At the Aspen Ideas Festival, I got up to a mic to ask Eric Schmidt a question. No, it wasn’t, “what would Google do?” I wanted his reaction to a notion I’ve talked about here that has crystallized since I wrote the book: that we are going through something more than a financial crisis and more profound and permanent than a recession. We are shifting from the industrial era – and the age of mass production, distribution, marketing, and media – to what follows, a society built on knowledge and abundance. We are seeing the collapse of the auto, banking, and newspaper industries and large swaths of the the rest of media, retail, real estate, and others to follow. We’re not going to go back; the change is bigger and more fundamental than that. “Did I go too far?” I asked.
“Yes,” Schmidt said. “But you’re good at that.” He had been asked earlier how he felt about people constantly asking what Google could and would do about this problem or that. At that moment, he pointed to me and said that What Would Google Do? did that; it took the Google model and extended it. If Google is a metaphor for thinking differently, I am happy to be it,” he said and then demurred, “Google is a simple company.”
Then Schmidt reacted to my question and this is what’s fascinating to me: He said he wished I were right. He said that too much of our resource, people, government help and attention, measurement go to the legacy players, the big, old companies. He wishes that weren’t the case. He wants that change but fears we will return to old reflex. Innovation, he said, happens at small start-ups but they don’t get the resource and attention.
I asked whether Google could be Google only because it was new. He said it was because it worked in the open internet.
He told about being an engineer before Google and seeing whole businesses start because of a regulatory porthole in telecom called the T-1, the 1.5 meg line that wasn’t regulated like the rest of communication. If that ceiling hadn’t been there, he argued, our development of digital would have sped ahead by five years.
So I’m thinking about that: My view of the coming world order may be more a manifesto than a prediction. Hmmmm.
* * *
Here are some of my tweets and notes from Schmidt’s Q&A:
* Asked how he reacted on THAT day in September, Schmidt says, “I was scared.” Google took its cash out of banks to sovereign nations’ currencies
* He says he still doesn’t understand how we got into the financial mess: “the failure of information that got us to this point.”
* On recovery: “We’re on schedule. Because the people who got us into this told us that.”
* He reminds US that Google was not part of finance. “Had we been doing it we might have been measuring where all the money was.”
* “We already had our bubble… We had a great time. Next time, I’m going to sell at the peak.” He’s doing great stand-up.
* Asked whether we can innovate out of a recession, Schmidt said “recessions end on their own & politicians love to take credit.”
* Schmidt says the ups and downs will be amplified because there is more information.
* “You do not want the government to own your company… In many cases, they will turn out to be jobs programs.”
* He says simply that he hopes people will more likely say this (house inflation, Iceland’s economy) just “doesn’t make sense”
* Q: You guys are everywhere. Schmidt: “That is our goal.”
* “I learned awhile ago that the right way to run human systems is transparency.” Problems came from information hiding.
* Brian Lehrer asks schmidt where Google is so bit it needs to be regulated as a public utility. A: “no”
* I don’t know how to solve newspapers generic problem. He says they are working on products in this arena. (No more details.)
* “The internet is a great friend to small businesses.” He says Google does not favor big businesses and big businesses don’t like that. [I say: See news.]
* Asked abot Froogle, he says, “Why did you remind me.” Why didn’t it work? “It didin’t work because it just didn’t work. We celebrate our failure in the company because we want people to take risks.” [Me: There's the beta corporation.]
* “We love advertising.” 97 percent of Google’s revenue is advertising. “No, we love advertising revenue.” He said his board is looking for more legs to the stool and Schmidt says they do have other streams coming.
At yesterday’s Personal Democracy Forum – where I was in the unfortunate position of speaking inbetween two of my favorite geniuses, danah boyd and David Weinberger – I sang the obvious hymn to the choir, arguing that government in a Google age means transparency. All governments’ actions and information must be searchable and linkable; we need an API to government to enable us to build atop it.
