Encarta: The Price Curve of Death
May 4, 2009
I found Randall Stross’s “Encyclopedic Knowledge, Then vs. Now” in the New York Times here interesting. The article provides a useful supplement to my comments about online pricing in my “Mysteries of Online” series here. What struck me as I read the essay was the need for what I call “the curve of death”. The idea is that researchers probe the “market”, determine a price range, and then over the life of the product adjust the prices to covert the idea into a gusher of cash. As Mr. Stross pointed out, Encarta was unable to make headway, first, against the $129 Compton’s Interactive Encyclopedia and, second, against the Wikipedia. The numbers he provided, when converted to a simple line chart, provide a textbook example of what I call the “curve of death”. In today’s online marketplace, one “can’t make up the investment on volume when the price is forced ever lower.” Here’s what the curve looked like when I toyed with Mr. Stross’s data:
Once the curve starts to nosedive, in this particular instance, Microsoft killed the product a quarter century after Encarta started through its lifecycle. What I concluded was that once a product fails to generate traction, further price cuts do not mean the product will become successful. I recall a lecture by an ivory tower type who explained economies of scale and the wisdom of cutting prices as the manufacturer moved “up the experience curve”. Didn’t seem to work for Encarta. My experience suggests that the ongoing cost of information products is a killer. Automation offers one way out of the box. Shifting production to volunteers may be another. The traditional approach and the traditional wisdom, in the case of Encarta, did not work even with the marketing muscle of Microsoft behind the product. Persistence is often an excellent characteristic. I wonder if the curve suggested an earlier exit from the Encarta business?
Stephen Arnold, May 3, 2009
Container Vessel Vertical Search
May 3, 2009
Short honk: MarketWatch here reported here that a free vertical search system for ocean going container vessels has been launched. The story “Linescape Launches a Free and Independent Ocean Container Schedule Search Engine” pointed to http://www.linescape.com. For me the most interesting comment in the description of this vertical search engine was:
Linescape has introduced several advanced features unique to its search engine, including an innovative “Route Planner” that presents users with a matrix of all the possible port combinations between two geographical areas and which carriers serve those routes. This very powerful and easy to use feature will simplify one of the most difficult tasks of a user — trying to choose the best possible origin and destination ports. A unique aspect of the website is the visibility of the number of transhipments in a journey, allowing a user to balance journey times with numbers of tranships to keep risks of delay to a minimum. Another advanced feature is the innovative “Multiple Lines” feature, whereby users are able to automatically build routes via transhipments, even between two unrelated shipping lines.
Linescape is a leading online provider of comprehensive ocean container shipping schedules for shippers and freight forwarders worldwide. Headquartered in Burlingame, California, Linescape was created in 2008 by a team of professionals who have spent many years in industries that require the shipping of goods to customers all over the world.
Merck Elsevier Confused about Information
May 3, 2009
At a Derby party yesterday, a number of still working journalists asked me about the “integrity” of a Web log. The idea was that working for a big publishing company conferred some seal of approval. There are Web log writers who purport to bring a standard of excellence to Web logs. My view is that any information regardless of publisher or medium has to be viewed with a “trust but verify” mind set. Sure. That requires work on the part of the reader, but in today’s world, trickery is not just easy, an indifferent reader makes discovery unlikely. At the party, I explained that the Web log you are reading is a marketing effort. I don’t charge. I have a policy of recycling information that is either old or not in my for fee work. I write columns for money and those get more of my attention than a Web log post commenting about a wacky explanation abut enterprise search by a business intelligence professional or a SharePoint certified professional.
What I lacked yesterday was a recent, concrete example of big companies getting cute with information. I now have a good example. I don’t know if it is true, and I don’t have an easy way to determine if Merck and Elsevier were confused or dabbling in disinformation. You can read the item and draw your own conclusion.
