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What started as an update to my recent post on the AOL search data debacle has taken on a life of its own, so I’ve turned it into a new post.

I wrote a similar post for my “official” blog at globeandmail.com/blogs/geekwatch — in which I wondered why everyone was getting so upset about the AOL data leak, since privacy on the Internet is effectively non-existent anyway — and judging by the comments that post sparked, I seem (or AOL seems) to have struck a nerve when it comes to personal privacy and the Internet.

One reader mentioned the recent New York Times article about the AOL debacle, in which a journalist tracked down a woman living in a small town based on some of the searches she did, which included personal information such as the name of the town — and another reader didn’t think much of my counter-argument that this says more about the journalist and the newspaper that tracked her down than it does about AOL’s release of the data. Some readers also thought my comparison to Rogers releasing information about pay-per-view rentals was spurious, since that wouldn’t include personal data (and I admit it’s not a great analogy).

As I mentioned in my response to those comments, I realize that there is a lot of information included in what AOL released, and that by putting two and two together (as the NYT did) someone could come up with a pretty good idea of who did those searches. I guess the point I was trying to make is that much of that information is already out there, and is effectively publicly available. If you type in your name or address or credit card number, it can be tracked and accessed, and while it takes a little more effort and knowhow than sifting through AOL’s search data (Elliott Back helpfully describes how to do it here), it doesn’t take a whole lot more. Privacy of information on the Internet is not black and white — it is shades of grey. I guess that was my point.

Law professor and blogger Michael Geist, whose opinion I respect, says that I am wrong and that the AOL incident illustrates why such search data should not only not be released but shouldn’t even be kept. John Battelle says that he was secretly thrilled at the New York Times story because “the silver lining of a data leak like this is that it allows the culture to have a conversation about what we’re getting into here by tracking all this data.” I would agree. If you want to explore the issue further, there is some great discussion going on not just in the comment section of my Globe blog but also at Greg Linden’s and Jeff Nolan’s.

When it comes to the $900-million deal between Rupert Murdoch’s News Corp. and Google for advertising and search-related services at Fox Interactive Media — the bulk of which is made up of MySpace — there are a number of ways of looking at it. On the one hand, it is in some sense a vindication of the half-a-billion dollars or so that Rupert (definitely not a stupid man) paid for MySpace, as Fred Wilson of A VC points out, saying it could be the “best Internet purchase ever.”

The deal also helps to crystallize some of the debate over valuation that has been going on about social networks such as MySpace, a debate that will likely get even more heated if Viacom bids for MySpace competitor Bebo, a deal rumoured to be in the works. Does it mean that MySpace is worth $3-billion, as some have been arguing? Not necessarily. But it does help put some financial meat on the bones of a company everyone has been trying to arrive at a value for. Rafat at PaidContent has a nuts-and-bolts breakdown of the deal.

One of the most interesting elements for me, however, and one very capably described by Om Malik, is how much MySpace needs Google. One of the reasons why the social network’s CPM (cost per thousand) is down around $1 is that it has a gigantic backlog — in part because there are billions of MySpace pages, and in part because advertisers have remained relatively cool to putting their brands on MySpace next to questionable content, to be looked at by fickle teenage users. Too much supply and not enough demand.

How is Google going to deal with that? According to Om and others, it will avoid certain parts of MySpace, and will include other Fox properties such as the IGN gaming network. But at the same time, the whole reason for the deal is so that Google can help create a social-network ad platform — the holy grail for sites like MySpace, as Gigaom contributor Robert Young puts it. That will be interesting to watch.

Okay, it’s only Duran Duran — the classic 1980’s “Hungry Like a Wolf” hair band — but it’s still pretty interesting that a band is setting up a virtual island in Second Life, where the boys will put on virtual concerts for giant robots, huge pink bunny rabbits, surfer dudes with green hair and other SL avatars. According to comments from the band, they seem pretty excited about the whole thing.

This seems like the next logical step in the virtual music business, after a recent concert put on by the BBC involved a Second Life component (virtual attendees got a tiny virtual radio so they could take the show with them as they moved around the virtual world), and a group of U2 devotees put on a virtual concert involving avatars of the band.