I also argue that as newspapers die – and they will – government transparency is a critical element in the new news ecosystem that will fill the void. When government information is openly available, a dwindling handful of journalistic watchdogs in a state capital can be augmented by thousands, even millions of watchdogs: citizens empowered. I’ll write more about this as part of the New Business Models for News Project.
But at PDF, I also listed four cautions regarding transparency – charges to us as citizens:
* We have to give permission to fail. In speaking with government people about What Would Google Do?, I’ve learned how much they fear failure and how cautious that makes them. Without the license to fail, government will never experiment, never open up, and never be collaborative.
In other words, we need beta government: the ability of government to try things, to open up its process, to invite us in, to collaborate. That was the lesson I learned from Google about releasing a beta: it is a statement of humility and openness and an invitation to join in. We need that in government.
* Transparency must not always mean gotcha. Oh, there are plenty of people to catch red-handed. But if transparency is about nothing more than catching bureacrats and politicians buying lunches, then we will not have the openness we need to make government collaborative.
* We have to figure out how to make government and its work collaborative. What if we were able to help government do its job? What if it acted like a network? What if it acted like Wikipedia, where a small percentage – less than 2 percent, says Clay Shirky – create it; it would not take many citizens to help make government work in new ways.
* We have to turn the discussion to the positive, the constructive. Again, there are plenty of bastards to catch. But we must move past that – especially once we have more watchdogs watching – so we can build.
I ran around the auditorium like a fool – a role I enjoy – playing Oprah and asking everyone in the audience to say what they thought government for the Google age looked like. Since I was running, I couldn’t take notes, but the #pdf09 Twitter hashtag captured some and PDF will put up a video later. Lots of great thoughts.
I said in What Would Google Do? – and argued the point in a talk at Google in Washington – that Google and other technology companies have more influence than they know – and should use it – in protecting free speech and pressuring censorious governments. I see evidence of the strategy working – or hope I see it – in China’s decision today to delay its noxious Green Dam requirement for all PCs sold there. Government and companies put pressure on; China blinked.
Yahoo’s new CEO, Carol Bartz, said in July that it’s not her job to fix governments. But neither is it a company’s job to enable tyrannical governments in their tyranny. Technology companies from Cisco to Nokia to Siemens that have provided technology to enable censorship and tracking, and companies from Yahoo to Google that have handed over information about users to governments that use it to oppress citizens should be ashamed. And we need to shame them. We need to give them cover by demanding behavior that is not and does not support evil.
In a digital age, censoring the internet, stopping citizens from connecting with each other, and using the internet to spy on and then oppress citizens is evil. We shame companies that helped enable fascist regimes in the ’30s and apartheid in the last century. Is it time for technology boycotts? I’m not sure. But it is time for the discussion.
For CUNY’s New Business Models for News Project, we would be very grateful if local blogs and sites filled out a survey to give us data in our analysis and modeling of the economics of hyperlocal news. The survey is here.
We are trying to find out how hyperlocal blogs and sites are doing their business today – how big they are, how big an area they cover, what’s working in advertising and what’s not. The data they give will be kept anonymous; that is, we’ll release it only in aggregate. We’ll also interview some of you to find out more.
Out of this, we are working to build models to show how to optimize the business of the hyperlocal news site: revenue opportunities, network opportunities, and so on. We’ll share that work on the site as it progresses.
As of today, we have a director, a business analyst, two business consultants, two journalism graduates, and six business students working on this effort. It’s serious. The more information we have to work with, the better they can serve the community. So if you have a local news blog or site, please fill out the survey and pass it along to others you know.
Following the frighteningly dangerous thinking of Judge Richard Posner – proposing rewriting copyright law to outlaw linking to and summarizing (aka talking about) news stories – now we have two more lemming lawyers following him off the cliff in a column written by the Cleveland Plain Dealer’s Connie Schultz.
First note well that Schultz is married to U.S. Senator Sherrod Brown as she calls on her newspapers and employer (my former employer, Advance Publications) and fellow columnists to influence Congress to remake copyright. She should be registered as a lobbyist. No joke.
