September 2004 Archives

"Thanks" alot to John Battelle for totally distracting me with this pointer to the Kelptone's A Night At The Hip-Hopera just when I'm trying to prep for his conference on Tuesday. I can't stop myself from playing this track over and over. And of course the fact that this is "illegal" is a compelling case in point for why we have to dramatically update our IP law in this country--and do so over the patronizing, self-important protestations of the music oligarchy (and the polticos that do their bidding.) You can't go to a movie now without the industry fronting some disheveled set designer suggesting absurdly that movie piracy has somehow cut into his probably unionized wages. And on a recent United flight I was treated to the unwelcome spectacle of the super-wealthy Sheryl Crow interspersing her in-flight performance with a complaint about music piracy. I think it’s a tactical mistake for the entertainment industry to mix lobbying into their content--and will diminish from both. There IS such a thing as IP theft, but IP laws are meant to strike a balance between incentives to create and freedom to create. This is an anecdote that there is an imbalance in the system.

My former partner Tony has announced that he's launching a new magazine built off the foundation of his web site, Always On. I share his optimism about the sector. Red Herring was successful for 8 years--and then it had two really tough years. But had Tony and I retained control (our real mistake) it would still be publishing today. Despite the Internet bubble hangover that many are still feeling there is a strong case to be made that we are actually in a boom that is BIGGER than the peak in 2000.

How do you measure Internet activity? Users? Time online? Households with broadband? Online commerce revenue? Online advertising revenue? ALL of these are greater than they were in the peak of 2000. The last one might shock some people: more advertising revenue was generated in the each of the last several quarters than at the height of the boom. I don't know about the sheer number of companies and employees in the Internet space, but I wouldn't be surprised if those numbers were higher too.

The one thing that is still down, of course, is the stock prices of Internet and tech companies. But those prices are still pretty good overall and Google is no slouch. And there continues to be a lot of VC out there to there so access to capital is not overly problematic.

It was a crazy time to do business at the peak of 2000--easy to get money but that was offset to an extent by how difficult it was to find great employees and the skyrocketing costs of things like office space. All in all, having watched this market closely since starting work on Red Herring in 1992 I don't think there's ever been a better time to start a company--and yes that goes for Internet companies too (which is why that's what I spend my days doing.) I think AO's blogozine and the re-launch of Red Herring are great for this market. Good luck!

An excerpt from Tony:

...in spite the Internet company stock blow-out, I firmly believe the original editorial premise behind both Upside and Red Herring was valid. Innovative companies still create the most jobs and wealth in the modern world, and media entrepreneurs can still build profitable franchises covering this dynamic market. But while AlwaysOn (AO) is still very much about the business of innovation, this is just part of the new story.

Interesting take from Independent.co.uk on how by linking to stories in reverse chron, Google is rewarding those who come late to the story and punishing those who breat the "exclusive." We all know that news changed dramatically with CNN brought news cycles from daily to up to the minute. Perhaps news aggregators and blogs will actually serve as a counter-weight to this trend. Ironically perhaps that as media becomes ever more instant, the premium on the scoop may actually be diminishing--and punishment for getting it wrong (e.g. Rathergate) is getting more severe and rapid. Perhaps aggregators and blogs will shift the balance back a bit from time based to quality based reporting. We'll see. Excerpt:

But in the case of what starts out as an exclusive story, such as Abu Ghraib, the most recently updated site won't be the one which got the exclusive. It'll be the me-too site, probably reporting what's on the newswires, and adding it (perhaps automatically via a computer) to its site. The organisation that got the exclusive languishes, perversely, at the bottom of Google's huge list, in a place where nobody is ever likely to "click through" to it to see the adverts there.

The Lead21 blog is now LIVE! Here is an excerpt from the about page:

Lead21 provides business and community leaders a platform to get involved in politics and public policy, meet key elected officials and thought leaders, and build on America that furthers entrepreneurial thought.

I agree with Jeff Jarvis that "CBS and Dan Rather so royally screwed up and they didn't even help themselves when it finally came time to admit they screwed up." Check out the loophole Dan Rather left in his statement not suggesting that the docments are false--just that they don't have the "confidence" in them they once had. How could they have had confidence in them in the first place?? Then notice the "misled" comment--trying to pass the buck.

