Wow

I hate to sound like a broken record, but this Ron Paul phenomenon is just amazing.  And I'm not saying that because I'm a supporter, but this guy has literally picked up so many passionate supporters that they're moving financial markets now.  The Internet is no longer just an ancillary information channel in 2008--it is THE information channel.

Background:  FOX News is sponsoring a debate between Republican candidates on January 6th.  Problem is, they're excluding the candidate who raised the most money in the 4th quarter--Ron Paul.  In response, his supporters coordinated a one day sell-off of News Corporation (NYSE:NWS) stock today.  And it has already dropped the stock price by almost 3%.

I've never heard of this type of ingenuity in stuffing a candidate down the Old Media's throat.  After shattering all kinds of fundraising records, Paul's supporters are now literally sucking the lifeblood out of FOX because it pissed them off so much.  I'm sure FOX is now paying attention.

It will be interesting to see other news outlets' take on this.  Paul's supporters are singlehandedly ripping the "Fair and Balanced" label off of the network and at the same time depantsing it in the financial markets.

12 Predictions for 2008

Chrismas is over, and it's officially 2008.  Wow, this was really a fast one for me.  Between getting married, selling Latigent to Cisco, moving to Boston, and getting acclimated to life at Cisco, I barely time to stop and breath.  But I had a couple of days to relax and collect my thoughts over Christmas and, as I like to do every year, I've put together a list of my predictions for 2008.  So, without further ado, my predictions for 2008:

1. The recession (that we are already in the beginning stages of if you look at the data instead of listening to the pump monkeys on CNBC) will make 2008 a slow and cautious year.  Budgets will shrink and new projects will be put on standby as the US and world economies slow as a result of the global credit market going into further gridlock.
2. After a horrific year in 2007 the dollar will rebound a bit, making outsourcing a hot ticket item once again (as it gets cheaper).  This will happen because the rest of the world will get hit even harder than we will by the recession.  US companies that are counting on international business to prop up their bottom lines will be severely disappointed as exports become more expensive to foreign customers and international budgets shrink as well.  Many (more) CEO’s will lose their jobs.
3. On the bright side, the Internet’s effect on politics will be one of the biggest stories of the year.  If you thought Howard Dean was an interesting story because of the way he used the Internet to coordinate and attract support, well, you ain’t seen nothing yet.  Ron Paul’s supporters have coordinated themselves to the tune of over $6 million in 24 hours, and this will continue to be an interesting story to watch throughout the presidential race.  The floodgates are open and Old Media is no longer the gatekeeper.
4. Google will attempt to integrate its Orkut social network into its iGoogle/Google Docs businesses.  Last year I predicted that MySpace would become un-cool and Orkut would take its place.  Well, I was right on half of that--in 2007 FaceBook became the new hip online hangout, but Orkut only gained popularity overseas.  Google recently announced that they’re fleshing out the profile aspect of their Google accounts, and it only makes sense to me that they will eventually integrate their Orkut social network with their Google accounts/iGoogle/Google Docs products.
5. Online identity will become a prominent issue, and OpenID will benefit.  Will 2008 be the year when we see the first high-profile online identity theft?  I don’t know, but I know that it will happen sometime soon.  As soon as someone famous loses control of their online identity you will see this become a VERY hot issue.  It may be the first time you see a search engine optimization specialist interviewed on the evening news :)
6. FaceBook will *start* to lose market share to emerging distributed social networks that will be born in 2008.  2007 was the year of FaceBook, primarily because they started opening up their platform and this created a flood of interesting applications.  But there’s only so far a fundamentally closed system can open up before it risks letting outsiders cannibalize its revenue stream.  I think FaceBook has already reached that point, and that opens up the door for more open systems to come in and gain market share.  OpenSocial is a step in the right direction, and the work being done around personal data portability is only going accelerate this shift.
7. Privacy and personal data ownership will be a critical issue for Web-based businesses.  As businesses start hitting the limit of what a strict advertising-based revenue model will allow (see above), they will test the limits of their users’ patience by mining user data and selling that data.  They will push and push until they find the line that they cannot cross.  FaceBook Beacon was just the first example of this phenomenon.  Either businesses will hold their users’ interests above all else, including profit, or they will slowly compromise their users in order to extract more money from them.  If history is any indication—and it usually is—we can expect them to compromise their users’ privacy.  This will bring the first users to distributed social networks.
8. Google will attempt to diversify its revenue streams.  You can already see this beginning with Google’s push into content with its Google Knol product.  Right now Google is a one-trick pony—it makes revenue from advertising.  It wants more, obviously, such as ALL of the advertising revenue on the content side.  In order to justify its insane stock valuation it will need to come up with a ways to collect a LOT more revenue.  The trick here is going to be coming up with new revenue streams that don’t cannibalize and piss off the ecosystem that has developed around it.  If Google starts competing with the content producers, content producers will start loving and promoting somebody else.  Once that happens, Google is no longer the unquestioned King of Search--content producers will start optimizing their sites for more profitable search engines, and the monopoly will start to crumble.
9. Companies with no sustainable long-term revenue streams (ie, companies whose main attraction is becoming commoditized and turned into features on other sites) will be sold while they can still get big money for them (they had better move fast, before belts start tightening).  This includes Twitter and Digg.  Rupert Murdoch may be tempted to add to his collection of terminally ill businesses (see:  MySpace, Wall Street Journal)
10. Mobile applications will become increasingly Web-based, perhaps hooking into OpenSocial-type API’s provided on the client device to offer a more seamless experience.  The iPhone and iPod Touch (one of the predictions I hit on last year) really opened the floodgates here as they’ve shown that Web applications can actually be usable on a mobile device.  WAP, R.I.P.
11. Cloud/grid computing will continue to develop and gain market share.  If Amazon can flesh out its SimpleDB service to be a bit more relational and analytics friendly it could put a serious dent in the small business database server market.  Experience with utility computing will be one of the hottest resume bullet points of 2008 (and every year thereafter).
12. You will see more content producers choosing to bypass distribution channels and take their products directly to the consumers.  I predicted last year that the NFL network would start doing this, and they have.  They’re now showing exclusive games on their network, and also streaming games off of their Web site.  Look for more high-profile consumer entertainment products to follow suit as trailblazers like the NFL Network show that you don’t need an expensive distribution channel to make money.

