Wak Oentoenk

For several weeks I've been in a private beta test of a new social networking service designed to help mobile and PC users keep in touch and share ideas. I think it's the sexiest new product I've seen since the Nokia 7650, and even though it's still in early beta I want to talk about it.

I promised not to describe some of the details of their implementation, because the patents haven't all been filed, so I apologize in advance that I'll have to leave some blanks. But here goes...

The company, Inrvoice LLC, has great credentials -- it was founded by former engineers from Netscape and RIM, who teamed up with a group of biomedical researchers from UC San Francisco. It's funded by a consortium of A-list VCs from Stockholm and Palo Alto. That in itself is unusual -- usually startups like this are funded only in one region. But I think the cross-cultural aspect of the service make its appeal universal.

The folks at Inrvoice are targeting one of the key drawbacks of today's social networking software -- the need to type ideas and comments in order to share them with others. Instead, Inrvoice's software directly captures the thoughts of users, as they happen, and shares them automatically with everyone in the user's social network.

I'm not allowed to give all the details of the process, but suffice it to say that it involves Bluetooth wireless, the user swallowing a small sensor pill, and one of the first commercial deployments of nanomachines that I've heard of.

The product is called Spitr, and I'm sure you'll be hearing a lot more about it in the weeks to come.



Spitr's ability to share thoughts rather than typed words dramatically increases the efficiency and richness of interactions on social networks. No longer do you have to guess what one of your friends might be thinking on a moment to moment basis; no longer do you miss out on nuances or ideas that they might not normally have time to share.

As an example of Spitr's power, here's a real Spew (the company's term for a transcript of a user's thoughts). I've been asked not to give the user's name, but I can tell you that he/she is a blogger and executive at a major Web company, attending a recent conference:

11:45:39 i wonder if there are any new comments on my blog
11:45:44 huh, the next speaker is making a web service that recycles composted kitchen waste
11:45:47 i dont get it. who eats at home anymore
11:45:49 when the hell is the lunch break
11:45:48 this company doesnt make sense to me but arrington likes it so i should invest
11:45:53 i wonder if there are any new comments on my blog
11:45:57 damn my new shoes look cool
11:46:03 hey what the hell was that. did something bite me or did i just sit on a tack. wait if i grab my butt i'll look stupid. dont move
11:46:07 ow ow ow it really hurts
11:46:01 dont move dont move
11:46:04 maybe if i pretend to adjust my sock i can lean over and
11:46:07 ahhh much better
11:46:08 damn i sat on my usb drive. hope i didn't break another one
11:46:10 is that guy still talking about kitchen waste
11:46:12 tim looks really good in that jacket
11:46:15 i wonder if there are any new comments on my blog

Currently, Spitr Spews are only one-way: the user's thoughts are transcribed and sent in writing to other members, who read them on their PC or mobile phone. The company is working on two-way Spews which transfer thoughts directly between the minds of recipients, but needs to do more work before it turns on the feature. In an early two-way test, the thoughts of Steve Ballmer and Eric Schmidt were accidentally linked in a single session, producing a destructive feedback loop that took down Sprint's EVDO data network for twenty minutes. The company is confident that new filtering software can prevent those loops in the future.

Even in its one-way mode, Spitr makes an incredible improvement in the frequency and detail of social messaging. But once it becomes two-way, it'll really take off. I think some of the most promising usages are:

Workgroup collaboration. A work team in a company could be continuously linked to one-another in a two-way Spew. The effect would be like a continuous staff meeting 24/7, but removing all remaining illusions that people might actually be paying attention.

International understanding. Another exciting aspect of Spitr is that the company is exposing an API to the service, enabling others to create mash-ups of Spitr with additional web services. One of the first mashups has combined Spitr with BabelFish to produce BabelSpit, which produces instant translation of a user's thoughts into six different languages. Here's the translated Spew from a Japanese tech executive attending that same recent conference:

11:45:33 As for me it is not possible to believe those which these people make their kitchen scraps.
11:45:42 I putting, tonight it is possible to be able, whether or not you think in doubt.
11:45:48 I me Tokyo yakitori which is eaten and desire the fact that it returns to the beer which is drunk.
11:45:57 As for me it is necessary to arrange the hair of my ear.
11:46:07 That man is he grabbing his underside?
11:46:12 Whether or not there is new comment in my blog, I think.

Spitr's potential impact on international communication is obvious.