The latter concert didn’t just feature virtual versions of the band but also included downloadable U2 songs and a host of “virtual sponsor” giveaways such as cans of Coke and bottles of Evian water — despite the fact that neither the band nor the companies had agreed to have their names and likenesses featured. The organizer says it was done to increase the realism and as a tribute to the band, but I wonder whether U2 or Evian would see it that way (the organizers tried to reach the band but didn’t get anywhere).

In other Second Life music news, Suzanne Vega — the iconic folk-pop singer whose Tom’s Diner became the first song ever made into an MP3 file — recently gave a concert inside the virtual world, one which started off (naturally) with a version of Tom’s Diner. Although attendees had to remove all add-on objects (including their avatar’s hair, apparently) so as to reduce lag in the game, this sounds to me like the beginning of something, well… real. Bands and performers have already gotten used to using MySpace to advance their careers.

And in other business-related SL news, Starwood Hotels says that it is going to try out a new micro-brand hotel idea inside the virtual world before launching it in real life. More on the process of setting up the virtual hotel can be found here. Lest all this Second Life-ing get a little too serious, I offer you this cartoon I came across at BLaugh while looking around for SL-related stuff in the blogosphere (hat tip to Fred Wilson).

I know I’m late to the party on this one, but I have to say I’m kind of confused about the huge outcry over AOL releasing a pile of supposedly “secret” personal data as part of what seems to be a misguided research effort, something for which it has now apologized. Obviously it’s a bit of a public relations gaffe, in the sense that the information kind of leaked out and everyone got all hot and bothered about it before there was a response, but I don’t really see why it became such a giant sh*tstorm in the first place.

Yes, there was plenty of personal information in the search logs (all two gigabytes of them or whatever it worked out to) that someone could theoretically do something nefarious with — theoretically — but doesn’t that pretty much describe the Internet? As more than one person has pointed out, including one of the commenters on a related post by Paul Kedrosky, much of this information is already available to people who are determined to get it (or pay for it). Didn’t Scott McNealy tell us that we don’t have any privacy on the Internet and that we should get over it?

Markus Frind of Plenty of Fish has said that the personal search data includes some potentially disturbing info, such as a repeated search by one user for information on how to kill your wife. But how do we know that this person was actually looking to kill his wife? Maybe he’s writing a screenplay. He also apparently searched for “steak and cheese” and “poop,” or at least the same user ID did. What does that indicate about the user’s overall mental state? Probably nothing — although I’ve often thought that people who eat steak and cheese are inherently unbalanced. (There’s more data surfing here).

As far as I’m concerned, setting off all kinds of personal privacy alarms over the AOL data is an over-reaction. As Greg Yardley points out, we have no privacy when it comes to Internet searches, and the sooner we get used to it the better. Greg Linden of Findory also seems to think the whole fuss is overdone, and so does venture capitalist Jeff Nolan.

Update:

I wrote a similar post to this one for my “official” blog at globeandmail.com/blogs/geekwatch and judging by the comments that this post has sparked, I seem (or AOL seems) to have struck a nerve when it comes to personal privacy and the Internet. One reader mentioned the recent New York Times article about the AOL debacle, in which a journalist tracked down a woman living in a small town based on some of the searches she did, which included personal information such as the name of the town — and another reader didn’t think much of my counter-argument that this says more about the journalist and the newspaper that tracked her down than it does about AOL’s release of the data. Some readers also thought my comparison to Rogers releasing information about pay-per-view rentals was spurious, since that wouldn’t include personal data (and I admit it’s not a great analogy).

As I mentioned in my response to those comments, I realize that there is a lot of information included in what AOL released, and that by putting two and two together (as the NYT did) someone could come up with a pretty good idea of who did those searches. I guess the point I was trying to make — and perhaps I went a little overboard in doing so — is that much of that information is already out there, and is effectively publicly available. If you type in your name or address or credit card number, it can be tracked and accessed, and while it takes a little more effort and knowhow than sifting through AOL’s search data, it doesn’t take a whole lot more. Privacy of information on the Internet is not black and white — it is shades of grey. I guess that was my point.

