jjprojects: our social web » social media

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

John Johnston — Wed, 05 Jan 2011 02:21:53 +0000

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.

Facebook has just raised $475 million from Goldman Sachs.
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.
The private sales would value Facebook at around $50 billion.
The minimum investment from clients is expected to be about $2 million.
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.
A potential investor has said that Goldman is taking about 4.5 percent fee from the money invested into the fund.
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.
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?
The SEC may intervene and rule that the “special purpose vehicle” circumvents the Securities Exchange Act and require Facebook to then report its earnings.
It so happens that the SEC just last month began an inquiry into the surge of trading shares of privately held Internet companies.
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?
Goldman Sachs is in the prime position to lead the lucrative IPO, whenever that occurs. Big fees.
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.
No doubt Twitter and other social media companies, and their investors, will be watching this whole developing situation with interest.

New hedge fund to use Twitter to predict stock market.

John Johnston — Thu, 23 Dec 2010 00:26:08 +0000

Further to my recent post on social media in relation to financial matters, but quite different, is appears that a new British hedge fund in planning to track Twitter in order to attempt to predict the direction of the stock market.

The initiative appears to be based on a recent paper by the University of Manchester and Indiana University, which found that the frequency of certain emotional words could be used, with a high degree of accuracy (87.9%), to predict daily moves in stock markets, between two and six days later.

An exclusive deal has been signed with Dr. Xiao-Jun Zeng, a doctor of computer science at the University of Manchester, to research trading models.

Are you skeptical about how successful this will be? I don’t blame you, but I’m going to try and follow this up to see how well they do in the markets. Apparently the fund is set to start trading with an initial 25 million pounds. Stay tuned.

Is social media being used to manipulate financial markets?

John Johnston — Tue, 14 Dec 2010 00:38:45 +0000

In India, the financial regulator, SEBI (Securities and Exchange Board of India), is planning to use a new suite of software tools to analyse conversations about financial markets in social media.

The software will analyse networks such as Facebook and Twitter, as well as blogs and more traditional social media such as forums. It is thought that some people may be using social media to try to manipulate markets. There has been a sudden rise in the number of cases of alleged manipulation.

SEBI has warned investors against websites offering stock tips, adding that people may expose themselves to undue risk by using unconfirmed information on websites and in social media.

I wonder if the use of such software by regulators to monitor conversations about financial markets and specific stocks will catch on in other countries too?

via The Economic Times

Twitter and Facebook have not abandoned Wikileaks, yet.

John Johnston — Thu, 09 Dec 2010 00:50:12 +0000

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.

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.

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?

Is Foursquare about to offer image uploads at last?

John Johnston — Wed, 01 Dec 2010 02:27:28 +0000

Do these tweets just now from Foursquare co-founder Dennis Crowley mean Foursquare is about to offer image uploads as part of an app update, at last?

I certainly hope so. I think it really needs it to keep people’s interest up over the longer term. I know he’s said before they have been planning to add the feature. Perhaps now is the time.

Facebook co-founder launches Jumo, a social network for activism.

John Johnston — Wed, 01 Dec 2010 00:48:21 +0000

Jumo is a new social network I’m certainly going to be keeping an eye on. That’s not easy to do at the moment. Because of all the initial interest, no doubt generated by the significant amount of launch coverage, I understand they are having a few initial problems.

Not such a bad situation to be in really, although a new network started by Facebook co-founder and Obama campaign director of online organizing, Chris Hughes, was always going to get a lot of attention. So far I have managed to create an account, log in, and have an initial poke around.

The idea behind Jumo is to let us find, follow and support causes that are the most important to us – a social network for social activism. Apparently there are already around 3,500 organizations signed up. No doubt many more will join in. Jumo is a also not–for–profit venture itself.

I’m not going to give any sort of review just yet, as it seems way too soon. I haven’t had a chance to properly suss it out. Will you join me in checking it out? Jumo just requires you to connect your Facebook account when you sign up.

Can we move as one using social media? Twitter’s Biz Stone thinks so.

John Johnston — Fri, 26 Nov 2010 01:59:26 +0000

Here’s an interesting recent video interview with Twitter co-founder Biz Stone.

One point grabbed me as I was listening to the interview. He says:

One particular event opened our eyes to what we had on our hands. That was in March of 2007 at a festival called South by South West….We had about 75,000 users at that point and many of the people at the festival were using Twitter, and this was the first time we were able to see Twitter in the wild, so to speak. And there were a couple of things that happened at that festival that made us realize that people were using our service to come together and move as one…We rushed right back to San Francisco and formed Twitter Incorporated.

I find this interesting in the light of my recent thoughts on what a global civilization, aided by an increasingly social web, might start to look like. Is it possible that sometimes (only sometimes) we may be able to use the social web to come together and act as one, on a larger scale than anything previously achieved? Twitter has certainly become a lot bigger since then.

Wow, a year in a labour camp for one retweet!

