Author: Mathew Ingram

A ruling has come down in the case of the record industry vs. Jammie Thomas — the single mom who took her file-sharing case to court rather than settle, as virtually every other person sued by the RIAA has done — and a jury ruled that she has to pay $222,000 for 24 songs that she downloaded, even though there was no evidence to prove that anyone downloaded them from her. This is so asinine it’s difficult to put into words.

I’m not going to argue that what Jammie Thomas did was right in a legal sense, because it clearly wasn’t, as Mike Masnick notes at Techdirt. So the RIAA was obviously within its rights to sue. But $222,000 for 24 songs? That’s just ridiculous. It’s a good thing the case only involved 24 songs, and not the 1,700 or so that Ms. Thomas had on her hard drive initially. That would have left her paying about $15-million for that music collection, if the same formula was used. And what was the formula? Something like X times Y, to the power of Z — where X is the lack of a sustainable business model, Y is an aggravated response to a non-existent threat, and Z is the inability to differentiate between customers and thieves.

I don’t know about the geniuses who run the RIAA, but if I was one of the guys in Journey or Aerosmith or Green Day or any of the other bands that Ms. Thomas downloaded and listened to regularly, I would call her up right now and offer to pay her court costs. Lawyer Ray Beckerman at Recording Industry vs. The People calls it “one of the most irrational things I have ever seen in my life in the law” (hat tip to John Paczkowski at All Things D for the link).

Further reading:

Check out these links for more thoughts on the verdict:

• Ed Felten at Freedom to Tinker
• Ashkan Karbasfrooshan at WatchMojo
• Michael Geist on the Canadian angle
• Cynthia Brumfield at IPDemocracy
• Larry Dignan at ZDNet
• Declan McCullogh at CNET
• the New York Times story

Update:

Jammie Thomas is appealing the verdict and there is a website set up for donations at freejammie.com. Wired’s Threat Level blog also has an interview with one of the jurors in the case, who more or less says that her defence was unbelievable and that the damages were so high because the jury wanted to “send a message.”

So Dave Winer thinks Techmeme has become a “cesspool,” as he puts it. Why? He says it’s because of the Techmeme leaderboard, and how it’s encouraging people to say all kinds of things in an attempt to game the system. But I think Dave is just pissed that a certain person he doesn’t name — but whose name rhymes with Mason Balacanis — was topping the site for much of the day.

Dave can’t even bring himself to mention J-Dawg’s name, calling him an “idiot who says idiotic things to get attention,” a reference that I assume goes back to Dave’s little contretemps with JC at a conference awhile back. The ironic thing is that by doing that, Dave himself engaged in exactly the same thing he claims to abhor — and got some nice Techmeme juice out of it to boot.

Update:

Mike says that Dave is using tinyURL in his post when he links to Jason, to prevent JC from getting any link juice. I guess that’s pettiness 2.0 (In a comment below, Dave denies that this was his intention). And Scott Karp has some tips for Gabe on how to prevent people from “gaming” Techmeme to rise up the leaderboard. But Scott, that would ruin all our fun 🙂

Humpty Dumpty: “When I use a word, it means just what I choose it to mean – neither more nor less.”

Alice: “The question is, whether you can make words mean so many different things.”

You have to hand it to Jason Calacanis, the diminutive Web entrepreneur behind Mahalo, for completely ignoring all the ink and electrons that have been spilled writing about the concept of Web 3.0 — including conversations like the one I had with Sir Tim Berners-Lee, the guy who invented the Web — and just coming up with his own definition. Not only that, he has the audacity to call it the “official” definition. Official according to whom? Why, to Jason, of course.

Not surprisingly, as Fred Wilson points out in his post, Jason’s definition is also effectively a thumbnail description of Mahalo, the people-powered search/directory service he is trying to build. Web 3.0, he says, is:

“the creation of high-quality content and services produced by gifted individuals using Web 2.0 technology as an enabling platform.”

That’s funny, because every time I’ve heard anyone who actually knows anything describe it, they use terms like “semantic Web,” and talk about adapting the way the Web is built so that information can be aggregated and linked in different ways automatically, as Josh Kopelman describes here. But that kind of definition wouldn’t suit Jason’s purposes, so in effect it doesn’t exist. I think I like the definition Jemima Kiss came up with better.

