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For some in Arab nations, Facebook is the only news source that matters

June 19, 2013 - 11:45am

When it comes to the evolution of media, and the growing role of social networks in how the news is distributed, there is often a focus on trends in the United States and North America — the death of newspapers, the rise of Facebook and Twitter, and so on. But at least some of these trends appear to be even more advanced in other parts of the world: for example, according to a recent survey of attitudes toward the media in a number of Arab nations, Facebook is one of the leading sources of news in countries like Bahrain and Tunisia.

The survey was conducted by Northwestern University in Qatar, and involved interviews with more than 10,000 people from Egypt, Lebanon, Tunisia, Qatar, Bahrain, Saudi Arabia, Jordan and the United Arab Emirates (which includes Abu Dhabi and Dubai). Although the Arab television networks Al Jazeera and Al Arabiya were the top source of news in most of the countries that took part in the study, on average Facebook was the third most popular.

If you look more closely at the numbers, the average for Facebook is hugely influenced by Tunisia, where more than 50 percent of all respondents said the social network was their number one source of news — in Bahrain, only 11 percent said the same, while Facebook’s ranking in the UAE was 10 percent and in Qatar it was 3 percent. The only countries to mention Twitter were Bahrain, where 8 percent gave it as a top source, and Saudi Arabia where it had 3 percent.

Social media is much more influential

Northwestern journalism professor Justin Martin, one of the researchers who did the study, told the media news site Journalism.co.uk that “if you look at the percentages of internet users who are active on social media sites, it’s much higher than the United States and Australia or Western European countries.” Martin said that this fits with earlier research that shows Arab countries are much more social in their use of media than many Western nations:

“Arabs, maybe more than any other culture around the world, have these anchored communities where they receive and share news and information and they tend to go there often for news and they tend to trust the information from their anchored communities.”

As a number of media theorists have described, social media’s effect on our news consumption is in some ways a throwback to the way news used to be consumed and distributed before newspapers existed — when coffee shops and other social outlets were the main source of information for communities (it’s also not clear from the study how much of what is shared on Facebook is news from a traditional source such as a newspaper or television network).

What is clear from the study is that people in some Arab nations don’t trust the traditional media much at all, which could also be driving them towards social networks as a source of news: in Egypt and Tunisia — both of which experienced revolutionary uprisings as part of the Arab Spring — only a quarter of those surveyed said they thought the media was a credible source.

Sociologist Zeynep Tufekci has written about how social-media use influenced the revolutions in Tunisia and other Arab countries, and how social networks helped to overcome some of the barriers that kept popular dissident movements in those countries from turning into revolutions in the past.

Post and thumbnail photos courtesy of Richard Engel / NBC

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Taking the pulse of the planet: How Twitter erases geography

June 18, 2013 - 12:25pm

Real-time social networks like Twitter and Facebook are connecting people around the globe in a myriad of different ways, millions of times every minute, but we hardly ever get to see those connections represented visually. That’s why research projects like a recent study from a team of scientists at the University of Illinois are so valuable — they allow us to see how these networks connect us, and how services like Twitter are making geography less and less relevant.

The study, entitled “Mapping the global Twitter heartbeat,” was published in the university’s peer-reviewed journal First Monday in May, and used what is known as the Twitter “Decahose” — which is made up of one-tenth of all the messages sent across the network. Access to the data was provided by Gnip, one of the companies that is licensed to sell Twitter’s full firehose, as part of a demonstration project with computer maker Silicon Graphics called “Twitter Heartbeat.”

For that demonstration, the researchers used the Decahose — which streamed more than 1.5 billion tweets from 71 million unique users during the period from October 23 to November 30 of 2012, an average of 38 million tweets a day — to show a real-time map of global discussion about topics such as Hurricane Sandy and the U.S. federal election. As part of that project, the team created one of the largest databases of global tweets with geographic data included, based both on GPS data and user profiles.

In addition to some interesting data about where most geo-located tweets come from (Jakarta in Indonesia and New York City were two of the top locations), the study looked at what the Twitter data shows about the way that social networks have changed the way we communicate. In many ways, the researchers said, networks like Twitter have “created a world in which a person may speak to another on the other side of the planet with just a few millisecond delay, effectively removing the geographic barrier.”

“Users on Twitter communicate with others both near them and half a world away, illustrating that the role of physical proximity in communication seems to be reduced in the era of social media.”

These maps of real-time connections produced for the Illinois study reminded me of similar maps created with Facebook data, such as the one that Facebook intern Paul Butler produced in 2010 (which appears below) — or the one that data researcher Pete Warden created by scraping Facebook user profiles, a fascinating map of connections that he later had to delete after the social network threatened to sue him for breaching its terms of service.

Although Twitter CEO Dick Costolo likes to talk about the service as the “pulse of the planet,” it’s worth noting that most of the world’s population still doesn’t tweet — and even most of those who do aren’t using it all the time: Twitter has about 550 million users, or about eight percent of the world’s population, but the top five percent account for almost half of all tweets sent. Of the sample the U of Illinois researchers looked at, one quarter tweeted only once.

In addition, the study notes that only 8 percent of all users had location data available. About one percent of all users surveyed accounted for more than two-thirds of all geo-referenced tweets, showing that geo-located are created by what the researchers called “an even more extreme subset of users” than overall tweets. They noted that studies relying on these tweets alone would have a “skewed view of the Twitterverse, especially over short periods of time.”

That said, however, it’s fascinating to see tangible evidence of how social networks like Twitter can help to erase geographical barriers and connect users around the globe in real time.

Post and thumbnail photos courtesy of Flickr user Dunechaser

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Five questions Edward Snowden didn’t answer during his live Q&A about NSA surveillance

June 17, 2013 - 3:42pm

Edward Snowden, the former CIA staffer who recently leaked a trove of documents about an NSA surveillance program known as PRISM, hasn’t exactly been a shrinking violet since he provided the information last week: in addition to a live interview with the Guardian shortly after the documents were published, Snowden did a live question-and-answer session hosted on the newspaper’s website on Monday, in which readers submitted questions via Twitter and online comments.

As more than one person noted while the discussion was going on, however, the former spy (who is now reportedly in hiding in Hong Kong) left a number of significant questions unanswered — perhaps in part because the newspaper is holding that information back for future stories, which Guardian writer Glenn Greenwald has promised will contain further revelations.

Some unanswered questions remain

In the Q&A session, Snowden talked about why he chose to reveal certain information to journalists in Hong Kong about hacking attempts against Chinese targets, discussed alleged discrepancies related to his reported salary, and argued that “being called a traitor by (former vice-president) Dick Cheney is the highest honor that you can give an American.” But the former CIA staffer also avoided certain questions or talked around them without giving specific responses. Here are a few things he didn’t say:

Why he chose to go to Hong Kong: Asked by Greenwald why he chose Hong Kong as a place to hide, Snowden said that the U.S. government had “destroyed any possibility of a fair trial at home, openly declaring me guilty of treason” — but he didn’t really answer the question. There have been conspiracy theories about alleged collusion with the Chinese government (which Snowden denied later in the discussion) and also some theories about the upside of choosing Hong Kong.

Whether he made copies of the documents: Greenwald also asked whether Snowden had made any copies of the NSA documents he provided to the Guardian, and if so whether he gave them to a number of different people for safekeeping, or stored them somewhere else — so that they would be available if something happened to him. But Snowden didn’t answer the question.

What exactly “direct access” means: Circa editor-in-chief and former Reuters social-media editor Anthony De Rosa asked Snowden to define what “direct access” means — a term that is used in the NSA documents describing the PRISM program, and something that technology companies like Google, Facebook and Yahoo have repeatedly denied they provide. Snowden would only say that “more detail on how direct NSA’s accesses are is coming.”

Whether agents can listen to phone calls: De Rosa also asked whether NSA agents could listen to the content of domestic phone calls without a warrant — as opposed to simply collecting and filtering the “metadata” around those calls, such as the location and length of time they take to complete. There have been allegations that the NSA is able to listen to specific phone calls without a warrant, but Snowden didn’t say whether this is true or not.

What will happen to him next: Snowden didn’t talk much about what he plans to do now, except to say that he had no plans to reveal secret information to the Chinese government in return for political asylum. He talked about looking towards Iceland as a potential destination before he leaked the information, but said that country was far too susceptible to U.S. government pressure to hand him over to the authorities. And he said the U.S. was “worth dying for.”

Was the Q&A too heavily mediated?

Snowden’s discussion was criticized by some for being more of a PR exercise than anything that actually provided much information: ProPublica editor Scott Klein said that the Q&A was “handled like a Russian gymnast’s press conference,” while journalism professor Jeff Jarvis said he felt the discussion was “heavy on rhetoric and light on specifics.” Journalist Tom Watson said that the Q&A was a “journalistic farce” and accused the Guardian of “selling a story rather than telling a story.”

I've seen scripted Presidential "town halls" that were less Potemkin Village-like than this so-called #askSnowden "chat" – c'mon @Guardian!—
Tom Watson (@tomwatson) June 17, 2013

There’s no question that the Snowden Q&A seemed a little rehearsed, and his answers appeared to have been edited in some places (Guardian US editor Janine Gibson said there were “some very old skool processes happening to make this readable”). I think the discussion would have been more interesting if it had been completely unmediated — the way Reddit’s “Ask Me Anything” features are — but despite the lapses, it’s still remarkable that someone like Snowden is talking at all.

Post and thumbnail photos courtesy of Shutterstock / Lightspring

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Tech companies working with the NSA are making a Faustian bargain

June 15, 2013 - 11:00am

As the fallout continues to rain down from recent reports about the NSA snooping on millions of phone calls and terabytes of web traffic, the spin campaign from both the government and the technology companies allegedly involved in the program has reached a fever pitch. First there were strenuous denials from the likes of Google, Yahoo and Facebook, followed by broad hints that they only co-operated because they were trying to make things easier on their users — and then leaked reports that some were essentially forced at gunpoint to do the NSA’s bidding.