John Johnston — Fri, 19 Nov 2010 01:06:18 +0000

Amnesty International has urged Chinese authorities to release a woman from a labour camp after she was sentenced to a year of detention for retweeting a supposedly anti-Japanese message:

According to the BBC, the woman, Cheng Jianping, is the fiance of human rights activist Hua Chunhui and has been accused of disrupting social order. She has been sentenced to reeducation through labour, even though she says her message was just a joke. There was no trial.

The offending tweet mockingly encourages nationalist protesters to smash the Japan pavilion at the Shanghai Expo, and when she retweeted the message, she added the words “Charge, angry youth” to it as a joke. Obviously this was taken all too seriously by Chinese authorities.

As the BBC points out, her detention is a sure sign of how closely China’s government scrutinises what is said on the web by its citizens. No kidding! That’s a rather severe punishment for one sarcastic tweet. The authorities must really worry about the power of social media to spread subversive ideas.

Is the future of eBooks social?

John Johnston — Wed, 17 Nov 2010 02:52:23 +0000

With the recent proliferation of eReaders, it must be worth asking the question: is the future of eBooks and eReading social? After all, these devices are connected to the web, where our online social networks are.

It seems to make sense that the next step would be to share thoughts and examples of what is being read. I already share many thoughts on social networks about what I’m reading at any given time. I’m sure many people do.

As a beginning, it may be worth noting that Amazon already displays such things as the ‘Most Highlighted Passages of All Time’ and ‘Heavily Highlighted Recently’, from the new social highlighting feature of kindle books.

In terms of social eReading, here are a few other possibilities, as recently suggested by Kevin Rose. And let’s face it, most of these will probably happen soon enough in one form or another:

Friend annotations – highlighting paragraphs and leaving voice annotations for friends. (As I said above, Amazon has already implemented part of this).
Lend a book to a friend by hitting a button and choosing a friend to lend to.
Seeing how far friends are into the same book you are reading.
Virtual book clubs – seeing who out of your Facebook and Twitter friends is reading the same book, so you can discuss it with them.

I don’t know about you but virtual book clubs seem to make a lot of sense to me, considering how popular they have been offline over the years. It seems like these would work pretty well online, in connection with eBooks. This is even something smaller, independent book sellers could start, or host, as a way to help compete with the big online retailers.

Academic Joshua Tucker has also pointed out some of the benefits and possible pitfalls of social eReading. On discovering the Amazon social highlighting feature by surprise, what disturbed him was that he could not find a way to opt out of sharing his own highlights.

The issue of privacy is one that may disturb some people, and will not bother others at all. As Tucker points out, now Amazon knows what books you have downloaded, they know which passages of the book you find interesting and can make recommendations on what you might be interested in buying based on them.

Tucker mentions that he found the collection of highlights at the end of the book most troubling as a professor, as the temptation for students may be to just read the social highlights and not read the whole book.

Another interesting issue to me, is that book authors may soon have the opportunity for feedback from readers, as blog authors do. As Tucker says, the possibility may exist for authors to see which parts of the book people are highlighting, and even to be able to answer questions from readers.

Do you like the idea of eReading becoming more social, or would some of these features be too much of a distraction? Do you think the privacy concerns are a serious issue, or overblown?

What would a global civilisation with a collective mind look like?

John Johnston — Fri, 12 Nov 2010 00:45:17 +0000

Lately I’ve been thinking more on the subject of this great human hive humanity is currently creating, in the form of our insatiable and widening use of the internet.

In just 20 years we have come to the point where almost 2 billion of us now use the internet, and no doubt that will continue to grow until most of us are communicating online on a regular basis, however long that takes.

Star Trek references aside (to The Borg hive mind), as I know someone will mention it, the question remains: is all this mass connectivity leading to a global civilisation with a collective mind? Is it an inevitable part of our social, technological and cultural evolution as a species?

Let’s just say the answer to that question is yes. Will this collective mind be able to help solve our greatest problems, such as climate change? Will it create new problems, such as large scale cyberwarfare? Will life on the internet just play out as it does offline or will it be different? Perhaps the answer is all of the above.

As usual I’ve already floated these ideas on Twitter, a part of this global hive mind in the making (now close to 2oo million users worldwide). It was suggested at one point that the general level of discourse on the web is not high enough at present to be able to achieve anything of real value in a collective sense.

My answer is that it doesn’t all have to be of crucial importance and of great value. Like conversation, the collective mind will wander, will concern itself with trivial matters and pointless entertainment, and “oh look at that silly cat” and celebrities and so forth. Like conversation itself, it can be trivial, it can be awkward, it can be small, it can be big, it can be vitally important. It can have a sense of urgency. It can be relaxed and slow. It can be a lot of things.

Someone also mentioned that it may be a disastrously disconnected global mind rather than a cohesive, perfectly in-tune collective consciousness. My answer to that is that perhaps it doesn’t need to be pretty or perfect, maybe it just has to be.

jjprojects: our social web » social media

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

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