The Belmont Club describes how the WSJ  and the Washington Post, while searching for the culprit in the financial crisis, pass one another like ships in the night, yet both arrive at the conclusion that more regulation could have prevented this mess.  The author, Richard Fernandez, then goes on to wonder whether any regulator could have stopped the gravy train that was sloshing so much gravy.  He then posits an alternative suggested by “ponerology”, which defines itself as the science of evil.  A basic tenet of ponerology holds that approximately 5% of the population is psychopathic, and that over time, they accumulate in the upper echelons of organizations (due to their ruthlessness?) and are well positioned to breed corruption within and without their organization and those related to it.  His closing and provocative thought:

It’s amusing until one realizes how often we discover, at intervals of 50 or so years, how a cohort of people more or less simultaneously learn to game a system until it crashes.

This Fortune/CNNMoney article sums up concisely how Wall Street arrived at its logical end – it’s what happens when the Masters of the Universe play the “game” with other peoples’ money instead of their own.

This creative gentleman converts the concepts of SEO/SEM (Search Engine Optimization/Search Engine Marketing) into catchy rap lyrics.  I think he should consider entering the employee training or seminar business – it would sure make some of this stuff easier to learn!

[youtube]http://www.youtube.com/watch?v=c96LTLlaXew[/youtube]

[youtube]http://www.youtube.com/watch?v=trhrN39li1M[/youtube]

This version unfortunately omits Mavis’ comment just after the end of the song -”beautiful!”  And that it was and is.

Like most of the Middle East and Africa, Latin America is skipping the 100% wired stage of telecoms. Governments in those countries were too financially unstable &/or corrupt to mandate buildouts beyond the wealthy enclaves and business districts of their major cities. The beauty of wireless is that it is so much less capital intensive. Consequently, wireless telephony penetration in LatAm now approximates 60-70%. Moore’s Law continues to reduce the cost/increase the functionality of handsets (and you can have either, but not both, as a consumer). In LatAm, prepaid service is a much bigger mode of payment for service, as it facilitates budget management. Also, calling party pays, not the one called. Finally, network convergence is driving all the margin out of the historically high margin voice telecom service (in late nineties 45% OPERATING profit was the norm), whether wired or wireless.

The Internet is in the process of aborbing wireless telephony. The constantly improving economics of optical and/or digital networking infrastructure and innovation enabled and fostered by entrepreneurs leveraging of IP (Internet protocol) internetworking technology (browsers, hyperlinked web, free email, graphic design, etc, etc,) has and will continue to drive the merging of all heretofore physically discrete analog networks (each being a separate business unto itself) into a single interconnected set of commonly structured and operated digital networks, all of which transport and connect video, voice and data applications – the “converged network”. Text/sms messaging is but one of thousands of applications that operate on and interconnect through the Internet. It is, in fact, the highest revenue /bit form of communications service for which consumers pay (by a factor of 1000), primarily because of the telecom operators end-to-end control of that network. For details see The Evolution of Price Discrimination in Transportation and its Implications for the Internet (especially Table 1 on second page of this pdf). The author, a mathematics/computing professor at U of Minnesota, is widely regarded for his fact-based approach to the economics of telecommunications networks.

Despite the convergence phenomenon, the US lags Europe and Asia in its usage of mobile telephony and mobile Internet (you can mostly thank the FCC’s bureacracy’s money-grubbing wireless spectrum lotteries for that). Nevertheless, US usage of wireless Internet will pick up dramatically in the next couple of years, as ATT/Cingular, Verizon and Sprint/Nextel have deployed their 3G (they call it broadband, but its really medium band) networks. (Europe/Asia finished theirs 3-5 years ago). Here is a chart showing Internet enabled mobile phone penetration as of a couple of years ago.