Further reading:

Brian Solis has some thoughts on what Web 3.0 is at Bubblicious, and so do Alex Iskold at Adaptive Blue, Jeremy Toeman at LiveDigitally, Allan Stern at CenterNetworks, and Eric Berlin at Online Media Cultist.

Update:

Jason has said that his post was just linkbait — to which Gabe Rivera gives the best response I’ve seen yet, in a comment on Jason’s blog (thanks to Megan McCarthy at Valleywag for the link). Gabe says:

“Yeah, I suppose you fooled Techmeme about your sincerity. Note that you also fooled Fred Wilson and Josh Kopelman in the process.

Training your readers to doubt you can be risky. Sometimes you want your posts taken at face value, e.g. those insisting your company is succeeding.”

Jason responds that the post was mostly sincere, and just the word “official” was linkbait — but in a comment on the Podtech blog he says the post was “90 per cent linkbait.”

Classic. The record industry — or at least the big boys in the RIAA — get their first chance to air their sophisticated arguments in court as part of a high-profile lawsuit involving an individual who downloaded music, and what do they say? That even making a copy of a single song from a CD you paid for is theft. Mind-boggling.

This statement came from (no surprise) the chief litigator for Sony-BMG, the same gang that thinks installing a Trojan on your computer is a great business model. When asked whether it was wrong for consumers to make copies of music that they had purchased, Jennifer Pariser said: “When an individual makes a copy of a song for himself, I suppose we can say he stole a song.” Making a copy of a purchased song is just “a nice way of saying ‘steals just one copy’.” I guess we should pull all those law books out of the library and strike out any reference to “fair use” then. Nice work there by the RIAA. Of course as Ars Technica points out, this isn’t the first time they have made that claim, despite the fact that the courts have repeatedly disagreed.

This is almost like a follow-up to my previous post on TechCrunch and CNET (be sure to read the updates, because I added some worthwhile links), but PaidContent has a post up about a new report from Jordan Edmiston Group looking at M&A activity in the media sector: according to the report, the total value of media M&A during the third quarter was $95-billion, up 110 per cent from last year — and the largest single segment was online media, with 232 deals worth a total of $8.3 billion — up from 136 deals worth $5.7 billion last year.

Boy, Henry “I used to be a famous Wall Street analyst” Blodget is sure on a roll — or make that a troll. Today he’s got a post about how TechCrunch could be bought by CNET for $100-million or so. His post is actually a response to one by Doug McIntyre at 24/7 Wall Street, in which Doug hypothesizes about blog networks such as TechCrunch and Huffington Post and GigaOm and how much they might be worth to existing media entities.

Mike has a sarcastic response to Henry’s post here. And there’s no question that $100-million seems like a fairy tale price — a lot like Henry’s $2,000 Google post from yesterday. Still, the idea itself makes sense. TechCrunch or GigaOm would fit as a part of CNET or several other media entities. The ironic thing is that selling would probably be a mistake, because at the moment they are doing far better than most of the companies that would be thinking about buying them.

Update:

Is $100-million nonsensical or not? Let’s look at the numbers: TechCrunch says it has 1.5 million unique visitors a month — although a commenter below says those numbers may be high — and CNET Networks has about 10 million a month, according to comScore (Compete says about 6 million a month). But as we all know, it’s about more than just uniques, right? It’s about monetization.

CNET had revenue last year of almost $400-million, although it only made a profit of $7-million, which is pretty pathetic. No one except Mike knows what TechCrunch made last year (check below for some Valleywag scuttlebutt — I have no idea whether it is even close).

Still, CNET’s market cap is $1.2-billion. If you assume that someone could monetize Mike’s 1.5 million unique visitors better than CNET can monetize its uniques (which wouldn’t be a stretch) then you could easily come to the conclusion that TechCrunch is worth about 20 per cent of what CNET is worth — or about $250-million.

I’m not saying it is, I’m just saying $100-million doesn’t look all that crazy. Oh, and Mike? If you do a deal, Cynthia Brumfield at IPDemocracy has some advice for you.

Update 2:

Dan Farber of ZDNet (which is part of CNET) notes that the rankings at Alexa and (presumably) comScore only measure CNET.com, but CNET’s family of sites get 137 million uniques a month. That’s an order of magnitude larger than the numbers I was using. That suggests TechCrunch might be worth in the neighbourhood of $20-million. Still nothing to sneeze at.