Celebrity interest groups. Fans of a celebrity could subscribe to a one-way Spew feed (a "Spweed") to monitor the thoughts of celebrities throughout the day. Inrvoice hasn't yet disclosed its financial model, but I believe this is how it will monetize the service. Imagine how much fans would pay to track Paris Hilton as she tries to remember whether she has a valid driver's license, or Britney Spears as she ponders the underwear yes/no question.

I think that's just the start, though. Every Spitr account automatically generates a Spew feed, giving each and every one of us the opportunity to auction off the last shreds of our privacy and create a circle of obsessive admirers. This is the ultimate evolution of social networking, and I expect to see Spweeds pop up rapidly on MySpace and weblog sidebars.

Biometric sharing. Since they're already placing sensors in the body, an obvious next step for Inrvoice is to add biometric data to the Spew feed. That's apparently what the company is planning, judging from the screen shot below that I found on a bulletin board:



One application of this could be to help a social group of teenage girls plan a shared trip to the bathroom.

I think this is a very powerful and extensible feature. Picture the company pairing the biometric data with the GPS in your mobile to deliver customized location-aware services. For example, you could configure your phone to automatically order a pizza delivered to your location whenever you reach a certain hunger level. Or you could scan a dance club for people with compatible levels of libido and blood alcohol.

The possibilities are endless.

Implications for the industry. I'll be interested to see how the Spitr service develops over time. There are sure to be efforts at clones from other companies, although the Inrvoice folks seem to be pretty confident that their patents will hold up. Google and Microsoft would obviously be interested, if only for the possibility of slipping ads directly into the thought streams of users. And I think it would be interesting to see what Apple would do with it, especially since Mac owners are already close to a group entity.

I'm sure we'll know more by the next time April first rolls around.

Okay, that's a deliberately provocative headline, but I was very surprised this week when Sprint gave more details on the rollout plan for its WiMax high-speed network. Keep in mind that Sprint's counting on support from the technology and content industries to help make its network successful. They want lots of new devices and lots of new services to drive usage of mobile WiMax.

So, what are the first nineteen cities where Sprint's rolling out WiMax?

There's Chicago, Detroit, Grand Rapids, Indianapolis, Kansas City, Minneapolis, Baltimore, Boston, Philadelphia, Providence, Washington D.C., Austin, Dallas, Denver, Fort Worth, Portland, Salt Lake City, San Antonio, and Seattle.

Let's see, what's missing? Oh, yeah -- the country's two biggest cities, New York and Los Angeles. Plus Silicon Valley.

Hey, I'm sure there are good reasons for the choices Sprint made. I'm delighted they're covering five cities in Texas, and it's great that the critical Rhode Island market will be nailed. But if it's essential to the success of your network that you get support from the tech and entertainment industries, wouldn't you make it a priority to let people use that network in the capitals of those industries, Hollywood, New York, and Silicon Valley? I mean, Portland's a wonderful place, but if I were trying to pick a city on the North American west coast that has tech and entertainment industry presence, I'd rank it just above Ensenada and Anchorage.

So I don't understand what Sprint's doing. I want to root for them, because I like the story they tell about their future business model for WiMax, but they're making it hard to love them.

________

A couple of other tidbits worth mentioning:

HTC, say it ain't so. Jason Dunn of Pocket PC Thoughts is blogging about CTIA for Microsoft. He says HTC hinted that its upcoming Advantage product will be priced at about $800. Advantage is very interesting technologically -- it's a Windows Mobile mini-tablet, a little larger than a handheld, and could make a very nice info pad. But the right price point for that product is $299. At $800, Advantage is going to be compared to low-end laptops, and it's vastly less powerful and capable than they are. I'm very concerned that if Jason's price information is correct, HTC is going to produce yet another tweener product that'll delight no one and give the info pad form factor a bad name. I love the way HTC is experimenting with different hardware designs, but I wish they'd be more clever about the target markets.

An alternate explanation for the reported collapse of Web 2.0. Venture capitalist Peter Rip reports that Web 2.0 as an idea must be falling apart because traffic to two major Web 2.0 commentary sites, GigaOm and Tech Crunch, has been dropping since late 2006. Peter makes some other very interesting points, in particular on the difficulty of moving Web 2 from a tool to a platform. But I'd like to suggest an alternate explanation for the traffic decline he noted: Maybe those websites have just gone stale. Magazines go through cycles -- for example, in business magazines Forbes was pretty interesting in the1980s, while Fortune was dry as day-old toast left by the side of the road in Arizona. Today their positions are reversed. I think the same sort of cycles are likely to happen in websites, and may be even more frequent, because so many sites depend on a single author who could easily burn out or get distracted.