Schultz says that David Marburger, an alleged First Amendment attorney for her paper, and his economics-professor brother, Daniel, have concocted their own dangerous thinking, proposing the copyright law be changed to insist that a newspaper’s story should appear only on its own web site for the first 24 hours before it can be aggregated or retold.
Incredible. So if the Plain Dealer reported exclusively that, say, the governor had just returned from a tryst with a Argentine lady, no one else could so much as talk about that for 24 hours. A First Amendment lawyer said this.
They make vague reference to the hot news doctrine theAP has been trying to dig up from its very deep grave. Note that their definition of hot is the cycle of newspaper publishing, not the cycle of news itself. Look at how fast the Michael Jackson news spread. Under these guys’ scheme, TMZ would have had exclusive right to publish his death for a day. Well, except it’s not a newspaper. And what they care about is protecting newspapers.
Schultz and the Marbergers complain about what they call the “free-riding” of aggregators, et al. But they simply don’t understand the economics of the internet. It’s the newspapers that are free-riding, getting the benefit of links.
These newspaper people are the ones trying to act as if they own the news and can monopolize it. Those days are over, thank God.
: LATER: Schultz has responded in the comments here. I have responded in turn. And I have just sent this message to the office of her husband:
Please consider this a press inquiry:
I want to know Sen. Brown’s stand on his wife’s column in the Plain Dealer on attempting to rewrite copyright law to give newspapers a 24-hour period of exclusivity on the news they report.
Does the senator support this legislation?
What will the senator vote on this legislation?
Will the senator recuse himself from voting on this legislation, considering his wife’s role in lobbying Congress on the issue?
Reporters have been calling today looking into the importance of Twitter and social media in the two big stories of the month: Iran and Michael Jackson. Have we come to a next step stage in social media’s impact on news? Maybe.
Certainly the Jackson news spread quickly via Twitter. TMZ.com got the news first and it spread from tweet to retweet and then it spread beyond the web as each of those Twitterers acted as a node in a real-life network. An AP reporter told me she was riding on a bus when someone came on and announced the news to all the passengers – that person was a node, the bus the network – and then everyone on the bus, she said, took out their smart phones and spread the news farther. The live, ubquitous, mobile web is an incredible distribution channel for news.
I also spoke with Tampa Bay’s Eric Deggans and we wondered together about the arc of the Jackson story in big media versus our media. I’ll just bet that the story will die off on Twitter trends, Technorati, YouTube, and Facebook sooner than it finally exhausts its welcome – and our patience – on cable news. Back in 2005, I said that TV news was paying more attention to Jackson’s trial than the audience was, as evidenced by discussion on blogs, which lost interest in the story long before TV did; indeed, they never obsessed on Jackson as TV did and TV believed we wanted to.
I think this also means that we are less captive to cable news. Since its birth, cable was the only way to stay constantly connected to a story as it happened, or allegedly so. But in the Jackson story, there really is no news. He’s still dead. All that follows is discussion and wouldn’t we really rather discuss it with our friends than Al Sharpton? Once the supernova of news explodes – taking down Twitter search and YouTube and jamming GoogleNews search – we probably to seek out TV, but it quickly says all it has to say and the rest is just repetition. If the Iraq War was the birth of CNN could Iran and Jackson mark the start of their decline in influence? Too soon to say.
Journalists end up playing new roles in the news ecosystem. Again, I followed the Iran story in the live blogs of The New York Times, the Guardian, the Huffington Post, and Andrew Sullivan and they performed new functions: curating, vetting, adding context, adding comment, seeking information, filling out the story, correcting misinformation. They worked with social media, quoting and distributing and reporting using it. I watched the filling out of the Neda video story as the Guardian called the man who uploaded it to YouTube and Paulo Coelho blogged about his friend in the video, the doctor who tried to save Neda. Piece by piece, the story came together before our eyes, in public. The journalists added considerable value. But this wasn’t product journalism: polishing a story once a day from inside the black box. This was process journalism and that ensured it was also collaborative journalism – social journalism, if you like.