Mike’s got a post up at TechCrunch about Henry “I used to be a famous Wall Street analyst” Blodget, in which he goes on at length about Blodget’s Google-related post at Silicon Alley Insider today — the one in which Hank argues that Google could hit $2,000 a share. Mike seems genuinely pissed that Henry is shooting his mouth off about such a thing, especially after the history, and says someone should “muzzle Blodget.”

The history, as pretty well everyone knows by now, goes more or less like this: in 1998, Blodget says Amazon is going to $400, it does so, stocks climb to the moon, then they crater, Blodget is investigated for fraud for misleading investors by publicly pumping stocks and privately dumping on them, etc. and agrees to a settlement in which he is barred from the securities industry for life.

As I said in a comment on Mike’s post, I could be wrong, but I read Henry’s post as a sarcastic response to a reader who complained he was being too pessimistic all the time (can you blame him, given what happened the last time he was overly positive?). I think the point he was making was that it’s easy enough to throw a few multiples out there, a few back-of-a-napkin financial projections, and get to almost any number you want. Heck, that’s what analysts do for a living — as Blodget knows better than just about anyone.

I think Henry was having some fun with his reputation, and maybe trolling to get a reaction. And he sure got one.

Update:

Henry has an update on what he was up to (and a response to Mike) here, and Kara Swisher has a take on it as well.

I must have missed the news that Getty Images — one of the largest image-licensing firms around, next to Bill Gates’s Corbis — had bought a company called Pump Audio back in June and was getting into the music-licensing business. Then I read this morning on TechCrunch that PumpAudio has relaunched as part of the Getty site, offering a song-tracking and licensing tool called (what else) Soundtrack.

Although the service is starting small, with just 20,000 songs from independent artists, Getty says it wants to expand through deals with the major record labels and others — and knowing Getty, it is likely to do so with a vengeance. Maybe it will even get into the “crowdsourcing” of music, the way it did with photos by buying Calgary-based success story iStockphoto.com.

Whether Getty succeeds or not remains to be seen, but there’s no question that the music-licensing business needs some organization. Insiders — including Spiral Frog CEO Joe Mohen, who I interviewed for this recent piece — say the process of getting all the required performance and publishing rights for a piece of music is byzantine and in some cases almost impossible, since there are thousands of different publishers and no central repository of information. A real “goat rodeo,” as a friend of mine likes to say.

If Getty can help to bring some semblance of order to that process, it will not only benefit anyone who is trying to license music — including perhaps the folks at Saturday Night Live, who had to pull a hilarious video from SNL off YouTube because they apparently failed to get a license for an Aphex Twin song — but will also benefit (theoretically) the artists who make the music.

Say what you will about Valleywag (just don’t get Mike Arrington started) but Owen Thomas is a pretty smart guy, and I think he makes a good point amidst all the sturm und drang about Facebook and its market value, and how eBay’s $1.4-billion Skype-related writedown could affect the perception of that value (for more on that, just see this Techmeme thread or the Times Online blog).

It’s true that eBay’s writedown says a lot about the risks of paying bubblicious prices for things, and a $10-billion valuation for Facebook has certainly got more than a whiff of bubble about it. At the same time, however, Owen points out that there are just as many risks in not buying things. eBay is a great example of that too, having tried and failed to buy PayPal early on. And Yahoo has a boatload of missed opportunities, including Google and Facebook.

As for Microsoft’s hyperactive basketball-coach CEO, Steve Ballmer, his remarks to the Times about Facebook being a “fad” are just as likely to be an exercise in talking down the value of something before you buy a chunk as they are a thoughtful commentary on the company’s actual value. Or it’s possible that he really doesn’t get it.

In the end, I think Kara Swisher at All Things D probably has the right read on the situation: Facebook is likely to take some money, at a handsome valuation, but remain independent (unless $10-billion gets dropped off at Mark Zuckerberg’s flat, of course). If nothing else, MySpace shows the downside of being acquired too early.

From the New York Times comes word that Huffington Post, which started as a rag-tag collection of blogs and has become a new-media superstar, is hiring away the general manager of CBSNews.com, Betsy Morgan, and making her the new CEO of the Post. This is a big coup for Arianna Huffington and her team, and it’s probably no coincidence that it comes just before a U.S. election, one that the HuffPost and Jay Rosen’s NewAssignment.net have teamed up to cover.

It will be interesting to see where this new hire takes the site (Mike Arrington says that he smells an IPO). In any case, congrats to Arianna and the entire HuffPost team — which includes the lovely and talented (and Canadian) Rachel Sklar of Eat The Press — for creating something extraordinary.