Is this the beginning of the end for RIM? Maybe not now, but... Richard Windsor of Nomura, one of my favorite financial analysts covering the mobile market, just issued a scathing recommendation to sell RIM stock.

"In order to see further upside we think RIM needs to ship around 1m Pearl devices per quarter to consumers outside of its traditional channels. We have seen no sign of these shipments."

Basically, he's arguing that RIM's dominance in the business communicator market has already been factored into the stock's value, and that to see a lot of upside it has to grow substantially in the consumer market.

I'm not as pessimistic about Pearl shipments as he is -- the early word in the industry was that Pearl was selling extremely well, although it's almost impossible to get reliable figures on phone sales. But I think he's right directionally, even though it's for the wrong reasons. The real question for RIM isn't whether it can break into the "consumer" communicator market, because there's no such thing. There are just communication users, and they use the same devices for both work and personal use. Those people make up about 12% of the population. At some point, between sales of RIM and Treo and all the copycat communicators coming to market, that segment's going to saturate, and RIM's growth will come to an abrupt halt.

The trick is predicting when it'll happen. I don't have enough data to make that call. If anyone wants to invest about $50k in some quantitative research, I could find out. ;-)

Think more creatively about new forms of telephony. Dean Bubley wrote a nice article on possible future uses of voice technology. His point, which I agree with strongly, is that we're paying too much attention to VOIP as a replacement for conventional phone calls. It's important, for sure, but the most interesting change in voice communication is likely to be the integration of voice conversations into lots of different web services. Talking will just be one of the things you do on web sites and online communities. You won't think of it as a phone call, but it'll displace traditional calls as surely as that Vonage handset on somebody's desk. The only difference is, most of the industry won't see it coming.

As they used to say in war movies, "the bullet you don't hear is the one that gets you."

After the death of the album. The mainstream media seems to be finally waking up to the main impact of the iTunes -- it enables people to buy singles instead of albums. That's a financial disaster for the record companies, because they can no longer force people to pay $14 to get the one or two songs they actually want. But I can't see how it is anything but good news for consumers.

Please excuse me if this sounds like bragging, but this trend is what I predicted last year when I looked in detail at the economics of music distribution on the Internet. In that spirit, here's what the newspapers will be reporting in another year or two: more and more new acts will be bypassing the record companies and using iTunes as their music publisher. This will let them keep about 65% of their revenue, rather than under 15%, enabling them to make reasonable money on a relatively small fan base. I believe Apple's fate is to become the music publisher of choice in the US, but the iPod installed base has to grow some more before it'll happen.

This afternoon I heard from a reporter that Google and Microsoft are now rumored to be interested in buying Palm. I have no idea who starts these rumors, or whether there's any truth to them, but they're not nearly creative enough. Here's my list of other companies that have absolutely no interest in buying Palm, but ought to be in the rumor mill anyway. Feel free to re-use these if you want to manipulate the stock market. No need to credit me; I don't want to be visited by the Feds.


7. Airbus

Compelling business rationale. I hear Airbus has a lot of trouble with the wiring in the A380, and there's a bunch of wires and stuff inside a Treo, so this seems like a good match. (Hey, it makes as much sense as Google buying Palm.)


6. eBay

Compelling business rationale. Most Treos end up on eBay eventually, after their owners upgrade to a new model, so this is an opportunity to "significantly integrate the value chain," as we say in the business. Each Treo could come with an eBay account, enabling the user to offer it for sale whenever they're ready.

As an added benefit, a Skype client could be bundled with every Treo sold. (By the way, this is apparently the only way to get Skype to port its full native client to Palm OS.)


5. Ben & Jerry's

Compelling business rationale. What if Jeff Hawkins designed ice cream flavors?




4. Cisco

Compelling business rationale. Apparently not required for a Cisco acquisition.


3. DaimlerChrysler

Compelling business rationale. I propose a straight-up equity swap: Palm for Chrysler. Daimler would give away a company that's talented at design, but whose products have fallen behind the innovation curve, and that has problems with execution. In exchange, it would get...exactly the same thing. But as a bonus, Daimler could build a Treo and sync cradle into every car it sells. This fits with the whole convergence thing that's supposedly driving all industrial development in the western world, so this merger is a natural.


