A Stern question

Is Stern worth his millions? | CNET News.com:

Under current projections, analysts say it shouldn’t be hard for Stern to pay for himself.

“I think it will turn out to be a very astute investment by Sirius,” said Sanford C. Bernstein analyst Craig Moffett. “The value of what (Sirius has) already gotten from him in promotional appearances alone is worth tens of millions of dollars in free advertising.”

In a recent research note, Friedman Billings Ramsey stock analyst Maurice McKenzie said he expected Stern to draw about 1.5 million new subscribers for Sirius, weighted heavily toward the last quarter of this year, and the first quarter of next, when the buzz around the shock jock’s defection is peaking.

I think Sirius is a solid investment today (it’s down two percent on the day at this writing) and up to $7.75 a share, as this will be a huge quarter because of Christmas and Howard Stern’s defection to satellite. Stern’s got some kind of talent that I don’t particularly get much of the time, but my wife loves it (and, so, two more years of Sirius is her Christmas present this year). The question I have is, will the titillation of listening to Stern, the wondering what he’ll get away with saying next, be diminished by the fact satellite radio is unregulated?

I’d say the best thing that will happen to Sirius and XM next year would be an FCC campaign to “clean up” satellite radio—it would fail, I believe and hope for the sake of free speech—because the thrill of listening to uncensored Stern would be reinforced, again. In addition to all the free Stern appearances, Sirius has clearly benefited from all the FCC attention paid to Stern.

The other problem I have with satellite is that it still exists on the broadcasters’ schedule and not mine. Podcasting, iTunes music and Audible audiobooks and subscriptions provide far more flexibility in my listening than 130 channels of music, news, sports and Stern.

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Mmmmm, taste that bitter deficit

FT.com: US Trade gap hits new high at $68.9bn

The US trade gap reached a new all-time record of $68.9bn in October as surging deficits between the world’s largest economy and its top exporters overshadowed the effect of declining energy prices.

The US commerce department said on Wednesday that the overall deficit expanded by 4.4 per cent in October after it had risen by 11.9 in the prior month.

Meanwhile imports of goods and services advanced by 2.7 per cent to a record of $176.4bn as exports rose by 1.7 per cent to $107.5bn, the second-highest reading.


Just another way we’re borrowing against the future. We can also see the declining value of American education, since the majority of added value in industrial products comes from human intelligence. The United States desperately needs to focus on creating human capital to counter the physical capital of emerging economies.

On a related note, though, I am glad that I bought Boeing at 33; it hit an
all-time high today. Planes, one of the ultimate knowledge value-added products, are selling like hot cakes.

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The money is in aggregation and filtering, that’s all?

VentureBlog: Where’s The Money In The Long Tail?: David Hornick writes of the decline of the use of the phrase “The Long Tail” in pitches to venture capitalists (thank the gods that is over!)….

None of this is intended to express any skepticism about the power of the Long Tail or the importance of the phenomenon. Long Tail economics are implicit in virtually every new media company I spend time with. But I think it is helpful for venture capitalists and entrepreneurs alike to focus on where the money is in the Tail. The real money is in aggregation and filtering and those will continue to be interesting businesses for the foreseeable future.

This is the case if you believe that creating a choke point between content creators and their audiences/communities. Granted, it’s a sort of reverse choke point, because they make getting to information “easier,” nevertheless we’re talking about being an intermediary. Getting between creativity or value and its customers, adding value by making the connection. There are other features and functions that facilitate direct connections, such as adding metadata processing capabilities, providing predictable structures for information so that it can be assembled by the user rather than by an intermediary, attention and influence analysis (disclosure: BuzzLogic, which I cofounded, is aimed at the latter) ad insertion and auditing (disclosure: Yes, I worked with Audible to make something that does ad auditing for audio programs), and transaction support, to name a few.

Long Tail economics are important, and they seem to dictate that the a lot of small transactions can be collected into a big, fungible asset. But doing so adds a lot of overhead to the small sales. That’s reality: Making money takes spending money. So, if that is the case, why bring intermediaries into a transaction if you are out at the shallow end of the tail? If they bring functionality you need, even if only offsetting costs, that’s a good reason. If they add marketing value, there’s another.

There is a tendency among investors to look for choke points and invest in them, because they can be collected into those priceable assets VCs want to sell. Valuable choke points do add value—Flickr would be one (it hosts and presents pictures in one place, making it easy to share and republish photos), but traffic passes through Flickr doing so—and to some degree any intervening service creates a choke point. Assuming that aggregation (gathering stuff) and filtering (hunting—and helping people hunt —for the right stuff) are the most profitable misses a lot of areas where the peer-to-peer market provides a more direct route. Is it too early for those P2P/one-to-one investments? I don’t think so, but, then, I don’t manage a fund, do I?

