When does a whisper become a shout?

It will be interesting to see whether there’s any kind of official response from Google (apart from Matt Cutts’ post) to the recent kerfuffle (or perhaps it’s more of a brouhaha) over the “tips” that have started appearing at the top of its search pages — the ones that direct people to download Picasa, or use Blogger. Blake Ross, a co-founder of Firefox, wrote a critical post about it recently, which Mike Arrington then responded to.

Blake’s point seemed to be that by promoting its own services on result pages, Google is unfairly using its search platform to hawk its own products, and that a company whose entire existence is based on the idea of search results and PageRank as a meritocracy — in other words, a process that drives the best results to the top over time — should have faith in that process and allow its own services to appear wherever they appear in the search rankings.

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Mike’s post expanded on this point, arguing that Google’s recent behaviour in that and other areas is a sign of Microsoft-like arrogance from the company, a criticism that my friend Mark Evans and others think is a little over the top. What is clear is that Google has grown to such a size that things people would previously have seen seen as innocuous — like small text links promoting the company’s products — all of a sudden seem like a huge deal.

I have a lot of respect for Blake’s position on the subject, and there are some excellent arguments back and forth in the comments section of his post (which the last time I looked contained more than 215 comments). But I think he and others — including Allen Stern at Center Networks — are being overly sensitive about Google’s tips. I think they are clearly set apart from the search results, and therefore are nothing but a harmless promo link (Danny Sullivan agrees with me).

It’s interesting to see how Google is being held to a much higher standard than another company likely would be, in part because it is so large now, and also because of its famous “Don’t be evil” motto — which is clearly causing way more trouble than it’s worth.

Google wins — because it doesn’t suck

LeeAnn Prescott from Hitwise has a much-discussed report about Google’s blog search getting a greater “market share of web visits” (Hitwise terminology for a combination of page views and visitors) than Technorati, the original blog search engine. This has led Om Malik, among others to write Technorati’s eulogy.

I’m not sure whether the ascendence of Google’s blog search spells the end of Technorati and/or Sphere — another blog search tool, which has done deals with media outlets such as Time magazine to put a “Sphere It” button on their stories — but I am sure of one thing. Google’s blog search is better for one very simple reason: It doesn’t suck.

I should qualify that. Technorati can be useful for searching specific terms, and using the “authority” ranking is not a bad tool. But when it comes right down to it, I agree with Erick searching for posts on a topic through Technorati is just not very useful — or not as useful as Google’s blog search. As Zoli Erdos and others have pointed out many times (here’s his latest roundup), Technorati also has numerous technical problems that continue to crop up.

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Searching related posts through Sphere, meanwhile, is quite honestly pathetic. Whenever I see a “Sphere It” button or link, I click it just to see what happens, and 99 times out of 100 it is a boatload of crap. I’ve seen links to things that literally don’t make any sense at all. Beside a blog post I recently saw a link that said there were over 1,000 related posts at Sphere, and I just knew that the vast majority were going to be functionally useless.

For the record, Mark Cuban’s IceRocket blog search isn’t much better. When I want to write about a particular issue, either on the blog or for a story at the Globe and Mail, I will almost always search to see if a blogger somewhere has linked to something that might present an alternative point of view or an interesting perspective — and I routinely wind up back at Google’s blog search.

Is it that Google’s algorithm is better? I’m not enough of a geek to know. You have to admit that Google knows search. And one thing I know for sure about their blog search: It is just better.

Update:

Mark Cuban, who is not only IceRocket’s founder but also clearly its chief evangelist, has posted several comments here defending his company’s blog search that are well worth reading. After giving it some thought, I would like to revise my original comment that IceRocket “isn’t much better” than Sphere. For some searches, it clearly is better — and arguably as good as Google. And no, I didn’t change my mind just because Mark beat up on me 🙂

Update 2:

I spent some time on the phone with Tony and Martin of Sphere (who responded in the comments on my initial post), and I think that — much as I like the imagery — “boatload of crap” might have been a little harsh when describing Sphere’s results. As Martin points out, some of the searches, including ones that use blog posts of mine as the source, bring fairly targeted and relevant results.