Whatever the case may be, agreeing to turn over data to the government might have seemed like a good idea at the time, but the potential downside risks of that particular slippery slope are fairly overwhelming.

The popular response to the NSA revelations may lie somewhere between mild disinterest and outright apathy, according to surveys like the one done by the Pew Center — in part because we seem to have gotten used to the idea that tech companies are monitoring our every move. But being seen as co-operating with the spy agency is still a fairly huge risk for cloud-based services. Not only that, but co-operating in even a small way makes those companies look like easy targets for further government pressure.

Who co-operated and to what extent is unclear

At this point, the actual truth of what is involved in the NSA’s so-called PRISM program remains a rapidly shifting target. The documents first published by the Guardian and the Washington Post a week ago seemed pretty cut and dried in their description of a system that allowed the spy agency “direct access” to the servers of Google, Yahoo, Facebook and about half a dozen other companies — something the Post originally said was provided voluntarily and gave the NSA broad access to information about user behavior.

Almost immediately, however, the details started to blur: not only did those companies deny providing “direct access” to their servers, but some sources said the data was only provided under duress, because of secret court orders related to the Foreign Intelligence Surveillance Act. As the days went on, other reports quoted anonymous sources saying the whole system (the one those companies had denied any knowledge of) was just an attempt to automate the processing of those legitimate FISA requests.

One report quoted anonymous staffers at several of the companies saying they only agreed to co-operate with the NSA because they were afraid if they didn’t do so, the government would demand even more of their data and that wouldn’t be fair to users. And finally, on Friday, the New York Times reported — using some conveniently leaked documents — that Yahoo had tried to resist the NSA’s attempts to compel it to provide user data, but was ultimately unsuccessful and was ordered by the court to comply.

User trust is a precious commodity

So what we have now are a broad range of conflicting reports about who did what — including semantic debates about what the term “direct access” actually means, as well as how much access was provided voluntarily vs. how much was provided under duress. So far, the only company that seems to have emerged unscathed is Twitter, which reportedly fought the government’s attempts to enrol the company in the PRISM program and succeeded, a tale that has burnished Twitter’s claim to be the “free-speech wing of the free-speech party”).

That said, however, there seems to be little doubt that many companies co-operated with the NSA, and may have set up “lockbox” or “clean room”-style facilities for providing data — and there are even suggestions that this group could go far beyond just Google and Yahoo and Facebook, and could include hundreds of other technology providers that have co-operated to some extent with the spy agency and given the NSA details about their equipment and/or products that could help its surveillance program.

These companies may have convinced themselves that co-operation was inevitable, or that they needed to do something to help the government catch terrorists, or that by automating the legally legitimate FISA process they could save themselves a lot of trouble and expense, or some combination of all the above. But in reality, they have not only shown themselves to be weak — which will encourage the NSA to pressure them even further because they know they can win — but also fundamentally untrustworthy, and that could cause them a lot more problems with users than they ever contemplated.

Post and thumbnail photos courtesy of Shutterstock / Luis Louro, Shutterstock / Lightspring and Flickr user Thomas Leuthard

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For some, the reaction to PRISM is a shrug: Are we suffering from Big Brother fatigue?

June 11, 2013 - 3:43pm

It’s been fascinating to watch the evolution of responses to the recent revelations about NSA surveillance activity. When The Guardian and the Washington Post first published their stories on Friday, the news that the spy agency was collecting vast quantities of data from phone calls, emails, chats and other online behavior sent shock waves through both the tech community and the public at large — but over time, the concern seems to have dissipated. Have we lost our ability to be outraged because we’re so used to the idea that we’re being watched?

One of the most tangible signs of this apathy (if that’s what it is) came from a Pew study that was released Tuesday of people’s attitudes towards the monitoring of their activity by the government. As described by my colleague Barb Darrow, over half of the Americans surveyed believed that the NSA’s behavior was “an acceptable price to pay to stop terrorism.” And almost half of those who participated agreed the NSA should be able to “monitor everyone’s email and other online activities if officials say this might prevent future terrorist attacks.”

A collective shrug of the shoulders

I confess that the Pew survey didn’t surprise me at all. Within hours of the Guardian and Post stories, there were responses flying through my Twitter stream and on other social platforms that amounted to a collective shrug of the shoulders: We knew this was happening, at least in general terms, most said — so why make such a big deal out of it? After all, the Patriot Act has been around since shortly after September 11 of 2001, and it authorizes a fairly wide variety of surveillance under certain conditions (although even the author of that Act says the NSA’s recent behavior over-reaches what was intended).

Another possible cause of the somewhat apathetic response is that so little is known about what the NSA is doing exactly. The initial reports said that the spy agency was provided with “direct access” to the servers of companies like Google, Facebook and Yahoo and could get whatever data it wanted — but then the qualifications started, and pretty soon it wasn’t clear what exactly “direct access” meant, or what kinds of data the NSA was permitted to get.

One thing PRISM makes clear is that all of those tin-foil hat wearing people knew what they were talking about.—
James Kendrick (@jkendrick) June 11, 2013

After some follow-up reporting from the Post, the New York Times and the Guardian, it appeared that the term “direct access” could refer to a system set up by the tech companies in question that would essentially automate official requests under the Foreign Intelligence Surveillance Act, providing a kind of secure area or “lock-box” to which only the NSA would have the keys. In other words, something that amounts to direct access by another name.

So one popular response boils down to: “Well, this is all legal and above-board then, so who cares?” — even though others pointed out that the court that approves the FISA orders is secret and has reportedly approved 99.9 percent of all requests made to it (according to other reports, the NSA and others can surveill wide ranges of data for weeks before they even need to get a court order, and other kinds of data such as chats may not even require an order).

Don't be distracted. The big story isn't Edward Snowden nor intelligence leaks. It's government's disregard for privacy and civil liberties.—
Robert Reich (@RBReich) June 11, 2013

We’re used to being snooped on

Part of the problem could be that, while leaker Edward Snowden’s dramatic revelations have gotten a lot of attention, there have been plenty of previous reports about similar activity over the past decade and very few of those have prompted much outrage at all. Former AT&T employee Mark Klein provided some pretty damning evidence in 2007 about how the NSA had set up a “secret room” filled with equipment that the spy agency could use to duplicate whatever data it wanted (using prisms, coincidentally enough) and that story eventually died.

Have views about personal privacy changed so dramatically? And if they have, are Google and Facebook and other “cloud” services part of the problem — or at least part of the reason — for those changes? It’s possible that we’ve become so used to the idea that our online lives are an open book, whether we like it or not, that there’s no longer any point in fighting it. If Google and Facebook are tracking all of our data and metadata in order to serve us ads, what difference does it make whether the National Security Agency is also doing it?

David Sirota at Salon makes a persuasive case for why the NSA’s actions aren’t even remotely the same as what Google and Facebook do — primarily because one is at least notionally voluntary. But that may not make a big difference to many users once the heat of the recent headlines has dissipated.

@mathewi I think it's that our networks already keep everyone informed by the second. We're all being "spied" on by Facebook, Twitter, et al—
Jack Narcotta (@JackN_TBR) June 11, 2013

What is there to be done?

The other complicating aspect is that, even if we were to get outraged about the NSA surveillance, it’s not clear what anyone could do about it. As more than one person has pointed out, it’s difficult to have the kind of “open debate” that President Obama said he wants to have about privacy and security when all of the actions of the NSA and PRISM are classified top secret, as are the court orders they use, and the secret court that produces them. Google isn’t even allowed to say that it gets FISA orders, although it is now trying to get approval to at least mention them.

There are some efforts aimed at pushing the debate forward, including a project called StopWatching.us, which is backed by a coalition of companies and entities — including the open-source Mozilla project and the Electronic Frontier Foundation. But all it plans to do is send a letter to Congress asking for changes to the Patriot Act and FISA (which some members of Congress are also asking for). There’s no real chance of a “Stop SOPA” type of movement because Google and Yahoo and Facebook are all involved in what is being protested about.

And the final death knell for broader interest in such matters is that the news cycle inevitably moves on. The NSA story is complicated, information about it is fragmented and contradictory, and most of the answers are top-secret and therefore unlikely to ever be confirmed. Not a great recipe for something that’s going to hold the attention of the average reader.

Post and thumbnail photos courtesy of Flickr user Thomas Leuthard

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Google confirms it is acquiring Waze to add real-time social data to its maps

June 11, 2013 - 12:05pm

After widespread rumors that the two were close to a deal, Google has confirmed on its official blog that it is acquiring Waze, a real-time social map network based in Israel. The price wasn’t disclosed, but earlier reports speculated that the web giant was likely to pay as much as $1.3 billion for the company, and All Things Digital reported that a source confirmed the purchase price was $1 billion. Waze had also recently been in acquisition talks with Facebook.

The Google post said that the company is eager to work with the Waze community of users “who are the DNA of this app,” and to integrate the real-time traffic updates and other information that the network provides into Google Maps:

“We’ve all been there: stuck in traffic, frustrated that you chose the wrong route on the drive to work. But imagine if you could see real-time traffic updates from friends and fellow travelers ahead of you, calling out ‘fender bender…totally stuck in left lane!’ and showing faster routes that others are taking.”

This kind of integration is one of the reasons why many argued that Google should try hard to snatch the company out of Facebook’s hands (Apple was also at one point rumored to be interested in the company), since the addition of Waze’s real-time traffic info could make for a significant competitor to Google’s app.

Product team to remain in Israel

On the Waze blog, the company’s founders said that they agreed to the acquisition offer from Google because CEO Larry Page and the Google Maps team “share our vision of a global mapping service, updated in real time by local communities, and wish to help us accelerate.” The founders added:

“Nothing practical will change here at Waze. We will maintain our community, brand, service and organization [and] we will continue to innovate our product and services, making them more social, functional and helpful.”