Law professor and blogger Michael Geist, whose opinion I respect, says that I am wrong and that the AOL incident illustrates why such search data should not only not be released but shouldn’t even be kept. John Battelle says that he was secretly thrilled at the New York Times story because “the silver lining of a data leak like this is that it allows the culture to have a conversation about what we’re getting into here by tracking all this data.”

I apologize for any repetition, but I continue to be fascinated by the ideas bubbling up around Jason Calacanis’s offer to the top Diggers and Newsvine and Reddit users (most recent post is here — and yes, I know that writing about Jason only encourages him, like paying attention to a child holding his breath). The latest clash came at Wikimania, the conference on Wikipedia and related “open-source knowledge” projects that was held recently at Harvard’s Berkman Center.

Yochai Benkler — author of The Wealth of Networks — spoke about his theories of networked knowledge systems, and Jason jumped up to suggest that his offer to pay the top Diggers, which has gotten several to jump ship for the new Digg-ified Netscape, contradicted some of Yochai’s theories. This moment could almost have been choreographed by notorious Wikipedia skeptic Nicholas Carr, who recently wrote a post about the contrast between Benkler’s ideas and Jason’s offer (he posted a followup response from Benkler as well).

There’s more from Jason on the Benkler speech at Wikimania here, and Andy Carvin has a nice overview of what happened at Digital Divide. A blogger named Alex Halavais also has some thoughts about the metaphor used by Jason in his response to Benkler (and others) — namely, the idea that while there are volunteer firefighters, there are also paid firefighters, and one doesn’t necessarily make the other less useful or important.

Does paying Diggers somehow cheapen what all Diggers do, or change the structure of the social-networking model so much that it wrecks it somehow? Or does it give others something to aspire to, and reward those who try harder? Will it spark efforts to game the system, and thus remove something crucial from the equation, or can both paid and unpaid exist side-by-side without harming each other? I’m not the only one interested in the idea — Matt McAlister also has some thoughts that are well worth reading.

Plenty of people have had a kick at the recent Business Week article on Kevin Rose and Digg — in some cases a Chuck Norris-style roundhouse kick, such as the one delivered by Jason at 37signals — and it seems to me that (as with so many articles in the media) one of the big problems is the headline, and it boils down to the use of the word “made.” As in Kevin Rose, the guy who “made” $60-million in 18 months.

In reality, of course, Kevin hasn’t really “made” anything, regardless of how Chris Pirillo wants to define the word. Or rather, he has made something — a tremendously useful and popular social-networking tool — but he certainly hasn’t made $60-million. It’s possible that the “people in the know” quoted in the article are right about the value of Digg, but that still doesn’t mean Kevin Rose has “made” $60-million. Even if you assume that venture capitalists put enough money into the company to give it a value of $200-million, he still wouldn’t come close to having actually “made” $60-million.

No offence meant to the authors, but articles like the one in Business Week are not difficult to write — just find someone who has valued MySpace at $3-billion or Facebook.com at $1-billion or whatever, and then divide that number by the percentage held by the subject of your piece. Or find someone who has valued users of (enter social-networking service here) at x dollars each, and then multiply by the number of users at MySpace or Facebook or Digg or whatever you want to write about.

Awhile back, everyone was having a pile of fun taking what Jason Calacanis sold Weblogs Inc. for and dividing by the number of readers, and then multiplying by the number of readers on their own blogs (I’ve got a couple of valuation widgets on the left-hand side of my blog, but I wouldn’t believe either one of them). The Business Week article on Digg is no different. It makes for a great cover line, and it probably gets people to read, but it should be taken with a giant block of salt.

Rafat is right — better not to have done it at all. And my friend Rob Hyndman is right too — the lines between journalists and bloggers are blurring, and not necessarily in a good way.

Update:

As I suspected, editing changes and a desire for a snappy cover line seem to be the cause of much of the hoopla. And Stephen Baker of Business Week tries his best to argue that “value” is a nebulous concept, and therefore the story and the number were justified. That’s a nice try, Steve — but all it really means is that the rankings of rich people done by business magazines are also highly suspect. And regardless of valuation, it still doesn’t mean Kevin Rose has “made” $60-million. Period. Which Kevin himself freely admits.

