending emails?

ComScore research says use of email declined by 59% among 12-17 year-olds in 2011, 18% among those 25-35 and 8% among 35-44-year olds. Europe’s largest IT company, Atos Origin, says it plans to stop its 49,000 staff sending internal emails by 2013. Why? One reason is email isn’t especially convenient and is a significant distraction at work. Employees typically receive around 200 emails every day, look at screens 37 times each hour, and (research suggests) it takes over a minute for staff to regain concentration after doing so.

So what are younger generations doing instead? The answer is instant messaging (IM). People also tend to stay in touch on social networks, via mobile devices, which broadcast their location, activities and messages more or less continually.

Is this good for us? Some research suggests not. There are parallels between use of instant electronic messaging and addictions to food, drink and drugs (all stimulants that give the brain a buzz). This is bad for all of us because we are losing the ability to think deeply and plan ahead. Use of email isn’t all bad. Email works across a variety of channels or platforms and does not require different accounts and passwords: it is compatible. Moreover, email archives can be hugely valuable and users can exert considerable control when opening and responding to email. So what’s next? Expect to see further declines in the use of email, but do not expect to see it disappear entirely. Also expect companies to start issuing official guidance about how people use various devices and when they should be switched off.

Ref: The Week (UK) 14 January 2012. ‘The end of email?’ Anon.
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Search words: email, social networks, communication
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Delivering tomorrow’s newspapers

A report by the Council of Economic Advisors says newspapers are the fastest shrinking industry in the US. Between 1984 and 2005, ad sales halved at American newspapers and Zenith Optimedia recently forecast that online advertising would surpass newspaper advertising by 2013 globally (2012 in the US). A study by USC Annenberg School of Communication and Journalism suggested most American daily newspapers would be gone within five years. This prediction may prove to be a little premature. Three years ago, two major US newspapers closed but, since then, very few large American newspapers have gone the same way.

So what’s next? Nobody yet knows what the new business model is and there is no silver bullet in sight. Newspaper groups are starting to charge for some, or all, of their content, which they were previously happy to give away for nothing. By the end of 2012, around 20% of US newspapers are expected to be charging for digital content, but print circulations and ad revenues linked to print will probably continue to decline.

Even so, many US newspapers remain profitable. They are just not quite as profitable as they once were and, in many cases, still create and distribute unique content that leads other forms of media in the news cycle. Moreover, in emerging markets, and globally, the picture is very different indeed. One global trend is national newspapers and magazines going global with their online readership. Britain’s Guardian newspaper now gets third of its audience from the US. Meanwhile Britain’s Daily Mail now outranks The New York Times, according to ComScore, although there is disagreement about how this is measured. The main issue is still this: how to monetise an audience online that can get the same or similar content online elsewhere - for free.

Ref: Financial Times (UK) 17-18 March 2012, ‘Newspapers pressed by digital onslaught’ by A. Edgecliffe-Johnson, and The Economist 17 March 2012, ‘Online Newspapers: The News of the World’.
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Smart phones, tablet computers and privacy

According to a poll by YouGov in the UK, 70% of people who download apps do not read the terms and conditions before agreeing to them. Yet hidden in the terms and conditions of a huge number of highly popular apps are these words: personal information may be collected and stored without a user’s knowledge or prior consent.

For example, Extreme Bright Flashlight, an app widely used on iPhones, harvests the identity of online accounts, the identity of people you call and may collect photographs or videos held on the phone at any time. Most people have no idea this occurs. Other popular apps and websites ranging from Flickr, Youtube, Facebook, Netflix, Angry Birds, Shazam and Lady Gaga’s trivia game, do much the same. Sometimes they go much further, collecting data on a user’s location, internet browsing history, email address book and may even read SMS messages stored on a user’s device or access a user’s Facebook profile.

At the extreme, some apps have taken over devices and called premium rate telephone numbers without the user’s knowledge or consent. Defenders of less extreme activities say data collection allows companies to personalise the user experience. Google, for example, uses data to personalise search results. This may be true, and even useful on occasion, but who does this data belong to and should others be able to profit from the data trails we create? These apps allow companies to collect personal data, which is then sold in aggregate form to third parties, including market research firms and advertising agencies.

Shouldn’t the individuals who create this data in the first place at least get a slice of this? More practically, shouldn’t all internet companies be forced to change their default privacy settings from ‘opt out’ to ‘opt in’? Our advice is to always read the small print and be careful what you tell to whom!

Ref: Sunday Times (UK) 4 March 2012, ‘In a flash, your details are on a server in Israel’, by R. Henry and P. Newlands and Sunday Times (UK) 26 February 2012, ‘Tap. Tap, tapping us all up – mobile apps invade privacy’ by R. Henry and C. Flyn.
See also New Scientist (UK) 28 January 2012, ‘Friends? Who needs them?’ by J. Aron.
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Search words: Apps, mobiles, privacy
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The future of Facebook

Is Facebook worth $100 billion? The valuation seems excessive – it’s more than Boeing is worth - but in another way, could be a bargain. Other tech companies such as Google and Apple are worth far more and many trends are moving in Facebook’s direction. Global connectivity is increasing rapidly (from 1.6 billion online in 2010 to 3 billion in 2016 according to Boston Consulting) and the shift to the mobile web also benefits Facebook.

At the heart of Facebook’s success is surely a deep and longstanding human desire to connect with other human beings. People like Facebook because it makes finding new friends, or looking up old ones, easy. It’s also a fast and convenient way to stay in touch and share everything from party invitations to baby photos, which is probably why the website now accounts for one in every seven minutes spent online globally.

Facebook also knows an extraordinary amount about the minutiae of its users’ lives, which is why it targets advertising so effectively (and why 85% of its revenue come from advertising). The sheer number of Facebook users (currently 900 million and rising) and time users spend on the site each day (15.5 hours per month in 2011) means Facebook is rapidly becoming the world’s de facto homepage. Other companies are increasingly linking to it because uses have to login in using their real identities.

But what might go wrong for Facebook in the future?

The first problem the company faces is operational: scaling up a small start-up into a giant corporation. Second is regulation, and this could be tricky. If Facebook continues to be successful it will, at some point, start to resemble a monopoly in the eyes of the US regulators and provoke an anti-trust case. It happened to Microsoft and it could easily happen to Google and/or Facebook.

The third problem is privacy. To date Facebook has been very clever about mapping the connections between people and what interests them and then selling this information to third parties. Much of the time Facebook users have little or no idea that this is happening and those that do know don’t seem to care. But this could change.

The network effects that made Facebook so large so fast could act in reverse if users start to feel exploited financially or no longer trust what is increasingly seen as a rather arrogant and potentially autistic company. Recently, users were forced to adopt a new feature called Timeline and had to opt out if they did not like it. This created a few mutterings, as did the acquisition of Instagram and the use of facial recognition technology, but so far there are few signs of Facebook fallout. But as the company grows larger, there will be inevitable tensions between attracting users and getting them to part with their money. The company’s devotion to online openness, or lack of privacy, may cause problems in the real world.

Ref: The Economist (UK) 4 February 2012, Leader: ‘A fistful of dollars’ and ‘Briefing - Floating Facebook: The Value of Friendship’.
See also Daily Telegraph (UK) 3 March 2012, ‘The dark side of Facebook’ by I. Hollingshead and E. Barnett.
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Search words: Facebook, social networks, communication, privacy
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