That’s it for this year--I feel pretty good about these predictions actually coming to fruition in 2008.  Whatever happens, it should be an incredibly interesting year, it feels like we’re on the cusp of some revolutionary new developments in the personal online space in particular.  As long as the recession doesn’t derail everything, that is :)

On the resolution side of things, I started a low-carb diet today to drop the Christmas poundage, I'm picking up last year's resolution to become ambidextrous, and I'm also resolving to blog more frequently.  Until Christmas I was of the impression that 2008 couldn't POSSIBLY be as eventful for me as 2007, until we found out at my wife Jessica is pregnant, so there goes that idea.  But, I'm still shooting for a good success ratio!

Game Changing: Databases in the Cloud

I love Amazon’s Web services.  They are game-changing.  EC2 lets you scale the number of servers you’re running infinitely at a moment’s notice, and S3 gives you an infinite amount of storage space.  No systems administrators to pay, no complex infrastructure to maintain, upfront cost to swallow.  Just gobs of cheap scalability. 

I’ve looked into using them before, and the ONE thing that seemed like a glaring hole in their arsenal was the lack of a way to run a database on it.  The problem is that EC2 virtual machines lose all their memory when you reboot them, so you can’t run a database on them.  And there’s no way to use an EC2 instance to store the data, it’s not a filesystem that any database engine recognizes.  So we had this awesome scalable firepower and awesome scalable storage, but no way to really hook them together.

Amazon's new SimpleDB service addresses that.  Now you can run your entire application in the cloud.  This is huge.  It’s not a relational database system, so you can’t do number crunching or analysis on it, but it’s PERFECT for CRUD operations (Create Read Update Delete).  Any transactional application is capable of running on this platform.

