Technology, Business & Cool Toys

Motto for Freedom Activists: ‘Don’t Be Unreasonable’

by Sonia Arrison on January 27, 2006 · 2 comments

Google recently created a public-relations firestorm when it unveiled a new search site in China that censors data on behalf of the Chinese government. Though the search giant’s success stems from its birth in a free country, that doesn’t mean the company is strong enough to enforce freedom around the world.

Many Americans were horrified to learn that American-grown technology firms such as Yahoo, Microsoft, Cisco, and Google are complying with the Chinese government’s demands to control information. When Yahoo handed over data last fall that landed a Chinese journalist in jail for 10 years for simply e-mailing newspaper briefing comments to a democracy group in New York, outrage followed. But the mistake many observers make is to equate the power of corporations with the power of governments.

Ajax Revolution

by Tim Lee on January 27, 2006 · 8 comments

I’ve raved before about the Google’s recent crop of richly interactive applications. The “technology” (really, collection of old technologies that have finally matured to the point where they’re usable) behind these has been christened “Ajax.”

So here’s the latest amazing application in the Ajax tool suite: Meebo. Meebo is a multi-protocol chat client like Trillian and Fire. But unlike those programs, which are applications for desktop operating systems, Meebo is entirely web-based. If you use instant messaging, I suggest you give it a try. The level of interactivity it offers is stunning.

This is what Google Talk should have been. True, they probably couldn’t have done the voice-communication this way, so a desktop application may have been inevitable. But on the other hand, doing an Ajax IM client would have been so much more impressive than implementing yet another Windows IM client.

“Ajax” is a word you’re going to hear a lot in the coming year. If I owned a traditional web-based application (MapQuest and HotMail, I’m looking at you), I would be very worried right now. Once users start to discover what a truly interactive website looks like, they’re going to be increasingly dissatisfied with the “point, click, and wait” model. There are dozens of opportunities right now for startups to steal a significant chunk of market share by being the first to market with a particular kind of Ajax application.

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Liberation Technology

by Tim Lee on January 23, 2006

So I’ve been following this month’s argument over at Cato Unbound, a site run by my friend and former colleague Will Wilkinson that takes a Big Idea each months and brings in some Smart People to discuss it. I’ve been meaning to jump in when I saw a point where I’d have something to add to the discussion.

The problem is that I agree with Eric Raymond’s opening salvo, in which he tears the lead essay, written by Jaron Lanier, to shreds. Lanier’s essay is chock full of breathtakingly broad generalizations expounded in a world-weary tone. He flits from topic to topic, issuing sweeping but vague pronouncements about each, without ever arriving at any kind of clear point.

So honestly, I’m not sure what Lanier’s point is, or whether I agree with it. So instead of jumping into that specific argument, let me offer some quick thoughts on this month’s big idea: what’s become of the techno-utopianism of the 1990s? While I think that some of the utopians over-stated their case, and most of them got the details wrong, their basic thesis was right: the Internet is going to revolutionize American (and world) politics, society, and economics.

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Unintentional Humor

by Tim Lee on November 14, 2005

This is funny:

Open source will fail to deliver innovation and is more likely to break applications, according to Shai Agassi, president of the product and technology group at SAP. “We all talk about how great Linux is,” he said at a speaking engagement at the Churchill Club in Silicon Valley. “But if you look at the most innovative desktop today, Microsoft’s Vista is not copying Linux, it is copying Apple.”

And Apple’s Mac OS X, of course, is based entirely on proprietary, commercial software. It doesn’t have a Unix-based open source core, an open-source web server, a web browser based on the source code of a web browser originally developed for Linux, Samba, an open-source package that allows file and printer sharing with Windows, CUPS, an open-source project that handles Mac OS X printing, and… well, I could go on like this for pages.

Mac OS X is a bundle of features, some of which are open source and some of which are proprietary. Arguably, most of the features that Microsoft is copying are proprietary, but to a large extent, the reason Apple has been able to develop so many innovative features so quickly is that they built the OS on a rock-solid open source foundation, saving them a lot of work in re-implementing a whole bunch of wheels. It’s downright absurd to argue that Mac OS X is a poster child for the superiority of proprietary software over open source software. What Apple demonstrates is that both proprietary and free software can benefit from collaboration.

