Archive for the 'politics' Category

“Great vampire squid” wraps itself around The Social Network.

Published on January 4, 2011 in Facebook, Twitter, business, politics, social media and technology. View Comments

I’ve wondered when this day would come. The start of a new decade is a fitting time I suppose. New decade. New blood.

On reading the news that Goldman Sachs has led a huge new investment in Facebook, I couldn’t help but recall with some amusement Matt Taibbi’s Rolling Stone article The Great American Bubble Machine, from April last year.

This rollicking take-down investigates how Goldman Sachs has helped engineer every major market manipulation since the Great Depression, including the tech stock bubble of the 1990s, the “housing craze” that lead to the global financial meltdown, the $4 a gallon petrol (or gas in American) bubble, and rigging the financial crisis bailout. The world’s most powerful investment bank is harshly described as:

a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

Can you see why, after recalling this article, I seem to have this mental image of a vampire squid wrapped around a big, blue ‘F’?

Goldman Sachs seems to have been just about everywhere within capitalism, including  ‘dot com’, ‘web 1.0′ IPOs leading up to the tech wreck, and now, it’s into ‘web 2.0′, social media.

With that in mind, here’s another harsh evaluation of the bank’s (and government’s) long history from said vampire squid article:

The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again

If you agree to any degree with this assessment, does that mean social media is about to be subjected to this? If you don’t, it’s all fine and dandy. I guess we’ll just have to wait and see what happens. I’ll reserve my judgment for later, because I’m not as cynical as you lot.

Any any case, let’s take a quick look at what has just happened with the Goldman Sachs/Facebook deal.

  1. Facebook has just raised $475 million from Goldman Sachs.
  2. In addition, the company intends to raise another $1.5 billion through a “special purpose vehicle” that Goldman Sachs will be initiating, to let its clients indirectly invest in Facebook.
  3. The private sales would value Facebook at around $50 billion.
  4. The minimum investment from clients is expected to be about $2 million.
  5. Goldman’s offering of Facebook shares will surely be watched closely on Wall Street, as it could set an example for other private companies (who don’t wish to go public but still raise a lot of money) to do a similar thing.
  6. A potential investor has said that Goldman is taking about 4.5 percent fee from the money invested into the fund.
  7. By using Goldman’s “special purpose vehicle“, Facebook will avoid having its financial information disclosed to the SEC and published publicly. Its competitors won’t know the details of its earnings.
  8. Using the “special vehicle”, Facebook still gets around $2 billion to use, without going over the 500 shareholder limit for disclosure, by having Goldman Sachs represent the investors on their behalf. Did someone say loophole?
  9. The SEC may intervene and rule that the “special purpose vehicle” circumvents the Securities Exchange Act and require Facebook to then report its earnings.
  10. It so happens that the SEC just last month began an inquiry into the surge of trading shares of privately held Internet companies.
  11. As Mashable points out, if Facebook is required to eventually report it’s earnings, why would it not then just go for an IPO, after of course growing quite a lot more in the meantime?
  12. Goldman Sachs is in the prime position to lead the lucrative IPO, whenever that occurs. Big fees.
  13. As Dealbook points out, an eventual IPO would also unlock CEO Mark Zuckerberg’s huge paper wealth, which Goldman Sachs, as a lead Facebook investor, would have a “leg up” in the assignment of managing post IPO.
  14. No doubt Twitter and other social media companies, and their investors, will be watching this whole developing situation with interest.

FCC approves net neutrality rules – good compromise or welcoming your new ISP overlords?

Published on December 21, 2010 in business, mobile, politics and technology. View Comments

The U.S. Federal Communications Commission (FCC) has adopted new rules in relation to net neutrality, or how internet providers handle traffic and various services.

Democrats on the panel have voted to approve the new enforceable net neutrality rules, which will restrict companies such as AT&T, Verizon and Comcast from blocking access to content unfavorable to them.