Let’s see what this does to an IT budget:

• Eliminates CapEx costs (no servers or datacenters to buy)
• Eliminates systems administrators (no machines to administer)
• Eliminates database administrators (it automatically takes care of storage and indexing for you)
• Eliminates capacity problems (no need to estimate and budget for potential traffic, you just pay for what you use—if your bill is too high you just kick users off)

And, as a result of this, SimpleDB is a startup’s best friend.  This makes bootstrapping a startup a million times cheaper and easier than it was previously—you only have to pay as your user base grows.  Which SHOULD cover your costs, or you probably have a problem with your business model :)

If you’re a system administrator or a DBA, it might be a wise career choice to make yourself familiar with these technologies.  The sheer financial sensibility makes it inevitable that small-to-medium businesses will be interested in running on this platform.  In fact I wouldn’t be surprised if completely new software applications are built on it and sold as traditional premise-based software, but run in the cloud.

Very cool stuff, I can’t wait to play with it.  I read thru the documentation and it looks pretty simple, but I'm currently waiting on Amazon to enable my account.

 

UPDATE:  It's not all gravy--as with anything, there are challenges and considerations to working with this kind of architecture.  I found a good list outlining the pros and cons here.

BTW Want to know something else that’s game-changing?  Ron Paul raised $6million yesterday—in 24 hours—beating John Kerry’s old record of 5.something (on the day he accepted the nomination)—totally grassroots—with no help from the campaign.  This is a truly incredible, science-fiction type event in politics.

More Web Centralization Problems

I’ve been thinking a lot recently about the whole centralization/decentralization thing, and privatization of the Web.  Seems you can’t really get away from the topic right now, every other day some new privacy issue related to FaceBook or MySpace is lighting the blogosphere on fire, splashing cold water on our collective faces and reminding us what a fragile ecosystem the Web really is.  The latest hot button issue is FaceBook’s Beacon advertising program, which basically broadcasts your Internet activities to your friends on FaceBook (yeah, just the kind of innovation we’ve been waiting for…)

I'm not going to go into the stupidity of this Beacon idea--really, is it even worth debating?--but to me this is just the latest in a long line of examples of the dangers of too much centralization.  Give someone—anyone—unfettered access to your data, and they WILL find a way to milk it for as much money as possible.  If you’re betting on the goodwill and good intentions of a corporation formed to make money then you obviously haven’t been involved in a capitalistic society for long enough. 

One of the big fears I have about the future of the Internet, if we don’t decentralize and privatize it soon enough—is the growing power of the few centralized sites that everyone uses.  If you think about it, there are a few select sites that have a LOT of power over the Internet and its citizens, simply because of the numbers of eyeballs they control.  Probably at least 90% of Internet traffic flows through them.  Without them, the Internet would be half as useful as it is today (which is a big part of the problem).  I can think of a few sites in particular:

• LinkedIn, Facebook, and Myspace—to find people
• Yahoo, CNN, MSN—to find news and content
• Google—to find just about everything else
• Amazon, EBay—to buy things

The only real exception to this rule is when somebody physically sees a URL somewhere—on a billboard, on TV, or in a magazine, and types it directly into their browser.  But even then, there are a large percentage of people who just type the URL into Google by mistake since they’re so used to using it.  Using Google as the entry point to the Web is almost reflexive.  I’m sure the browser toolbars don’t help with the confusion either.

A big problem is that people tend to go thru these clearing-house sites and central filters in order to get to the content they’re looking for instead of directly to the source of the content itself.  Instead of looking at my business card and seeing my site address is jasonkolb.com, they’re much more likely to look me up on Google and find my site that way (judging from my site stats, a LOT of people do this).  Or, depending on their age, they may look me up on Facebook or Myspace and find my profile there (which is just a placeholder pointing them to this site).

So far this has worked ok, but what if those filters and middle-men become unreliable?  What if Google suddenly decides that there’s another Jason Kolb who deserves the #1 spot in the search results for “Jason Kolb” more than I do?  (Not exactly “Joe Smith”, I know, but there ARE other Jason Kolb’s out there.)  And then, what if that other Jason Kolb decides to pretend to be me?  Hasn’t my identity effectively been stolen?

And since I rank #1 for the term "Jason Kolb", what if I pretend to be a different Jason Kolb?  Haven't I stolen his identity?

