2019: Another Cycle of IPOs?
December 7, 2018
With so much money constantly flying around Silicon Valley, it’s no surprise that venture capitalists and stock IPOs can often be the source of fraud. We never realized how simple it could be until reading a recent Bloomberg story, “Paying for Popularity Can Be Fraud.”
According to the story, anyone with a little seed money can pay someone to buy up imaginary product, so that it looks like a startup is turning record profits. Even more frightening, it can be done out of thin air:
“[Y]ou can now build valuable products—iPhone apps, crypto currencies, newsletters, etc.—at zero marginal cost, which makes this fraud much easier and more efficient to pull off: You can just give your buddy the money to buy your product and then sell it to him for that money, shuffling money in circles without having to spend any to build more products.”
Here’s an ironic idea: What if some enterprising soul turned technology against some of the more highly anticipated IPOs? Or will enforcement authorities pull off a “look in the rear view mirror” approach in the new year?
Patrick Roland, December 7, 2018
Visual Search Gets Personal
December 7, 2018
The steps made in visual search are many and well-advertised, so it should come as no surprise we have news. What might be surprising, is that you could be part of this latest development by Google. We learned more in a troubling and fascinating story in recent Venture Beat story, “Google Makes Dataset of 50 Million Drawings Available on its Cloud.”
According to the story, Google’s cloud sourced AI drawing game, Quick Draw, is turning out to be less time-killer and more data collector:
“Quick Draw has collected more than 1 billion drawings across 345 categories, 50 million of which Google open-sourced last year — complete with metadata, including prompts and geographical user locations. Today, it’s making them available through Google Cloud Platform (GCP) in the form of an API and an accompanying Polymer component.”
This is a really odd development for a tool that most people never realized would be made public and mined for data. However, when it comes to anything visual, one should not be surprised by Google’s ultimate goal. Currently, they are fine-tuning their visual search tools and we have a hunch this is part of the big picture. Search by talking, search by drawing—next up mental telepathy?
Patrick Roland, December 7, 2018
Revisiting Facebook Trustiness
December 6, 2018
After news of its most recent data breach hit the headlines, Facebook found itself once again on the defensive. A long apology tour and showcase of efforts to better protect users was rolled out, but was it enough? For one Venture Beat commentator, the answer was “no.” We learned more in the article: “Sorry, Not Sorry. The Problem With Facebook’s Sorry Campaign.”
The piece lays out the social media giant’s many sins and concludes:
“Therefore it is up to us, as consumers to penalize bad behavior and reward good behavior. The two mechanisms available to us are voting with our feet and wallets and voting for representation in our government so that we can enact legislation to safeguard consumer privacy.”
They are not wrong. It is up to consumers to ask more, demand more, and get more from their online platforms. However, we don’t side with negative pundits like Slate who have given up on Facebook. We do have faith in Mark Zuckerberg’s baby and feel like the very public scrutiny is a good thing. It’s only under this heat lamp that real change can happen, because the alternative is to perish. We simply cannot see that happening without aggressive government intervention from entities outside the United States.
In short, hello, EU.
Patrick Roland, December 6, 2018
Wal-Mart Versus Amazon: Is the Game Over?
December 6, 2018
Wal-Mart likes to be on top. Wal-Mart’s sales, however, have fallen due to Amazon and other online retailers, but they will not go down without a fight. Wal-Mart has decided to fight digital sales with a bigger, better digital supply chain super structure. The Motley Fool reports on Wal-Mart’s biggest investment in, “IBM And Microsoft Are Upgrading Wal-Mart’s Digital Supply Chain.”
Wal-Mart has teamed up with Microsoft and IBM to revamp its supply chain. Azure is the official cloud infrastructure of Wal-Mart with an exclusive five year contract. All of the retailer’s Web sites will now run natively on Azure and taking advantage of Microsoft’s machine learning and data management tools. Azure’s insightful tools will also streamline Wal-Mart’s supply chain, watch energy levels, and control devices.
Wal-Mart uses IBM’s blockchain technology to monitor product origins and IBM also built an onboard system for suppliers. How does the new supply chain help Wal-Mart:
“The modernization of Wal-Mart’s supply chain with cloud, IoT, and blockchain services could improve the retailer’s operating margin, which has been weighed down by e-commerce and overseas investments, store renovations, and wage hikes in recent years. That digital foundation can also pave the way for Wal-Mart to install more robots in its warehouses and stores, thereby reducing its overall labor costs. A streamlined supply chain would also help Wal-Mart avoid food safety problems, which are becoming increasingly common across supply chains and multiple countries and states.”
The new system will also help Wal-Mart regain some of the losses from its China suppliers due to Trumps tariffs.
The team up between Wal-Mart, IBM, and Microsoft is a joint effort to counter Amazon-their common enemy. But is the game over for Wal-Mart? Police in many municipalities find that Wal-Mart is a frequent stop and not for a hot dog and a soft drink. Perhaps Wal-Mart ecommerce would be less exciting than a visit to some establishments?