Just my two cents, since I have some money on the line in several of these areas: Content is a great investment, too, especially content that can change someone’s day, career or life; finding the ways to price and sell that content (through ads, too), is the big trick. Google has only scratched the proverbial surface with a single business model among many potential ones, and AdSense is still far from perfect.

I want my technology associated with content and I want my content associated with great technology.

UPDATE: Greg Linden is for filtering (I am, too, though along with lots of other functionality and business models). See my comments in response to Danny Ayers’ Search Personalization and Attention. The Long Tail is dynamic, communities are constantly refining meaning, which changes the filtering challenge.

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Borrowed recovery

Calculated Risk: GDP Growth: With and Without Mortgage Extraction:

Many observers estimate that MEW will fall significantly in the next few years. If so, this will be a drag on GDP as the growth of personal consumption expenditures slows.The two most direct impacts of a housing slowdown are:1) the loss of housing related employment.2) lower MEW and the impact on personal consumption expenditures.

gdp_w_and_wo_mew_2

Source: Calculated Risk

This is a chart to pay attention to. It shows that people have been borrowing on the equity to sustain their consumption, which means the economy will eventually feel a severe constriction on personal spending—borrowing on rising home equity is completely unsustainable.

Compare the 1990s to the 200s and you can see that the whole Bush “recovery” is just more borrowing on the future.

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It’s not the medium that’s winning, it’s the style

BuzzMachine :

Deborah Howell (with whom I used to work at Advance) writes an ombudsman column for the Washington Post that illustrates, in its quotes from editors at the paper, the kind of clueless, destructive, and snobbish territoriality between print and online that is killing newspapers.

Political reporters at The Post don’t like WPNI columnist Dan Froomkin’s “White House Briefing,” which is highly opinionated and liberal. They’re afraid that some readers think that Froomkin is a Post White House reporter.

John Harris, national political editor at the print Post, said, “The title invites confusion. It dilutes our only asset — our credibility” as objective news reporters.

I have to stop there. What a terrible insult and slap at a colleague who writes a very good, respected, and journalistic column for online. What a slap from a newsroom snot. But that is what newsrooms are like.

This is a debate, not a slap fight. And it is a debate that, if dissected, could help reduce or eliminate the cluelessness Jeff rightly derides. However (and there is always one of those with me) the argument is not between online and print, but two different styles or processes of writing. Jeff Froomkin’s commentaries could be published in the paper, but they make more sense in the immediate environment of the online publication; that they arose in the blog format doesn’t separate them from printed words in any fundamental way—they are, if anything, a throwback to the confrontational and opinionated journalism that held people in power to account of the past.

Jeff’s right that there is no reason to discount Froomkin’s work, but he wraps that in a celebration of the Web and approaches to writing that presumes people who write for print are going to be buried. Instead, there will be print (although not necessarily newspapers like we’ve known them) and electronic publications; seeing the difference between the artifacts (McLuhan’s medium as message is important here) produced with the writing is important, but the telling thing is the approach to the subject itself.

The catalog of supportive postings from Froomkin’s readers, which Jeff piles into this argument, doesn’t change the fact that Froomkin’s honest in-the-face-of-power style would succeed anywhere. Jeff’s comments, ending with “Perhaps the paper should be doing more of what he does. Did you ever think of that, o, vaunted newspaper editors?” only prove that the debate is ineluctably personal, something Jeff has faulted me for before.

I’d like to see the debate bring everyone forward, not attempt to leave a lot of folks behind just because we don’t work with the same medium. People matter more than the medium.

UPDATE: David Coursey takes the opposite side of the argument in ‘Open Source Content’ Has No Quality Control :

There is a stupid notion going around that the news media would be better off if anyone and everyone got to make a contribution to it. Blogs and podcasts are examples of this and reader-generated electronic “newspapers” are beginning to spring up. People who should know better see this as democratizing the flow of news and information.

Whether David likes it or not, the change is happening all around him. Dismissing public participation in the news and the definition of the world is the other face of elitism that dismisses print journalists from relevance. Making the process open and accountable, so people can participate in public debates based on improved information, is worthy and necessary. This is a door that can’t be closed.

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Alexa rising

TechCrunch » Alexa Totally Gets It, Opens Up API:

Amazon’s Alexa is opening up its 5 billion web documents and 100 terabytes of data to anyone who wants to use it. Included in this data are Alexa’s famous site rankings based on toolbar users.

As John says, this certainly opens up entirely new classes of search engines and other applications that can be built by leveraging this data.

Alexa is charging for its data, but it isn’t much.

The first 10,000 requests per month are free. Thereafter, requests are charged at a rate of $.00015 each (just 15 cents per thousand requests.). For example, if you make 100,000 requests to the Alexa Web Information Service during a given month, you will be charged $13.50. Your first 10,000 requests are free, while your remaining 90,000 requests are charged at a rate of $.00015 each: .00015 * 90000 = $13.50.