And then what happens if those middle-men and filters actually go down completely?  As TinyURL so effectively demonstrated recently when it went down, if middlemen sites go down, the Internet almost ceases to function.  If Google went down, not only would nobody would be able to find me, the Internet would be pretty much paralyzed.  And if Facebook decides to block searches for my name, as it recently did with Ron Paul  (vote for Ron Paul 2008, Save Our Country!  Sorry, couldn’t resist ;), it’ll make it that much harder to find me.  If FaceBook goes down, suddenly HUGE numbers of people effectively go off the grid and become unreachable on the Internet to many of their friends.   

If everyone were running their own private site, similar to this blog, it wouldn’t be as much of a problem.  Of course, that still doesn't solve the problem of people looking for me via Google, but that's a much more complicated problem to solve.

Six Things You Should Know About the Federal Reserve

The Federal Reserve is one of those things that I grew up hearing about every once in a while on the noon business hour on the local news station here in Chicago, and I knew they had something to do with interest rates, but beyond that it never really crossed my mind.  I think they talked about it for about 10 minutes in college economics 101, but otherwise we mostly talked about supply and demand, trade, monopolies, etc.  I just kind of assumed it was part of the government and never really bothered to look into what it was actually about.

Well, on my honeymoon in Tahiti, I realized that everything was REALLY expensive for Americans, but not so expensive for everyone else.  The dollar had lost a lot of value since I'd gone to Europe a few years ago.  And then I started hearing Ron Paul talking about the abolishing the Federal Reserve.  So I did a little homework.  It was enlightening.

Chris Pirillo recently wrote a post "Is It Time to Abolish the Federal Reserve?", where he cites some interesting quotes from financial experts regarding the trouble that the Federal Reserve is causing around the world.  If you've never looked into the Federal Reserve on your own, you had better sit down Dorothy, because Kansas is about to go bye-bye.  This is quite a rabbit hole:

• It is NOT part of the United States government.  It is a privately owned group of 12 banks.  The truth is that The President (you would think that this would be done by Congress, but that's another topic) is allowed to appoint members of the Federal Reserve Board, who issue guidelines about how things should be run.  But it is not part of the government, it is a privately owned corporation.
• Nobody knows who owns it.  Yeah, the kicker to the last part is that we don't get to see who owns it, although I could venture a couple of guesses.  Because it is a private corporation, not a public corporation, it doesn't have to abide by SEC rules and therefore does not have to disclose ownership.
• It is constantly stealing your money.  Every time the Fed injects money into the economy, by buying bad mortgages, making account "adjustments" at member banks, or buying T-bills, the money in your bank account loses a little value.  It's called Inflation, and it only benefits a few select people.  The law of diminishing returns says that the farther away you are from the source of new money, the less value you get from it.  The Fed and its member banks derive a LOT of value from new money, because it originates with them, but its value diminishes with each successive transaction the money is involved in.  By the time it trickles down to you and I, we end up losing value.  And make no mistake, it can just create new money *poof*:  "The Federal Reserve can also create book-keeping credits in the reserve accounts of its member banks"
• It was created under cloak and dagger.  Literally.  It's such a normal part of life now that you may not realize it, but the way the Fed was founded, the promises that were made, and the deception involved would make a great spy movie:
  

  "I was as secretive, indeed I was as furtive as any conspirator. Discovery, we knew, simply must not happen, or else all our time and effort would have been wasted. If it were to be exposed that our particular group had got together and written a banking bill, that bill would have no chance whatever of passage by Congress…I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System"

  Frank Vanderlip - President, National City Bank of New York

  Read about the early history of the Federal Reserve for more fascinating details.
• It caused the Great Depression.  Shortly after the system was put in place, the Fed reacted to a liquidity crisis by contracting the money supply.  Bad move.  As a result we got the Great Depression, the New Deal, and the big bad government we know and love today.
• It is illegal according to the Constitution.  Article 1, Section 8 states that "Congress shall have the power to create money and regulate the value thereof".  Congress no longer has anything to do with the process.

They don't teach you this stuff in school (our great educational system in action).  But this is not fringe conspiracy stuff, this is well-documented fact, just look it up on Wikipedia.  Better block out a couple hours if you do though, because you'll quickly learn that there's a lot you don't know.