Whitney Grace, December 6, 2018
Thomson Reuters: Content Slicing and Dicing Chops People
December 6, 2018
A certain database company raked in the dough by pitching XML slicing and dicing as the way to piles of cash, happy customers, and reduced editorial costs. Thomson Reuters was “into” XML inspired slicing and dicing. Now the chopping up has moved from disparate content to staff.
According to a real news organization, the article “Thomson Reuters to cut 3,200 jobs by 2020, offer fewer products” states:
Thomson Reuters said it plans to cut its workforce by 12 percent, or 3,200 positions, by 2020 as part of a push to reduce spending.
Capital outlays as a share of revenue will be down about 30 percent by 2020, Thomson Reuters said Tuesday in a presentation for investors. By that year, Thomson Reuters expects to have about 11 percent fewer products and pare its number of locations by 30 percent. The pullback underscores efforts to exert cost discipline after third-quarter revenue came in 2.3 percent less than analysts had expected.
TR revenues have been less than exciting. Despite management’s heroic efforts, the company has not been able to shake the money tree with the vigor some stakeholders expect.
Thus, slicing and dicing of staff and products is underway. Nothing like a hefty reduction in force or RIF to brighten the individuals who can now look forward to finding their future elsewhere.
The larger question is, “What will TR do if the staff reductions and new points of focus do not generate revenue?” The account, lawyer, and MBA infused senior management may have to look for different sources of inspiration; for example:
- Seeking to pull the company into new markets with must have products and services. Not easy, I know, but TR will have to do more than follow the well worn grooves in the business models which are like the streets of Pompeii
- Selling itself to another large professional publishing outfit. What about a Thomson Elsevier or (perish the thought) an Ebsco Thomson?
- Selling the bits and pieces to investment banks or small companies eager to capitalize on TR’s missed penalty kicks. What would Bloomberg pay for the terminal business and maybe the Palantir inspired services? Perhaps Factset would toss a soccer boot on the pitch?
- Modifying its executive compensation methods so that TR unit managers actually cooperate on certain opportunities and initiatives.
There are, of course, other options, but many of these have been tried before; for instance, new units, new senior managers, new acquisitions, and new technologies.
Net net: TR may have to start thinking about life as a smaller, leaner, less profitable operation. Lord Thomson of Fleet may not be able to return and infuse the company. He’s needed in my opinion.
Stephen E Arnold, December 6, 2018
Facebook: Explaining Again and Wanting Context
December 6, 2018
My grandmother, who raised three children in the Depression, told me again and again, “Never complain, never explain.” Good advice? Probably not. But her mantra makes more sense to me than “Deflect, deny, and spin.”
I thought about my grandmother when I read the Facebook post about the Six4Three explanation crafted by the wordsmiths at Facebook. Yep, Facebook, an outfit which has been in the news of late.
Information generated in the white hot flame of Silicon Valley’s business processes is an art form. Hey, no one appreciated Picasso straight away either. Before heading to Philz, I can visualize furious tapping on a laptop in order to paint word pictures of what could be done to generate revenue, enhance power, and augment one’s bonus. Those types of prose should not count for anything. The words are little more than clumsy ways to give ideas some shape.
I noted this statement:
The set of documents, by design, tells only one side of the story and omits important context.
Right. The fix is to provide more documents and provide more information about the “context.”
Several observations from rural Kentucky:
The documents were released, in my opinion, as a signal to Mr. Zuckerberg that he has annoyed some individuals in the UK government. I am not sure Mr. Zuckerberg grasps the type of hurdles the UK government can erect for him and his verbal parkour experts to navigate.
Next, the documents will act as a bit of a kick to the buttocks of some countries’ regulators, investigators, and investigative authorities. The notion of “cherry picking” and “context” is one that may cause some quite intelligent and capable information centric people to probe. Ah, probe. Interesting idea. Probe deeply. More interesting.
And Facebook is now in reaction mode. The best offense is a good defense, but the defense is coming too late for users. I am not a Facebook “user” although a software script posts pointers to my stories and videos on a page which belongs, I believe, to my late, much missed Tess the dog. With some services losing body count and the general buzz about Facebook drifting into the auditory pain zone, the defending, the deflecting, the apologizing have lost efficacy.
In short, more to come. One does not destabilize without getting dizzy from slaps about the ears. I say, old chum, have you been poked by a brolly? No. Soon perhaps. Soon.
Context? You want to provide context? Poke, probe, prod — whatever the word — the action will roil the social graph.
