Andy's Mind

Tech Crunch claims repeatedly that Last.fm passed user data on to notorious extortion syndicate theRIAA has become. Their reports are based on unnamed sources, but Last.fm’s strong denial strengthens the suspicion that it may be indeed true (Prince Gorchakov, Russian foreign minister in the 19th century used to say that he doesn’t believe rumors that have not been strongly denied).

The prospect of RIAA thugs laying their hands on records of what all Last.fm users listened to over – in many cases – years is something that should serve as a wake up call for all of us. Even if it did not happen yet there is no guarantee it won’t happen in the future. Actually, one can be sure that one day it will. As we move more of our data to the notorious “cloud” – that is machines we have no control over at all – we basically make it available to the highest bidder. And consequently we loose some degree of control over our lives and privacy.

Conversely, the corporations operating the “cloud” get more and more insight into our lives, views, relationships, material possessions and even thoughts. Then they sell it to advertisers, governments and – as it turns out – RIAA thugs. This is, basically, why all those services are free to use. The users pay for them not with currency but with their data they feed into them.

And Last.fm is just the tip of the iceberg. Think of Google. If you use the whole range of their compellingly simple and easy to use services then they can corelate your e-mails kept in GMail with your photos kept in Picasa, with your conversations on Groups, your blog posts on their blogging engine, your documents and spreadsheets in their Docs and even your browsing history if you use their browser toolbar or Chromium browser. And they don’t have to manually browse through all that to use it – on the contrary, they can algorithmically process all this data and single out people that match a certain profile. Or detect trends. Or predict events. Or map people’s connections.

There is a book out now called “The Numerati” written by Stephen Baker that describes in terms understandable for a layman what can be algorithmically derived from all the data we leave about us. It is all great for marketers for pinpointing their advertising Google and others live off. But it’s also great for secret police and others who want to single out people based on their views or associations. And great for governments who want to know about trends in a population even before they are publicly expressed.

You think Google won’t work hand in hand with the government if asked, that they would resist to protect your privacy? Don’t delude yourself – they will do it the instant some types from NSA or another gov agency walk into their offices. And they even do it publicly now. Yeah, I know, it is just for predicting flu outbreaks and who would object to something this good etc. But same technology can be used for detecting and pinpointing, say, tax dissent (like tea parties). Or map support for anti-Obama politicians – especially given Google’s political views being in line with the current’s administration.

Since I have been using GMail for some time now I think Google knows more about me than any of the people close to me in the real life. I should have moved away from GMail already – the reason I didn’t do it yet is that using their services is so easy and in our busy lives there is little space left for setting up private servers, installing spam-fighting software etc. But the more I see and realize what is going on the more I’m compelled to do this.

For now I’ve uninstalled the Last.fm’s scrobbler – and so should you.

Yet another example of Google’s power to manipulate what the Internet sees and what it doesn’t has just surfaced thanks to those sites, that are not (yet?) hosted on Google. It seems Google is laying engineers off (no big deal – many companies are these days, Microsoft just did) and is also trying to hide the information about it in its own search results and on Google News pages. Read the source.

Now, I was positing Google can do the same with political or social views its owners don’t agree with. I was ridiculed by those who still believe in Google’s slick PR front. But the truth is that power corrupts and huge power corrupts greatly. For Google the temptation to manipulate the content stream that passes through them was just too big. And this just proves how bad it is for the public if content streams are monopolized.

And it also shows that corporations are just corporations. Google always tried to be “cool” to hide the reality of what it was becoming, but in the end there is no escaping it. When bad times strike there is no “cool” anymore – there is just the almighty balance sheet. And attempts to hide it are both scary – and pathetic.

It has been reported recently that Amazon has sold 500k of their ugly Kindle readers in 2008. In fact, despite the slump of sales of almost everything in the last month of 2008 the demand was so high they did run out of them in November.

This shows the power of content. Kindle isn’t the best of digital readers. And it is ugly. And there are limitations to the content you “purchase”. In fact, a book you “buy” from the Amazon’s Kindle store is not your property, you can’t do nothing with it other than read it on the device. For example you can’t give it to friends. Or print few pages. So in fact it is a long-term lease that will function as long as Amazon and your Kindle will work.

But the Kindle wins with other digital readers and other more open ebook formats because of the amount of well catalogued content – books, magazines – you can easily get on the device for moderate prices. In fact, even my father’s book on composites which is a scientific textbook on an exotic subject is available as a Kindle book.

Amazon clearly had connections and power to work with major publishers to get their books as Kindle ebooks. And they had easier time persuading them to do so, as because of the closed nature of the whole system they could offer publishers more reassurances their content will be protected. Plus, small, independent publishers can use their very simple publishing platforms to get their books to Kindle with very little cost. The effect is that user buying Kindle gets an easy access to a huge library of books, something no other reader offers. That is why the Kindle “brick” has gained momentum many doubted it will ever get (me included). Once again it was proven that content is the king and the key, not devices to deliver it.

The only hope now for open ebook formats and other readers remains the fact that Amazon Kindle is not available anywhere outside the US. That leaves a huge market open for other devices. And lets hope other players will use it, because the future where digital reading is monopolized by a closed platform is not a vision to cherish.

I wrote recently that I think we’ll see less funding for startups in the near future – it seemed pretty obvious. Now the New York Times is reporting that this is exactly what’s happening.

First to disappear are so called “angels” – small private investors that were giving initial funding to startups in their very early phases of growth. Angels became an almost indispensable part of the startup game helping young companies become interesting enough for venture capitalists to look at. Funding their provided was much easier to get (if you knew right people in the US) than VCs and helped startups put together initial business plans, teams and mockups/demos of products/sites/etc.

But, as the crisis unfolds and economy corrects the mistakes in resource allocation to consuming (2/3rds of US economy is – or rather was – consumer based) angels face same problems as everyone. Some of them even used to invest money that was in fact credit against the value of their real estate or stock holding from past successful ventures. As value of both falls down so does their capacity to invest. Plus, with all the pessimism in the media people are even less willing to take any risks with their money looking rather for safety and savings.

But there is an upside to all of this, which I have pointed out in my New Year’s article: all that means better quality. Yes, less startups will get money, but those who will get funded will be those with better teams, better business plans and better, more innovative ideas.

Quantity will go down, so the quality will go up. This is good news, even if that means we won’t get another dozen of new, “unique” social networking sites.