Now, after extensive additional interviews, I no longer have the confidence in these documents that would allow us to continue vouching for them journalistically. I find we have been misled on the key question of how our source for the documents came into possession of these papers. That, combined with some of the questions that have been raised in public and in the press, leads me to a point where-if I knew then what I know now-I would not have gone ahead with the story as it was aired, and I certainly would not have used the documents in question.

Rather needs to make a Truman-like statement that the "buck stops here" or I think he will go the way of Trent Lott and Howell Raines.

From Henry Miller:

Human rights? Their expansion and consolidation are worthy goals, to be sure, but Vasella's saccharine altruism brings to mind economist Milton Friedman's 1970 reproachful observation that "businessmen believe that they are defending free enterprise when they declaim that business is not concerned 'merely' with profit but also with promoting desirable 'social' ends; that business has a 'social conscience' and takes seriously its responsibilities for providing employment, eliminating discrimination ... and whatever else may be the catchwords of the contemporary crop of reformers." Friedman derided business executives so inclined as "unwitting puppets of the intellectual forces that have been undermining the basis of a free society." ...

Businesses do not have social responsibilities; only people do. And inasmuch as corporate leaders work for the owners of the business, their responsibility is to pursue the best interests of their employers - interests that relate primarily to making as much money as possible while conforming to the legal rules and ethical norms of society. By taking actions on behalf of the company that he decides arbitrarily are "socially responsible," a corporate executive is, in effect, spending someone else's money. His actions reduce returns to stockholders, which means he is spending their money.

One of the easiest things to do is to spend other people's money on causes in which you believe. One of the most difficult, but most meaningful, is to spend your own money. If executives wish to support non-business-related goals of their own choosing, they should make charitable contributions from their private fortunes. Many charitable foundations have been established precisely for that purpose.

Mort Zuckerman said something to the effect today that the rule of holes was: when you find yourself in a hole, stop digging. CBS is still digging. In a brash piece of bait and switch journalism CBS seems to believe that as long as they can show that the substance of the story was true, it doesn't matter all that much that they were peddling fake documents. Listen to this hard hitting dedication to the truth:

Are those documents authentic, as experts consulted by CBS News continue to maintain? Or were they forgeries or re-creations, as Knox and many others believe?

We will keep an open mind and we will continue to report credible evidence and responsible points of view as we try to answer the questions raised about the authenticity of the documents.

Many people suggest that this document story is the "politics of distraction" and the REAL story is of Bush's Guard service. Well they are BOTH stories but while IMO the Guard story will have little if any impact on the election at the end of the day, I think the bigger story at the end of the day is what Rather and CBS may be doing to the general credibility of big media. May not seem like it now, but many in the media industry may look back at this episode conclude that it was yet another point of erosion for their status quo. If I were one of his peers or still working in traditional media I'd be pissed. Since I'm a "PJ" now, I have to admit to some schadenfreude.

Thanks to The Mudville Gazette for the pic of Minister Dan.

A cool new client based p2p, social network called Grouper has just launched. Founded by several of the Spinner.com folks. Congrats Josh! Check it out! Here's how they describe themselves:

Grouper is a new Windows based application that allows users to share their personal media within private groups. Grouper uses P2P technology connecting you directly to your friends' hard drives where you can share large files in a safe, encrypted environment. Grouper is a simple install and requires no firewall reconfiguration.

Steven Horwitz makes the case for why both left-wing and right-wing ideologues should welcome the blogosphere. On the one hand, there is the people vs. the powerful aspect that many have discussed. What gets me particularly enthusiastic about the blogosphere, however, is that news, which had been largely the perview of a few big, central planners, is now increasingly dispersed and therefore behaving more and more as information does in a free market, rather than a planned economy. For anyone concerned about concentrations of power, whether governmental or corporate, this is a good thing. The merging of publishing and economics? Not quite yet, but perhaps journalism schools should be expanding their curricula. Here's the money quote from Horwitz:

The Hayekian lesson is that it is through the ability to enter the market and compete that knowledge gets created and made socially available to others. Just as in economic competition, where the process will tend to allocate resources better than alternative processes, so in the competition to produce news does the process tend to produce the best approximation to "truth." Markets are in that way examples of liberty defeating power. The very openness and competitiveness of markets makes any momentary hold on power tenuous, requiring that those who possess it continually act affirmatively (e.g. innovating, serving consumers well) to keep it. CBS and other Big Media simply have never had to face this sort of environment before and have become sloppy as a result.