The unfortuante truth about the confluence of these two stories – Jackson and Iran – is that the former pushes the latter off the front page, the constant cable attantion. But will it push Iran out of our consciousness and discussion? Again, we’ll see. I was in the car when I spoke with Eric but he told me that on Twitter, the trends were all but filled with Jackson – except for the Iran election, which was still there, in the middle. That renews my faith in us.
Expanding copyright law to bar online access to copyrighted materials without the copyright holder’s consent, or to bar linking to or paraphrasing copyrighted materials without the copyright holder’s consent, might be necessary to keep free riding on content financed by online newspapers from so impairing the incentive to create costly news-gathering operations that news services like Reuters and the Associated Press would become the only professional, nongovernmental sources of news and opinion.
Good God. Posner is not just trying to mold the new world to old laws – which is issue enough – but is trying to change the law to protect the old world and its incumbents from the new world and its innovators. He is willing to throw out fair comment and free speech for them. That is dangerous.
Posner’s thinking is incomplete in a few ways. First, he is ignorant of the imperatives of the link economy. The links and discussion he wants to outlaw is precisely how content is distributed and value is added to it in the new media economy.
Second, as Masnick points out, Posner assumes that jouranlism as it was done is journalism as it should be done: that the goal is to protect newsrooms, unchanged. But there are tremendous savings to be had thanks to the link economy: do what you do best, link to the rest.
Note how The New York Times and The Guardian – not to mention the Huffington Post and Andrew Sullivan – covered the Iran crisis. They linked. Links made their journalism complete. So did readers. The Times has three editors for every writer but in the blog, there was no need – no opening – for them. There was no need for production or design. The new news organization can and will operate at a different scale from the old one, because it can and because it must. So what is Posner protecting besides the old budget and payroll. He’s not protecting journalism – or rather, he’s protecting it only from progress.
No, sir, the news industry – and the law – must be updated for this new world and so must your thinking.
Salesforce.com’s Marc Benioff says the future of computing will be like Twitter – that is, live, not batched. “Any concept of batch or delay in development or execution, I think, will not be tolerated by customers anymore,” Benioff said at Structure 09 according to the Digitalbeat report.
But this urgency isn’t just about speed. It’s about organizing work around process over product: beta-think. “Even in development, customers are demanding now that they want to be able to build in that sandbox and deploy immediately, instantly, no delay,” Benioff said. Take that principle past software to other industries – news and advertising, to name two – and to work itself as beta becomes a principle of workflow and management. And that shift will bring a cultural clash to countless workplaces just as we’ve seen in the newsroom.
Many companies haven’t realized this is where things are headed, he said. Benioff recounted attending meetings with chief information officers who all refused to believe that Twitter represents anything significant; they don’t have accounts themselves because “it’s not their generation.” Benioff’s response? He types the name of their company into Twitter search and shows that they’re missing out on a huge part of the conversation. (Benioff isn’t an impartial observer here, since Salesforce’s Service Cloud product is all about connecting companies to their customers on services like Twitter.)
“I think corporations have to step it up in terms of integrating with these real-time systems,” he said.
That’s the same lesson that Iran’s Supreme Leader, Ayatollah Ali Khamenei, has learned recently as Twitter is used to organize anti-government protesters, Benioff added: “He’s probably on Twitter right now.”
Paid Content reports today that The New York Times Companies’ Martin Nisenholtz is talking about charging for the paper’s mobile app.
On the face of it, this seems to make sense: People are paying for mobile content and functionality (ring tones vs. earth-shattering news, ferchrissakes!) and for mobile apps. The New York Times iPhone app is downright wonderful. It’s far better than The Times’ Kindle app (no fault of The Times; all the Kindle news sites are sucky). I’d pay for the app – once.
But would I pay for an ongoing subscription to it? Well, here’s the problem: my iPhone brings me the web and I can read The Times there without paying. Damn, that genie; doesn’t know his place (in the bottle).