We’ve been working with Alexa data at BuzzLogic (which is what Persuadio has morphed into) and it is an easy to use API that is adding tremendous value to our analysis at a low cost. This is a gold mine for developers and I agree with Battelle and Nick Carr that this is a signal event as it is an easy way to flesh out background information about sites. As I was saying in the post below, the future is going to be on the record and this is one of the ways we’re going to find out more about who’s doing the talking.

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Feeds with flare, feeds with DNA

Burning Questions – The Official FeedBurner Weblog:

FeedFlare is our initial effort to make this vision a reality; if you’re a publisher or podcaster who shares this vision, or you just want a cooler, livelier, happier feed, then this service is for you.

FeedFlare is a one-step service that enables publishers to configure a very slim “footer” containing customizable actions that will appear beneath each item in a feed. Here’s an example of what FeedFlare looks like to a subscriber of this blog’s feed

This is a solid step in a right direction by Dick Costolo and the gang at FeedBurner. Using metadata this way will allow greater integration of intelligence in the management of feeds. The announcement talks about more browser-friendliness, which is a big plus, but RSS is fading into the communications between applications and, I think, that’s where it will take deepest root. If you can tell a browser what to do with an enclosure, you can also start embedding scripts that tell a calendaring application to confirm availability first, to facilitate finding a time before actually bothering the user with an invitation.

Imagine embedding reputation information in data, which would solve some of the current concerns about collaboratively created knowledge: A “fact” with low reputation scores associated with it would never reach my view of Wikipedia. The DNA of a collaborative environment are surely about extending the public record so that everyone is able to examine the sources of their information and applications put it to work based on our particular style of using knowledge.

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The best Web 2.0 I’ve heard

Full Circle Online Interaction Blog: Kiva – Investing In Human Lives:

Now THIS is what Web2.0 could be about. Simple. Rich with human connection. If everything goes according to plan, my investment will return to my PayPal account in the agreed upon time. Of course I risk losing it, but so far Kiva has had 100% payback. It’s still early in the experiment, but microlending has a good rep – something like 97% repayment.

Nancy White finds a microlending system, Kiva. It works like Grameen Bank, making small loans to small business in developing countries. You can become a microlender from your desktop. Beautiful idea.

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Bush wiping his nose on the Constitution: ‘It’s just a goddamned piece of paper’

David Isenberg points to this article, Capitol Hill Blue: Bush on the Constitution: ‘It’s just a goddamned piece of paper’, which includes this passage about an argument over the Patriot Act:

GOP leaders told Bush that his hardcore push to renew the more onerous provisions of the act could further alienate conservatives still mad at the President from his botched attempt to nominate White House Counsel Harriet Miers to the Supreme Court.

“I don’t give a goddamn,” Bush retorted. “I’m the President and the Commander-in-Chief. Do it my way.”

“Mr. President,” one aide in the meeting said. “There is a valid case that the provisions in this law undermine the Constitution.”

“Stop throwing the Constitution in my face,” Bush screamed back. “It’s just a goddamned piece of paper!”

I’ve talked to three people present for the meeting that day and they all confirm that the President of the United States called the Constitution “a goddamned piece of paper.”

As David points out, this is the “piece of paper” that Mr. Bush is sworn to protect and defend. That he views it this way is proof that he doesn’t believe the ideas written on the paper and, if that is the case, he should be impeached today. Not tomorrow, but now. All the talk of bringing liberty and freedom to the world, of being a shining light, that Bush doles out in platitudinous floods means nothing if he believes that the ideas in the Constitution, which limit his power, are not important.

Presidents do not get to talk this way. Presidents that talk this way are not patriots, rather they are tyrants waiting for the rest of America to believe the Constitution is “a goddamned piece of paper” so that they can take power and make everything “right” by the tyrant’s standards.

Impeach this president now, don’t let him trample on this nation’s founding ideas.

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Schwarzenegger clears way for Tookie Williams’s death

Schwarzenegger denies clemency to convicted killer – Yahoo! News:

“Clemency cases are always difficult and this one is no exception,” Schwarzenegger said. “After studying the evidence, searching the history, listening to the arguments and wrestling with the profound consequences, I could find no justification for granting clemency.”

The guy killed people, yes. But he also wrote books urging kids to turn away from drugs and gangs, leading an anti-gang movement from Death Row. If this isn’t a case where rehabilitation has taken place, what is? Schwarzenegger is acting, not actually talking about deliberations he undertook. As a “social liberal,” this was precisely the kind of case that Schwarzenegger would say justified clemency. As a human being it was a case that justified clemency.

If leaving Tookie Williams in prison for the rest of his life, working to dissuade kids from following his steps to jail, is a bad move, then Schwarzenegger has no good moves to offer.