The Web, politics, and information transparency, by Jon Stewart.

Today, I was going to write about how the incredible information transparency of the web is completely changing the political environment by putting more pressure for accountability and truthfulness on politicians and political candidates while also allowing for the apparent trivialization of politics (which is actually just the exposure of politics for the tragicomic meaningless theater that they’ve become).

But then I saw this clip from The Daily Show (Note: WordPress doesn’t allow embedding videos from Comedy Central, hence the plain old link) and I realized that I could never explain all of that as clearly and as funny as Jon Stewart always does. Enjoy.

Internet radio grows up.

The NY Times today have a nice short article that clearly explains some of the more popular Internet radio services out there. These are web-based music streaming services that allow you to create a personalized radio station that chooses songs for you based on certain criteria. Those criteria vary depending on the service. Two of those services show the difference between using experts and the collective intelligence of the crowd to provide better recommendations:

Pandora uses “musicologists” who classify hundreds of thousands of songs and artists based on their musical “genetic” makeup. For example, the “genome” of Madonna’s “Let it be” is comprised of “electronica influences, danceable grooves, a subtle use of vocal harmony, use of string ensemble and a vocal-centric aesthetic.” As songs get played for you on Pandora, you can vote them up or down and thus teach your station to play better music for you.

Last.fm uses know experts but instead employs mathematical algorithms to analyze the playlists and listening habits of its members to create recommendations. In addition, Last.fm promotes itself as a social networking site, à la MySpace. Pandora does this a little bit by allowing people to share their personal stations, but not to the extent that Last.fm does.

 Which one works better? I don’t know. I’m a loyal Pandora listener, especially for an instrumental jazz station that I have created and honed over the last few months. I have never used Last.fm. Whenever I go to its site, I get overwhelmed by the social networking bells and whistles. All I want is a simple, customizable radio station and that’s what Pandora gives me.

Maybe in the end that’s what matters the most. The quality of the recommendations by the two services is probably comparable. What’s different is their functionality and look and feel. One is a simple, no-frills, customizable radio station. The other is a full blown social network that’s centered around music and musical tastes.

Service Science joins the research field.

The NY Times reports today that a group of large technology companies, universities and professional associations are working together to create a new area of research which they call “service science.” Basically, they are trying to understand how technology affects the service sector in terms of productivity, innovation, and so on.

Why they feel the need to create a new field and call it service science is a mystery to me. This is something that Information Systems researchers have looked into for years. Not to mention others in Operations Research, Management Science, Economics, and even some in Marketing.

As I wrote previously in this blog, the issue of IT and productivity is complex and important. But splitting up its study even more than it already is, may only make things worse. On the other hand, if the SS (those Service Science researchers will have to find a better acronym) people are able to integrate all the fractured research on IT productivity out there into something more coherent, some good might come of this after all.

Wikipedia vs. Citizendium: Let the battle begin!

Citizendium, an alternative open online encyclopedia, has gone live. It was created by Larry Sanger who happens to also be a Wikipedia cofounder. The two encyclopedias share a lot of similarities. They are both free to read and open for anyone to edit. They are also both ad free. However, Citizendium requires contributors to use their real names while Wikipedia doesn’t. And Citizendium will go to experts for verification of its articles, while Wikipedia will not.

 I won’t debate the latter difference. I am always a little suspect of “experts.” Maybe it’s because I work in academia and I see how many times “expertise” is just misguided stubborness.

But the real-name-use rule is interesting. There is a plethora of research on the effects of anonymity in computer mediated groups. The results are not always consistent but some trends have emerged. For example, anonymity in such groups promotes flaming, the act of posting hostile and insulting messages that are often long and rambling. Flaming can be done by group members that would not otherwise engage in it if they weren’t anonymous. Anonymity can also increase group polarization. Both findings would favor Citizendium.

However, anonymity also increases the number of original ideas (though not necessarily the quality of the best idea), partly because it allows everyone to contribute, even if they are disagreeing with the majority of the group. This may favor Wikipedia, especially since it sometimes allows for multiple articles on a topic, if it’s one that is controversial or is subject to interpretation.

By requiring real names, Citizendium promotes accountability and responsibility which is a good thing. But it also may silence many contributors who may have important knowledge but are reluctant to provide it under their real name. Citizendium does allow one to apply for a pseudonym, but only in special cases.