The story “Merck Makes Phony Peer-Review Journal” in the Bioethics.net Web log here reported:
The Scientist has reported that, yes, it’s true, Merck cooked up a phony, but real sounding, peer reviewed journal and published favorably looking data for its products in them. Merck paid Elsevier to publish such a tome, which neither appears in MEDLINE or has a Web site, according to The Scientist. What’s wrong with this is so obvious it doesn’t have to be argued for.
A big publishing company took money from a big drug company. Now what about the integrity of a Web log? My thought it that one cannot trust information from any source. Reader beware.
Stephen Arnold, May 5, 2009
Real Time Conversations: The Next Big Big Thing
May 3, 2009
Short honk: real time conversation is the next big thing. You will want to read Marshall Kirkpatrick’s “The Man Who Made Gmail Says Real Time Conversation Is What’s Next” here. The source is the person who coded up Gmail in one day and then knocked off AdSense. (My hunch is that he had help from other Googlers.) Now Paul Buchheit is a Xoogler, working at FriendFeed. For me, the most interesting comment in the article was:
The father of the best web email program on the planet believes that a real-time streaming interface for simplified aggregation of conversation and content from all around the web is going to join the handful of tools we use regularly, like email, IM and blogging.
After reading the article, I had three questions. First, why hasn’t Google been more aggressive in this market space? Maybe Mr. Buchheit was a voice unheard? Second, will services such as FriendFeed leapfrog Google the way Google hopped over Yahoo a decade ago? Finally, maybe Google knows something about the fragility of real time conversation systems that elude lesser minds?
Stephen Arnold, May 3, 2009
LexisNexis, Its Data and Fraud
May 3, 2009
Robert McMillan’s “LexisNexis Says Its Data Was Used by Fraudsters” here caught my attention. The story reported that “LexisNexis acknowledged Friday [May 1, 2009] that criminals used its information retrieval service for more tan three years to gather data that was used to commit credit card fraud.” Mr. McMillan added that “LexisNexis has tightened up the way it verifies customers.” The article noted that LexisNexis “was involved in other data breaches in 2005 and 2006.” Interesting. So 2005, 2006, 2009. Perhaps the third time will be the charm?
Stephen Arnold, May 2, 2009
Unusual Customers for Microsoft Hotmail
May 3, 2009
Short honk: The Washington Post reported an interesting use and even more intriguing users found Hotmail email reliable and reasonably secure. You must read “Al-Qaida Used Hotmail, Simple Codes in Planning” by Pamela Hess here. The notion of monitoring email appeals to me, and it is clear that a lack of monitoring seems to have come to light. It is also possible that monitoring was in place and did not work.
Ms. Hess wrote:
Al-Marri sent e-mails to Khalid Sheik Mohammed’s hotmail account _ HOR70@hotmail.com _ addressed to “Muk” and signed “Abdo.” The details of that code were included in an address book found in an al-Qaida safehouse in Pakistan.
Ms. Hess reported that the Hotmail users tried to get Yahoo to work but were not able to achieve the desired function:
Al-Marri initially tried to use a Yahoo e-mail account to contact Mohammed, but it failed to go through. So he switched to Hotmail as well. When al-Marri arrived in the United States, he created five new e-mail accounts to communicate with Mohammed, using the 10-code to send him his cell phone number in Peoria.
The Post included a photo of one of the individuals who used Hotmail for “secret” messages. Interesting. I am thinking about what Ms. Hess reported. The idea that Microsoft worked is fascinating as is the issue with Yahoo Mail.
Stephen Arnold, May 2, 2009
Data Managers as Search Engine Experts
May 3, 2009
An unhappy quack to the reader who sent me a link to Information Management’s article “When Data Becomes [sic] Metadata” here. Right off the mark, the word “data” is a plural, so the headline contains a subject verb agreement editor. My thought is that the editors at Information Management were rushing to meet a deadline. Okay. The deeper issue in the story attributed to Steve Hoberman was this passage:
Data managers will be relied upon as experts in search engine technology. We will be asked how search engines work and will be held accountable for analyzing and modeling Web 2.0 components such as tags and ontologies. Users will expect similar results and response times as their search engines for all of their reports and queries. Therefore, there will be an increased focus for us on the physical data model to ensure rapid query response time to match search engine response time.