Google’s blog post noted that the Waze product team would remain in Israel and operate separately “for now.” According to reports in the Israeli media, the issue of moving the company’s staffers to California was apparently a sticking point in the negotiations with Facebook, and a commitment to keep the company based in Israel may have made the difference for Google in the negotiations.

Waze, which has been growing rapidly, has a user base of about 50 million in 110 countries, who shared more than 90 million reports of traffic conditions, speed traps and other data on the network in 2012. The company has raised $67 million in venture financing from investors such as Kleiner Perkins Caufield & Byers, Li-Ka Shing and Blue Run Ventures.

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NSA whistle-blower revealed: 29-year-old former CIA staffer says he felt compelled to leak

June 9, 2013 - 4:02pm

Another bombshell dropped on Saturday in the ongoing revelations surrounding the federal government’s PRISM surveillance program: the man who leaked the top-secret documents about the program came forward and revealed his identity — he is Edward Snowden, a 29-year-old former technical assistant with the CIA. Snowden said in an interview with the Guardian that he knows he will be charged with a crime for his actions, and expects he may “never see home again,” but that he felt compelled to leak information about the National Security Agency’s surveillance activity.

Snowden said that there wasn’t one specific moment where he decided that he was going to reveal top-secret information (if you’re just coming to this story, check out our omnibus post about what we know so far, which is being updated regularly). He said it just built up over time as he watched the agency collect more information via phone calls, emails, credit-card transactions, etc. He said he thought President Obama might change what was happening, but decided to leak the documents after the president “continued the policies of his predecessors.”

“The NSA has built an infrastructure that allows it to intercept almost everything. With this capability, the vast majority of human communications are automatically ingested without targeting. If I wanted to see your emails or your wife’s phone, all I have to do is use intercepts. I can get your emails, passwords, phone records, credit cards.”

NSA “routinely lies” to Congress

Snowden, who has since fled to Hong Kong and says even his family doesn’t know that he is involved in the leak, told the Guardian that he decided the NSA had overstepped its bounds and on top of that the agency “routinely lies” to Congress about the scope of its activities.

“I don’t want to live in a society that does these sort of things… I do not want to live in a world where everything I do and say is recorded. That is not something I am willing to support or live under… I can’t in good conscience allow the US government to destroy privacy, internet freedom and basic liberties for people around the world with this massive surveillance machine they’re secretly building.”

The former CIA technical assistant, who worked for contractor Booz Allen, said that the ability the National Security Agency has to pull in personal information about American citizens, track their location and even bug their computers is more far-reaching than many people know.

“You are not even aware of what is possible. The extent of their capabilities is horrifying. We can plant bugs in machines. Once you go on the network, I can identify your machine. You will never be safe whatever protections you put in place.”

Since the original story broke on Friday, there has been much debate about how the PRISM program works, and whether it allows the NSA to have “direct access” to the servers of companies such as Google, Yahoo and Facebook, as alleged in the slide presentation leaked by Snowden. The CEOs of those companies have denied any knowledge of such activity, but sources have told the Guardian, the Post and the New York Times that the NSA did in fact have direct access to their systems.

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Through a PRISM darkly: Tracking the ongoing NSA surveillance story

June 7, 2013 - 2:50pm

It was a relatively quiet week for internet news until Guardian blogger Glenn Greenwald dropped a bombshell on Thursday, with a story that showed the National Security Agency was collecting data from Verizon thanks to a secret court order. But that was just the beginning: the Washington Post later revealed an even broader program of surveillance code-named PRISM, which involved data collection from the web’s largest players — including Google, Facebook and Apple — and then the Wall Street Journal said data is also being gathered from ISPs and credit-card companies.

This story is moving so quickly that it is hard to keep a handle on all of the developments, not to mention trying to follow the denials and non-denials from those who are allegedly involved, and the threads that tie this particular story to the long and sordid history of the U.S. government’s surveillance of its own citizens. So we thought it would be useful to try and collect what we know so far in a single post, which will be updated as often as possible with new information.

1) The Guardian leak 5) Tracking down PRISM 9) Is there a back door? 2) The leak widens 6) The ripples spread 10) How it might work 3) The Washington Post leak 7) Google’s denial 11) For your own good 4) The fallout 8) Zuckerberg’s denial 12) The leaker revealed

The Guardian leak

Guardian blogger and former lawyer Glenn Greenwald reports that the NSA has gotten a secret order from the Foreign Intelligence Surveillance Court that allows it to collect data about phone calls made by “millions of customers” on the Verizon network: location data, time and other identifying info about the call — everything except the actual content of the calls themselves (the Guardian has a background piece about what kind of metadata is available with such an order).

“The National Security Agency is currently collecting the telephone records of millions of US customers of Verizon, one of America’s largest telecoms providers, under a top secret court order issued in April. The order… requires Verizon on an ‘ongoing, daily basis’ to give the NSA information on all telephone calls in its systems, both within the US and between the US and other countries.”

The leak widens

Other stories that follow the Guardian report quote anonymous sources saying the Verizon court order is a renewal of an order that has been in place for some time, and add that other telecom companies such as AT&T are also involved in similar programs. Greenwald notes in his story that the NSA started a program of bulk collection of telephone, internet and email records in 2001 under President Bush and this later caused controversy when it was reported in 2006 that the NSA had been saving all of this information and was analyzing it to try and detect terrorism.

Information-security experts and other industry watchers note after Greenwald’s story is published that the NSA and other government agencies have had these kinds of abilities for years thanks to laws such as the Protect America Act and the FISA Amendments Act. ProPublica has a roundup of what the government can find out about you and your behavior without a search warrant, and security expert Bruce Schneier says that what we don’t know about the government’s surveillance programs is even more frightening than what we do know.

Meanwhile, our Stacey Higginbotham wonders whether the NSA story will be a wakeup call about the power of big data, while Derrick Harris looks at how the security agency and other government entities analyze the vast amounts of information that come from such programs.

Freelance journalist Joshua Foust argues that the NSA revelations won’t cause most people to change their behavior — including their habit of voting for politicians who enact the kind of legislation that permits such surveillance — because they simply don’t care enough about the issue. Some experts said the kind of data the NSA is getting can be very powerful when it comes to finding patterns of behavior, but research from the Cato Institute says that even mining large amounts of data can turn out to be not that helpful when it comes to catching terrorists.

The Wall Street Journal, meanwhile, said that the NSA’s surveillance program was “legal and necessary” and the furor over the disclosure of this program was misplaced:

“Nobody’s civil liberties are violated by tech companies or banks that constantly run the same kinds of data analysis. We bow to no one in our desire to limit government power, but data-mining is less intrusive on individuals than routine airport security. The data sweep is worth it if it prevents terror attacks that would lead politicians to endorse far greater harm to civil liberties.”

The Washington Post leak

Within hours of the Guardian story appearing, the Washington Post reports that it has been leaked an internal slide presentation from the NSA that describes a program it calls PRISM — which involves the collection of email and other personal data from internet companies including Google, Microsoft, Facebook, Apple and Yahoo. According to the Post report (and a subsequent Guardian report based on a similar leak), this program has been underway since at least 2007, and involves what one NSA slide refers to as “data collected directly from the servers” of the companies named.

All of the companies who are reportedly involved in PRISM (which refers to them as “partners”) deny any knowledge of such a program, and say they only provide data when forced to do so by court order, and that they have no “back door” systems that would allow the NSA to do what it claims to be doing. These denials are met by widespread skepticism, and many observers — including TechCrunch founder turned VC Michael Arrington — wonder why insiders working at the tech giants allegedly involved in the program wouldn’t have leaked the information earlier.

The ongoing fallout

Some tech-industry observers say the denials from internet companies may be true, because they aren’t convinced the companies in question would even have to know about the NSA’s collection practices in order for them to work. The original Washington Post story is updated early Friday to note that it’s not clear whether “direct access” to the servers of those companies would be required, and quotes from another leaked document that says the program allows NSA officers to send “content tasking instructions directly to equipment installed at company-controlled locations,” which could mean boxes installed at ISP switches.

Several sources note that former AT&T employee Mark Klein revealed in 2007 that he had come across documents that showed the telecom company installed equipment — using glass prisms as “splitters” — that allowed the NSA to make a copy of the data stream coming from the AT&T network and send it to data-storage centers operated by the security agency. This was alleged to be part of a larger program that stored telephone calls, emails and other internet activity for the government and had been underway for years.

Some network analysts speculate that the NSA may be making use of equipment installed at CDNs (content delivery networks), which handle much of the data traffic for companies like Google and Yahoo. Laws passed in the U.S. require equipment makers such as Cisco to build into their products a way for law enforcement officials to tap into the streams they carry, and the NSA could be searching those streams directly instead of copying or storing all the data itself (since the cost of the program is a relatively cheap-sounding $20 million, according to the Post leak).

In a statement about the leaks, the Office of the Director of National Intelligence said that it does its best to work “within the constraints of the law” to collect information related to national security, and that unauthorized leaks such as those to the Guardian and Post “threatens potentially long-lasting and irreversible harm to our ability to identify and respond to the many threats facing our nation.”

Trying to track down PRISM

A search for entities that might be involved in the NSA program turns up software from a relatively secretive startup called Palantir — which has been funded by the CIA through its investment arm — that happens to be named PRISM. According to descriptions of the software, it allows clients of Palantir to sift through massive amounts of data and find patterns quickly.

Others are skeptical, however, that the software described could be used to do what the NSA appears to be doing, and security-industry sources say the NSA usually builds its own products and doesn’t like to use those from third parties. On Friday afternoon, Palantir told The Verge: “Palantir’s Prism platform is completely unrelated to any US government program of the same name.”