The Netscape-Digg story is the gift that just keeps on giving. First there was the offer from Jason Calacanis, formerly of Weblogs Inc., to pay the top submitters on Digg, Newsvine and Reddit if they started submitting stories to the new Digg-style Netscape site. That led to a mild flame-war between Jason and Digg founder Kevin Rose. And now Jason has updated everyone on the results of his little strategy (which some applauded and some — okay it was Mike Arrington at TechCrunch — criticized as an act of desperation) in a recent post.

According to Jason, Netscape has hired three of the top 12 Digg submitters and the top submitter from both Newsvine and Reddit. He also has some stats on how active the top Diggers are (I’d be interested in hearing Kevin’s take on those stats at some point), and expresses them in his typically restrained fashion:

“The top 10 users on DIGG are responsible for 30% of the front page stories on DIGG. That’s 3% of total front page stories each!!! Think about that for a second… the top 10 users of DIGG do 3% of the work each–that is stunning. They get paid nothing but they are responsible for 3% of the total content on the home page. Wow. Like WOW, WOW, WOW!”

Despite all the sturm und drang about the payment offer from Netscape, it’s possible that this deal could turn out to be good for everyone: Netscape has gotten lots of publicity and will get some motivated submitters, and the loss of a few people from Digg and one each from Newsvine and Reddit isn’t likely to hurt them. In fact, the Newsvine member who accepted the deal has a post up about his decision, which is well worth reading. He remains committed to Newsvine as a community, even though he will be paid to submit to Netscape.

Erick Schonfeld of Business 2.0’s blog also has an interesting post that jumps off from the Netscape issue. He says Derek Powazek — whose wife writes the Flickr blog — is publishing a print magazine that contains user-submitted photos, and plans to launch a series of magazines that contain user-submitted content and photos. He said he plans to pay contributors if the magazines start to actually make money.

If nothing else, the much-discussed decision to make America Online’s software and services completely free will result in a great laboratory experiment on a truly grand scale, an experiment that will hopefully answer this compelling question: Can a moribund online service — one whose very name has become synonymous with the word “lame,” one whose services are notoriously difficult to cancel, and one which has remained steadfastly a “walled garden” while all around it the benefits of advertising have become abundantly obvious — suddenly undergo a deathbed conversion and become an ad-driven online colossus after years of appearing to not really give a crap?

Time Warner is obviously hoping the answer is yes. The business case is somewhat easier to make than it appeared at first, since the media and entertainment conglomerate will be giving up a billion dollars or so in revenue from customers who currently pay for the luxury of having an aol.com email , but will also save the truckloads of dough it spends on marketing costs, including those billions of sign-up CDs that litter the planet (hint: they make a nice wind-chime style mobile for over the baby’s crib). And online ad revenues are growing strongly at AOL, which no doubt gives TW hope. Staci has a great breakdown of the conference call at PaidContent.

But the bigger question is how many people will decide to use AOL’s services when they are free, and no longer attached to the company’s dial-up software. Is it too late, or can the company make some kind of prodigal son-type comeback?

I meant to blog about this yesterday, but being on dial-up in the middle of a thunderstorm kind of put the kibosh on that idea. A blog search-analysis tool called Enquisite — which I have been testing for a little while now on this blog — launched on August 1, and is well worth a look if you want to drill down into the details of where your site shows up on the various search engines and why. As my friend Mark Evans notes, it isn’t the type of tool you’re likely to use if you just run the average blog. But if you are running a business site and want to fine-tune your search placement, my sense is that Enquisite could definitely help.

There are plenty of search-analysis tools out there that will tell you what keywords people typed in to get to your site and that sort of thing, but Enquisite (which is based in Victoria) gives you an incredible amount of detail about everything related to search and your site, including what page of results your site turned up on for various terms, and allows you to compare the positioning on different search engines from a bunch of different perspectives. Enquisite also says that it is able to do this without actually querying the various search engine indexes, as many tools do (something the search companies frown on). How it does this is a closely-guarded secret, and the subject of several patent applications.