Stephen E Arnold, December 6, 2018
Google: Innovation Desperation or Innovation Innovation
December 5, 2018
Google has an innovation problem. The company has tried 20 percent free time. Engineers were supposed to work on personal projects. Google tried creating investment units. Google has acquired companies, often in time frames that seemed compressed. Anyone remember buying Motorola Mobility in 2011? Google created a super secret innovation center because the ageing Google Labs was not up to the task of creating Loon balloons and solving death. There have been competitions to identity bright young sprouts who can bring new ideas to the Google. If I dig through my files, there are probably innovation initiatives I have forgotten. Google is either a forward looking outfit, or it is struggling to do more than keep the 20 year old system looking young.
Has Google tried thinking in the hot tub like Archimedes? Google has bean bags, volleyball courts, and Foosball. But real innovations like those AltaVista mechanisms or GoTo’s pay to play for search visibility? There is Web Accelerator, of course.
I read “An Exclusive look inside Google’s in-house incubator Area 120.” The write up reports that a wizard Googler allegedly said and may actually believe:
“We built a place and a process to be able to have those folks come to us and then select what we thought were the most promising teams, the most promising ideas, the most promising markets,” explains managing director Alex Gawley, who has spent a decade at Google and left his role as product manager for Google Apps (since renamed G Suite) to spearhead this new effort. Employees “can actually leave their jobs and come to us to spend 100% of their time pursuing something that they are particularly passionate about,” he says.
Okay, Area 120. That even more mysterious than the famous Area 51. I am thinking of the theme from “Outer Limits.”
The Googlers “pitch” ideas in the hope of getting funding. A Japanese management expert explained a somewhat similar approach to keeping smart employees innovating. See Kuniyasu Sakai’s explanations of the method in “To Expand We Divide.” You probably have this and his other management writings on your desk, right? Someone at Google seems to have brushed against these concepts. In Fast Company / Google speak, these new companies are “hatchlings.”
Several observations:
- Innovation is a problem as companies become larger. Google illustrates this problem.
- Google’s approach to innovation is bifurcated. Most of its “innovations” originated elsewhere; for example, IBM Clever, AltaVista technology, GoTo-Overture “pay to play” advertising. The company’s goal is to innovate using original ideas, not refinements of other innovators’ breakthroughs.
- Google faces an innovation free environment. A recent example may be found in the wild and crazy Amazon announcements at its Re:Invent conference. Somewhere in the jet blast of announcements, there were a couple of substantive innovations. Google does phones with problems and wraps search in layers of cotton wool. Amazon, its seems, is sucking search innovation from Google.
For these reasons Google is gasping. Even rah rah write ups about Google like the recent encomium to Jeff Dean and Sanjay Ghemawat (both AltaVista veterans) is a technical “You Can’t Go Home Again” description of the good old days.
On one hand, Google’s efforts to become innovative are admirable. Persistence, patience, investment—yada yada. On the other hand, Google remains trapped as a servant to its Yahoo (GoTo and Overture) business model for online advertising.
The PR will continue to flow, but innovations? Maybe.
Stephen E Arnold, December 5, 2018
Google and AltaVista
December 5, 2018
I read “The Friendship That Made Google Huge.” Interesting. I would like to ask,
Why isn’t AltaVista’s contribution to Google search put front and center?
And
Were other AltaVista’s veterans hired by the Google to jump start the engineering of the system?
Google was “clever”, and the company surfed on the missteps of Hewlett Packard. Google also borrowed some inspiration from GoTo-Overture-Yahoo. In short, Google’s story is more nuanced than some retellings of history suggest.
Stephen E Arnold, December 5, 2018
Calibrating the Ethical Compass: Kid Ads
December 5, 2018
I read “Oath Agrees to $5 Million Settlement Over Children’s Privacy Online.” No big deal. Ads to kids. Hey, makes sense. Ah, Yahoo, your spirit lives on.
Stephen E Arnold, December 5, 2018
Factualities for December 5, 2018
December 5, 2018
The word of the year is “misinformation.” With that in mind, believe these factualities or do not believe them. Your call.
- 18 million. According to the Inquirer, “LinkedIn received a small slap on the wrist from Ireland’s Data Protection Commission (IDPC) over its usage of 18 million email addresses belonging to non-members of the world’s biggest humblebrag website.” Ah, Microsoft LinkedIn.
- 60 million. Number of people affected by the United States Post Office data leak. Source: Dark Reading
- 500 million. Number of people affected by data leaks at Marriott Starwood. Source: Pymnts.com
- 52. The number of times a day a person checks his or her mobile phone. Source: Ubergizmo
- 175 zettabytes. How much data will be produced each year by humans and their systems. Source: the ever reliable IDC. See this link for information about their administrative expertise.
- 4,829 percent. Revenue increase at Darktrace, a UK cyber security firm. Source: Compelo
- 1,300. Number of photos of their children parents have posted online by the time the kids are 13. Source: Technology Review
- 900 percent. Amount Facebook inflated its data related to its “ad watching”. Source: Slashdot
Stephen E Arnold, December 5, 2018
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