Former Reuters social-media editor Matthew Keys said on Twitter that he had found several references to the PRISM program in classified job listings dating back to 2007:

Not wanting to be left out, the secretive activist group Anonymous released some classified documents that refer to Defense Department information technology — but they appear to be mostly jargon-filled descriptions of the department’s IT infrastructure, with little or no connection to PRISM or any NSA-related data collection practices.

The ripples spread outside the U.S.

As our man in Europe — David Meyer — noted in a couple of posts Friday morning, the repercussions from the PRISM and NSA revelations are being felt in Europe as well, with some critics calling for changes to the so-called “Safe Harbor” program, which allows data about EU citizens to be stored by non-EU companies. And the Guardian has reported that the U.K. government appears to have been getting information via the PRISM program, which was designed to focus on the communication activity of non-U.S. residents (since U.S. law still technically prevents the government from spying on its own citizens without a warrant).

Meanwhile, President Obama — whom many critics have accused of carrying on with surveillance programs started by his Republican predecessor, despite his disavowal of such methods while campaigning — said through a spokesman that he “welcomes the discussion” about privacy and security:

“The president welcomes the discussion of the trade-off between security and civil liberties. The close examination of some of these complicated issues could cause people to arrive at differing opinions… The president welcomes that debate.”

Late Friday, the Guardian posted another security-related scoop, publishing what it called a “secret presidential directive” that orders the U.S. government’s top national security and intelligence officials to draw up a list of potential overseas targets that the U.S. could hit with cyber-attacks. The story goes on to say this operation:

“can offer unique and unconventional capabilities to advance US national objectives around the world with little or no warning to the adversary or target and with potential effects ranging from subtle to severely damaging”

Google denial and Sir Tim Berners-Lee

The creator of the world wide web, Sir Tim Berners-Lee, posted a statement at the Web Foundation blog saying:

“Today’s revelations are deeply concerning. Unwarranted government surveillance is an intrusion on basic human rights that threatens the very foundations of a democratic society. I call on all Web users to demand better legal protection and due process safeguards for the privacy of their online communications, including their right to be informed when someone requests or stores their data.”

And Google co-founder Larry Page posted a response Friday afternoon to the accusations in the Guardian and Post stories, written with Chief Legal Officer David Drummond, saying the company does not provide the government with “back door” access to its servers, and had never heard of the PRISM program until Thursday:

“Press reports that suggest that Google is providing open-ended access to our users’ data are false, period… Any suggestion that Google is disclosing information about our users’ Internet activity on such a scale is completely false.”

Zuckerberg denial

Facebook co-founder and CEO Mark Zuckerberg posted a statement about PRISM on his Facebook page late Friday, saying he wanted to respond personally to the “outrageous press reports” about his company’s involvement in the surveillance scheme. In language very similar to the Google denial, Zuckerberg said the network has not been part of any program to give the U.S. government “direct access” to its servers.

“Facebook is not and has never been part of any program to give the US or any other government direct access to our servers. We have never received a blanket request or court order from any government agency asking for information or metadata in bulk, like the one Verizon reportedly received. And if we did, we would fight it aggressively. We hadn’t even heard of PRISM before yesterday.”

Does the NSA even need a back door?

Christopher Mims at the Atlantic business site Quartz quotes NSA veteran and whistle-blower William Binney — who was part of a group that asked the Defense Department to investigate the NSA in 2002 — saying the security agency could probably get its hands on about 80 percent of the web traffic that passes through the U.S. without even having direct access to the servers of companies like Google. That’s because the NSA has access to at least one of the largest communications hubs on the continent, as described by the Electronic Frontier Foundation.

The Wall Street Journal posted a story that quoted unnamed security experts who said the tech companies mentioned in the PRISM presentation could be telling the truth about not providing “direct access” to their servers, but still have their data collected by the NSA. The Journal said U.S. officials told the paper that the NSA “receives copies of the data through a system they set up with a court order.”

“One industry executive familiar with the handling of data requests from U.S. intelligence agencies said companies have set up ways to cope with the volume of data by automating parts of the process. This method would allow data to be funneled to intelligence agencies without the need for manual steps by company employees.”

At The Daily Beast, writer Megan McArdle looked at the issue of whether tech company denials should be believed or not, and quoted privacy expert Julian Sanchez from the Cato Institute saying there are a number of ways that the NSA could get the data it wants without requiring direct access, including the “secret room” with splitter equipment that Mark Klein described at AT&T (mentioned above):

“Most likely… is that they’ve got something akin to the “Secret Room” that Mark Klein disclosed in AT&T hubs where traffic is being cloned (the companies would need to provide the relevant SSL encryption keys) split off into NSA’s own machines. It would be literally true, in that case, that the NSA does not have direct access to Google’s servers.”

How PRISM might work in practice

Late Friday, the New York Times posted a story that said some tech companies resisted the NSA’s demands to provide easier ways to get access to user data — including Twitter — but that some consented, opened up discussions with the security agency about developing methods to share that data, and even “changed their computer systems to do so.”

“In at least two cases, at Google and Facebook, one of the plans discussed was to build separate, secure portals, like a digital version of the secure physical rooms that have long existed for classified information, in some instances on company servers. Through these online rooms, the government would request data, companies would deposit it and the government would retrieve it.”

In other words, “companies were essentially asked to erect a locked mailbox and give the government the key” and Facebook actually built such a system, the NYT story said. Declan McCullagh at CNET explained in a post that according to his sources, all that the PRISM process does is automate something that is required under FISA (the Foreign Intelligence Surveillance Act) — so court orders are given to the tech companies and they have simply made the process of handing over that information easier.

Marc Ambinder, a security expert who writes for The Week, also described his understanding of how PRISM functions — in a nutshell, PRISM is just a piece of software that allows the NSA to collect and interpret data that is handed over under FISA. The actual software itself isn’t classified, which is why mentions of it show up online and in job postings. In McCullagh’s piece, a former NSA lawyer says that the slide presentation the Washington Post published is “suffused with a kind of hype that makes it sound more like a marketing pitch than a briefing.”

Meanwhile, for those trying to keep track at home, the Electronic Frontier Foundation has put together a comprehensive timeline of events related to NSA surveillance activity over the past decade:

It was for your own good

First tech companies claimed they didn’t know anything about PRISM and weren’t supplying data (or at least not direct access), and now the story some sources close to those companies are telling is that they set up portals or some other method of complying with FISA requests in order to “protect the innocent,” according to a post at TechCrunch.

“The NSA may have wanted full firehoses of data from Google, Facebook and other tech giants, but the companies attempted to protect innocent users from monitoring via compliance systems that created segregated data before securely handing it over as required by law.”

The Guardian has responded to criticisms of its original description of PRISM and the whole notion of “direct access” — as well as the repeated denials from Google executives and others that this has been taking place — by posting another slide from the leaked NSA presentation. While some have speculated (as mentioned above) that PRISM could mean simply sucking data from ISP equipment, the NSA slide contrasts this method of getting data with PRISM’s, which it describes again as “collection directly from the servers” of the companies mentioned.

The Director of National Intelligence released another statement on Saturday, calling the disclosures by the Guardian and Washington Post about NSA data collection “reckless” and filled with “significant misimpressions.” So DNI James Clapper said he had declassified some details about the program, published in a fact sheet (PDF link). Among other things, it says:

“PRISM is not an undisclosed collection or data mining program. It is an internal government computer system used to facilitate the government’s statutorily authorized collection of foreign intelligence information from electronic communication service providers under court supervision, as authorized by Section 702 of the Foreign Intelligence Surveillance Act.”

The Washington Post published a follow-up story on Saturday that described the PRISM process in much the same way as earlier stories from the Guardian and the New York Times: as a system or software that allowed the NSA to process FISA requests for information more quickly — and the paper reiterated earlier statements that because the program was top secret, only a few individuals within those companies would even know about it, let alone be able to discuss it. According to the Post:

“Executives at some of the participating companies, who spoke on the condition of anonymity, acknowledged the system’s existence and said it was used to share information about foreign customers with the NSA and other parts of the nation’s intelligence community.”

Much of the criticism about the original Post story and the Guardian story has focused on the description of PRISM as allowing “direct access” to the servers of companies like Google, Facebook and Yahoo — something the leaders of those companies have strenuously denied providing. The most recent Post story suggests that at least some of the debate over this term is semantic, and that its sources say PRISM did allow the NSA to get data from those companies directly:

“Intelligence community sources said that this description, although inaccurate from a technical perspective, matches the experience of analysts at the NSA. From their workstations anywhere in the world, government employees cleared for PRISM access may ‘task’ the system and receive results from an Internet company without further interaction with the company’s staff.”

NSA whistle-blower reveals his identity

In another bombshell, the Guardian revealed the identity of the whistle-blower who sent them the leaked documents about PRISM and the NSA surveillance program: he is Edward Snowden, a 29-year-old former technical assistant at the Central Intelligence Agency, and he is now living in Hong Kong and expects he will “never see home again.” He said his family doesn’t know about his activities, and that he fully expects to be charged and potentially face jail time for his actions.

In an interview with the Guardian, Snowden says that he gradually became frustrated with what the NSA was doing and believed it was wrong — but originally held off on leaking anything because he thought Barack Obama would change those policies when he was elected president. But Snowden says the president continued with “the policies of his predecessor” and so he decided to come forward and let the American public know what was happening behind closed doors:

Snowden also said the documents he leaked clearly show that “the NSA routinely lies in response to Congressional inquiries about the scope of surveillance in America” and that the abilities that he had as a contractor with the CIA were beyond what most people can even imagine:

The reaction

In a post written for The Atlantic magazine, James Fallows said that the most frightening and important part about PRISM and the rest of the NSA surveillance activity revealed by Snowden is that it is all legal under the Foreign Intelligence Surveillance Act and other legislation.