The Obama Administration has claimed a win in relation to its net neutrality campaign promise, maintaining it represents progress. Others are claiming the measures do not go nearly far enough. Obama has said:

As technology and the market continue to evolve at a rapid pace, my Administration will remain vigilant and see to it that innovation is allowed to flourish, that consumers are protected from abuse, and that the democratic spirit of the Internet remains intact.

Unsurprisingly, Republicans at the FCC and in Congress are opposed to the new measures, with Sen. Kay Baily from Texas labeling it an unprecedented power grab by unelected members. Republican FCC Commissioner Robert McDowell accused the FCC of becoming a vigilante group in order to help Obama with a misguided campaign promise.

However, there has also been disapproval dished out from many net neutrality advocates. The New America Foundation has said the new rules prioritise the profits of corporations such as AT&T over the public, internet entrepreneurs and local businesses. Public Knowledge maintains that the rules fall far short of what they could have been and Free Press has asserted that the rules amount to fake net neutrality. The Institute of Policy Integrity has labeled the new rules “tepid”.

The main criticisms seem to be that while wired broadband providers may not unreasonably (whatever unreasonably means) discriminate against any lawful traffic, the rules don’t apply to wireless providers. Also, “paid prioritisation” has not been banned. This means that providers may be able to set up paid priority access on networks. “Managed services” are allowed over ‘last mile’ broadband. Providers can sell prioritised IP services of any kind.

In short, critics say that the new rules are full of loopholes and grey areas, hence the distinct lack of celebration from net neutrality advocates. As Ars Technica has pointed out, “damning with faint praise” seems to sum up responses from long-time net neutrality supporters.

Read Write Web has a decent rundown of the “six key principles” underpinning the new rules if you are interested in looking a little closer.

Twitter reveals Top Trending Topics and Most Powerful Tweets for 2010.

Published on December 15, 2010 in Twitter, environment, politics and social media. View Comments

In what’s becoming an end of year tradition, if you can call two years in a row a tradition, Twitter has revealed its Top Trending Topics for the year.

The company has also compiled a list of the Most Retweeted tweets, what it asserts to have been the 10 Most Powerful Tweets of 2010, and a tree timeline of some notable people who have joined Twitter over during the year: Who’s New On Twitter.

Twitter 2010: Year In Review

Unsurprisingly, ‘Gulf Oil Spill’, ‘Haiti Earthquake’ and ‘Pakistan Flood’ made it to number 1, 2 and 3 respectively in the News Events section. ‘Wikileaks Cablegate’ appears to have made it to number 7 on the list, even though that particular global brouhaha is still in full swing.

In other topic areas, Apple took out four of the top ten spots in ‘Technology’, and Justin Bloody Bieber took out top spot in ‘People’. Again, no doubt Julian Assange is rocketing up that list at the present time.

Below is a rundown of the Overall Top Trends, if you can’t be bothered clicking the link above and going all the way over to Twitter. I have to say, Inception has been my favourite film for the year too.

  1. Gulf Oil Spill
  2. FIFA World Cup
  3. Inception
  4. Haiti Earthquake
  5. Vuvuzela
  6. Apple iPad
  7. Google Android
  8. Justin Bieber
  9. Harry Potter & the Deathly Hollows
  10. Pulpo Paul

A few of the listed 10 Most Powerful Tweets are certainly debatable, but in my book, this one from hit parody account @BPGlobalPR was a real doozie at the time:

Catastrophe is a strong word, let’s all agree to call it a whoopsie daisy.

What’s your favourite trending topic for the year, or favourite Most Powerful Tweet?

Internet war, what is it good for?

Published on December 9, 2010 in business, politics, social media and technology. View Comments

On Wednesday (US time), Dave Winer published a post entitled ‘Are we starting a full-out war on the Internet?‘. This may seem a bit extreme or at least overly dramatic to many, but given the goings on in relation to Wikileaks, and the ongoing fallout from the release US Embassy Cables, it has certainly given me pause to reflect on the question.

Winer states upfront:

I’m afraid it (the storm surrounding Wikileaks) also will draw us into a future that I’ve believed was coming and didn’t want to talk about.