2. HP

Compelling business rationale. No, wait, this one actually makes sense. Never mind.


1. JetBlue

Compelling business rationale. Give a Tungsten to every employee, pre-loaded with a datebook alarm that says, "Time for the airplane to leave now." The acquisition would pay for itself within three months.

One of the stranger rituals of American sports is the country's affection for the annual college basketball championship tournament. Why this country is so obsessive about college basketball and football, when every other college sport is completely ignored, is a mystery that the nation's greatest sociologists and standup comedians have never been able to explain.

But there it is. If your alma mater's basketball team is participating in "March Madness," as we call it, it's mandatory to watch the games on TV. Unless, of course, you have to take your son to a futsal game.

Futsal is a separate story in itself, basically the bastard spawn of soccer (what the rest of the world calls football) and basketball. In the US it's about a million times more obscure than college basketball, but my son likes it and his team had a game scheduled for the exact same time as my college was playing in the tournament. So I did the dad thing and drove him to the game.

But I also did the Silicon Valley dad thing and took my notebook computer with me. The high school where the game was played has a fully open WiFi network, and I had registered to receive a live streaming video feed of the basketball tournament from the CBS television network. Finally, a practical use for Web video!

So I sat down in the gymnasium, started up my notebook, logged into the network, went to the CBS website, and selected my team's game. Excitement building, I clicked on "Watch now," waited a few seconds for the feed to buffer, and...



In case you can't read it, the message said I was "prevented from accessing this game due to local blackout restrictions."

Bastards!

Here is the deal, CBS. If I had access to a TV, do you think I'd be trying to watch your crummy, pixelated, low-res, business card sized video feed? The only people interested in watching online video of a sports event are those who have no access to a television. There is absolutely zero chance of cannibalization of the TV station's audience.

Besides, think about it for a minute. Who are the people most likely to want to watch that feed? People in the school's home town who can't get to a TV. But that's exactly where the game is certain to be blacked out. So CBS has created an incredibly elaborate system to systematically tease and frustrate its most enthusiastic customers. You can't see the game you really care about, but you're welcome to watch the games that are meaningless to you.

The word for this, folks, is "perverse."

I know why CBS did the blackout. Its contracts with local broadcast stations prohibit it from streaming games they're airing. CBS had the same problem with last year's tournament -- meaning they have had more than a year to fix this thing, and failed to do so. Instead, CBS and its local stations are once again missing a great chance to build customer loyalty and develop a nice online business.

I did try out an interesting feature that CBS allowed me to access, called a "glog" (I guess that stands for game blog). It's basically written commentary on the game, streamed live. Unfortunately, if you look closely at the first and last comments below, you'll see that the commentary got caught in a loop and repeated endlessly. I was confused when the teams started running the same plays over and over.



This mess is typical of the foolishness that often happens when old line companies try to deal with the Internet. They spend millions setting up an elaborate technological tour de force but neglect to take care of the basics, like letting fans actually watch the games they want to see, and making sure all the features work.

The lesson: The product you deliver through a website isn't a bunch of HTML and Java code, it's a solution to the problem of a user. Unless all of the elements of that solution line up properly, your product is a failure.

I know CBS's online coverage isn't a total waste; some people do get to some games they want. But if you'd like a taste of what CBS is doing to a lot of fans, check out this message board where fans of Georgetown University tried to figure out how to access the online feed. It's pitiful.

As for me, I was reduced to watching the scoreboard thing you see below, and waiting for it to refresh every 15 seconds or so.



A hundred and sixty years of telecommunication progress, and I'm reduced to watching a basketball game by telegraph.

PS: My son's team lost, although he did score a booming goal from beyond halfcourt. He's always wanted to do that.

I thought it would be good to add a suggestion box to Mobile Opportunity. Here it is. If you have any questions, comments, or suggestions about this weblog, please post a comment here. I'll link to this post from the sidebar, so you can get to it easily.

Thanks in advance for your feedback.

The Emerging Telephony (eTel) conference brings together the open source and web telephony community. It's a bit of a geekfest, with a lot more focus on technology than on business issues, but some of the trends and ideas I saw at it this year are worth sharing.

I wrote a business-oriented summary for the Rubicon weblog, focusing on three issues I saw at the conference that I think have broad relevance to tech companies: the emerging standards for identity management, the vulnerability of mashups to unexpected failures and security holes, and the integration of voice services into websites. I won't repeat that discussion here; you can click here to read that post. What I'll do here is go into more detail about the other interesting things I saw.