I think the problem, at least from my perspective, is twofold: One, Sphere draws relevance from the entire post as well as from the rest of the blog — therefore, if a post is short and/or the blog writes about a lot of different subjects, then a Sphere search isn’t going to come up with results that are all that relevant (Tony says it didn’t work particularly well on Scoble’s blog for that reason).

What happens in those cases is that Sphere comes up with a lot of related posts, which is why on some blogs I see a Sphere widget that says “56,975 related posts” and the first thing I think is “bullshit — there can’t possibly be that many related posts.” (Tony agreed with me on that one).

The bottom line is that Sphere is still trying to find the best method, just as Google and IceRocket are. I appreciate Tony and Martin taking the time to talk to me about it, especially after I dumped on them.

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Sure, I’d love a free Ferrari, but…

Just checked in with Techmeme after a few days of eggnog and tobogganing, and what did I find but another ethical dilemma brewing, this time courtesy of Microsoft (although Edelman appears to have played a role as well). I predict that the blogosphere-as-ethical-minefield meme will continue to be a hot topic in the year to come, if only because there seem to be a ton of unresolved issues, not to mention a vast difference of opinion on what’s right and what isn’t.

Reading through the various posts on it, like Joel Spolsky’s or Judi Sohn’s at Web Worker Daily — who wins the prize for my favourite headline, with “There ain’t no such thing as a free laptop” — and the comments on some of those posts, including the ones at Brandon LeBlanc’s blog (he got one of the free Microsoft laptops with Vista but didn’t say so for a few days), it seems as though some people think keeping the laptops is just fine, and others think it is a heinous crime.

As with many of the other ethical issues the blogosphere is wrestling with, this one also occurs in traditional media, particularly in the technology area, where reviewers are often given software and hardware to test. Sometimes the understanding is that the reviewer will keep it (if it isn’t of huge value), but in the vast majority of cases it is sent back. Are there reviewers who keep things they shouldn’t? Sure there are. Does it affect their credibility? Who knows.

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Ed Bott thinks that bloggers should be able to keep the free laptops, and says he isn’t going to lose any of his faith in the credibility or trustworthiness of Brandon LeBlanc or Long Zheng as a result of them keeping it. His argument is that trust is something you build up over time, and that it takes more than a free laptop to demolish it — and I would agree, to a point.

But I also think that a blogger trying to build up credibility and win an audience is fighting an uphill battle to begin with, and accepting freebies without disclosing them is a very slippery slope, and that’s why my position on PayPerPost has also been that payment is fine provided it is disclosed. The FTC seems to agree, given its recent decision on word-of-mouth marketing.

As Tony Hung points out at Deep Jive Interests in this post on PayPerPost buying Performancing, bloggers want to be compensated and many people don’t see anything wrong with that, and neither do I, provided it is disclosed. Anything else, in my opinion, is on the slippery slope. If you think you’re able to keep your footing on that slope, be my guest — but don’t be surprised if you wind up at the bottom.

Happy ChristmaHanuKwanzivus to all

Just a quick note to my legions of devoted fans to say that posting will likely be sporadic over the next few days, as a result of the combined holidays of Christmas, Hanukah, Kwanzaa and Festivus — all of which I have chosen to celebrate, in an attempt to accumulate as many presents and as much food as possible. If you have a lot of time on your hands and want to stroll through some Ingram family photos from the past year, our digital Christmas card is here. Best wishes (of whatever season) to all of you.

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And now, the standard disclaimer, as approved by my solicitors:

Please accept with no obligation, implied or implicit, my best wishes for an environmentally conscious, socially responsible, low stress, non-addictive, gender neutral, celebration of the winter solstice holiday, practiced within the most enjoyable traditions of the religious persuasion of your choice, or secular practices of your choice, with respect for the religious/secular persuasions and/or traditions of others, or their choice not to practice religious or secular traditions at all together with a fiscally successful, personally fulfilling and medically uncomplicated recognition of the onset of the generally accepted calendar year 2006, but not with due respect for the calendars of choice of other cultures whose contributions to society have helped make Great Britain great not to imply that Great Britain is necessarily greater than any other country and without regard to the race, creed, colour, age, physical ability, religious faith or otherwise or sexual orientation of the wishee.