Well, now it’s official: Skype turns out not to be worth the $4.1-billion that eBay seemed to think it was back in 2005. As Henry Blodget notes at Silicon Alley Insider, the $1.4-billion writedown that the online auction company just announced effectively recognizes what everyone else has known for some time: Skype may or may not have been a mistake (I would argue it was, although Ash Karbasfrooshan disagrees), but one thing is for sure — eBay paid way too much for it.

In true contrarian fashion, my friend Paul Kedrosky says that all the breast-beating about eBay overpaying for Skype is overdone:

“Ebay is still motoring along, and this is lots of reason to be optimistic about the auction company’s future.

Over-focusing on the lamentable (and long past) Skype deal strikes me as a mistake.”

As I said in a comment on Paul’s post, I disagree. eBay may very well be motoring along, but the purchase of Skype was an error in judgment, and a fairly expensive one at that. I realize that a $1.4-billion writedown is small beer for eBay, but the fact that the company made such a decision — without any compelling synergies or anything else to justify the price — speaks volumes about the leadership of the company as far as I’m concerned (as usual, John Paczkowski has the best headline).

It’s nice for Niklas Zennstrom and Janus Friis that they not only get a big chunk of that $530-million earnout, but they can now get on with their lives (and with Joost, which launched as a no-invite-required app today) and quit trying to force some kind of fit between Skype and eBay — a fit I’m willing to bet they never saw either, although Niklas defends the deal in an interview with Thomas Crampton (Janus writes about it here).

As for eBay? Henry thinks they should sell Skype to Yahoo or Microsoft or someone like that, and he might just be right. Jeff Nolan thinks the company should turn it into a backend service-type offering, a la Amazon’s EC2.

Mike Arrington has the scoop on the latest move by Gabe “Techmeme” Rivera: a Top 100 blogs list, which will be made up of the blogs whose posts most often appear on the blog aggregation engine — a site that I (and many other bloggers I know) check at least once a day, if not once an hour or so). As Mike points out, this is a pretty big kick in the goolies for Technorati, which has been losing its grip on the blog-search and blog-ranking business for the past little while, and now doesn’t even have a CEO any more.

Marshall Kirkpatrick over at Read/Write Web disagrees that Techmeme’s launch of the Top 100 means trouble for Technorati, however — he says that there’s “plenty of room for other standards of measurement.” And as a number of people have pointed out — including Jason from Webomatica in a comment you can find below (try my new Ajaxy comment feature) — Technorati tracks all blogs, while Techmeme is, well… just tech. Fair enough.

I’d also like to point out that my somewhat rah-rah approach to Techmeme’s new feature has absolutely nothing to do with the fact that yours truly is number 37 on said list, according to this post by Dave Winer.

An interesting piece in the New York Times today (although it was in the Fashion & Style section, which I thought was a little odd). I’m not sure if the topic signals some kind of evolution in the way the Times looks at the blogosphere or an evolution in the blogosphere itself — or maybe a bit of both.

It’s about people who have become known — “Internet famous” — not for having a popular blog, or for being a YouTube star, but for commenting on other people’s blogs and content (no doubt an academic somewhere will call this “meta-blogging.”) As the Times piece puts it:

“Since many blogs have a readership of one — or, at best, the writer, his mother and some guy he sat next to in seventh grade who found him on Google — piggybacking on a more popular site offers a wider audience for a keyboard jockey’s gripes and quips.

Not everyone is up to the task of creating a blog with the kind of consistent tone and provocative topics that attract visitors.”

The Times piece profiles a Metafilter commenter known as DaShiv, as well as Seth Chadwick, who posts on a food-related site called Chowhound. But my favourite quote comes from Marshall Poe, a professor of new media at the University of Iowa, who describes the motivation of commenters in this way:

“You are one of the millions of people who sit at a computer all day… every hour you have 10 minutes where you’re not doing anything productive at work, and you can’t look at porn.

So you make a comment and fulfill this desire to show yourself off as a smarty-pants.”

The Times piece also talks about a commenter on Gawker, where the site picks and chooses who will be allowed to comment, and so a competition has developed where people try to post the wittiest comments so that they can join the club. Now that’s social networking. And DaShiv explains why he prefers to comment at Metafilter rather than starting his own blog:

“It’s easier to join in on a conversation than to start one,” he said matter of factly.

And it takes both kinds to make the blogosphere tick.