I also think it’s a mistake to assume that the desktop is the be-all and end-all of the software market. Open source software isn’t that great at producing high-quality desktop software (Firefox is a major exception) because, frankly, desktop software is boring to create. In contrast, open source software is thriving in behind-the-scenes roles like web, file, and email servers which, while not as visible to the average user, is every bit as important economically.

I Want My GPL

by Tim Lee on October 21, 2005

James DeLong muses about Google’s motivation for cutting a deal with Sun, speculating that Google may be contemplating a switch to Solaris to avoid the obligations of the forthcoming GPL 3.0.

This is (to be euphemistic) a silly theory:

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Variable price fixing?

by Jerry Brito on September 30, 2005

Everybody seems to be freaking out about Warner Music chief Edgar Bronfman saying earlier this week that he would like to see variable pricing on iTunes. Rather than a flat 99-cent rate for all songs, Bronfman would like to charge more for popular songs and less for songs that are older or not in demand.

Some have suggested that this would amount to price fixing. They’re thinking of resale price maintenance, where a firm requires resellers of its product to sell at a certain price. If all the resellers are locked in to the same price, they won’t compete on price, price won’t come down, and the producing firm might get a supra-competive return. But to make this work Warner would have to not only set the prices on iTunes, but everywhere else. You would also have to assume that songs aren’t substitutable, so that consumers wouldn’t just move over to non-Warner songs that are cheaper. You would have to assume that or a cartel of all the major labels, which would really be serious.

What Bronfman is really proposing isn’t that strange at all. As BusinessWeek notes,

Some books cost $25, others $15. There are magazines that sell for $4.95 a copy, while others go for $2.95. And who hasn’t secretly perused the bargain racks of CDs, looking for a $5 disc from that hair-metal band you loved so much in the ’80s? [I’m looking at you, Adam.] All Bronfman suggested was creating an environment where some songs would command a premium and others would do the equivalent of filling the bargain CD bin.

Still, some ask, what business does Bronfman have telling Apple what retail price to charge? He’s the wholesaler, they say. He can charge Apple more if he likes and let Apple decide whether it will raise its prices. The problem with this reasoning is that Apple does not license music from the labels for a flat per-song royalty. Proceeds from each download are reportedly split 35-65, Apple-label. Here’s an explanation of the agreement:

The deal is straightforward. Of the 99 cents of a download, Apple keeps a portion and the rest goes back to the label, which is then responsible for distributing back to the artists, songwriters, publishers, and so on according to the existing terms between the labels and their bands. This makes it really simple for Apple to acquire content because they don’t have to deal with stuff like licensing agreements or paying publishers–all that stuff is the labels’ responsibility.

Bronfman is just trying to make the portion kicked back to Warner variable depending on the song’s market value. And, oh yeah, Apple doesn’t have to take the deal.

Now, I agree with Steve Jobs when he says, “If the price goes up, [consumers] will go back to piracy and everybody loses.” But that just means that Bronfman’s variable pricing scheme would be a dumb business decision because I personally don’t think any song is worth more than 99 cents. Priced above this consumers will download illegally or buy other songs. But variable pricing by itself has nothing to do with illegal price fixing as some have suggested.

From Luxury Item to Disposable Good: The Amazing $29 DVD Player

by Adam Thierer on April 16, 2005 · 6 comments

So I drove over to CompUSA late last night for a special 10-till-Midnight sale. (Yes, I’m that big of a dork… but hey, I needed a new laptop and they had some good sales).

When I walked through the door, there was a mob standing around a giant bin fighting each other for a chance to grab one of the DVD players inside. After the commotion died down and all of the DVD players were picked over, I went over to see what the big deal was. Incredibly, CompUSA was selling brand new progressive scan DVD players for $29.99.