This also reminded me of something that was said in the BBC documentary series I saw on TV here in Australia not long ago, The Virtual Revolution. At one point it asserted that mass warfare on the Web is a strong possibility for the 21st century, and it will be our choice as to whether we take it in that direction, and to what extent.

As far as I know, humans have always been in violent conflict with each other to varying degrees. Is there any reason to think life and actions online will be any different? I certainly hope so. There is the hope that we are heading into a new era where mass warfare may become a thing of the past, as our online global civilisation further develops. Not that there will not be conflict, it’s just that it may look more like civil conflict. In a more globally connected world, to what degree will it be ‘them and us’?

DDOS attacks such as the ones we’ve seen on Wikileaks, and then in retaliation from supporters, on multiple companies that withdrew their digital services from Wikileaks, are nothing new. As I write this, I see that Sarah Palin says she is also under heavy attack from London–based supporters of Wikileaks. What is new is the very high profile nature of this situation, and that it involves the US government, and many other governments around the world. It also goes to the heart of the rapidly changing media industry; many would say an industry in crisis.

As Winer implies, what we have seen in the past few days is a kind of mob mentality emerge, both online and off. It’s all in the spirit of “fighting the good fight” for free speech, on more than one side of the debate in fact. And before we know it, we could be in the middle of an online war that we find it impossible to extricate ourselves from.

As @deekdeekster on Twitter pointed out as I was thinking out loud about writing this post, “the implications of mob internet rule are scary, as much as the strangling of free speech”. There is certainly something to that.

There’s also something to the assertion that governments have been pushing around other governments and their people, and it’s not a surprise that people resent that, and citizens should know what governments are doing in their name. That is indeed a solid reason why Wikileaks (and other whistleblower organisations) should be vigorously defended, and be allowed to continue to exist.

It remains to be seen whether this is how 21st century wars will partly be fought, but it seems highly likely. Many societies are becoming more and more dependent on digital networks. What the present international situation shows is that we are getting to the point where attacking, disrupting and targeting information and the flow of information, and indeed revealing previously secret information, can have a major impact on the world as we know it.

Twitter and Facebook have not abandoned Wikileaks, yet.

Published on December 8, 2010 in Facebook, Twitter, politics and social media. View Comments

Amazon Web Services, PayPal, Visa, Mastercard, its DNS server and its Swiss bank account have all abandoned Wikileaks, presumably after Senator Joe Lieberman called on corporations to stop doing business with Wikileaks. However, two notable outlets for the organisation’s communications still appear to be accessible as I write this post: Facebook and Twitter.

Facebook Wikileaks

Are Twitter and Facebook going to shut down the Wikileaks accounts? It appears not, well at least not yet. ReadWriteWeb reported that Facebook has made the decision to keep Wikileaks’ Facebook page live. Andrew Noyes, Facebook’s Manager of Public Policy Communications is quoted as saying:

The Wikileaks Facebook Page does not violate our content standards nor have we encountered any material posted on the page that violates our policies.

Facebook also asserted that it hasn’t received any official requests to disable the Wikileaks page (as of the writing of that post), or any notification that the articles posted on the page contain any unlawful content. They also maintain that they are continuing to monitor the situation. This seems to imply that if Wikileaks is found to be breaking the law, Facebook might change its mind.

Wikileaks Twitter

Twitter has also said that it is not censoring Wikileaks from ‘Trending Topics’, after it was questioned by reporters and users on the issue. Twitter was suspected of removing the hashtags #wikileaks and #cablegate after the heavily used tags were no longer trending.

So despite taking a number of serious hits over the past couple of days, including the arrest of Wikileaks founder Julian Assange in London on sexual assault charges, Wikileaks is still able to communicate via social media.

Additionally, to make it very difficult indeed to remove Wikileaks from the Internet, with the aid of many supporters, multiple (1289 at the time of writing) mirrors of Wikileaks have been set up.

Do you think Wikileaks’ social media accounts will eventually be disabled, if it’s found that any laws have been broken by the organisation?

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