First, a couple of overall comments about the conference:

We're breathing our own exhaust. There were about 280 people on the attendee list for the conference. Several speakers asked for a show of hands from all who worked at operators and handset vendors. Virtually no hands went up. Looking through the attendee list, I saw one or two people each from BT, Sprint, DoCoMo, and Vodafone. France Telecom/Orange had several people and was a sponsor. On the handset side, there were individuals from Nokia, Motorola, UT Starcom, and Palm. But absolutely no Verizon, TMobile, Cingular/ATT, Samsung, LG, RIM, SonyEricsson, etc. Basically, the conference consisted of open source telephony enthusiasts and Internet companies speaking to themselves and confidently predicting the downfall of the operators.

In Silicon Valley we call this "breathing your own exhaust" -- you bring together a bunch of people who already agree with each other, and they reinforce each others' opinions. A lot of conferences are like that, and I don't want to ding the O'Reilly folks who ran the conference because they can't really control who comes to their events. But it was symptomatic of the lack of communication between Silicon Valley and the operators. That missing dialog affected the presentations of some of the speakers.

An example: An otherwise excellent speaker on identity, Kaliya Hamlin, tried to suggest some potential win-win strategies in identity management that would help users while still enabling the operators to make money. She suggested that the operators offer identity services and tie them to a commerce engine, so users could buy things and charge them through their wireless bills. It's a great idea, and the Japanese operators are already doing it. But I know from personal experience that as soon as you mention "billing" to most of the US and European operators they run screaming from the room. Their billing systems are already too complex, held together by chewing gum and spiderwebs, and the thought of making a big change to them is terrifying. Kaiya gets an A for effort, but in a forum that had a balanced representation her idea would have been discussed and debated rather than just tossed out there.

Somewhere, sometime I'd like to see a forum where the operators and the Internet folks could engage as equals and attempt to find common ground. Agreement might be impossible, but at least it'd be fun to watch.

The ideas for mobile social communities give me the creeps. People who go to conferences tend to be outgoing; one of the reasons they go is because they enjoy interacting with other people. The O'Reilly folks cultivate this attitude very well, with a lot of breaks and discussion sessions that run late into the night. The energy level is great, and reminded me a bit of some of the early Mac and Palm developer conferences.

But when you take those same extroverts and ask them to design social networking software, the results are creepy. Don't get me wrong, I think online communities are one of the building blocks of the future economy. But the type of community I prefer is one where you interact only on particular topics that you want to share. What the extroverts are designing is communities in which deep knowledge about everyone else is a goal in and of itself.

Case in point: Jyrki Engestrom of Jaiku showed an S60 presence client designed to "bring your address book to life." What it does is collect information about your current status and relay that to everyone else on your contact list. Jyrki showed us the status report on his wife -- at the time of his presentation, she was asleep, with the ringer turned off, at home (the software picks up where the user is through location services). He could also check his wife's calendar to see who she's meeting the next day. In the future, the client will be extended to show what music the user is listening to, and will use Bluetooth to report on anyone else who's nearby. The client also has an API, of course, so we can all extend it to give even greater layers of intimacy.

And of course it'll all be paid for by (drumroll, please) advertising that gets tailored to all that personal information the phone is collecting about you.

Jyrki says the effect is like having a blog, but with smaller chunks of content -- a lifestream, a "living address book." To me, it was more like a system for making everyone the star of their own little reality TV show. Think about it, an entire world that works like LiveJournal. I've got no problem with the folks who enjoy that, but I suspect this will be yet another mobile feature that cuts the mobile market into segments -- some people will like it, and some people would rather bodysurf in a gravel pit.

(For the record, I'm the only luddite who thinks this way. Check out this amusing rant from Steve Bryant regarding Twitter.)

Yahoo is more fun at a conference than Google. If you're ever at a conference and have to choose between attending a talk by a Google exec and one by a Yahoo exec, go to the Yahoo one. Yahoo people sometimes (not always) share ideas and interesting projects they're working on. They seem to hold the same philosophy as many web app companies, that if you share good ideas you'll get back more benefit than you give away. Google, meanwhile, is tighter than Spandex jeans on a 16-year-old. They don't share information on any unannounced projects, so about the only thing they can do at a conference is talk about work they already completed. At a conference I attended last year, a Google manager gave a talk on how they created Google Calendar. Get this -- they interviewed users. Oooooooh. The Google speaker at eTel, Chris Sacca, was much more entertaining. But as expected he talked about history -- Google's work to build a WiFi network in Mountain View, California.