Amid the news that YouTube has beaten MySpace when it comes to Web traffic (a stat that we should all be somewhat skeptical about, since it is based on Alexa data, as Pete Cashmore points out over at Mashable) there is increasing attention being paid to the fact that YouTube’s success is based largely on two things: copyright violations, and “user-generated content” from which the users in question see absolutely no return whatsoevers.

Obviously, some of those posting their skateboard tricks or a buddy’s lip-synching routine to YouTube get such a huge charge out of seeing their stuff on a website that they don’t really need any more compensation for their efforts — but for those who would like to see a little something in return for all those millions of downloads, there is always Revver. As Scott Karp points out, the guys at Eepybird who did the Diet Coke and Mentos video got $30,000 because their video clip was posted on Revver, but lost out on that much or more because it was also posted to YouTube. Amanda Congdon and Ze Frank have both asked downloaders to post their stuff to Revver instead of YouTube.

It’s possible that the Mentos guys wouldn’t have gotten quite as many downloads from Revver if people hadn’t seen it first on YouTube, but even assuming that’s true, they still deserve some compensation for their work, and the best way to accomplish that seems to be Revver. Why haven’t YouTube or Google Video tried to build the same kind of model that Revver uses? Maybe they’d much rather keep the cash for themselves. In YouTube’s case, they probably need it to pay their gigantic bandwidth bills. (Lulu.tv, Eefoof and Flixya also pay submitters of video).

I think the latest Pew study on newspaper and online news readership is worth paying some attention to, and I say that knowing full well that by the time I’m done I will wind up agreeing (again) with Nick “the Voice of Doom” Carr, and God knows I hate to do that (David Newberger has a good overview of the report here). One of the important points is in the second paragraph:

“For the most part, online news has evolved as a supplemental source that is used along with traditional news media outlets. It is valued most for headlines and convenience, not detailed, in-depth reporting.”

As Nick notes in his post: “The upshot is that online news appears to be not a replacement for traditional media but a supplement to it. The people who tend to use online sources are the same people who read newspapers and watch news shows on TV. They take a quick look at headlines online, but they continue to rely on traditional news sources for the details.”

It’s true that this might weaken the “Internet will kill newspapers” argument, but then I’m not sure anyone actually believes that, even Jeff Jarvis. The fact is that the two serve very different purposes — and those different purposes are likely to continue to widen, as news moves online and newspapers focus on analysis and local coverage (if they’re smart, that is).

Does that mean newspapers are home free? Not really. They still have to worry about getting the mix right and beefing up their online operations, because younger news readers are not moving to print. As Greg Sterling notes:

“Younger Americans are not adopting the habit of reading the newspaper in print. Just 22% of those under age 30 report reading the newspaper in print on the previous day, down from 29% a decade ago. Newspaper websites make up for much of this loss. In fact, the very youngest adults surveyed ­ those ages 18 to 24 ­ were slightly more likely to have read a newspaper this year than a decade ago, due in large part to their increasing use of online newspapers.”

I’m going to do something I don’t usually do, and that’s disagree with my friend and fellow meshconference.com organizer Rob Hyndman on the subject of whether CEOs should blog or not — sparked by the New York Times article on the subject. Rob says that he doesn’t see how a CEO could possibly have the time to blog, since most of them are fanatically busy, and that he “doesn’t get” claims that CEOs or political candidates should blog.

I can totally see the point that many CEOs are extremely busy trying to run their companies or put out fires of various kinds, or simply trying to understand the various forces acting on their businesses from day to day — and Mark Evans, in a comment on Rob’s post, also makes a good point when he says that CEOs have to be aware of Sarbanes-Oxley and other legislation that ties their hands when it comes to disclosure. All that said, however, I still believe that there is a place for a blogging CEO.

