The Crisis in the content economy

Empathy for Newspapers

However, the declining cost of information also means that the tens of thousands of middle-class jobs the newspaper industry has shed are being replaced by tens of thousands of low-wage jobs in a new digital sweatshop. Information production is becoming a less viable way of making a living, and the lowered cost of information on the Internet is directly responsible for this severe wage reduction.

Or as Clay Shirky put it, "Society doesn’t need newspapers. What we need is journalism." (Actually I think we need newspapers, although not necessarily in broad sheet form.) See my earlier piece, Content is not King.

Edit - Rob Pegoraro has some additional thoughts.

Publishing 2.0: How Google Stole Control Over Content Distribution By Stealing Links

Bad news for hacks is bad news for flacks

'Baltimore Sun' Closes Suburban Offices, More Cuts Coming

BALTIMORE In the latest sign of trouble for Tribune Co.'s cash-strapped newspapers, The Baltimore Sun is moving its suburban bureau employees to its downtown office and also plans another round of staff reductions, a union leader said.

This piece I wrote for Bull Dog Reporter has proved to be hideously prophetic.

Even the government IT press has been hit.

It is going to be harder and harder to place stories.

Economic downturn in the age of the Internet

Lucy Kellaway, the Financial Times

This is our first experience of recession in the internet age, and so far I don’t like it one little bit. You could say that the internet makes the recession more bearable as there are all those networks to help people get jobs and there is Ebay for buying things second-hand.

Yet such things are trivial compared to what the internet is doing to our confidence. The internet has created a global psyche. The web has mentally joined us at the hip, so we can no longer put our heads in the sand. If that sounds painfully contorted, it is because it is. Just as no country can decouple itself from the ailing global economy, none of us as individuals can decouple ourselves from the ailing global psyche.

Through blogs, websites and e-mails the world’s economic ills are fed to us on a drip all day long. It is not just that we hear about bad things faster, we hear about more of them and in a more immediate way. My worries become yours, and yours become mine. On the internet, a trouble shared online is not a trouble halved. It is a trouble needlessly multiplied all over the world. After reading this article, people in Australia will surely start worrying about my paint colours, too.

I think this is the strength of the Internet, its ability to give ordinary people a voice and the chance to hear the voice of ordinary people. It is changing the way we view recessions.

It is also changing the way we view wars.

Recession proof marketing

There is no such thing. Can we stop with all the happy talk now? These are hard times which we will survive. The best way to do that is to come to terms with what is happening.

Libraries in hard times

In Bad Times, Free Resources Are a Hot Commodity

In the past few months, it has become even busier. The library, like most in the Washington area, has had a rising tide of users as patrons look for free computer access, DVD loans and activities for children during the recession. Circulation in the last six months of the year rose as much as 23 percent in libraries around the region, records show.

The influx comes just as county managers are preparing budgets for the coming fiscal year in a time of huge shortfalls. Libraries, like other services, face drastic cuts that could mean reducing staff and hours or even shuttering branches.

It never ceases to disappoint me that the same business interests who are so eager to call for public subsidies for sports stadiums are so reluctant to support a proven economic and community resource like libraries.

A serious accusation requires serious evidence

U.N. crime chief says drug money flowed into banks

VIENNA: The United Nations' crime and drug watchdog has indications that money made in illicit drug trade has been used to keep banks afloat in the global financial crisis, its head was quoted as saying on Sunday.

If UNODC really has such evidence they need to come forward and put it on the record.

Partner or competitor?

Is your vendor becoming a fine young cannibal?

This is something Tony Byrne discussed during his presentation at DC Content Mavens. In hard times vendors are tempted to muscle in on their consultant's business. This has happened to friends and relatives of mine. As a VAR or local dealer you introduce the product line, develop the relationship, and then in tough times the manufacturer cuts the price and sells direct.

Desperate times produce desperate men. Watch your back.

Bad news on FOSE

Mark Amtower

FOSE cornerstone exhibitors CDWG and Microsoft will not be exhibiting this year. The FOSE web site lists only 248 vendors signed up so far and many biggies are missing. Others AWOL include PC Mall and GTSI. Despite massive early web PR (starting last summer, and inlcuding the prerecorded phone call I had over the weekend), overall interest in FOSE seems to be way down. Even with the merger of the show with GovSec (they say it is two different shows in the same place at the same time, but it is really one big event), I look for attendance to be down.