Other highlights

Microsoft has fun with SMS. Sean Blagesvedt and Rajesh Veeraraghavan of Microsoft Labs showed off an experimental project that lets someone send instructions and database queries from a mobile to a PC via SMS. On the PC, you use an Excel template to control how the system will respond to the SMS commands. The PC can send messages back to the phone via SMS. The whole system is effectively a tiny command-line interface between the phone and the computer.

That would be an interesting but not-too-compelling experiment in the US or Europe, but they're aiming it at developing countries where it's difficult for a small business to set up a separate web server, and 3G connections are rare or expensive. Using the existing 2G infrastructure and a low-end PC, a company could set up a basic information access system. I liked the idea.

Coincidentally, Don Norman just wrote an article pointing out the rebirth of the command line in search engines interfaces and in computer operating systems. So this stuff is popping out all over (thanks to David Beers for the link).

Universal identity. I mentioned Kaliya Hamlin's talk above, and I hope it didn't sound like I was picking on her, because I thought she did one of the best talks at the conference. She described the efforts that several organizations are making to create a single, unified system for verifying your identity online. The goal is that you log in once per browsing session, and after that you're automatically logged into every site you visit. There's a lot of work going into making this an open standard, so various competing identity services can operate underneath it. I was impressed with the work that's going into it, and I think it'll be useful infrastructure for the industry, even though I'm not sure if it's solving a burning need for the average user.

Tidbit from the front lines in a municipal wireless deployment. Chris Sacca of Google said the WiFi network it installed in Mountain View, CA, is seeing steady growth. One notable statistic: in any given day, about 90% of the base stations get some traffic. All of them get traffic in a given week. Traffic is highest in the lowest-income parts of the city. That sounds strange, but think about it for a minute -- the rich people all have cable or DSL already. Municipal wireless is often depicted as a benefit for rich people, but maybe by democratizing access to the Web it actually helps poor people the most.

(Of course, "poor" in Mountain View is a relative thing. Maybe "less well off" would be a better term.)

He also showed a lot of amusing pictures of dinosaurs, a pointed reference to the operators. That pretty well reflected the attitude of most of the speakers at the conference.

Progress reports on open source mobile devices. A couple of companies showed works in progress on open source mobile devices. TrollTech demonstrated its Greenphone, which is prototype hardware of a phone running its QTopia Linux (demo devices are, unfortunately, what you have to produce when you don't have a local licensee shipping your latest stuff). Fonav showed a new UI and PIM suite built on the Greenphone, and OpenMoko discussed the Linux phone it's developing. All of the products were interesting, but I kept wondering what unique problems they would solve for users. It was hard to tell, because the time available for demos was very small.

I don't think open source phones that do the same things as the smartphones already on the market are going to excite many users. The thing holding back smartphone adoption isn't the proprietary nature of their operating systems, it's their lack of compelling functionality for most users. If the open source phone guys could turn their energies loose on that problem, I think they'd have a better chance of changing the world.

I scan a lot of technology weblogs, and it has been fascinating to see how the recent New York Times report on the hiring of Paul Mercer by Palm has been echoed all over the blogosphere. The story seems to have some sort of special iconic importance to a lot of people; they view it as a response to the iPhone, or as a milestone indicating trouble for Palm.

Paul's a good guy, he had a nice reputation at Apple, but it bewilders me that the Times picked up on that particular hire. There has been a ton of change in Palm's marketing and product marketing organization in the last year, starting long before the iPhone. Two of the leaders in the team left, and Palm recently hired Brodie Keast to run the whole thing (Brodie is a very senior, longtime veteran of Apple, Tivo, and a bunch of other places). Brodie reorganized marketing, some iconic Palm veterans have left (including Rob Haitani*), and Brodie has brought in some new people. There hasn't been a peep about any of that on the New York Times, or any blog I read. But Paul's hiring gets a ton of play.

We're told that blogs act as a supplement to the mainstream press, digging out the real stories and adding lots of missing detail. But sometimes the press and blogosphere together are just a big echo chamber. In this case, I think everybody has missed the real story, a longer-term changing of the guard at the company. Weird.

________
*That's what I was told by a Palm employee, but I haven't seen an official announcement, so please view it as a strong rumor until there's confirmation.