Obviously, not every CEO is going to be Mark Cuban, nor is every one going to be Sun CEO Jonathan Schwartz or Edelman head Richard Edelman. And I don’t think anyone would expect a busy CEO, or political candidate for that matter, to blog religiously or obsessively. But I think the direct conduit that a blog — even a sporadically updated one — offers between a CEO and his customers or clients, or even his own employees, is a very valuable thing. Surely a few minutes here or there could be found by just about any CEO to try and keep that conduit alive.

Walking along the street, you decide to make a phone call with your cell. Pulling out your phone, it detects a wireless signal and logs on automatically, allowing you to make your call by Wi-Fi instead of using your expensive cellular service. Sounds great, doesn’t it? And hopefully, someday, that dream will come true and we’ll all be able to do just that. How close that vision might be is an open question, however.

A piece in the New York Times has gotten plenty of people excited about the prospect, given the interest expressed by companies like T-Mobile, Cisco and Earthlink. T-Mobile, for example, says it wants to let users switch seamlessly from its cell network to Wi-Fi hotspots it owns, which sounds great. But what if you want to use your phone in someone else’s hotspot — how easy will that be? Will you have to sign on and authenticate yourself every time, and/or pay your provider?

I’m as excited as the next guy about the idea of using Wi-Fi to make Skype calls instead of cellular calls — but I don’t think the carriers are going to make it as easy as I might like it to be, and I think we could wind up with a mish-mash of standards, charges and procedures. As usual, I think Om Malik has the right mixture of enthusiasm and skepticism on this one.

My thanks go out to Jason Kottke, whose remaindered links provide an almost endless source of great material for reading and thinking, for a recent link to an essay by Paul Graham, the programmer turned venture capitalist/incubator guy. Paul writes blog posts too, but he also writes thoughtful essays about all kinds of things — and the latest one stemmed from speeches he made at Usenix and another conferenceon Rails, about the benefits of being marginal when it comes to designing software or starting companies.

As Jason says, the essay is “filled with odd conclusions and unfair assumptions, but the general ideas are interesting to consider; lots of food for thought in this one for me.” Among the things that caught my eye as I read it were these great bon mots:

“I think that’s one reason big companies are so often blindsided by startups. People at big companies don’t realize the extent to which they live in an environment that is one large, ongoing test for the wrong qualities.”

“Outsiders have nothing to lose. They can do risky things, and if they fail, so what? Few will even notice. The eminent, on the other hand, are weighed down by their eminence. Eminence is like a suit: it impresses the wrong people, and it constrains the wearer.”

“The very skill of insiders can be a weakness. Once someone is good at something, they tend to spend all their time doing that. This kind of focus is very valuable… but focus has drawbacks: you don’t learn from other fields, and when a new approach arrives, you may be the last to notice.”

Great stuff. Thanks Jason — and thanks, Paul.

During all the discussion of the Long Tail that went on recently between Lee Gomes and Chris Anderson — with Nick Carr playing the part of the umpire — one of the things that got talked about was “hits” or “stars” and whether they can come from the tail or not. I was thinking of that when I read the recent Economist piece on a popular MySpace personality named Christine Dolce, who likes to go by the name ForBiddeN (if you have to ask why, then you are out of the loop and should go back to watching old Rockford Files episodes).

Ms. Dolce, who happens to be blonde and rather chesty, seems to like lots of mascara, Johnny Depp, people with piercings and a kind of S&M vibe with lots of denim and rippling muscles (not necessarily in that order), and she has created her own line of clothing called Destroyed Denim, as well as advertising a line of cologne — “the only cologne with REAL sex pheromones!” — and now she has a deal with Axe deodorant. Ms. Dolce apparently gets more than 800,000 hits a day and has been crowned the “Queen of MySpace.” Playboy pictorials are rumoured to be in the works, and she has been written about in Business 2.0 magazine and the Wall Street Journal.

Where did Ms. Dolce come from? Who knows. She’s a makeup artist who is busy creating her own brand, just like rock singer and MySpace hot property Tila Tequila, who reportedly has over a million MySpace “friends.” Are either of them any less real or any more fake than N-Sync or Dog the Bounty Hunter or anyone on just about any reality show or American Idol would-be star? Not really. But they are busy making themselves, rather than having others make them. How will MySpace handle this, Scott Karp wonders. Good question.