Wow, I have to admit that I am amazed. The federal government is the only entity which is buying this year. I expected that at least the regulars would show up.

If you are one of the exhibitors, now is the time to start your marketing & PR effort.

Whither Google reader

Steve Rubel is concerned that Google might kill Google reader because it is not profitable. I had always assumed that Google was collecting and aggregating reader information and selling it.

For example, which zips code have the most Google News Alerts on e-discovery? What other key words do they have? Fraud? Maddoff? Sarbanes-Oxley? XBRL? Of those who have Google News Alerts on e-discovery, what do they have in the Google reader? Gabe's Guide? Washington Post? Blog of the Legal Times? CNET? That would be very valueable to have.

I trust that Google limits the number of queries in such a way that no one would be able to know what I had in my reader.

Google as an advertising vehicle is valuable, Google as market research is pure gold.

Federal market may be limited

Kim Hart as a report on NVTC's recent panel discussion on surviving the current downturn. The consensus seems to be that the Federal market can no longer be depended upon to keep local technology businesses afloat.

Federal sales cycles typically take three times as long a the commercial market. Certainly the Federal market offers no short term fix.

Edit -
A cheerier view.

Little considered aspect of Software as a Service

Making technology investments in tough times

Some commentators have opined that more customers will turn to SaaS-based solutions inasmuch as the cash crunch will hit buyers' capital ("CapEx") budgets first. If that's the case with you, you'll want to weigh reduced initial cash outlays against potentially higher operating costs on a long-term basis under a SaaS model. Depending on the type of service provider, you're shifting at least part of the capital burden to your SaaS vendor, so you'll want to weigh their liquidity very carefully.

More generally, it's prudent to examine the financial health of all your major technology suppliers, current and prospective. We've always counseled looking more closely at balance sheets rather than profit-and-loss statements. Many vendors still remain cash-rich, even as they become customer-poor. I'm no financial expert, but I'd value short-term assets over things like "goodwill."

Keep in mind that bigger does not always mean more solvent.

Venture Capital slumps

Venture

Capital Funding Slips, Slowing Business Development
Locally, the National Venture Capital Association said this month that disclosed second-quarter venture capital investment slid 15 percent from the same period of 2007, to $234 million.

Not very encouraging, but still better than housing or finance.

Bad economy for Venture Capital

A Cringing Quarter for Venture Capitalists

The National Venture Capital Association, the industry’s trade group, largely blamed a weak economy for the trouble its members are having finding profitable exits. But it said the government is to blame too, particularly for the dearth of initial public offerings. Were it not for excessive regulation in the form of Sarbanes-Oxley, it would cost less for companies to go public and there would be more offerings, the industry group said.

I don't think that there is any possibility of changing Sarbanes-Oxley in the present political environment.

Federal Reserve credibility meltdown

Barclays warns of a financial storm as Federal Reserve's credibility crumbles

US central bank accused of unleashing an inflation shock that will rock financial markets, reports Ambrose Evans-Pritchard

Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall "below zero".

A bad sign. A very bad sign.

A state of wealth destruction

That is how George Soros characterized our economy in his interview on the NewsHour. Judging from the interview, Soros shares my view that regulations exist for a reason and that regulatory authorities need to be willing to act. In particular, they need to enforce margin requirements in the early stages of a bubble.

Soros has a new book out, The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means. It sounds promising. His book, Age of Fallibility: Consequences of the War on Terror, is well worth reading.

The energy sector, PR and economic indicators

New Global Research Shows Exxon–Mobil Ranks Low on Transparency — Revenue Leader is Most 'Secretive' of Oil and Gas Companies

The world's largest energy group, Exxon–Mobil, is as secretive as its Russian and Chinese rivals, new research has suggested. Transparency International evaluated the reporting practices of 42 oil and gas firms including payments made to resource–rich countries. Exxon was the least transparent along with China's CNOOC and Russia's Lukoil. Transparency International, which targets corruption, is a global network across more than 90 countries. It said the lack of transparency can cause corruption and hurt the poor, BBC News reports.

In response to the report, Exxon says it was committed to honest and ethical behavour and opposed corruption. The firm said it, along with other members of the International Association of Oil & Gas Producers, disagreed with the report's methodology.