“That these programs are legal — unlike the Nixon “Plumbers” operation, unlike various CIA assassination programs, unlike other objects of whistle-blower revelations over the years — is the most important fact about them. They’re being carried out in “our” name, ours as Americans, even though most of us have had no idea of what they entailed.”

Fallows — and others such as Talking Points Memo founder Josh Marshall — raised some question marks about the wisdom of Snowden’s choice of Hong Kong, which is still part of China and therefore not particularly open to harboring whistle-blowers. However, according to some experts in the law, Hong Kong might be a good place to seek asylum because of a loophole that could allow Snowden to remain there indefinitely.

Icelandic MP Birgitta Jonsdottir, an early supporter of WikiLeaks and of freedom-of-information laws in general, told Forbes magazine that she plans to try and get her country to offer Snowden political asylum. But observers of the political scene in Iceland say this might be more difficult than it would have been in the past, since the new Conservative government is seen as more friendly to the Obama administration.

Daniel Ellsberg — the man who leaked the famous “Pentagon Papers” in 1971 and revealed that the government had been lying about the Vietnam War — said in a piece written for the Guardian that Snowden’s leaks give the United States a chance to “roll back what is tantamount to an executive coup against the U.S. constitution.” Ellsberg said that Snowden’s revelations were the most important leak in the history of the United States, including his own.

“Since 9/11, there has been, at first secretly but increasingly openly, a revocation of the bill of rights for which this country fought over 200 years ago. In particular, the fourth and fifth amendments of the US constitution, which safeguard citizens from unwarranted intrusion by the government into their private lives, have been virtually suspended.”

Meanwhile, David Kirkpatrick — author of the book “The Facebook Effect” — asked whether the secrecy and privacy invasions involved in the PRISM program might impair the growth of social networks and cloud services like Facebook.

“Do we really want to impair such powerful tools for spreading dialogue, political discourse, and U.S. values? Is it worthwhile to impair the extraordinary financial and commercial success of these great flagships for the American economy? Does Obama want Facebook et al just to be seen as tools of American power?”

Politico took a look at some of the things that we still don’t know about PRISM and the activity involved in the NSA’s surveillance program — including how much data the spy agency has been collecting from phone companies as well as tech companies like Google, whether this data collection has actually thwarted any specific terrorist attempts or not (something that is the subject of much debate) and how exactly the PRISM program works in practice.

Meanwhile, the Daily Beast has a piece that looks at the group within the U.S. intelligence apparatus that hunt down leakers like Snowden, a kind of internal police force called the Associate Directorate for Security and Counterintelligence — or the Q Group for short. And Salon magazine has a feature and interview with Laura Poitras, the documentary film-maker who was contacted by Snowden and later helped both the Post and the Guardian write their stories about the leak.

Got anything I am missing? Let me know at mathew@gigaom.com

Post and thumbnail images courtesy of Shutterstock / Lightspring and the Washington Post

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The NSA surveillance story reinforces why an entity like WikiLeaks is so important

June 6, 2013 - 6:07pm

WikiLeaks, the secretive repository for government malfeasance, hasn’t been in the news much lately except for occasional updates about founder Julian Assange, who remains in exile inside the Ecuadorian embassy in Britain. And neither WikiLeaks nor its supporters had much to do with the latest blockbuster leak of government intelligence, which confirmed that the National Security Agency has been collecting phone-call data from Verizon customers thanks to a secret court order. But despite all that, the NSA story helps to highlight why having an independent repository for high-level leaks is a valuable thing.

The original report on the NSA’s surveillance effort came from Glenn Greenwald, who writes about politics for The Guardian, courtesy of a leaked document that confirmed the existence of an order signed by the ultra-secret Foreign Intelligence Surveillance Court. As the New York Times explains, even the existence of this kind of order is subject to the highest levels of U.S. government secrecy — much higher, in fact, than the diplomatic cables that former Army private Bradley Manning is accused of providing to WikiLeaks.

Update: Both the Guardian and the Washington Post are reporting that the federal government has also been getting personal data from a number of large internet players for years — including Google, Facebook and Apple.

The real story isn't just the spying itself: it's that we have this massive, ubiquitous Surillveance State, operating in total secrecy—
Glenn Greenwald (@ggreenwald) June 06, 2013

The government is cracking down on leaks

Even without the current Manning trial as a warning, the risks of a leak like the NSA court order would be abundantly obvious by now, given the Obama administration’s ongoing campaign against government leaks — a campaign that some argue has gone too far, with reporters being named as “co-conspirators” by the authorities (a charge that has echoes of the “aiding the enemy” accusations against Manning). Among other things, the government recently seized the phone records of Associated Press reporters.

This kind of cloak-and-dagger activity towards journalists — which some observers (including me, and former New York Times executive editor Bill Keller) have been warning might occur in the wake of the government’s pursuit of Manning and Assange — has likely thrown a substantial chill over the U.S. media when it comes to exposing government information. As if to reinforce that, within minutes of the Guardian story appearing online, sources said the Department of Justice would likely be investigating the leak and how it arrived in Greenwald’s inbox.

There have always been leaks, of course, and there would no doubt continue to be leaks even if WikiLeaks didn’t exist. The legendary Watergate investigation and the release of the famous Pentagon Papers both happened without WikiLeaks, or even the internet. But there’s also no question that having a repository for such documents that is both anonymous (or as close as it is possible to get) and largely stateless would make it easier for such leaks to occur.

Daniel Ellsberg, the former Defence Department official who leaked the Pentagon Papers in 1971 — and later became part of one of the most ground-breaking First Amendment trials in history — has said that Manning and WikiLeaks are carrying on the same tradition he was a part of: namely, the quest to hold the government accountable for its actions. Since the media seem reluctant to play the role they should in this effort, Ellsberg says, WikiLeaks becomes even more necessary.

WikiLeaks continues to struggle to stay alive

Meanwhile, WikiLeaks itself is struggling — in part because of Assange’s legal issues, as well as a lack of funding that was exacerbated when PayPal, Visa and MasterCard cut off the ability to donate to the organization, despite the fact that WikiLeaks hasn’t been accused of a crime. And viable alternatives have not yet emerged (a splinter group headed by a former WikiLeaks lieutenant tried to set up a competitor called OpenLeaks without much success, and the New Yorker recently launched its own effort called StrongBox).

Greenwald suggested in a comment on Twitter that the Obama administration’s behavior towards government leakers may have actually encouraged sources like his to become even bolder, as a way of defying what they see as an unreasonable attack on freedom of speech and whistle-blowing. But if WikiLeaks were stronger, sources would have another place they could go to reveal important information — and one that would be more difficult to attack.

To that end, a group called Freedom of the Press was formed earlier this year by Ellsberg and a number of other free-speech advocates, including BoingBoing’s Xeni Jardin and actor John Cusack, which is designed to help support WikiLeaks and a number of other entities via crowdfunding. Freedom of the Press has also crowdfunded a number of stenographers to take notes about the Manning trial, since very few media organizations were allowed to attend and most have had restrictions placed on what they can and can’t report.

Whether WikiLeaks can survive or prosper given the splintering of the organization (which appears to have been caused at least in part by Assange and his mercurial approach to running WikiLeaks) — remains to be seen. But having some kind of entity that performs the same function is a clear public good.

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Twitter expands its advertising ambitions with WPP global partnership

June 6, 2013 - 11:38am

Just a few weeks after signing a substantial advertising deal with Starcom Mediavest Group — a major global ad buyer for companies like Walmart and Coca-Cola — Twitter has signed a similar agreement with WPP Group, one of the world’s largest advertising firms. Although no financial details have been released, WPP calls the deal a “global strategic partnership.” It’s the latest in a series of moves by Twitter that are designed to make it easier for advertisers to target consumers based on their activity, and thereby boost Twitter’s revenue.

A WPP release says that the partnership will allow the group’s various units to “leverage Twitter data” in order to deliver more effective campaigns, “enhanced targeting” and more real-time insight for the firm’s clients, and that the two will work together to approach key clients. Sir Martin Sorrell, the chairman of WPP, said Twitter’s relevance continues to grow “not only as a social platform, but also as a window into consumer attitudes and behaviour in real time.”

Sorrell’s interest in expanding his firm’s relationship with Twitter should probably be a wake-up call for traditional media companies, most of whom are used to getting the bulk of their advertising revenue from WPP’s clients. Sorrell said recently that he views Twitter, Google and Facebook as “media owners masquerading as technology companies,” and Twitter’s real-time behavior analytics are something many media players can’t even hope to duplicate.

Making Twitter ads more targeted

While there is no dollar value on the WPP deal, it will almost certainly be worth tens or even hundreds of millions of dollars for Twitter: the recent deal with Starcom (a unit of Publicis) was described by the Financial Times as being worth “hundreds of millions of dollars” over a period of several years. The Starcom arrangement also provided clients of the firm with preferential access to advertising slots within Twitter’s network. At the time that deal was announced, the global CEO of Starcom Mediavest told the FT that Twitter “in a very short period of time, has gone from an experiment to something that is essential.”

Much of what advertisers are interested in is the real-time information network’s ability to function as a “second screen” for TV viewers, and Twitter has been devoting most of its resources to capitalizing on this phenomenon: the company recently launched a series of partnerships with broadcasters and content companies called Twitter Amplify, and has also been refining its ability to offer advertisers targeting based on specific keywords.

Twitter’s ability to target advertising messages, and specifically those related to video, got a big boost when the company acquired Bluefin Labs in February. And eMarketer recently estimated that based on some of its recent moves related to advertising, Twitter’s ad revenue in 2013 could hit $1 billion.