The Internet will continue to drive major structural change into the advertising and other digitizable media for the next 25-35 years. (The Carlota Perez book previously mentioned explains paradigmatic technology diffusion; Ray Kurzweil, referenced below, builds on the same concept to posit that technology/human change has accelerated since time began and will continue to do so, resulting within 30 years in implanted brain chips that leverage our thinking capabilities the way our foot on the gas petal leverages our muscular capabilities). Anyway, back to the present. Broadband connectivity (medium band, really – until we get more competition in telecoms, the 100MB/sec links available throughout Seoul, Korea and other foreign cities will be a figment of our imagination here) just recently hit critical mass in the US. Broadband mobile phones (again, medium band vs other nations) will reach critical mass in the next three years. That $200/household for Internet ad spend represents only that revenue that has been derived from the move of print ads to the web; audio/video related advertising is at its inception (and is why Google paid $1 billion for the largest market/mind share position in that market. Audio search is well developed and will begin to be monetized via ads soon. Video search has further to go, but I have no doubt that Moore’s Law will bring the processing power required to do it to an economically viable level. The number of doublings in processing power/unit ($) of resources consumed just recently passed thirty. Given the exponential nature of this growth, however, the absolute gain from each doubling has now reached the point of delivering stupendous economic impacts (same applies to storage, where you can now easily buy Terabyte storage servers for less than $1000). For more on the law of accelerating returns associated with technology advances, see Ray Kurzweil.

Some talk about buying/selling advertising in terms of the current industry participants like Fox News. Although Rupert does get it regarding broadband Internet, very few organizations with the size and longevity of any of the existing broadcasting/media companies are ever able to make transformative changes to their business models. See Clayton Christensen, The Innovators Dilemna, for hard proof. The companies that break standard price points will have a different view of the economics/business model, just as Bill Gross (Idealabs) did when he invented the pay-per-click Internet advertising business model that Google has leveraged into a $150 billion market cap. Remember, Google did not even begin to sell search advertising until the 2001-2002 timeframe.

A final point about change in content/advertising markets – the Internet evidences and enables statistical distributions commonly known as the Pareto principle (80/20 rule). Chris Andersen of Wired wrote the signature piece on this phenomenon which he dubbed The Long Tail (link to his website, which links to article, book, Wikipedia, etc.) Andersen’s point is that for digitazable products/services, the changes wrought by the growth in interconnected and ever mor powerful communication/computational processing devices will enable the exploitation of demand that was previously unexploitable due to the lack of sufficient market scope to spread the fixed costs of production and distribution over. The fixed costs are now already incurred, in terms of the infrastructure of the Internet, and the marginal costs of distribution are virtually nonexistent. An Amazon employee described the Long Tail as follows: "We sold more books today that didn’t sell at all yesterday than we sold today of all the books that did sell yesterday."

Publishing and advertising are undergoing structural transition last seen when Gutenberg’s press was invented. The Internet, and more specifically, the broadband Internet (which has reached critical mass during the last six years), eliminates the cost of distribution as an economic factor in media publishing and advertising. The fact that some businesses, including most of the historical advertising and publishing concerns, have not adjusted their business models has absolutely nothing to do with Bush or politics. For extended treatments of this subject, see Carlota Perez: Technological Revolutions and Financial Capital and Clayton Christensen: The Innovators Dilemna. For more concise observations in point of the facts of structural change in advertising business, I refer you to these:

Excerpt from Andy Kessler’s series of blog posts on Media 2.0 (Kessler is a money manager, investment banker & vc/hedge fund operator who also writes books (latest titled Running Money) and articles published by Forbes, Wired, LA Times, Am Spectator, Weekly Standard & WSJ)

So what is a Media Mogul to do? They control pipes in a world of zero margin costs. It costs virtually zero to sell one more digital song, or run one more digital ad or post one more digital classified. As chips and bandwidth get cheap, digital distribution crumbles the quaint old days.

The time and the tools are ripe for this GO WIDE approach. Especially on the Web, which is nothing but layers and layers of functionality.