Who will win the encyclopedia battle? I don’t know. Only time will tell. My bet is on Wikipedia. It has the momentum, the experience, and the brand name to attract enough contributions to sustain it. And despite the room for vandalism and malicious content, it allows everyone to add information without fear.

But Citizendium has definitely made this battle more interesting.

Investment strategies using collective intelligence

Fin.uti.ae is an experimental site that is trying to create funds that use the collective knowledge of investors to form investment strategies instead of using a few expert fund managers. Right now, it’s trying to prove the concept works, so its interface is really simple. They are giving away $100 to each of the five individuals who contribute the most to the site’s performance so go check it out.

It’s an interesting experiment. If investment knowledge truly is distributed throughout the market, theoretically you could capture that knowledge by aggregating all the individual bits of knowledge of each individual investor. What you need is a large enough community and a liquid enough knowledge repository. A large pool of individual contributors is also necessary to wash out the ones who provide wrong information (deliberately or not). According to one of the founders of the site, they are currently performing a modest 3% over the DOW with a continually improving alpha. But they’ve only been running for a short time and their pool of individual knowledge contributors is still relatively small.

The big question for me is whether in the context of financial markets, all the collective intelligence of the individual “lay” investors cannot even come close to the insider knowledge that the very few priviliged investors have (and who persumably will not share it). Fin.uti.ae may be able to give a clearer answer to that question.

It’s all about information: The wireless application and service innovators.

Business Week has a special section on wireless technologies this week and as a part of it, they showcase what they call “The New M-Commerce Barons.” They are the new innovators in wireless applications and services. Going over this impressive list of innovations is illuminating in the sense that one can identify the types of opportunities that are available today for creating business value using technology. Some examples:

1. Use information technology to reduce even the slightest time delays in a person’s daily life. Check out Mobo, for example, which allows you to pre-order food using a text message so it’s ready when you get there. For a busy New Yorker, the ability to save 10 minutes of waiting for lunch to be prepared is worth a lot.

2. Provide information, using a simple interface, that is otherwise unavailable or hard to get. Loopt, the brainchild of 21-year-old student, provides the location of your friends with GPS-enabled devices. 4info allows users to send text messages with questions on news, sports, movies and so on. Google also does this very successfully for all kinds of information.

3. Allow people to share information. Call it community building, call it social networking, call it whatever you want. People have always loved to share information, from showing off vacation photos to giving recommendations on restaurants. Eyeka allows users to share photos and video and even sell them to those who want to buy.

4. Piggyback on someone who’s already successful. iSkoot allows users to make Skype phone calls using their cell phones and voice networks. (Jajah already does this without using Skype, by the way)

So, it’s all about information. How you create it, manipulate it, interpret it, distribute it. Find a way to add value to at least one of those processes and you may have an idea for a successful business.

Interestingly enough, Business Week also showcases the latest trends in wireless devices, but compared to the innovations in wireless applications and services, the devices just look downright boring.

Nintendo’s Wii: Off the beaten path of innovation

Nintendo’s Wii video game console has been outselling both Microsoft’s Xbox and Sony’s PS3. It’s a great example of a company that decided to veer off the innovation path that all the industry players were following. The video game industry has grown tremendously and has produced amazing innovations in game design. But one thing that nobody challenged was the player-game interface. Since I was a kid, the interface has been a combination of joysticks and buttons. There seemed to be no reason to change that. If you’ve ever watched a kid play a video game on any console, you know that they develop the ability to manipulate multiple joysticks and buttons very well, in order to interact with the game (an ability I can’t seem to develop myself anymore). And since the kids and the young adults they later become were always the main market for video game consoles, the companies saw no need to challenge that.

Enter Nintendo. They created a motion sensitive control, now known as the Wiimote, which allows players to interact with the game through natural body movements. As a result, not only is the Wii selling like hotcakes among those same kids and young adults, but it’s also finiding new fans where nobody could have imagined. Yahoo! News reports on how senior citizens are becoming video game fans with the Wii. And I remember a story I read a few weeks ago that touted the Wii as a weight loss tool for overweight kids and adults.

Challenging established industry trends is risky. But it can really pay off. Disruptive innovations (like the Wii) can really shake up entire industries and can create new markets where they didn’t exist before. That is, of course, until they themselves become the new industry trend. Who wants to bet that Microsoft and Sony will both come up with their own version of the Wiimote soon? Maybe there’s will be wearable ones.

Twitter, Dodgeball, and other funny things about privacy.