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Why the Apple e-book trial should be over already: The DoJ has an open-and-shut case

June 4, 2013 - 11:57am

The federal antitrust case over collusion and price-fixing in the e-book industry entered what will likely be its final chapter on Monday, with opening statements in court from the Department of Justice and Apple — since all of the accused publishers have already settled. And while Apple is undoubtedly going to make an impassioned defence of its innocence over the next few weeks, the fact is that the DoJ has what amounts to a slam-dunk case: no matter how you look at it, the company colluded with publishers to keep e-book prices high.

In fact, the government’s case is so compelling that the judge in the trial has already said she thinks it will prevail, despite Apple’s protests to the contrary. In pretrial comments, U.S. District Judge Denise Cote said she believes the government “will be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of e-books, and that the circumstantial evidence in this case will confirm that.”

Apple: Amazon made us do it

Not surprisingly, Apple has complained that this amounts to pre-judging the case, but it’s not hard to see how the judge arrived at that conclusion: Emails sent from Steve Jobs and other Apple executives to various publishers as they tried to strike a deal make it obvious that the computer company wanted to see a united front from the book industry before it agreed to any terms, and that it essentially pressured publishers to collude in order to achieve that.

In the run-up to the antitrust trial, Apple and the Big Five publishers who were named in the lawsuit tried to make their case in the court of public opinion, and their argument was that while their behavior may have looked an awful lot like collusion, they needed to do so in order to blunt the effect of Amazon’s virtual monopoly over e-books — which they suggested was a far worse danger than cutting a deal with Apple, the underdog in the market.

In an open letter about the case published a year ago, Macmillan CEO John Sargent denied that his company colluded with anyone when it decided to move to what is called the “agency model” of pricing (in which the publisher gets to set the price for e-books, rather than the retailer), and argued that doing this was necessary to blunt the force of Amazon’s hold on the market. At the end of the letter, he quoted Authors’ Guild president Scott Turow:

“The irony of this bites hard: our government may be on the verge of killing real competition in order to save the appearance of competition. This would be tragic for all of us who value books and the culture they support.”

Were consumers harmed?

Very little of this is likely to be part of Apple’s legal arguments in the current trial, for the simple reason that it would never fly as an excuse for encouraging or facilitating collusion and price-fixing. If the major players in an industry get together and effectively agree on a strategy for keeping prices artificially high, it’s not enough to say “But your honor, we had to do this because our competitor is too large and it was the only way we could compete with them.”

As we’ve tried to point out in posts about the accusations against Google for its behavior, antitrust law in the U.S. isn’t designed to help prevent competitors from being squashed by a large player in an industry — even if that player has what amounts to a monopoly position. The key point is whether that particular company’s behavior alters or damages the marketplace in a way that harms consumers. And when it comes to that, the DoJ is on rock-solid ground.

As the Justice Department pointed out in its opening statement, the price of e-books climbed by as much as 50 percent in the weeks following Apple’s agreement with the Big Five publishers. Those two groups can — and have, on many occasions — make the argument that keeping prices higher than they would have been otherwise is in the long-term interests of the publishing industry (although that is also debatable), but that’s not what the DoJ or the court is interested in.

Apple took a risk, and it lost

Apple’s only argument is that while e-book prices rose and stayed high for some time as a result of its actions, they eventually came back down — but the judge is unlikely to find that persuasive either. In effect, Apple would be saying: “Yes, we colluded with publishers, but our attempt to keep prices artificially high eventually failed due to other market conditions we were powerless to affect.” That’s admitting guilt, but hoping to get a pass anyway.

So why is Apple bothering to fight this case, even though it knows that it will probably lose? Some of it could be sheer bloody-mindedness, but the company may also be worried about the potential implications of the ruling as it pertains to what are called “most-favored nation” agreements, which give partners the right of first refusal when it comes to pricing. As Zach Seward notes at Quartz, these agreements are everywhere in the entertainment business, and if they amount to collusion then Apple could find it harder to strike deals in other areas.

The bottom line is that Apple engaged in risky behavior with publishers because it felt it had to do so in order to break Amazon’s iron grip on e-books, and offering higher prices to publishers if they cut a deal with the company seemed like the best way to do that. Apple may even have been correct in that assessment — but collusion is still collusion. The only question now is how large the judgement against the company will be in terms of damages.

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If media is being disrupted like the car industry, then who is the Tesla Motors of media?

June 3, 2013 - 6:15pm

In an earlier post for paidContent, I looked at the broad similarities between the automotive-manufacturing industry and the media business — specifically newspapers — and how disruption has affected both in some fairly similar ways. And that got me thinking: if these two industries are roughly equivalent when it comes to disruption, then who qualifies as the Tesla Motors of media? In other words, who has been the most disruptive force over the last decade or so, the one that has forced other media companies to question some of the most fundamental aspects of their business?

Whatever you think of Tesla or its founder Elon Musk (who also happens to be working on sending people into space), his company has defied some long-held beliefs of the car business, including the idea that bespoke car companies always fail, that electric power isn’t ready for prime time in the consumer automotive space, and that car companies can’t sell direct to the consumer (my colleague Katie Fehrenbacher has a great post on Tesla here).

The most disruptive force in media?

The idea of picking a media company as the Tesla of that industry isn’t to find a one-to-one equivalent, for what should be fairly obvious reasons: for one thing, the car business involves making and selling expensive physical products — products that can’t be digitized and copied or aggregated the way that media content can. And there’s probably no development in new media that corresponds directly to Tesla’s ambitious bet on the long-term value of electric power (although I would argue that the use of crowdsourcing comes fairly close).

That said, it’s worth thinking about who has been the most innovative company in media over the last decade or so, and I think the Huffington Post deserves that title — although there are some caveats to that, which I will get into. In discussing this with colleagues, some voted for Twitter or Facebook, and it’s true that they have been extremely disruptive (Twitter most of all, I think, for a number of reasons). But they are still outside the industry to some extent in that they don’t compete directly, although they may want to.

For me, The Huffington Post is the Tesla of media because it is the closest thing to a traditional entity that sprang into being, seemingly out of nowhere — sui generis, as the saying goes — and very quickly forced the industry to question a lot of long-held assumptions. Among those assumptions were the following:

No one of any quality would write for free: Although newspapers and other media companies have always taken occasional submissions from readers or experts and run them for nothing, the Huffington Post was the first to show that you could build a substantial media entity on that approach, and that in many cases the quality could match or exceed what newspapers pay for.

Users wouldn’t want a news aggregator: This was one of the most absurd assumptions, since many newspapers themselves are essentially just aggregators, but there was some scepticism that the Huffington Post would be able to succeed by running excerpts from other news sites. In fact, many readers saw this as a valuable service rather than an affront to journalism.

A new entity couldn’t build a large audience: Even after the Huffington Post launched and it was obvious that it appealed to many online readers, traditional media players said it wouldn’t be able to compete with established brand names like the New York Times. In 2011, its traffic exceeded the Times.

Viral content can’t be treated like a science: Before BuzzFeed, there was the Huffington Post, which was the first to show that fairly simple tools (integrating Facebook’s open platform, adding sharing buttons and using strategies like A/B testing for headlines) could increase web readership almost exponentially.

A viral-media site couldn’t evolve: Once it became clear that the Huffington Post was not going away, and that it had developed a large audience, there were those who believed it would always be a sideshow devoted to either lowest-common-denominator content and/or thoughtless aggregation. In 2012, the site won a Pulitzer Prize for investigative journalism.

Huffington Post was, but now BuzzFeed is

All of this helped The Huffington Post build what became a $315-million organization in a little over five years, right under the noses of the largest and most well-funded media entities on the planet. And the value of the company was determined by the acquisition offer in 2011 from AOL, then part of the sprawling AOL-Time Warner empire, something that many saw as a huge validation of the Huffington approach.

This is also where the caveats come in: For me at least, much of the early innovative energy that The Huffington Post had seems to be gone. That might be because time has moved on, or because it has been absorbed by a giant entity and has less freedom to move (and a lot more internal politics), but it seems as though much of the innovative spirit has gone elsewhere — to newer entities like BuzzFeed, for example, which shares much of the same DNA as the early Huffington Post, via co-founder Jonah Peretti.

BuzzFeed has not only doubled-down on some of those elements, such as the viral content and the aggregation approach, but it is forging new ground as well — including an attempt to build a scalable model using nothing but “native” advertising or sponsored content. And it has also evolved, just as the Huffington Post did, adding more long-form writing and branching out into politics and other categories that were seen by some as being incompatible with its model.

Does all of this make BuzzFeed founder Peretti the Elon Musk of media? We’ll have to save that for a future post. If you have any of your own suggestions for who deserves to be the Tesla Motors of media, feel free to add them below.

Post and thumbnail photos courtesy of Flickr users Scott Beale and George Kelly

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Do we really want Facebook to decide what qualifies as hate speech and what doesn’t?

May 29, 2013 - 7:53pm

As my colleague Eliza Kern has reported, Facebook has apologized for the way it handled “hate speech” against women on the social network, after repeated complaints from advocacy groups alleging that it was turning a blind eye to what was clearly offensive behavior. This has been hailed by some as a victory, since Facebook has admitted that its policies around such content are weak. But even if its policies are improved, do we really want Facebook to be the one deciding what qualifies as hate speech and what doesn’t?

What makes this kind of topic so difficult to discuss is that much of the content Facebook was accused of harboring is unpleasant in the extreme: some of the pages that were mentioned in the complaint by the group Women, Action and the Media advocated violence against women, promoted rape, and made jokes about abuse (one of the tamer examples was a page called “Kicking Your Girlfriend in the Fanny Because She Won’t Make You a Sandwich”). No one in their right mind would argue that this kind of content isn’t offensive.

Facebook decides what speech is free

The larger problem in making Facebook take this kind of content down, however, is that it forces the network to take an even more active role in determining which of the comments or photos or videos posted by its billion or so users deserve to be seen and which don’t. In other words, it gives Facebook even more of a licence to practice what amounts to censorship — something the company routinely (and legitimately) gets criticized for doing.