Continue reading “Happy ChristmaHanuKwanzivus to all”

Good luck with the Google-killing, Jimbo

Update:

Mike Arrington posted what he says is an exclusive screenshot of a Wikia search page, but Jimmy Wales has said that Mike’s post is all wrong and that the screenshot has nothing to do with what he’s working on. In a comment on Rex Dixon’s blog, Mike says that his source is pretty good and he thinks what he saw was an early version of Wiki Search. Meanwhile, Rich Skrenta has said that Jimbo is also interested in reviving the Open Directory Project in some way — another attempt at people-powered search that has fallen on hard times (hat tip to Techdirt for the link).

Original post:

I’ll say this much: Jimmy “Jimbo” Wales, founder of Wikipedia, has no shortage of hubris. Instead of saying he plans to launch a “social” search engine using Wikipedia-style co-operation strategies, he comes right out and tells the Times that he’s gunning for Google. Why not reach for the top, right? So Google has a few thousand PhDs and about $40-billion in cash. Big deal.

Like many people, my first impression of Jimbo’s new idea was that it has a really dumb name: Wikiasari, a Hawaiian-Japanese hybrid that is likely to irritate people from many different cultures. And my second impression was that Jimmy has a bit of a mountain to climb with his “social search” proposal. As Pete Cashmore at Mashable notes, this kind of thing has been tried before, and more or less, well… failed.

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In a comment on Niall Kennedy’s post about Wikiasari, Greg Linden of Findory — which finds relevant blog posts and news articles based on things you have read before — points to a piece that Chris Sherman wrote at SearchEngineWatch awhile back about social search and how it doesn’t really work all that well, especially as the Web continues to grow.

No matter how many people get involved with bookmarking, tagging, voting or otherwise highlighting web content, the scale and scope of the web means that most content will be unheralded by social search efforts. The web is simply growing too quickly for humans to keep up with it.

That doesn’t mean that social search efforts aren’t useful—in most cases, they are. It simply means that people-mediated search will never be as comprehensive as algorithmic search.

Mashable also makes a good point, which is that a social search engine could easily wind up being just as distorted by ulterior motives as a service like Digg is, since there would be even more incentive to get to the front page of search results. Wikipedia is already criticized for the way its internal group of editors control entries from behind the scenes. What if their actions meant the difference between hundreds of dollars and millions of dollars in advertising?

Jimbo also takes a whack at Google’s search results in the Times piece, by saying that if you search for something like “Tampa hotels” all you get “is crap.” But I searched for Tampa hotels and got half a dozen totally relevant listings for hotel directories, local Tampa search sites and so on. How is that not relevant? And how would people-powered search provide anything better for me if I wanted to find a good hotel? Jimmy’s got a bit of work to do.

Sometimes the truth just slips out

(cross-posted from my media blog)

In a recent blog post, Anil Dash of SixApart wrote about the fallout from a comment that Seagate CEO Bill Watkins made to Fortune magazine, in which he said that his company’s products help people “buy more crap and watch porn.” The comment — which was made during an informal dinner with bloggers and reporters in San Francisco — apparently got Watkins into some hot water within the company, and so he sent out a memo to employees saying:

Unfortunately, and unwisely, I also used pornography as an example to illustrate a point. Fortune Magazine chose to focus narrowly on this example in their headline.

They are in the news business and eager to get their reader’s attention and I should have known better. Even though I believe Fortune’s headline writers took my comments out of context, I want you to know that I am sorry if this has in any way offended anyone.

As the original Fortune piece noted, Watkins is well known for being a colourful personality who likes to speak his mind. Some of those writing about the incident, incuding commenters on the followup post on Fortune’s The Browser blog, are afraid that the magazine’s choice to feature the quote prominently (including in the headline) might dissuade Mr. Watkins and other CEOs from being candid.

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That may be — but it’s unlikely. What’s more likely is that the Seagate CEO feels completely comfortable with what he said, but issued the memo as a face-saving measure. After all, his comment wasn’t as bad as the one Ratner Jewellery CEO made in 1991, when he said (among other things) that a decanter set his company sold was cheap because it was “total crap.” The company’s share price fell by almost a billion dollars and he was soon the ex-CEO.