I know, I'm having a fantasy. The term "convergence" and the idea behind it -- that various industries in technology and entertainment are gradually merging -- is pervasive online and in the popular press. Nothing I write here is going to change that.

But let me say this for the record anyway: The problem with convergence is that when you look closely, it's not happening.

Markets aren't converging, they're diverging. The web deconstructs mass markets, by making it economically attractive for a company to address narrower market segments. Online marketing can be targeted at much more specific demographic groups than mass media could reach, and online communities help companies to talk directly with their most important customers. I've already written about this happening in mobile devices, but if you want another example, look at television: the mass markets are slipping away from the big networks, eaten by a gazillion cable channels. Or look at newspapers, chewed down by a blizzard of websites.

"Convergence" is definitely not the right word for what's happening to markets.

Are the industries converging? If the markets aren't converging, then maybe it's the industries that are doing it. The computer industry gradually merges with telecommunications, which seamlesly blends with entertainment. I can kind of get into that, except for phrases like "gradually merge" and "seamlessly blend." They sound far too gentle. What's actually happening is more like they way they make steel: coal, lime, iron ore, and oxygen get fed into a blast furnace and utterly consumed by unearthly fire. If that's what you mean when you say "convergence," then yeah we're converging.

OK, so what should we call it? I kind of like "spontaneous combustion;" it captures the spirit of what's happening. But I can't picture the Economist running a 16-page special section on the spontaneous combustion of the mobile phone industry, so we need to come up with something snappier. Maybe "deconstruction" or "re-forging." "Collision" might do the trick, but it doesn't sound quite violent enough.

I don't know, what do you think? If you have a better term for it, please post a comment.

I recently wrote that the argument over the viability of Web 2.0 applications misses the point -- most of the applications on any new computing platform die. What matters are the innovations and new business models that we learn from them.

One of the things we're clearly learning about from Web 2.0 is how to organize an online community.

There have been obsessive communities in society for thousands of years: dog breeders, fraternal societies, Amiga users, and so on. What the Web has done is make it much easier for those people to find each other and hang out together. Although most people will tell you that a good online community is motivated by passion or enthusiasm, I think it runs a little deeper than that. The best Web communities are about shared obsession. They're run by people who share the community's obsessions and celebrate them together.

Ted Rheingold, founder of dogster.com and catster.com, is one of the best explainers of the whole online community phenomenon. If you get a chance to see him talk, don't miss it (you can listen to an MP3 of one of his speeches here). He gives a lot of sensible rules on how to manage an online community, the most important of which (in my opinion) is to let the users lead, but always moderate the community to weed out antisocial people. If you want to see a great example of his philosophy at work, look at the company weblog to see how the obsession with pets permeates everything the company does.

Because community members are self-motivated, it's possible for groups to exist online solely through volunteer effort. The work they can do together is often very impressive. One example I've mentioned before is that a volunteer group called the Pacific Bulb Society is gradually using a wiki to create a very comprehensive reference work on species flower bulbs. (Yes, it's esoteric, but remember what I said about shared obsessions.)

Although volunteers are great, a community can do a lot more if there are full-time people working on it, and that means forming a company and bringing in revenue. Many online communities charge money for special services, but advertising can also play an important role because for almost every community there's usually a company that wants to market to them. This is another area where the Web 2.0 companies are learning a lot. The original assumption was that it'd be easy to advertise on a community site -- just put up a banner offering a product that's relevant to the community. As Rheingold points out, that doesn't work well. People reading a community site aren't there to buy something, they're there to hang out with people who share their interests. The advertising that works best on a community site is subtle brand building tailored to the community's interests, rather than traditional offers. Basically, the advertiser needs to join the community. Because of this, Rheingold strongly urges community sites to develop their own ad sales teams, rather than working through an ad sales syndicate, because a syndicate can't fully represent the community to the advertiser.

Communities don't have to be built around a particular subject, like cars or computers. Any shared enthusiasm, emotion, or identity can be the basis of a community if it bonds people together and gives them something to talk about. For example, one frequently cited community is the photo site Cute Overload (#114 on Technorati). The obsession that ties those people together is their shared love of fuzzy animals that have pudgy faces.

Another popular site that's intended to be a community is Digg. That came as a surprise to me, because I thought of it as a collaborative news filter, a kind of group effort to replace the New York Times. (At least, that's what some folks said online, producing quite an argument at the time.)

