virtualeconomics

Good news for journalism: no way is Demand Media really worth more than the New York Times

When Demand Media floated earlier this week it started out at $17 a share, rocketed on first day trading to a high of $24, and even after falling back to trade around $22 last night its market cap of $1.8bn still makes it worth more than the New York Times. It's that "worth more than the New York Times" bit that evidently set journalists' teeth on edge - if the US paper of record is worth less than a five-year-old content farm, what hope for journalism?

It's neither surprising nor informative that journalists almost universally hate Demand Media and want it to fail. People who make a living from writing and take pride in crafting sentences are hardly disinterested observers of a content farm that treats articles like commodities and has driven down the price of an article to $15.

The good news for journalism is that there is no rational basis for believing that Demand Media is worth more than the New York Times. Looking at the numbers behind the IPO, Demand Media's almost $2bn valuation doesn't make an iota of sense. 

Even as Egypt burns, horse sex is still the greatest news story on earth

I know, I know. There's real, serious news to talk about today. Egypt is in flames. Almost anywhere could be next. It looks like the Egyptian army has just changed sides and joined the protestors, which effectively marks the end of the Mubarak government. But I've been covering the absurd popularity of news stories about people having sex with horses for a long time, dammit, and even today I'm not passing up this one.

On the BBC News website today, the most-read story is still (or one might even say again) an article about a man having sex with a horse. The Egyptian revolution - as it surely must now be called - stands in second place. 

This is very far from being the first time a news article about humans having sex with animals has led the news agenda.

On freedom of speech

One of the great things about freedom of speech is that by extending it to everyone we can identify the lunatics as soon as they open their mouths. And one of the best things about the internet is that it extends freedom of speech so freely and universally that everything everyone says is immediately available for critique, rebuttal and derision. 

Compare and contrast, for example, Melanie Phillips' insane rant claiming that teaching children about the child-rearing habits of penguins will turn them gay, with Johann Hari's beautiful and impassioned plea for tolerance. Phillips has been derided sufficiently elsewhere. Hari's column should be read by everyone.

Once upon a time, people limited to reading a single printed newspaper might have been exposed only to the original rant. Free and universal access to the counter-point exposes it for what it really is. 

(Photo by xrayspx on Flickr)

It's not about the Internet, stupid

So while access has been dramatically curtailed the Internet is still working, a bit, in Egypt, and helping the people there organise the overthrow of the US-funded dictatorship. Props to the dedicated people outside Egypt who are working to keep TOR relays up and maintain the infrastructure that people need to coordinate that protest. Most especially props to the journalists who are still reporting from Egypt - I'm keeping a list of people still tweeting out of Egypt here. 

There's plenty being written about the Egyptian revolution today, most of it from a risibly net-centric point of view (the government there is evil! Never mind killing its citizens for engaging in legitimate protest, it's actually shut down the internet too!). Hopefully what remains of the Internet there will help Egyptians coordinate their revolution and let the world know what's going on there today, and perhaps fighting to close it down will distract their government from killing them, but really the overthrow of a quarter-century old tyranny isn't about the net.

(Photo from James Buck on Flickr)

BskyB prepares to compete with BT for the UK's next mobile market

BskyB buying The Cloud isn't interesting because it positions them to compete with BT for on-the-move wifi access. It's interesting because it positions both companies to be currently the only players in the next mobile market. 

What we quaintly call our mobile phones are increasingly obviously just sub-scale computers. On a train today I used mine as a 16 gig music player, a Twitter station, a Kindle and a text-messaging system. Next time I buy a phone it'll be the biggest tablet I can fit in my pocket - a reality Tmobile's data cap seems to obviously reflect. Or to put it another way, my need for mobile Internet access on my "phone" so vastly exceeds my need for voice telephony that the market BT, and now Sky, are getting into is the sort of universal Internet access both home and away that will form the basis of my next "mobile phone" contract.

So it's a smart move from Sky, but not one to compete with BT so much as to join BT in eliminating Vodafone, Tmobile, Orange and O2 over the next few years. Voice is increasingly a needles luxury on a mobile phone, especially when it's still used to lock you in to long contracts that can be avoided by going without.  

