What’s that $19B about? WhatsApp at a glance.

Doc Searls provides an excellent summary of the implications for trends in marketing and consumer privacy related to FaceBook’s $19B acquisition of WhatsApp. Here’s my take on the deal terms:

We have to assume there is a lot of overlap between the FB and WhatsApp user base. And, regardless of what anecdotal information we have about how people pay for or use the service, the potential revenue from the WA user population remains purely speculative. So, what do we actually know?

FB values WA users based on their activity, which represents about one message per day per user at the highest level. They are slightly more engaged than FB users, with 70% daily usage rate vs. FB’s 63% of users active every day. They are paying $1 per message sent per user/day, or roughly $0.00273 per message sent over a year. That’s a manageable low cost of traffic acquisition, but because the payment is concentrated in time, the financial impact on FB’s business could be pronounced, though we must acknowledge there is downside risk to the deal, too.

CNN Money reports that FB sees revenue of approximately $1.72 per user globally. It’s much higher in the US and Canada, where revenue is about $4.85 per user/year. This means the combined company could make up to $0.72 per user in the first year, if they implement ads in WA. However, it is important to note that FB’s ARPU for the Rest of the World and Asia are sub-$1. If most WA users are in Asia and developing countries, which I’ve understood is the case, the deal loses money more often than not under current conditions.

I doubt people will pay for the WA service (it’s unproven now) and, if they were to pay $1 a year, the deal is only a break-even for those users who pay. If 10% pay, which is a typical “Freemium” conversion rate used in projection, there is not sufficient revenue to prevent WA from being mined as a source of user data and implied intentions. As WA is integrated into FB, notably to FB’s user surveillance regime, which is the core of the FB business, it will likely need to add ad or VRM revenue to make the deal worthwhile. And that puts the whole deal in jeopardy, since there is little to no switching cost for users.

My $0.02.

Caffeine helps consolidate short-term memory

I’ve been drinking five to eight shots of espresso as my breakfast for many years. People laugh about it. But with this report on the efficacy of caffeine in consolidating short-term memory — what you are learning and dealing with each day — I can point to Science as a justification for my coffee abuse. The interesting thing about caffeine is that it does not have the same effects alone as coffee. All those alkaloids and oils are good, somehow.

Risk and empathy

Here’s why risk is hard to think about: It is deeply distributed across a population, so lightly does risk fall on everyone that it is easy to dismiss its impact on others. But when risk actually strikes, it comes like a nail driven through your flesh, it can feel like the sky falling on you.

Keeping an open mind to the potential risk in any endeavor, learning not to resent when risk strikes, and sharing the burden of unanticipated risk when possible are the key practices that allow a businessperson or bureaucrat to retain their humanity. Otherwise, it is easy to forget that risk is always shared in any relationship or endeavor.

The magic upside of global warming?

Perhaps it is the fact that every visit to the United Kingdom includes multiple comments about how few holidays Americans take or just the end of the last school holiday in my daughter’s high school career, but I’ve also noticed how hard we work in the States through the lens of a new source of days off, “severe weather closures.” Every season these days contributes a share to an annual dose of unscheduled days off due to extremes of heat, cold or storm fronts that bring too much or too little water all at once to a region. If you work in a large organization, you’ve probably seen email about office closures over the last week.

Weather so bad that it is dangerous to go outside may be nature’s way to tell us to relax a bit more. That said, I remember standing on the curb waiting for the school bus in Virginia, Minnesota back in the 1960s, when it seemed to be -30 degrees below 0 Fahrenheit. And it was uphill both ways to the house. Maybe we’re just soft.

Targeting habitable worlds for exploration

Think of where we are, just now. The journal Nature reports on research that provides a testable model for analyzing and, ultimately, visualizing remote worlds for the potential habitability of Earth-like destinations for exploration. Basically, using multiple observations of a planet as large as the planet Uranus in our solar system in transit of its star, the team has built a model that, if confirmed by the James Webb Space Telescope when it is deployed in 2018, confirms the model accurately allows us to predict — and refine our analysis of — the planet’s ability to host life, assuming there is not something on a habitable planet more dominant than ourselves that will annihilate us on arrival, and support colonization by humans or their machines.

Think about that. Like the Dutch company that this week announced it has about one thousand candidates it will send to Mars on a one-way trip, humans can start to make long-term bets on distant colonies by banking the claim represented by a ship or fleet headed off in some direction once it leaves. Even if that ship is not the first to arrive from Earth, it would still represent the initial claim to the planet. So, if space travel could be speeded to or past the speed of light and a later flight arrived first, the initial pioneers’ ancestors would retain their share of the planet, which could even be adjusted for future value as the first travelers’ confidence is reinforced by later followers, even if the followers got their first.

For most of my life, punctuated by my childhood fascination with space travel and the Moon, as well as in the 40- to 90-minute portions of my attention devoted in their hundreds and thousands to Star Trek throughout the past 50 years, I have not believed that man could leave the immediate neighborhood of this planet and its Moon. Maybe it is passing 50 years of age with some advanced aircraft-grade titanium cervical disc replacements. But I’ve come to see that the pioneering of space is the next shitty, but necessary, stretch of road humanity needs to walk in order to take any larger place in the Cosmos than it already has had the audacity to imagine.

Or, perhaps, this exercise in futurism will merely make it clear that mining my neck for its titanium is less profitable, but also much less risky than traveling to a planet orbiting a distant star, and I’ve sealed my own fate by enabling the short-sighted to consume the hearty and spirited men of their times for scrap metal. For anyone missing that this is meant satirically, titanium is not a particularly valuable metal. Really.

Happy New Year, one and all.

Small fusion project with potentially big results

Reading with interest about the Sandia National Labs’ Z machine, an electromagnetic fusion reaction generator, if it every works. More than a decade behind schedule, the project is the least heavily funded of the various fusion projects in the U.S. and Europe. Someone will make fusion work, and it will be a tremendous step forward toward sustainability. Check out how the Z uses a ring of supermagnets and tuned laser burst to compress and, hopefully ignite, a fusion reaction. It’s simplistic in its design, essentially a containment field. Let’s hope we keep funding this kind of small project instead of defaulting to one big bang approach to fusion. It will yield more results we can learn from.

prose poesie

“You don’t realize that you’re a big old bag of blood until you actually burst,” is not the start of a story I wanted to hear out, yet it was precisely this tale with which she introduced herself to me. “My grandfather was quite drunk and took me to the top of the Sears Tower in Chicago,” she continued. I tuned out. She went on, relating in comic detail how the old man first talked his way into complete access to the building, then fell to his death. She smiled when she remembered his face falling away and though she heard not a word was convinced the gentleman realized just before his death that he was nothing more than a bag of blood hurtling to the concrete below. She was certain that was the man’s last thought. “Splat,” she would finish the story, clapping one hand down on her upturned palm for emphasis.

The Tether Hypothesis

A fascinating development in cognitive science, the tether hypothesis, which says that our brains on the rapid onset of evolutionary growth compared to other species was “ripped apart” and allowed to rewire itself.

In and of itself, it explains nothing about why our brains wired themselves for Mind, but it does break down a barrier to understanding how it happened. It makes sense that our brains would opportunistically rewire themselves at the time our craniums grew dramatically. Why chemical signaling reached between far-flung regions of the brain — except if you assume that the brain was fundamentally changing from an unconscious mind to a conscious one, which begs the question — provided the opportunity to blend experience and memory to facilitate consciousness remains a mystery.