March 2010 Archives

The Social Media Bubble

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Umair Haque:

I'd like to advance a hypothesis: Despite all the excitement surrounding social media, the Internet isn't connecting us as much as we think it is. It's largely home to weak, artificial connections, what I call thin relationships.

During the subprime bubble, banks and brokers sold one another bad debt -- debt that couldn't be made good on. Today, "social" media is trading in low-quality connections -- linkages that are unlikely to yield meaningful, lasting relationships.

Call it relationship inflation. Nominally, you have a lot more relationships -- but in reality, few, if any, are actually valuable. Just as currency inflation debases money, so social inflation debases relationships. The very word "relationship" is being cheapened. It used to mean someone you could count on. Today, it means someone you can swap bits with.

Why focus groups tell you the obvious

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Luke Johnson:

Irecently commissioned some market research and, as is too often the case, it told me what I already knew or was obvious. I paid the bill of several tens of thousands of pounds, consoling myself with the fact that the work at least confirmed my prejudices - always a satisfying sensation. But I also sensed I had received very poor value; and in talking to other clients of research companies, I realise quite a few feel the same way.

As Michael Skapinker wrote on Tuesday, the idea that the customer is always right has become an accepted truth in business. Unfortunately, customer desires are often wholly unrealistic - because of cost, technology or legislation. As Henry Ford said at the launch of the Model T: "If I'd asked the customer, he'd have asked for a faster horse."

I remember Peter Boizot, founder of PizzaExpress and my predecessor as chairman, telling me how, in 1965, customers in his Soho pizzeria felt uncomfortable with authentic Italian pizza - and demanded chips. But he stuck to his vision and guided their tastes to the genuine product.

The Economist:

HEN the Sloan Digital Sky Survey started work in 2000, its telescope in New Mexico collected more data in its first few weeks than had been amassed in the entire history of astronomy. Now, a decade later, its archive contains a whopping 140 terabytes of information. A successor, the Large Synoptic Survey Telescope, due to come on stream in Chile in 2016, will acquire that quantity of data every five days.

Such astronomical amounts of information can be found closer to Earth too. Wal-Mart, a retail giant, handles more than 1m customer transactions every hour, feeding databases estimated at more than 2.5 petabytes--the equivalent of 167 times the books in America's Library of Congress (see article for an explanation of how data are quantified). Facebook, a social-networking website, is home to 40 billion photos. And decoding the human genome involves analysing 3 billion base pairs--which took ten years the first time it was done, in 2003, but can now be achieved in one week.

All these examples tell the same story: that the world contains an unimaginably vast amount of digital information which is getting ever vaster ever more rapidly. This makes it possible to do many things that previously could not be done: spot business trends, prevent diseases, combat crime and so on. Managed well, the data can be used to unlock new sources of economic value, provide fresh insights into science and hold governments to account.

Tricia Duryee:

n just 18 months, the number of Google (NSDQ: GOOG) Android phones being shipped has soared to 60,000 a day, and over that period countless new devices have been released by handset makers for sale by carriers worldwide.

Nothing typically moves this fast in wireless. So how has Google done it?

Well, at least part of the answer appears to be that Google is sharing advertising revenues with carriers that use Android, according to multiple sources who are familiar with the deals. In some cases, sources said, Google is also cutting deals with the handset makers. The revenue-sharing agreements only occur when the handsets come with Google applications, like search, maps and gmail, since that is not a requirement of Android. Google declined to comment, and said terms of its agreements with partners are confidential. A number of carrier and handset makers that I spoke with about this declined to comment.

10 Best Places for Second Homes

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Steven Sears:

AT LONG LAST, THE MARKET FOR LUXURY REAL estate is coming back to life.

Prices for primary residences, which plunged at least 20% from the peak in 2007, appear to have bottomed. In some of the snappiest locations, scattered bidding wars are breaking out and prices are turning upward.

In Greenwich, Conn., realty brokers say, the final months of 2009 were almost record-setters for sales volume, as two years of pent-up demand was unleashed. Even the megadeal is back. In Beverly Hills, film producer Jeffrey Katzenberg just plunked down $35 million for an 8,700-square-foot home on six acres.

There's nothing like a stabilized economy and a huge rebound in stocks to send folks looking for the perfect manse. The return of hefty Wall Street bonuses hasn't hurt, either.

With all that in mind, and with summer just around the corner, Barron's sized up the market for upscale second homes, one of the greatest luxuries of all. We scoped out dozens of deluxe enclaves across the country, speaking with brokers, homeowners and others. Our conclusion: Now could be an excellent time to buy.

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