Nisenholtz says, quite rightly, that one problem with the iPhone app is that there are fewer opportunities for advertising. And even so, the few ad avails I see are all filled with free house ads for The Times itself; obviously, the sales staff hasn’t taken seriously the opportunity to sell this prime audience (why is it always thus?). So The Times’ app makes bupkis. Even the house ads are irritating, so I might pay for an app without ads. But then I’d be paying for less irritation rather than for the content.
Here’s what I think is a pretty solid business tip: I wouldn’t back or bet on a company and industry that’s described this way in today’s New York Times (my emphasis):
Like newspaper owners, media moguls are looking for new ways to protect their investment from the ravages of the Internet. And, as with the newspaper industry, the answer remains elusive.
I’d rather invest in a company that will take advantage of the new opportunities of the internet, not seeing ravages in the future but instead growth and profit. I’ve said often that protection is no strategy for the future. An industry whose strategy for the future is built on trying to keep us from doing what we want to do and resist the flow of the internet is an industry that is merely biding time. That should be the lesson they learn from newspapers and music.
Yes, I think that the tactic described in that story, put forward by Time Warner’s Jeffrey Bewkes, of enabling us to watch shows we’ve already paid for online makes sense. Indeed, I refuse to use HBO on demand on cable today because they want to charge me extra to watch what I’ve already paid for. So I’ll rush to the chance to watch my shows without having to go through the bother of recording them or paying for them twice.
But the real future is an on-demand future, an unbundled future. Once freed from the forced march of cable bundles, I will buy only the content I want to buy online, no longer being bribed into supporting the 90 percent of cable channels I never watch so I can get the 10 percent I want.
For that matter, what’s a channel? I was an an event last week with entertainment moguls of various camps and one asked another whether the channel would die. The second exec didn’t think so. At first, I agreed, as I pictured myself on the couch watching one of the channels I do care about.
But then I pictured my kids on the couch. They’re not doing what I do. They never just watch channels (tennis matches excluded). They live on-demand. They watch programming only through the web, Hulu, the DVR, on-demand channels. Some look at that future, our kids’ future, and see “the ravages of the internet.” They’re not long for this world; they’re only trying to delay the inevitable. They’re trying to swim upstream against the internet. But they’re only going to drown there.
There’s nothing unsexier in journalism than covering state government. “Trenton bureau” just doesn’t have the same ring as “Paris bureau,” does it? Do you know the names of your statehouse reps? I’ll confess I don’t.
And so my biggest fear in the death of metro papers is the vacuum that will be left in coverage of state capitals. I don’t buy the dire predictions that journalism itself or investigative journalism will die with those papers. Washington will still be covered; one could say it’s over-covered (if often poorly covered) today. City government will be covered because it affects people’s lives directly and because there’ll always be somebody to catch the mayor red-handed.
But statehouses? Unless your governor is a former movie star or pro wrestler or client of prostitutes, they don’t get much – enough – attention. And even when it does get covered, there’s no obvious and endemic advertising support. Capital coverage was the gift of broccoli from news organizations and no one’s likely to bring that dish to the new news potluck.
That’s why I think that in the new ecosystem of news, state capital coverage may need to be publicly and charitably supported. Unsexy though it may be, it does affect our lives and purses. And witness the inanity in Albany lately, state government is populated too often with crooked fools who must be watched.
I’ve had a few email exchanges on the topic with John Thornton, a venture capitalist in Texas who’s worrying about state coverage. “It’s where the economics are the most up-side down,” he said:
Think about this: the total 08 Fed budget was $3.1 trillion. Subtract, national defense and entitlements, and it shrinks to $1.3 trillion. That’s the “discretionary spend” which is the dominion of Congress. Sure, there is always room for better coverage of Congress, but I’d submit that it’s pretty well covered as is.