Frankly I don't know how we would get rid of this thing without killing our economy temporarily.  I think we'd have to move to a new currency backed by gold, like the dollar was until Nixon took us off the gold standard in the 70's.  I'm hoping someone more educated than myself has a more elegant solution to this problem.

Finally, a quote from Thomas Jefferson:

"If the American people ever allowed the banks to control the issuance of their currency, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers occupied."

Wise man.

The Internet is Blowing Up The Political Landscape

The mass media outlets are losing their stranglehold on the flow of information to the people.  Newspapers are dying, and TV networks are suffering.  This in and of itself is and has been a huge story over the past few years, but the 2008 US Presidential Election is revealing an underlying power struggle that is occuring as a result of this information revolution we're enjoying.

Along with the flow of information, the balance of power is shifting.  For almost a century, people have gotten their news from TV, radio, and newspapers.  ALL of those outlets are feeling a financial crunch, but what's become apparent is that what they fear even more than losing finances is losing the power that comes with being the information gatekeepers.  As people flock to the Web for more of their information diets, traditional large media outlets are suddenly no longer the gatekeepers who decide who and what gets to be seen by the public.  The public can now circumvent mass media if the quality of information coming from it is low, and that appears to be exactly what is happening.  The Internet is pulling back the curtain on what's REALLY happening, and we now have the opportunity to see mass media for what it really is, and what it has probably been for some time:  a BIG machine operated by a FEW people pulling the strings, manipulating it to project the image of reality that they want to see.

What's sad is watching the old, ugly machine in action when you can now see what's really going on.  Nowhere is this more apparent, in my opinion, that with the campaign of Ron Paul, a candidate for the Republican presidential nomination.

I'd never heard of Ron Paul before a few months ago, but I do keep an eye on Digg.  I saw his name in a few headlines and didn't pay much attention for a while, until I finally decide to see why this guy kept making it to the front page, almost literally every day.  As I investigated further, I discovered a huge groundswell of support for him on all of the social networking sites.  Other candidates are using the social networking sites effectively as well, but Ron Paul is DOMINATING them, particularly on Eventful.com, MySpace.com, and YouTube.com.  Wired recently ran a great article about his popularity online:

According to Technorati, "Ron Paul" is one of the web's most searched-for terms. News about Paul has an outsize presence on Digg and reddit, two sites that allow users to highlight their preferred content. Paul's YouTube channel has been viewed over one million times, dwarfing efforts from competitors like John McCain and Rudy Giuliani. The Ron Paul internet boom has born everything from Belgians for Ron Paul to a reggae music video promoting Paul's views on monetary policy and habeas corpus.

If enough people put somebody or something in front of your face, enough times, it's hard not to pay attention, regardless of what the media says.  And when people are passionate about something, they make sure it gets in your face.  The people of the world, who populate the social networking sites which have turned the Internet into a utility almost as pervasive as electricity, obviously LOVE this guy.  He has been at or near the top of every debate poll. And yet, when I watch these so-called news shows, Ron Paul is nowhere to be found.  In fact when they talk about Republican candidates, they end up talking about Fred Thompson, who ISN'T EVEN IN THE RACE. ????

What I believe is happening is that the media outlets are pushing back HARD against the fact that they are losing their influence, and yes power, over the elections.  No longer does a candidate need the blessing of the networks, millions of dollars to run TV ads, or even the blessing of his own party to be a viable and powerful candidate.  Campaigns can now be run in grass-roots fashion again, as they were intended to be.  If this keeps up, campaign finance reform might become a moot point (still needs to happen, but that's another can of worms)...

This seems to be the first time a candidate has been forced down the throat of mass media by the people of the country demanding he be a force in the elections... what a great story.  Putting the country back into the hands of the people instead of the elite few is one of the most noble uses I can possibly think of for this incredible gift we have in the Internet.

Oh and by the way--Needless to say, I am 100% sold on Ron Paul, he is head and shoulders above every other candidate in this election.  Please, if you live in the  US do our country a favor and check him out, and if you like what he's about do your part to strip the mass media of their remaining power and help turn them back into what they're supposed to be--conveyors of information, not gatekeepers.