Bill Gates

This process will be hastened, he believes, as more and more television content moves online. “Internet TV and the move to the digital approach is quite revolutionary,” he says. “TV has historically has been a broadcast medium with everybody picking from a very finite number of channels. If you want content that is a local sports thing or a hobby that you are interested in, that’s not available to you. The use of the internet to deliver those video signals and the idea of seeing what you are interested in, and having the ads targeted to you, is becoming the standard way that video is delivered. Over the course of this next decade that will be very common.”

Internet advertising, aimed at niche audiences and more creatively ambitious, will provide a way round the increasing problem for advertisers of television viewers fast-forwarding through commercial breaks in shows that they have recorded. “It will be possible to target the ads and it will be important to have ads that the consumer doesn’t skip over, incorporated in the right way.”

Om Malik’s posts – Google… the OS for Advertising and The Web Money Machine – Beyond Adwords (author of Broadbandits: Inside the $750 Billion Telecom Heist, writer for Red Herring, Business 2.0, Forbes, WSJ and now founder/executive editor for GigaOm.com)

excerpts:

Google’s core competency is to use technology in a manner that devalues and deflates4 traditional industries by extracting inefficiencies in existing processes. And the long-term strategic implications of this “Google effect” is much more disruptive than simple market realignment… rather, it’s an issue of rendering old core (human) competencies obsolete and replacing them with new ones reliant on automated, scalable technologies (much like what Wal-Mart did to retailing and what Craigslist is in the process of doing to classifieds). For instance, the only way for traditional media companies to leverage the core competencies they have today in order to compete with Google’s Ad/OS, in the long run, is to start breeding ad salespeople who will have the expertise and capability to sell across all media platforms. Sure, that’s feasible… when pigs can fly.

The media industry is in the middle of a massive change, thanks to the ubiquitous presence of broadband everywhere. Fast pipes are enabling niche networks, venture capitalists are investing in new media properties. The online video market resembles an old fashioned bubble, and companies are sprouting up like mushrooms after a fresh monsoon. All of this is predicated on one business model: advertising. Google bet $1.65 billion in chips on YouTube, betting that it can profit from this shift to online video. Their confidence is understandable: Google now accounts for 25% of all online advertising dollars.

Although this post by Guy Kawasaki is six months old, his advice for Jobseekers has timeless value.  A few excerpts are presented below, but there’s a lot of wisdom in this one, so don’t miss it.

The best way is to profess your love of the company’s product or service, and I literally mean “love” not “read about,” “have used,” or “looked at the web site.” If the company is at all enlightened, passion can overcome the lack of a “perfect” educational background and work experience.

… here’s the 1/2/3 Rule of Resumes:

1 page long.

2 key points.
3 sections.  "Two key points" means that your resume should only have three sections: contact information, work experience, and educational background.

Bring copies of your resume to the interview

Answer the first question, “How are you?” with a great response.  For example, a great response is, “I feel great. I’m really anxious to learn more about this job and tell you about myself, so that we can determine if we’re a good match.” In other settings, this question is an unimportant formality. In an interview it’s an opening to blow away the interviewer with your enthusiasm.

Get the scoop from the first interviewer. A job interview is a sales call: Listen to what the customer says she wants and then explain why you are the solution.

• "What are you concerned about in filling this role?”

• “What are the company’s greatest challenges?”

• “What are the hot buttons of the other people I’ll be meeting?”

How can I immediately help this company? If you can’t help the company immediately, then maybe this isn’t the right company for you.

Provide your references on the spot. Print your list of references so that you can provide them in the interview—as opposed to providing them later. In general, try to anticipate every possible request that would turn into a follow-up item: providing references, sample work, examples from your portfolio, software that you’ve written, whatever.

If you really want to play the reference game at the highest level, ask your best reference to proactively call the interviewer.

Tell the interviewer you see a good fit and want the job if this is the truth.You’d also be amazed at how few candidates go for the close. You should clearly communicate that you want the job because aggressiveness counts for a lot in job interviews…

If you don’t think there’s a good fit, say so too. At least you’ll be remembered as an honest person. Perhaps the company will have a position in the future that is a good fit.