But despite the posturing, the New York Times and Digg are doing entirely different things. The Times is hoping to be the dominant online news source in the US, funded by advertising and supplemented by fees for access to the archives, columnists, and whatever other souvenirs they can sell you. The Times says its online revenues have been growing, and publisher Arthur Sulzberger has taken to saying grandiose things about the website totally replacing the print edition: "I really don't know whether we'll be printing the Times in five years, and you know what? I don't care either."

Digg, meanwhile, is a leader in a category called "social media," with an emphasis on the word social. It's really a community site, explains founder Kevin Rose. He says his long-term intent is to use Digg's user ratings of news stories and other web content to assemble communities of people who have similar interests. Digg's system for commenting is also intended to help build the community feel. He says one of his favorite features is the ability for users to rate each-others' comments. That reinforces the community dynamic; and besides, Rose says, it's fun to use. He likes to peek at comments that have been buried by the community, just to see if he agrees.

So the news is just a vehicle for Digg to assemble communities.

True community is almost impossible to fake, because obsessive people can instantly spot anyone who's not also obsessed. If your company is setting up a community website, make sure the people running it are as obsessive as the visitors you're recruiting, or the site won't work. In fact, all it will do is make you look bad.


Mobile communities

One area where we still have a lot of learning to do is the role of communities in the mobile world. The mobile industry is very enthusiastic (you might say obsessive) about moving online communities onto mobile devices. I think that's going to be a lot trickier than it sounds. The assumption made by the mobile industry is that since community members are obsessed, they will want to carry their obsession with them at all times. But check out one of the community sites, and look at all the features that make the community work. Let's jump back to Dogster for an example. Here's their home page:



Ladies and gentlemen, that is one of the ugliest home pages on the web, and it's packed with about ten times more links than Web design principles say you should ever put on a single page. That's entirely deliberate; the site is laid out like a giant box of Valentine candies, so you can't resist trying at least one link.

How in the world are you going to deploy that on a mobile device?

You'll redesign the page. You'll remove some features, and most of the pictures. You'll make the type bigger and you'll put the most popular features up front. In other words, you'll display Dogster Lite on the phone. And that changes the user dynamic. Now instead of visiting Dogster, they're visiting a limited subset of the site. The opportunities to disappoint people are enormous.

I'm not saying a mobile version of a web community can't succeed; I'm sure a lot of them will. But it won't be easy, and it won't be straightforward.

I've been at some telecom conferences where speakers said the operators had an opportunity to create and lead new communities on the mobile Web. That's twisted thinking in two ways. The first is that communities are led by people who share obsessions with their visitors. Unless the operators are forming communities on cell tower placement and the details of FCC regulatory compliance, I don't think they are well suited to lead user communities.

Second, there is already a huge supply of vibrant communities online. It's far too late to displace them. I'm sure there will be some new communities created that take special advantage of mobility, but for the most part the challenge for the operators is not creating new communities, it's inviting the current communities in. That means giving them the opportunity to run experiments in how to format their sites for mobile, and letting them lead the resulting communities. In other words, the operators need to establish an open garden for communities, and we all know what an uncomfortable issue that is.

Finally, there's the question of revenue. The whole reason the operators want mobile data is to increase their billings. But most online communities are very low-revenue, if they bring in any money at all. There isn't a big revenue stream for the operators to tap into. They can certainly use online communities to increase the amount of traffic on their networks, but with more and more operators moving to flat pricing for mobile data, increasing traffic isn't necessarily a goal.

Unless the industry is careful, the operators could end up with a situation similar to what happened with cameraphones -- the users like the feature, but it doesn't actually generate a lot of revenue.

Next time: How the Web spawns new forms of media.

In case you missed it, there's a long interview with Jeff Hawkins of Palm over on PalmAddicts. In the interview, Hawkins hints very strongly that he'll show the company's new "third category" device in May.

"We’re going to be announcing something…but I won’t tell you what it is…we will be launching this year, not in the distant future. I’ll give you a much bigger hint: I’m going to be speaking at Walt Mossberg’s D Conference in May. It’s a high-end industry conference. Anyway, I’m going to be giving a talk there, and that would be something for the Palm fans to keep a close watch on."

That should be enough to get the rumor mill cranked up again.

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By the way, I apologize for the shortage of posts recently. I had the opportunity to work on a couple of papers with Prof. Joel West of San Jose State, discussing the iPhone and some other interesting subjects. They ate into my blogging time. I'll let you know when the papers are available.

Joel has an interesting blog on open strategies. It's worth checking out.