Joe Kraus, of Excite fame and soon to be of a new company fame, has started blogging. Welcome to the blogosphere Joe! Excerpt from his firs post:

Allow myself to introduce... myself. My name is Joe Kraus and Bnoopy is a blog about entrepreneurship -- thoughts, lessons learned, open questions. It's all stuff I'm thinking about right now in the midst of starting a new company. My background is that I was one of the founders of Excite. Then I co-founded DigitalConsumer.org and now, I've got a new project still in stealth mode.

There is now an entire site dedicated to "Ra^thergate" as well as a cartoon. And John Fund makes the point as well as anyone:

A defensive Dan Rather went on the air Friday to complain of what he called a "counterattack" from "partisan political operatives." In reality, traditional journalism now has a new set of watchdogs in the "blogosphere." In the words of blogger Mickey Kaus, they can trade information and publicize it "fast enough to have real-world consequences." Sure, blogs can be transmission belts for errors, vicious gossip and last-minute disinformation efforts. But they can also correct themselves almost instantaneously--in sharp contrast with CBS's stonewalling.

As Fund describes this:

A watershed media moment occurred Friday on Fox News Channel, when Jonathan Klein, a former executive vice president of CBS News who oversaw "60 Minutes," debated Stephen Hayes, a writer for The Weekly Standard, on the documents CBS used to raise questions about George W. Bush's Vietnam-era National Guard service.

Mr. Klein dismissed the bloggers who are raising questions about the authenticity of the memos: "You couldn't have a starker contrast between the multiple layers of check and balances [at '60 Minutes'] and a guy sitting in his living room in his pajamas writing."

He will regret that snide disparagement of the bloggers, many of whom are skilled lawyers or have backgrounds in military intelligence or typeface design. A growing number of design and document experts say they are certain or almost certain the memos on which CBS relied are forgeries.

Mr. Klein didn't directly address the mounting objections to CBS's story. He fell back on what high school debaters call the appeal to authority, implying that the reputation of "60 Minutes" should be enough to dissolve doubts without the network sharing its methods with other journalists and experts. He told Fox's Tony Snow that the "60 Minutes" team is "the most careful news organization, certainly on television." He said that Mary Mapes, the producer of the story, was "a crack journalist" who had broken the Abu Ghraib prison abuse story.

This is the problem with centralized media: you get single points of failure, as with Dan Rather, who can delude himself that it is the bias of others, not his own, that is distorting reality here. Decentralized media, aka the blogosphere, has no such structural design flaw. It may have other flaws, but the folks at CBS underestimate its strengths at their own peril.

My thoughts on this third anniversary ...

Here is a link to a document trumpeted by CBS News' 60 Minutes that purports to raise questions about Bush's military service.

Now here is a link to a blog post that seems to convincingly prove that this document is a poor forgery.

Now here's a link to ANOTHER "document obtained by 60 Minutes" and here is a link to ANOTHER blog post showing that THIS document was probably forged too.

Now here is a link to the CBS News page that links to the documents (and more docs that look like forgeries as well) with NO MENTION that they may in fact be forged. And in fact here is a link to an AP story in which CBS stands by its reporting.

Now--setting aside everything political about this: forgetting for the moment who forged these documents and why--it sure looks like yet again big media is out to lunch here and the blogosphere is coming to truth's rescue.

UPDATE: Left wing bloggers fight back against right wing bloggers, and the right wing bloggers counter-punch. MUCH more interesting than Dan Rather...

MORE: This one is pretty damning, and this post links to a bunch of other posts. Big media enters the coverage: to debunk a competitor. And here is some blistering editorial commentary, comparing the standards of Big Media on these docs vs. the Swift Vets.