To take just a few examples, Facebook has been repeatedly accused of removing content that promotes breast-feeding, presumably because it is seen as offensive by some — or perhaps because it trips the automatic filters that try to detect offensive content and send it to the team of regulators who actually police that sort of thing. The social network has also come under fire for removing pages related to the Middle East, as well as pages and content published by advocacy groups and dissidents in other parts of the world.

As Jillian York, the director for international freedom of expression at the Electronic Frontier Foundation, has pointed out, the entire concept of “hate speech” is a tricky one. In France, posting comments that are seen as homophobic or anti-Semitic is a crime, and Twitter is currently fighting a court order aimed at having the social network identify some of those who posted such comments. The company is resisting at least in part because it has staked its reputation on being the “free-speech wing of the free-speech party.”

It’s an increasingly slippery slope

Some groups have tried to convince Facebook that pages promoting heterosexuality qualify as hate speech, while others have complained that pages making fun of people who are overweight should fall into the same category. Many people would undoubtedly see the kind of content that Women, Action and the Media are complaining about as being clearly offensive in a way that these other pages aren’t — but not everyone would agree.

Where does Facebook draw the line on this particular slippery slope? Is it only the content that draws the most vocal criticism that gets removed, or the campaigns that influence advertisers?

As more than one free-speech advocate has noted, if popular protests about offensive content were what determined the content we were able to see or share a few decades ago, anything promoting homosexuality or half a dozen other topics would have vanished from our sight. There is at least a case to be made that the simplest course of action for a network like Facebook would be to only remove content when it is required to do so by law. But then what happens to the kind of content it just apologized for?

Private entities making their own rules

To its credit, the social network has tried to find other ways of discouraging these kinds of pages — including requesting page administrators to identify themselves (although the company’s “real name” policy raises some equally troubling questions). And while Facebook’s behavior looks and feels like censorship, it isn’t legally an infringement of free speech because Facebook is a corporate entity, and free-speech rules only apply to governments.

And that fact about Facebook — that it is a proprietary platform controlled by private interests — is part of what makes this situation so complex. For large numbers of people, the social network is a central method for connecting with and sharing information with their friends, a combination of water cooler and public square. But like Twitter, it is not a public square at all: it is more like a shopping mall, with private security that determines what behavior is tolerated what isn’t.

That’s not a problem when you want security to remove the people who are offending or disturbing you, or when you agree with the company’s decisions — but it’s quite different when you are the one who is being accused of being offensive or disturbing. And Facebook has provided plenty of evidence that it can make just as many wrong choices as it can right ones.

Post and thumbnail photos courtesy of Flickr user Hoggarazi

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Circa hires Anthony De Rosa away from Thomson Reuters to expand its editorial ambitions

May 28, 2013 - 11:00am

Circa, the mobile-only news service founded by Cheezburger Network CEO Ben Huh, announced on Tuesday that it is hiring Thomson Reuters social-media editor Anthony De Rosa to be the media startup’s editor-in-chief. Circa co-founder and CEO Matt Galligan said in an interview before the announcement that De Rosa will be building out the company’s editorial team, which will be based in New York rather than San Francisco, where the rest of the startup is headquartered.

De Rosa also said in a separate interview that he will be adding some new elements to Circa’s news repertoire — including a possible move into more traditional reporting. Galligan said that De Rosa was the company’s only choice for the editor-in-chief position, given what he has accomplished since he became the social-media editor at Thomson Reuters, and his status as a leading source of breaking news during events like the Boston bombings:

“I spoke with Anthony little over a year ago when we were getting Circa started, and gave him some ideas of where we were going, what our thoughts were about where we were going to take news. He was recommended to me by a bunch of people, because he’s always been on the forefront of thinking about this stuff and where news should move… we wanted somebody who could add editorial leadership but also push us forward.”

Reinventing the idea of a news story

As we described in a post last fall, Circa was founded by Galligan and Huh as an attempt to reinvent the news-consumption experience for a mobile device: it provides a summary of the top news stories in a number of categories — but unlike Summly, the news-summarizing app that was acquired by Yahoo earlier this year for an estimated $30 million, Circa’s story summaries are created from third-party news reports by an editorial team of human beings rather than by algorithms.

One of Circa’s unique features is that readers can “follow” or subscribe to a specific story and then get regular updates when there is a new development: instead of having to rewrite the entire story, the way many traditional news outlets do, Circa simply updates the existing entry and alerts users, who can then go directly to the new information. The feature is proving to be popular, Galligan said: during the Boston bombings, close to 30 percent of users subscribed to updates.

De Rosa, who has been social-media editor at Thomson Reuters since July 2011, said he was intrigued by Circa’s “follow” model, and also by other aspects of the service — in part because of a conversation he had with Huh at a media-industry event called NewsFoo before the company was even created. De Rosa said that he and the Cheezburger CEO (who was originally trained as a journalist) shared many of the same thoughts about the future of news.

“I was really interested in a lot of the principles behind it, and I think both of us share the ideals behind what Ben was trying to do — the concept of trying to transform the traditional article format, making articles more useful, thinking about presentation and timeliness, that was distilled into Circa shortly after that.”

Circa may move into traditional reporting

Circa came out of a broader news-reinvention project that Huh started called Moby Dick, which brought together a number of ideas about how news has to change for a digital and mobile age — including theories about how the traditional article format is no longer as useful a way of distributing information to news consumers, something journalism professor Jeff Jarvis and others have also written about (including Dave Cohn, the former Spot.us founder who was the founding editor at Circa and will now be De Rosa’s boss).

De Rosa said that in addition to helping build the editorial team — which currently stands at 11, some of whom are located in foreign countries so that Circa can have a 24-hour news flow — he wants to explore the idea of having Circa staffers do more of their own reporting, rather than just assembling stories based on reports from other news outlets. That extra reporting would likely involve calling primary sources to confirm information, he said.

“There’s no immediate desire to do original reporting, but that might be something I will push for — it doesn’t necessarily mean boots on the ground, but I definitely want to see the newsroom verifying information for themselves, so if we can contact primary sources and make sure that we feel comfortable about the information we’re putting out, I definitely want to ensure that our newsroom’s doing that.”

Both on Twitter and in comments to The Atlantic Wire, former Reuters.com editor Kenneth Li — who hired De Rosa — said that his departure was “heartbreaking” for the wire service. Former Thomson Reuters technology editor Peter Lauria (now at BuzzFeed) said something similar.

Heartbreaking. big loss for us. Big get for @circa RT @Circa: Introducing our new Editor-in-chief: @antderosa. blog.cir.ca/2013/05/28/cir…—
Kenneth Li (@kenli729) May 28, 2013

Big get 4 Circa..big loss 4 Reuters..big congrats 2 AnthonyRT @Circa: Introducing our new Editor-in-chief: @antderosa blog.cir.ca/2013/05/28/cir…—
Peter Lauria (@peterlauria3) May 28, 2013

And De Rosa’s ultimate boss, Circa co-founder and financial backer Ben Huh, also welcomed his newest employee on Twitter:

Welcome to the new world, where managing tweets can lead to the Editor-in-Chief job. Excited to have @AntDeRosa onboard @Circa (cc: @mg)—
(@benhuh) May 28, 2013

Post and thumbnail images courtesy of Flick user Jan-Arief Purwanto and Shutterstock / wellphoto

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Has Yahoo’s relaunch of Flickr revitalized the photo service — or ruined it?

May 27, 2013 - 12:49pm

Even as Yahoo was closing in on its ambitious $1-billion acquisition of Tumblr last week, the web giant was busy on a number of other fronts as well — including a relaunch of its classic photo-sharing service Flickr. But just as some sceptics (including us) have raised red flags about Yahoo’s ability to capitalize on the purchase of Tumblr without ruining it, the Flickr redesign has plenty of vocal critics as well. Are these the usual die-hard users who are simply resistant to change of any kind, or has Yahoo altered Flickr to the point where it has made the service worse rather than better?

As my colleague Laura Owen has described, the new Flickr includes a number of fairly dramatic changes — not the least of which is a full terabyte of storage for all users. Now, instead of a Pro level where members paid for extra storage, Flickr users can pay a monthly charge to have advertising removed from their feed, or they can pay an even larger annual fee to double the amount of space. The user interface of the service has also been completely redesigned to focus on showing large-format photos.

Changing the look also changes the focus

Not surprisingly, the relaunch caused a storm of controversy on Flickr forums and elsewhere, with many veteran users complaining that it was difficult to find things or that favorite features were missing. As many Yahoo fans have since pointed out, this kind of response occurs virtually every time a service or website launches a new design — and as a result, many supporters have argued that the backlash is just noise and will eventually subside. The redesign also has some prominent fans, including Flickr co-founder Stewart Butterfield:

A blogger by the name Newton Gimmick, however, argues in a post at Infinite Hollywood that the backlash to Flickr’s relaunch is more than just the typical knee-jerk response: in his view, the redesign has fundamentally changed some aspects of the service in important ways — ways that make it less likely Flickr will succeed or thrive, rather than more likely. In an attempt to be “cool” or compete with other services like Instagram, he says, Yahoo has ruined what made Flickr different, which was the element of shared community.

“Yahoo’s new vision of Flickr is to try and be a cool site like Tumblr and Instagram. Yahoo is furious that Instagram has so much of the market share. What Yahoo failed to realize is that Flickr doesn’t share the same market with Instagram. Flickr wasn’t ever about posting the latest photos from your iPhone.”