(Photo from sklathill on Flickr)

Some unlimiteds are more equal than others: Tmobile's "fair use" redefinition continues

Last week Tmobile caused a bit of a stir by announcing that their allegedly "unlimited" mobile Internet browsing would be capped at half a gig. At the time I guessed it was to stop people just sticking their old SIM in a tablet. Today, I discovered that actually it's just a ploy to charge customers to get that cap raised.

When Tmobile first announced the massive drop in bandwidth last week, Techdirt commented

"Basically, this is T-Mobile UK announcing to the world that it doesn't have the bandwidth to actually give people what they want, and it hasn't invested in the necessary upgrades to offer a reasonable service. Or, a simpler way of explaining it, is that this is T-Mobile UK telling users in the UK who actually want to use mobile broadband to find another provider."

Google now the UK's largest advertising channel by a factor of two (or possibly three)

Yesterday Google mentioned in passing that it made £2.2bn in the UK last year, making it far and away the UK's largest single advertising channel and giving it roughly 50% of the UK online ad market and approximately 12% of the whole UK ad market. 

Google's 4Q2010 results break out, as usual, UK-only revenues and they allow for some interesting comparisons.

Google announced UK revenues of $878m/£582m in the final quarter of 2010, making the company's UK revenues for the full year $3.3bn/£2.2bn. Compare that to the UK's powerhouses of TV advertising - Sky reported ad revenues of £319m and ITV ad revenues of £728m in 2010 (Sky of course makes about four billion in TV subs revenues on top of that).

"We're not on price comparison websites because..."

You know a good way to spot when an explanation is just an excuse? It keeps changing. 

Direct Line tells us they're not on price comparison websites. Indeed, the company has been boasting of its refusal to compete on price for rather more than a year now.

The reasons an insurance company might not to appear on price comparison websites are, admittedly, more complex than a mere desire not to compete directly on price. There are potentially sound business reasons to want to own the customer relationship. But since those reasons are mostly to do with preventing the price comparison site from selling those customers cheaper insurance from a new advertiser at the end of the year, they aren't an explanation you can tell the customers themselves. So over the course of more than a year we have seen, instead, a series of bizarre excuses.

Tmobile's data cap

Let's connect a couple of recent news stories:

(1) CES was all about tablets. Tablets tablets tablets. 70 of the things. iPad is already selling well, the Samsung Galaxy Tab hasn't been a disaster and now everyone else wants to sell us one of these things too

(2) Tmobile has cut back its mobile broadband cap to half a gig - a paltry amount if, say, you stream a lot of video or music but adequate for a bit of light phone browsing.

So what? Someone at Tmobile has spotted that their customers are all about to buy new tablets, stick their old phone SIM cards in them and neither pay Tmobile anything for the hardware nor even sign up to a new contract.

It's a defensive play to pretend the world hasn't moved on from the old telco model of selling customers a new handset every year and charging them for voice bandwidth. It's not especially evil, and it might even be smart, at least unless one of the carriers doesn't play and we all just move over there.

Twelve year old bank letter spoof celebrates its anniversary by fooling a new generation on Twitter

Twelve years ago to the day, on 7th January 1999, a spoof letter, allegedly sent by a customer to their bank, appeared on page 11 of the Queensland Courier Mail. The letter purported to be a sarcastic response to the increasing automation of the bank's customer services, demanded that the bank henceforth contact them via the customer's own automated telephone system using a PIN, and the story that accompanied it claimed that the manager of the bank liked the letter so much he had forwarded it to the paper. 

The story is not, of course, true. The letter is a spoof, and Snopes.com debunked it at some length back in 2003 when it resurfaced as an Internet meme and floated around on email for a few days. It has since been attributed to the Guardian and a variety of other newspapers, but the most recent manifestation of the letter doing the rounds today on Twitter claims it was written by a 98-year-old woman and published in the New York Times. Apart from updating the imaginary customer's age from 96 to 98 (a strange way of reflecting the passage of some eight years) the letter has barely changed in more than a decade, but it's nice to see Twitter giving it a chance to celebrate its birthday.

(Photo from Ardfern on Wikimedia Commons)