Thanks to John Battelle for being the first in the blogosphere to talk about Rojo, a company I co-founded and am CEO of. We are still in beta but will be inviting users in to help us test the service in the coming weeks. As to what Rojo (pronounced like "mojo") actually IS John did a pretty good job with his teaser. Excerpt:

Think of it as a second-generation RSS aggregator with some subtle social networking, recommendation, and republishing juice.

If you'd like an invitation to check out Rojo, just visit www.rojo.com and give us your email and we'll let you know when we are ready for you.

More to come...

I also thought Lt. Gov. Michael Steele's (R-MD) speech was very powerful. Excerpt:

I am proof that the blessings of liberty are within reach of every American.

We have come an incredibly long way since the first Republican President, Abraham Lincoln, signed the Emancipation Proclamation.

We have come a long way since another Republican President, Dwight Eisenhower, sent the National Guard into Little Rock to open the school doors to black and white children alike.

And we have come even further since a majority of Republicans in the United States Senate fought off the segregationist Democrats to pass the Civil Rights Act of 1964. ...

You see, she raised me to understand and appreciate the words of Abraham Lincoln, who said: "You cannot bring about prosperity by discouraging thrift. You cannot strengthen the weak by weakening the strong. You cannot help the wage earner by pulling down the wage payer. You cannot further the brotherhood of man by encouraging class hatred. You cannot help the poor by destroying the rich. You cannot build character and courage by taking away man's initiative and incentive. You cannot help men permanently by doing for them what they should do for themselves."

I remember in 1998 that Red Herring was priviledged to have a former governor of Georgia speak at our Venture Market South conference. While I wasn't very excited about it at first because the only thing I knew about him was that he was a Democrat, when he gave his talk I became an instant fan. It doesn't surprise me, then, that 6 years later he gave the kind of powerful speech that he did. Whether you loved it or hated it, you have to admit it was extraordinarily powerful. It was the most stirring speech I think I've ever heard. Some excerpts:

Now, while young Americans are dying in the sands of Iraq and the mountains of Afghanistan, our nation is being torn apart and made weaker because of the Democrat's manic obsession to bring down our Commander in Chief.

What has happened to the party I've spent my life working in?

I can remember when Democrats believed that it was the duty of America to fight for freedom over tyranny. ...

Motivated more by partisan politics than by national security, today's Democratic leaders see America as an occupier, not a liberator.

And nothing makes this Marine madder than someone calling American troops occupiers rather than liberators.

Tell that to the one-half of Europe that was freed because Franklin Roosevelt led an army of liberators, not occupiers.

Tell that to the lower half of the Korean Peninsula that is free because Dwight Eisenhower commanded an army of liberators, not occupiers.

Tell that to the half a billion men, women and children who are free today from the Baltics to the Crimea, from Poland to Siberia, because Ronald Reagan rebuilt a military of liberators, not occupiers. ...

No one should dare to even think about being the Commander in Chief of this country if he doesn't believe with all his heart that our soldiers are liberators abroad and defenders of freedom at home.

But don't waste your breath telling that to the leaders of my party today. In their warped way of thinking America is the problem, not the solution.

They don't believe there is any real danger in the world except that which America brings upon itself through our clumsy and misguided foreign policy.

It is not their patriotism -- it is their judgment that has been so sorely lacking. They claimed Carter's pacifism would lead to peace.

They were wrong.

They claimed Reagan's defense buildup would lead to war.

They were wrong. ...

I could go on and on and on: against the Patriot Missile that shot down Saddam Hussein's scud missiles over Israel; against the Aegis air-defense cruiser; against the Strategic Defense Initiative; against the Trident missile; against, against, against.

This is the man who wants to be the Commander in Chief of our U.S. Armed Forces?

U.S. forces armed with what? Spitballs? ...

John Kerry, who says he doesn't like outsourcing, wants to outsource our national security.

That's the most dangerous outsourcing of all. This politician wants to be leader of the free world.

Free for how long? ...

From John Kerry, they get a "yes-no-maybe" bowl of mush that can only encourage our enemies and confuse our friends. ...