As Anil notes in his post, the Seagate incident was the result of a series of otherwise reasonable decisions: Watkins jokes around with bloggers at dinner, Fortune spots a salacious and funny quote, and an editor highlights it (editor Jim Ledbetter discusses his decision in the comments on the followup item). The Seagate CEO then says he is sorry, and life goes on.

Update:

John Furrier of Podtech has posted a comment to say that he was at the dinner with Watkins, and that he described in a post here that he thought Fortune blew the Seagate CEO’s remarks out of proportion.

Warning: Deep link at your own risk

When it comes to the Web, it goes without saying that being able to link to things is kind of important — in fact, it’s a little like saying the ability to make the wheels turn is kind of important when it comes to driving. No linking equals no Web. So it’s not surprising that so much attention has been focused on a ruling out of Texas that seems to declare linking illegal, unless the person who owns the content that is being linked to agrees.

The case in question involves a site called Supercrosslive, which was sued for linking to audio streams from another motocross site called SFX Motor Sports. The latter claimed that by “deep linking” directly to the podcasts, Supercrosslive was depriving it of the revenue from ads that visitors would have seen (and presumably thought about clicking on) if they had made their way through the website to the podcasts themselves.

As the CNET story makes clear, there have been a number of rulings that look at the issue of linking to illegal material, including a piece of software for decrypting DVDs, but there haven’t been many cases which suggest that linking to legal material could be forbidden by a third party. In fact, there have been several U.S. rulings that found linking — even “deep linking” — is totally legal, including this one.

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On the surface, it’s easy to see the point that SFX is trying to make. It litters its website with ads, hoping that the people who want the audio clips will pass by them and generate some income, and then Supercrosslive links directly to the podcasts and allows people to bypass all the ads. For you legal beagles, there’s more discussion of the issues at this blog, written by one of Google’s senior counsel.

The important point, however, as Techdirt notes, is that there are any number of ways for the site to prevent someone from linking directly to or streaming the audio — they could require a password, they could only allow downloading, they could filter out direct links from Supercrosslive’s IP address, and so on. If you don’t want people to link to things, then there are any number of ways to achieve that goal.

Unfortunately, the Texas case (unless it is overturned) could set a dangerous precedent.

NBC should make Andy Samberg CEO

Like a lot of TV networks, NBC was cruising along happily ignoring the Internet as much as possible, until the “Lazy Sunday” video clip from Saturday Night Live hit YouTube almost exactly a year ago and caused what I like to refer to as a “holy crap” moment in the executive suites of the broadcaster. More than five million people watched the clip in the space of about two weeks. So what did NBC do? Told the site to take it down. In other words, the stupid pills kicked in.

To someone’s credit, however, NBC rethought this move and started taking Internet distribution seriously, setting up a unit called NBBC (the National Broadband Broadcasting Co.) to seed the Web with NBC content. And that leads us directly to the latest viral video hit from SNL, the musical satire called “My Dick in a Box”, featuring Justin Timberlake and Andy Samberg.

As the New York Times describes, NBC chose to put an uncensored version of the video on their site, and it is all over YouTube as well. I think it’s hilarious, and plenty of other people seem to think so too. The other skits with Justin Timberlake, including one where he plays a giant Cup o’ Soup street-corner vendor, are also worth watching, as is the segment with Jimmy Fallon called “The Barry Gibb Show.” All are available on the NBC site and elsewhere.

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Like many people my age (don’t ask), I remember Saturday Night Live from way back — John Belushi, Dan Aykroyd, Gilda Radner, etc. — and slightly less way back (Dana Carvey, Mike Myers), and I have periodically enjoyed newer versions of the show including such “stars” as Adam Sandler, Chris Farley and Ben Stiller. But like Ashkan Karbasfrooshan at WatchMojo, I have probably paid more attention to the show in the past year or so than I have in a decade, and that is almost single-handedly the result of Andy Samberg (and Chris Parnell, who got booted from the show in a recent purge).