When I teach my class on e-business, at some point we talk about location-specific services. The idea is that information and services are available on a device that is mobile (from a cell phone to a laptop) based on the device’s current geographical location. I talk about how it would be possible for a company to push information, such as an ad, to a cell phone or PDA if it knows its location (through GPS, for example). So, as I pass outside a BestBuy store I could, theoretically, receive a message on my cell phone giving me a unique code I can use to get 15% off my purchases if I go in and buy in the next hour.

What ensues is a flurry of hands up followed by complaints about invasion of privacy, annoying interruptions, and so on.

At which point, I usually give my short speech about how in the US Constitution, privacy was never explicitly written (only implied by certain later amendments) and how that is representative of the schizophrenic attitudes Americans have about their privacy. They always seem to be complaining about its loss, often up in arms trying to protect it, but in the same breath will give away tons of personal information for just about anything: discounts, free t-shirts, 15 seconds of fame on YouTube, you name it.

Dodgeball (owned by Google) and Twitter are two services that allow others to know where you are and what you are doing at all times. They do it in slightly different ways but the bottom line is the same: They can be used to disclose private information about one’s location and whereabouts. And both are very popular. In fact, Twitter was all the rage at SXSW recently.

The way I see it, people will give up their privacy more and more, partly because there will be better things offered in exchange and partly because they will have no choice. We seem to be continuously decreasing the amount of private information we truly expect to have. But at some point, and it may already be here, there will be a huge market for “privacy technology.” The average joe and jane out there will be willing to pay for “information island” technologies: solutions that allow them to have information that is fully disconnected from the rest of the networked world. I have a feeling that in the not so far future, we’ll be talking about all the start-ups that offer exactly those kinds of solutions.

Google tests pay-per-action advertising

Today, everybody seems to be talking about Google’s experiment with pay-per-action or cost-per-action advertising (Others, like Turn, are also doing this). Basically, an advertiser would only pay Google if a user clicked on an ad and also performed some pre-determined action on the advertiser’s site (buy a product, register, etc.). There are a lot of arguments in favor of this, including reducing click fraud, since the advertiser will not have to pay for all the fraudulent clicks on their ad.

This makes me a little wary, only because it’s starting to remind me of the beginning of the online advertising craze. Back in the mid-90s when all we had was the simple rectangular banner, everyone got so excited about the ability to click on an ad and be transported to the store, that they started ignoring the other effects of advertising, i.e., getting inside people’s heads even if it doesn’t involve immediate action. So, for a few years, all anyone cared about were clickthroughs. And when those clickthroughs went downhill (because people stopped clicking on ads), they all started to talk about the death of online advertising. Fortunately, others remembered that advertising is not all about direct response but about things like branding. And online advertising started to flourish again.

What we shouldn’t forget as we talk about PPA models, like the one tested by Google, is that for rich media advertising the PPA model doesn’t work. Users don’t click much on rich media ads because they appear on publisher websites where they go to consume information. For example, when I am at the NY Times website, I want to read the articles, not click on an ad and be taken somewhere else. So, what matters most for rich media ads is how much they change customer beliefs and attitudes. It’s not whether users click on them and then buy or register at the site they go to.

It’s ok to be excited about the prospect of PPA advertising but only if we are talking about sponsored search ads. After all, they most often appear after a keyword search at a search engine, when a user wants to click on a link to go somewhere else and do things like buy, register, and so on.

Burger King does video games.

Microsites are websites created by companies that allow customers to interact with a brand using games, funny movies, educational interactive tools, and anything else that can hold a user’s attention. Usually, customers can’t buy any products on these sites, though there’s always information on where they can go to buy them. Great examples of microsites are shaveeverywhere.com (for Norelco’s men’s hair trimmer), drinkmilk.ca (by the dairy producers of British Columbia), and subservientchicken.com (by Burger King).

Burger King has gone a step further. They created three video games for the Xbox that feature Burger King characters like the King and the subservient chicken itself. Business 2.0 reports that they promoted them over the holidays and sold over 2 million copies for $3.99 each. They also created BKGamer.com, a microsite where the millions of players of the BK games can go and register high scores, download goodies, get tips and tricks, and of course find out where to buy the games if they don’t have them already.

Marketers have always known that having customers interact with a brand in a fun and enjoyable way is better than just exposing them to the brand with a static ad. The web, with its excellent interactive capabilities presents amazing opportunities to do that. So does video gaming (online or offline).