The report ranked BP, the UK's largest firm, as "medium" for revenue transparency. Anglo–Dutch firm Shell was classed as "high" for transparency along with Brazilian firm Petrobras.

It's never a good thing when your firm's lack of transparency is compared to that of the Russians and Chinese.


Big oil boosts buy-backs in absence of new investments

Rising nationalism, insufficient talent and scarce supplies are limiting investment opportunities for the world's major oil companies, leading them to increase share buybacks, said Jim Mulva, chief executive of ConocoPhillips. ...

... "One could argue that companies spending this amount of money buying back stocks are slowly liquidating themselves," said Robin West, chairman of PFC Energy, the consultancy.

At a time of record gas prices, this is not reassuring.

The Peak Oil Crisis: The Case for 2008

It is conventional wisdom for most of the people following the peak oil story that we still have a few years to go before the real troubles begin. Some say 2011, others 2015 or later, but in general, among those calculating the depletion vs. new supply balance most have been talking about troubles starting in years rather than months.

Let’s ponder for a second the meaning of “peak oil.” Ever since the concept was invented some 50 years ago, peak oil has meant the point in time when world oil production increases to a level that never again will be reached. For most of us, however, peak oil will not be a point on a government chart, but will be the day when we drive up to a gas station and find the tanks empty, restrictions on how much we can buy, or more likely a price that makes us realize our lifestyles are going to change. We can no longer afford to use our cars in the manner that we have been doing all our lives.

In recent weeks there have been developments suggesting that the troubles associated with peak oil may be coming faster than many realize.

Time to find some new energy experts.

The credit crash and our times

Krugman

Credit — lending between market players — is to the financial markets what motor oil is to car engines. The ability to raise cash on short notice, which is what people mean when they talk about “liquidity,” is an essential lubricant for the markets, and for the economy as a whole.

But liquidity has been drying up. Some credit markets have effectively closed up shop. Interest rates in other markets — like the London market, in which banks lend to each other — have risen even as interest rates on U.S. government debt, which is still considered safe, have plunged.

Many innocent players are going to get caught up in this. Banks which made stupid loans will panic and refuse to make good ones, or won't be in a position to. During the in the aftermath of the junk bond collapse in 1991 a business associate of mine had his line of credit cancelled. My friend was a VAR selling almost entirely to the federal government. His receivables were in the form of federal purchase orders, as safe as you can get short of currency. He could not bid on business without the ability to buy inventory on credit, so he had to turn away millions of dollars in business. There were many situations like this in 1991 and there will be even more in 2008.

What is truly sickening about this is that so many saw it coming and tried to raise the alarm. It does not speak well of our national discourse and political culture that we allowed it to happen.

The real estate crash

Foreclosure filings up 93% this year

A bad sign. A very bad sign.

Trouble in the bond market

Bonds plunge as US debt loses its appeal

Government bond yields in the eurozone and the UK soared to fresh multi-year highs on Wednesday as investors nervous about rising interest rates continued to dump bonds.

A later story is more encouraging:Bonds stabilise as yields draw in investors

Except for this part:

“It’s not the end of the sell-off in bonds, but the market has stabilised and we have seen some buying from pension and insurance accounts,” said Gerald Lucas, senior investment adviser at Deutsche Bank.

Signs of reduced bond buying interest on the part of Asian central banks and other foreign investors has been one factor behind the sell-off. But the sell-off pushed up yields and that attracted investors who favour low-risk investments.

I don't think that our political leadership has done anything to prepare us for what is to come.

Slow But Steady Growth Projected For U.S. Tech Sector

Forrester's index points to a rosy 2007 as overseas sales continue to drive a need for U.S. goods.

The U.S. tech sector is expected to grow slowly, but steadily, this year, driven by expanding overseas sales, a market research firm said Wednesday.

The projection is based on last year's trends, which are expected to continue in 2007, Forrester Research said. In the fourth quarter of 2006, the firm's U.S. Tech Sector Index rose two points from the third quarter and 5.6 points year to year to 128.8. That number reflected an increase in seven of the 11 indicators.

Web 2.0 Funding Doubled In 2006, But Few Rich Yet

Four-fifths of all Web 2.0 investment was focused on U.S. start-ups, with $682.7 million plowed into 126 firms.

May this be a sign of things to come.