Samberg, as the NYT story describes, came to SNL from a comedy troupe called Lonely Island, and brought with him several writers and producer types. Whether they have helped to boost NBC’s smarts when it comes to the Internet as well as making hilarious videos (the Natalie Portman one is also a keeper) is difficult to say, but I would argue that he has helped that network more than just about any senior executive you could name. He deserves a raise.

Google: Anti-trust case waiting to happen?

Depending on whom you talk to about Google’s share of the Web-search market, you are likely to get estimates of anywhere from 30 per cent to the upper 40-per-cent range. Rich Skrenta of Topix, however, says that the true number is closer to about 70 per cent, and that anyone who is currently running a Web business and is familiar with the search business already knows that.

In regular releases from the major traffic-measurement firms such as comScore and Nielsen NetRatings — including this one — Google is given a market share of 44 per cent and 49 per cent respectively. But Skrenta says that “Everybody involved in the search industry and everyone who actually runs a website knows these numbers are completely wrong.”

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He describes how he “picked a basket of medium-to-large websites and looked at the inbound search traffic percentages using Hitwise,” and that Google came out with an average of 70-per-cent market share. Don Dodge notes that this could be a result of looking at search referrals versus raw searches, but I think that’s a bit of a red herring. The fact is that Google owns about 70 per cent of search that drives people to websites. And that is money.

Google has already been sued by someone who claimed that their business was being adversely affected by the company’s policies, and that this was illegal because Google had what amounts to monopoly power. If that sounds familiar, it’s because Microsoft was accused of pretty much the same thing in a federal anti-trust case that was launched in 1998 and dragged on for years.

Is Google a potential anti-trust target? Nick Carr has said he thinks so, and Mike Masnick at Techdirt has also said it’s in the realm of possibility. I don’t think that kind of claim has a hope of succeeding (and didn’t think that it made much sense in the Microsoft case either), but stats like Rich Skrenta is throwing around are likely to raise some red flags with the policy wonks in Washington.

The Ingram Christmas letter for 2006

Boy, how time flies. Why, it seems like just yesterday that we were running around in T-shirts. Wait… that was just yesterday! At least, it was in Toronto anyway. I know that our friends in Calgary — and other places where they experience normal weather patterns — will mock us, and so they should. Nice as it is, though, it certainly took the fun out of getting our Christmas tree. Going for a haywagon ride with hot chocolate and a campfire just isn’t the same when it’s plus 15 out. Upside: No shovelling.

Our year started as all years should — with a big party, in this case up north at our friends’ farm in the wilds of northern Ontario. Then it was off on a mini ski-trip with Becky’s brother Dave and his family at a hill in Calabogie (also in the wilds of northern Ontario). After a hair-raising, white-knuckle drive home, we rested up for a month or two, and then made our way down south to Becky’s parents’ place near Venice, Florida with her sister Barb and family for some swimming in the ocean, some playing catch and some sunset-watching.

There was also a great trip to Busch Gardens for some rollercoasters and gondola rides and animal-watching, with much fun had by all three girls, then there was time left to feed the horses and we also celebrated Zoe’s 8th birthday. I also wrote a feature for the Globe about teaching Caitlin to drive, and illustrated it with some humorous photos.

After we got back from galivanting around down south, there was some Easter-egg fun at Becky’s cottage up in Muskoka, along with an ad-hoc game of Survivor for all the grandchildren, and not long after that there was time for some croquet-type fun at Mathew’s cottage in the Ottawa Vallley. After we got done with all that merriment, Mathew dove head-first into organizing a Web conference called “Mesh” that was held at the MaRS Centre in downtown Toronto for two days in May, with about 450 people attending and a series of keynote interviews, as well as panels and workshops on blogs, wikis, podcasts and all sorts of other Webby goodness.

Then pretty soon the time had rolled around for Meaghan’s 13th birthday — another teenager in the Ingram household. Hallelujah! And by then it was warm enough for a little bit of pool-type fun and some horseback-riding for Caitlin.