On the other hand, the cumulative state budgets are $1.6 trillion, or 30% *more* than the discretionary spend of Congress. These taxpayer dollars are, of course, spread out into 50 byzantine and corrupt state capitols, the coverage of which has fallen dramatically and continues to do so.
So how will such coverage be funded? Thornton is counting on philanthropy. He said:
It’s certainly apropos to look at the public radio and tv numbers. Austin’s npr station, kut has 200k listeners and 17k contributors—the best conversion rate I know of. They raise $3m from individuals and $3m from contributors. . . .
Dance companies in Texas raise $20mm a year. . . . If journalism philanthropy, 10 years from now, were the size of dance, we’d put 150 reporters on statewide issues and could literally change the way state government operates. Think about that: an extra 20 at the capital; a couple each for all the agencies and the school board; 20 on the border. You almost can’t spend that much money responsibly. I don’t need opera. I don’t need visual arts. Don’t need symphony. Just give me dance, and I’ll change state government.
What this needs is people with the passion of a Thornton to sell the cause and raise the money. But as with NPR and Wikipedia and Spot.US, not everyone who benefits has to give to make the nut.
This is one of the areas we are investigating at the New Business Models for News Project. The question we are asking is how much potential charitable giving we can project for news in a market and what that will support.
We will also look at how the rest of the ecosystem can support this coverage. For example, wouldn’t it be wonderful if your town and city blogs and sites had at the ready charts to tell you who your state reps were and what they’ve been doing: their votes and expense accounts, too? Support will come not only with money – it has to start there – but also with the attention papers used to be able to give such coverage.
: LATER: In the comments, Bob Wyman argues that state capital coverage is actually a good entrepreneurial opportunity.
Another disconcerting metric: The wide ratio of lobbyists to reporters. Here in Illinois, we have more than 3,000 registered state lobbyists. The number of working journalists in Springfield, by contrast, falls in the dozens. Indeed, a recent report found only 355 full-time state capitol reporters nationwide.
When newspaper people in the U.S. aren’t wishing they were the Wall Street Journal – “well, they can charge” – they aspire to be The Economist.
Dream on.
I just got email announcing The Economist Group’s latest financials.
* Operating profit up 26% to £56m
* Revenue up 17% to £313m
* Full year dividend of 97.3p per share, an increase of 8%
* The Economist’s worldwide circulation grew 6.4% to 1,390,780 (July-December 2008 ABC). It was named Magazine of the Year by Advertising Age and topped Adweek’s Hot List for the second year running
* Economist.com’s performance has been strong, driven by a strategy to make it a place for intelligent debate; advertising revenue is up 29% and page views 53%
The good news is that quality still sells.
The Economist is to the rest of the news industry as Apple is to Google. In What Would Google Do?, I argue that Apple is the unGoogle. It violates practically every one of the 40 rules I set out. But it succeeds. Why? It’s that good, uniquely good. There’s room for one such company, probably, in any industry – and that spot isn’t always filled (name me the Apple or The Economist of phone companies, airlines, cable companies, or retail).
In news, the Economist is the exception that proves the rules. It doesn’t have the individual voices and brands that succeed elsewhere on the internet; it has a single, institutional voice (but a charming one). In a sense, it’s a general-interest publication in the age of specialization (and every other general-interest product, from Time to the metro daily is failing). It has built a strong online product but it’s still not known for that; it’s a magazine (pardon me, newspaper) that still relies on and succeeds in print.
The problem for the rest of the industry is that they can’t all break the rules as The Economist does because they’re just not that good. You have to be great to the The Economist or Apple and if you fall short, you fall all the way. And staying great is constant work.
I was at The Economist’s offices in New York last week for lunch with editors. Don’t think that they are resting on their laurels. They, too, are trying to understand The Economist’s role on the new media age (my advice: they have just about the smartest crowd anywhere and I hope the company asks how that crowd can be empowered to connect, share, and create). But it’s a nice perch from which to be wondering what to do next. While other publications are looking for a limb to grab onto as they fall, The Economist is looking for the next higher branch.