Now to explain to you how incredible this was to me, you have to understand that I’m one of those idiots called an “early adopter.” Yes, I’m the guinea pig who buys every new technology right out of the gates for outrageous prices just so I can be the first kid on the block with the hot new toy in town. Back in 1993, I was one of the first people to buy Onkyo’s hot new laser disc player–you remember those old discs that were as big as LP records and that you had to flip them over to continue to watch even short movies? Well, I threw down $1000 bucks on one of those suckers. It was rendered obsolete by the rise of DVDs just a few years later, and yes, I bought one of the first DVD players to hit the market too. This one was around $1000 bucks as well. And later this year I plan to throw down even more insane amounts of cash to be one of the first to grab a Blue-Ray high-def DVD player. So I’m not just the sucker that’s born every minute, I’m a reborn sucker every few years. The industry loves spend-happy idiots like me.

So, anyway, there I am in CompUSA late last night staring at the empty big of $29 DVD players and thinking to myself just how amazing that was. Not just because I paid so much more for my first one a few years ago, but also because of how fast the market had brought the price of these devices down below the cost of a good steak at Morton’s. (I had had a steak at Morton’s earlier in the day that cost $34 bucks. It was the cheapest one on the menu!)

Moreover, at a price of $29, that means that DVD players are now almost as inexpensive as the DVDs that they play! In fact, on a rack right next to this bin of $29 DVD players was a stack of “Lord of the Rings” special edition DVDs that actually cost more than the DVD players. (Also, in another bin, CompUSA was selling brand new LCD computer monitors for $120 bucks. Insane!)

Am I the only person that finds this absolutely amazing? I wonder what all those people who complain about a “digital divide” in this country would say about this.

P.S. Proving yet again what an idiot I am, I bypassed all the great sales on sub-$800 computers last night and shelled out over $2000 bucks on a state-of-the-art new Toshiba multimedia laptop. I’m sure the same model will be selling in a bin next year for $400 bucks. Somewhere in Tokyo, an account executive is laughing about people like me right now.

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Open Source Community Grows Up

by Sonia Arrison on April 8, 2005

I attended the Open Source Business Conference in San Francisco this week and was impressed to see that the community I once regarded as mostly a bunch of socialists has morphed into a capitalist-loving crew. Here’s my column for more details.

The Case against Micropayments

by Tim Lee on March 6, 2005

I just came across this great article from 2000 by Clay Shirky. He argues that micropayments are a bad idea that are doomed to fail because they economize on extremely cheap resources (bandwidth, content) at the expense of a relatively valuable resource–the user’s time. He persuasively argues that there’s no such thing as a no-brainer transaction–if a micropayment is large enough to be worth the bother to the seller, then it’s large enough that the buyer will want to consider it before approving it. But the time and annoyance of having to think before clicking on every link the user encounters might vastly outweigh the value of the penny being transacted.

Another way to put this, I think, is that we already have micropayments: they’re called ads. Users pay for content, not with cash payments, but with their time– giving a split-second of attention to the ads on the page as they read the content. And it turns out that in most cases, advertisers are willing to pay more for ad impressions than users are willing to pay for content. And users prefer ads to micropayments because micropayments take more time and hassle to deal with than ads that can be easily and safely ignored.

A Small, Grudging Advance for Contract Law

by Jim Harper on December 21, 2004

Self-styled Internet lawyer Ira Rothken has gotten a settlement from software companies and retailers that should reform the shrink-wrap license conundrum.

When the terms of a shrink-wrap license make the license enforceable upon opening the package and include a return policy you don’t accept, how do you decline the terms and return the product? If there ever was a conundrum, this is one, folks.

In Washington, lots of complaints about EULAs (End-User License Agreements) are addressed to regulators and politicians. But EULAs are contracts. The resolution to problems with EULAs lies in contract law – like the doctrine of adhesion contracts, about which I was expert in my law school contracts class. (Um, I’m not any more.) Many terms in EULAs may ultimately be stricken under this doctrine. So, good for you, Ira, and watch out, EULA-writers!

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