June and July were not great, unfortunately. Becky’s father Bob was diagnosed with an aggressive form of cancer and went downhill fairly rapidly, and passed away in mid-July. But he was in no pain for the last few weeks, and was surrounded by his loving family. He lived a wonderful life, and we all miss him very much (I set up a tribute website for him here and if that’s down I set up a mirror here). It was difficult to enjoy things much after that, but the kids had fun canoeing around and even kayaking, in Zoe’s case. There was also a trip to camp for Meaghan and Zoe, where the youngest Ingram spent the week sleeping in tents at the outdoor camp and had a terrific time.

And in between there was time to go fishing at the Ingram cottage at Golden Lake, to lie in the sun on the boat reading books, to catch a fish over by the swamp, and to play some cards at the kitchen table (and yes, Zoe beat all of those teenagers at whatever game they were playing). We also made time to go on a hike up a mountain or two, and to get up early and watch the fog roll out in the morning, and then hang around on the beach doing as little as possible. Soon, fall was starting to creep in and it was time for Thanksgiving, at which point we decided to deep-fry a turkey using a marvelous contraption that Mathew’s mum gave him for his birthday. It worked great — although it was a bit nerve-wracking boiling 15 litres of oil.

The fall also saw Zoe dive into playing hockey, the first Ingram ever to do so. She became a member of Team Bubblegum (a name sure to strike fear into the hearts of her tiny opponents) with a bright pink jersey to match, and has played her heart out, including a thrilling game as goalie. Then she dressed up as an angel for Halloween (the older girls were too cool for Halloween this year), and later Becky and Mathew followed her lead by dressing up too — for a murder mystery at Becky’s brother’s place. Pretty soon it was time for making gingerbread houses and Christmas get-togethers of various kinds.

And that’s about it for 2006 so far. A couple of big parties left and that will be all she wrote for another year. If you feel like checking out some more Ingram pictures, you can usually find them either at photos.mathewingram.com or at Mathew’s Flickr photo gallery page, which is here. For e-mail purposes, Mathew is at [email protected] or [email protected]and Becky is at [email protected]. Mathew also writes several Web and media-related blogs, which you can find at www.mathewingram.com. We here at Ingram and Co. wish you and yours all the best of the season.

Remaking the charity biz, Web 2.0-style

Austin Hill — a smart guy who founded the company that eventually became Radialpoint, and writes a venture-capital oriented blog called Billions With Zero Knowledge — has put together what he hopes will become a Web 2.0-style charity called Gifter, and launched it with a “million-dollar blog post.” For every wish that is submitted, $1 will be donated to charity.

You can also sponsor a wish by donating $1 or more to Gifter (props to Austin for keeping all the vowels in the name, unlike most other Web 2.0 outfits). There’s an explanation of how things work here, including a description of how you can use online charity tools such as Tom Williams’ excellent GiveMeaning.com, as well as CanadaHelps.org (another of Austin’s ventures, called Project Ojibwe, has sponsored 2,500 wishes).

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Coincidentally enough, Muhammad Saleem of The Mu Life and a partner just launched a website called Socially Given, where they are also hoping to use Web 2.0-type community tools to bring together people who want to contribute. Their idea stemmed from a post on Digg, in which Valleywag said it would donate $10 every time its “Diggbait” posts made it to the front page — and Muhammad calculated that this would bring in far more in advertising profits than would be given to charity.

Cambrian House, the Calgary-based “crowdsourcing” software-development company (which I wrote about here), also has a socially-driven charity effort of sorts called Robinhood Fund, in which people pay $5 to submit a wish, and then the community votes on who should receive the money collected each month. Past recipients have included a woman who needed medication for her sister’s Parkinson’s disease.

Is Digg getting better, or worse?

If you like things like podcasts, video and a widescreen look to a website, then Digg has just launched a site redesign that will be a nice ChristmaHanuKwanakah present for you, as described by both Om Malik (at NewTeeVee) and Mike Arrington at TechCrunch. But will all of these new additions help to broaden Digg’s appeal, or will they just further dilute that appeal?

If you’ve been following the blogosphere, there has been a fair bit of controversy about Digg — not about it broadening its reach into general news and other areas (in fact, there’s been surprisingly little comment about that) but about it being rigged, about submitters taking money under the table (which I wrote about here), and so on. Jason Clarke has argued that Digg is useless.