Yikes. I am not sure what a data manager is. I know for certain that there are not too many search “experts” running around who can deploy a system that works, conforms to the requirements, and remains on time and in budget. I can name five people, and I don’t think any one of those individuals would describe himself or herself as a “data manager”.
More troublesome is the leap from competence in data management to expertise in search. Hogwash. The reason organizations are struggling with information retrieval is often rooted in miserable data management methods. The write up means well but is, in my opinion, likely to set the stage for yet another search and content processing train wreck. This time the engineer is not a consultant from a second or third tier advisory firm in New York. The hands on the controls is a person who is a “data architect” or a “business intelligence professional”.
Who next will receive the title of “search expert”? Perhaps the person who sets up a trade show exhibit at a conference that includes vendors of photocopy equipment?
Stephen Arnold, May 3, 2009
Ray Ozzie of Microsoft on Newspapers
May 2, 2009
PaidContent.org ran a story based on Ray Ozzie statements. You can read Joseph Tartakoff’s “Microsoft’s Ozzie on His Company’s Web Strategy” here. What I found interesting was this statement attributed to Mr. Ozzie who was commenting about the future of newspapers:
There is a new business model with anything that can be delivered digitally,” Ozzie said. “Look what’s happening with news. I’m not certain what the new business model really is but certainly the old business model is impacted … It’s not clear that as these new models come into play whether revenue or profit pool in a given industry is equivalent in the new world as in the old world. Could very well be that the business model is sound in that there is a business but not the size of the business. If journalism is something we care about we’re going to have to find new ways to subsidize that.”
Is Microsoft advocating the newspapers, like GM and Chrysler, be supported by the government via subsidies? Is he underscoring the hopelessness of the present newspaper companies?
The reference to business models interests me because Microsoft’s own business models seem to be sputtering. I wonder if Microsoft will jump into the news business and provide the much-needed cash infusion needed to keep traditional news operations heated in the winter and air conditioned in the summer.
Stephen Arnold, May 2, 2009
Answering Questions: Three Semantic Hot Rods
May 2, 2009
Short honk: ReadWriteWeb.com published “The Robot Made Me Do It: Comparing Three new Cyborg Q&A Services” is a useful write up here. Marshall Kirkpatrick provides descriptions of Aardvark, Hunch, and Swingly. Each of these services uses sophisticated content processing methods to answer a question typed in a search box. My question: “How many users are able to type a suitable question in a search box?” Q&A technology has a great deal to contribute to search but, in my opinions, as plumbing. Worth downloading and tucking away.
Stephen Arnold, May 2, 2009
Lousy Sales, Trust Your Search Engine Marketing Consultant
May 2, 2009
Short honk: Remarkable assumptions make this short article quite interesting. The title sets the stage: “Why It’s Important to Trust Your SEM Company in a Down Economy” here. The author Scott Buresh is a search engine marketing consultant, and he addresses an issue that struck me as counter intuitive – trust a marketer. Hmm. Not only is it important to trust a marketer in a lousy economy. You need leads. Do you use your network? Do you make phone calls? Nope, you trust your search engine marketing consultant. Mr. Buresh wrote:
It’s probably true for most businesses that there are fewer people actively searching for their products and services due to the economic climate. Companies reasonably approach this situation thinking, “Why should we pay the same amount in marketing that we’ve traditionally been paying when our current target market has shrunk?”
The points seems reasonable to me, but Mr Buresh has a different viewpoint:
Although the budget you allocate for a search engine marketing company and its services may be fixed, it’s likely that many of your competitors have lost their budgets, opening up the playing field and potentially allowing you to garner more of the business that’s still out there.
You get the idea. I don’t trust search engine marketers in a good economy. In a down economy, I put my billfold in my AMSEC safe and hide the key.
Stephen Arnold, May 2, 2009
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