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It’s obvious that some of this is getting to other people too. Over at TechCrunch, one person says they hardly go to Digg any more because the comments are cluttered with morons, and that “As Digg gains more and more momentum to be mainstream we will see that it no longer becomes a barometer of cool but just another established website beaten by fragmented niche sites.”

There are definitely both risks and rewards to the way Digg is going. On the one hand, video is becoming more popular — and Digg’s crowd-voting system can no doubt bring its value (positive and negative) to that as well. But at the same time, adding podcasts and video streams and other features takes away from the streamlined focus on Web links that made Digg so popular (StumbleUpon, which got its start in Calgary, has also launched a video service).

As Digg-style voting tools get worked into other sites, it’s also possible that people might desert Digg for other, more focused sites in particular areas (the way Digg used to be for technology). Meanwhile, Pete Cashmore over at Mashable says the changes are “ridiculously overhyped as usual.” And Neil Patel at Search Engine Land notes that Digg has also made some changes that will affect submitters in subtle ways.

Yes — but a smaller, less frothy bubble

Bubble-ology has become a more popular topic than ever now that Time magazine has named You as its annual Person of the Year (no, not you specifically, but the collective you — or us; oh never mind). In fact, there’s quite a bubblicious debate going on between my friend Paul Kedrosky and Josh Quittner of Business 2.0.

Josh wrote a piece for Time that boils down to the old “it’s different this time” argument. Yes, it’s kind of bubble-rific out there, but it’s okay because it’s different. As Paul notes, the most ominous words in the investment business are “it’s different this time” — words which are usually a prelude to all the same mistakes being made, but with different names and by different people.

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Paul counters that, if anything, this bubble is actually worse than the first one, because “it’s cheaper this time to get yourself in just as deep — and this time there is no IPO market to bail you out.” And he is right — but then Paul is also the one who told our mesh conference back in May that as a venture capitalist, he is a big fan of bubbles because they speed up the pace of development, and that it “takes a lot of dead bodies to fill a swamp.”

In the end, the debate over where we are on the bubble-ometer comes down to a debate over what was wrong with the first bubble. Was it that entrepreneurs got taken advantage of by venture capitalists eager for a big-dollar IPO exit? Or was it that the combination of those two factors wasted billions of dollars of investors’ money? If you think that VCs and Wall Street brokers were to blame (as I do), then the lack of IPOs is probably a good thing.

Then the only ones losing money (assuming they are losing) are big companies like Google and eBay. Does the current bubble make it easier for entrepreneurs to get in over their heads? Sure it does. But I don’t think they can get as far in, because there isn’t as much incentive, and because it’s a whole lot cheaper to scale up to acquisition size than it was before.

Finally, PayPerPost changes its tune

Anyone who has been following the debate in the blogosphere over “blog payola” — under-the-table compensation for a positive review of something — knows the name PayPerPost.com. The company emerged earlier this year and was instantly vilified for paying bloggers to write about clients, but not requiring them to disclose that compensation. Pete Cashmore of Mashable said that PayPerPost was unethical, and Shel Israel called founder Ted Murphy “the devil.”

Now, the company has decided to change its approach, and — according to a press release Mike Arrington has reproduced on TechCrunch — will require bloggers who take part in the program to disclose that they are being compensated. As Mike notes, it isn’t a perfect solution, since bloggers can choose to have a site-wide disclosure policy rather than disclosing which specific posts are paid for, but it is a whole lot better than nothing (Scott Karp doesn’t think it goes far enough).

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It’s not clear whether this change has come about because PayPerPost decided its initial policy was wrong, or because it wasn’t getting enough uptake among bloggers or advertisers, or because of the recent FTC ruling on word-of-mouth marketing and the requirement to disclose, which I wrote about here. It’s possible that it was a combination of all the above.

In any case, I think the move is a good one, and would like to believe that PayPerPost finally saw the error of its ways (although I would much rather that each post involving compensation was disclosed as such). Allowing bloggers to write positively about clients without disclosure amounts to deception, and that isn’t a proper basis for any kind of relationship, financial or otherwise.