Gimmick argues that because the new layout is aimed at creating an Instagram or Tumblr-style stream of large-format photos, many of the other features that Flickr users relied on to connect with fellow photography enthusiasts and exchange information about their photos are either missing or almost impossibly hard to find. For example, he says, Flickr used to make the “EXIF” data about a photo — the type of camera, aperture size, frame rate, etc. — obvious, but now users have to hunt for it.

the more I use the new Flickr – the more I hate it. For people browsing pictures its an improvement – for people using it, its total crap.—
Digital Cosmonaut (@iamkosmonaut) May 26, 2013

Has Flickr lost its core value?

Yahoo’s CEO set off a minor firestorm following the Flickr relaunch when she said that “there’s no such thing as professional photographers any more,” which many took as a denigration of the industry. Mayer quickly explained that her comments were intended to refer just to the abolishing of the “Pro” tier of Flickr service. But Gimmick argues that the real impact of her comment is to make it clear that Yahoo no longer cares about even hobby photographers: instead, it simply wants to accumulate as many photos as possible.

“They want teenage kids posting up all the stupid duck face photos that they litter Instagram and Facebook with. Because those teen kids, are ad revenue. If you’re hip, people will pay big bucks to advertise on your site. And if you offer tons of free space for kids to post duck face photos, you’ll draw in lots of users and that means lots of ad revenue.”

It’s easy to see Gimmick’s rant as just another lament for the passing of the “good old days” by someone who has been a fan of a service for a long time. But as a long-time Flickr user, I think he might be on to something with his criticisms: I have used the site mostly as a way to backup my photos — but there are plenty of places that make it easy to do that. The real killer feature of Flickr has always been the community aspects, and the redesign diminishes or hides those in many ways.

That may be the kind of tradeoff that Yahoo and Mayer see as worthwhile — perhaps even necessary. But for me and Gimmick, and potentially other users as well, downplaying those features removes the main rationale for our loyalty to the site. If Flickr looks and feels just like every other photo-stream or sharing service, why wouldn’t we just go and use one of those instead?

Post and thumbnail photos courtesy of Getty / Chris Jackson

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If Google isn’t trying to snatch Waze away from Facebook, it really should be

May 24, 2013 - 10:40am

The plot has thickened around the potential acquisition of Waze, the Israel-based social-mapping service, with news from Bloomberg late Thursday night that Google is considering a bid for the company, which is already reportedly evaluating a $1-billion-plus offer from Facebook. While other sources have poured cold water on the Google news — and some speculate that it is just a gambit designed to draw a higher price from Facebook — there are some pretty compelling reasons for Google to acquire the company.

News of the Facebook bid emerged earlier this month via reports in the Israeli media, which said that the social network had offered up to $1 billion to acquire Waze, which adds a real-time social element to traffic maps and claims to have close to 50 million active users. More recently, however, the Facebook talks have apparently bogged down over issues involving whether Waze will have transfer most of its staff from Israel to Facebook’s home base in California.

As with many such reports, the Bloomberg news is couched in all sorts of qualified terms, quoting anonymous sources “familiar with the matter” who say the company “may be considering” an offer, and it’s not uncommon for companies to float such rumors when they are looking for more money — or when they want to convince their acquirer to drop certain conditions, such as the requirement that Waze move its operations to San Francisco.

Some Israeli news outlets have also reported that Facebook has locked down its offer with a clause that prevents Waze from negotiating with other companies. And Google may have decided that making a bid for Waze simply isn’t worth the hassle that it might generate from antitrust authorities, who are already said to be looking at the company on other matters.

Google needs Waze more than Facebook does

All that said, however, there are some compelling reasons for Google to make a bid for Waze, as I tried to outline in a recent post. While it would make sense for Facebook to acquire the company — if only because it would help cement the social network’s move into mobile, and broaden the range of behavior and location data it could use to target users — it makes far more sense for Google.

Google Maps is one of the core offerings the company has when it comes to mobile, arguably almost as important as search and email. And it’s clear that Google cares about evolving the service, since it continues to pour resources into redesigns and added features like the ones that Om wrote about recently. There’s also no question that the social data provided by users is a crucial element of maps — and that is what Waze specializes in, and has managed to build right under Google’s nose.

I would argue that Google can’t afford to let Facebook (or Apple, although it reportedly isn’t part of the current negotiations) get its hands on Waze — in much the same way that Facebook CEO Mark Zuckerberg came to the swift conclusion that he couldn’t afford to let Twitter acquire Instagram, and made a surprise $1-billion offer without even consulting his board of directors. If Google hasn’t already made a bid for Waze, I think it needs to get busy working on one.

Post and thumbnail photos courtesy of Flickr user Dunechaser and Eva Blue

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Instructions on how to transform a comment troll into a human being

May 22, 2013 - 12:18pm

If you write anything on the internet — or for that matter, read anything on the internet — you’ve undoubtedly experienced comment trolls, flame-wars and plenty of other bad behavior. Some blogs and news sites have tried either handing over their comments to Facebook or not having comments altogether as a way of preventing this kind of activity, but one site called Climate Desk took a different approach: they tracked down and interviewed their most persistent troll, and in the process revealed him to be a fairly normal human being.

As the Columbia Journalism Review describes in a post on the project, Climate Desk not only found and interviewed their comment troll — a 57-year-old insurance executive named Hoyt Connell — as part of a video series called “The Secret Life of Trolls,” but also profiled a scientist who spends much of her time engaging with trolls on the topic of climate change. In the final instalment, the scientist and the troll met each other via Google Hangout.

The CJR post criticizes the Climate Desk series because “it doesn’t shine as much light under the bridge as it could have,” since it doesn’t go into detail about why Connell latched onto climate change as a topic, or what drives him to comment so aggressively (fittingly enough, Connell comments on the CJR post himself to try and clear some of this up). But what impressed me was how normal this mega-troll seemed once he was interviewed.

Comment trolls are people too

I found the same thing — and I think others did too — when Gawker Media outed a notorious Reddit troll named Violentacrez last year, after attention was drawn to several offensive sub-Reddits he created. Although clearly much of his behavior on the site crossed a line, the interview showed him to be a more-or-less normal, and in some ways even sympathetic (or possibly just pathetic) character. Not that this justified his conduct, but it helped to explain some of it.

We’ve written before about how the value of comments transcends the occasional troll, and how the best way to maintain a civil dialogue is to engage with readers directly, a point blogging pioneer Anil Dash also made in a post a couple of years ago. And writers like Ta-Nehisi Coates of The Atlantic have shown that commenters can be much more than just a noisy distraction — in some cases, they can actually become collaborators. The Climate Desk series is a good reminder that trolls are people too.

Post and thumbnail photos courtesy of Flickr / Jeremy King

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Yahoo swears it isn’t going to screw up Tumblr — but how realistic is that promise?

May 21, 2013 - 2:47pm

As the dust begins to settle from one of the most significant acquisitions in web-land since the Facebook/Instagram deal, the warm glow of euphoria created by Yahoo’s $1.1-billion takeover of Tumblr has given way to the harsh reality of blending — or, more importantly, not blending — two vastly different companies and cultures. In a statement about the deal, Yahoo CEO Marissa Mayer promised not to “screw it up,” a comment undoubtedly aimed at the sensitive community of Tumblr fanatics. But is it even possible for Yahoo to keep this promise?

Even before the news was confirmed on Monday, critics with long memories were reminding anyone who would listen about Yahoo’s track record with acquisitions, which has some rather notorious bumps in it, including two major ones known as GeoCities and Flickr. Those two deals alone have made many question whether Yahoo will be able to do the right thing with Tumblr — and while it may be unfair to lay the blame for these at Marissa Mayer’s feet, there are plenty of reasons to be skeptical about the future of this latest acquisition.

How long will it take yahoo to ruin tumblr?—
Blake Hounshell (@blakehounshell) May 19, 2013

GeoCities + Flickr: billions in missed opportunities

In 1999, Yahoo bought GeoCities for about $3.5 billion, which even at the time was an eye-popping amount. Although it was over a decade ago, which is eons in internet time, there are some broad similarities between what GeoCities was then and what Tumblr is now: both were distinctive and somewhat chaotic communities, focused on allowing individuals to create their own space. Yahoo did a number of things that arguably accelerated the demise of its high-priced acquisition, including trying to monetize it through hosting fees and cheesy banner ads.

The other stick that many anti-Yahoo types use when they want to beat the company up about its acquisition strategy is Flickr, the pioneering photo community that languished under Yahoo’s ownership until relatively recently. As many of its hard-core fans (including me) have argued in the past, Flickr was — or at least could have been — Instagram before Instagram.

There have been a number of post-mortems on what happened with Flickr, but in a nutshell Yahoo did almost everything wrong: the larger company took away or smothered much of the photo-sharing community’s most important features, prevented its employees from innovating or growing, and forced all kinds of integration between the two platforms that did nothing to benefit users — in fact, precisely the opposite. It was like the trifecta of failure, and a perfect example of why most large-scale acquisitions don’t work.

“All Yahoo cared about was the database its users had built and tagged. It didn’t care about the community that had created it or (more importantly) continuing to grow that community by introducing new features.”

Successful mergers are exceedingly rare

It’s certainly reasonable to argue — as many of her fans in Silicon Valley have since the Tumblr deal was announced — that Marissa Mayer shouldn’t be held to account for these lapses, since she had nothing to do with them and the internet has changed a lot since then. Yahoo is also substantially more desperate than it used to be (if that’s possible), and that has arguably made Mayer more cautious about potential screw-ups.

But the bottom line is that just because Mayer is a new CEO doesn’t mean she or the company won’t screw Tumblr up somehow anyway — either deliberately or by accident. That’s because large companies like Yahoo have a way of destroying the value of the things they acquire even if they don’t mean to do so, especially when the thing they have acquired is a somewhat unique community with special characteristics, which Tumblr arguably is.

This is why successful large acquisitions of web communities or services are so rare — rare enough that almost everyone can only point to a single example: namely, Google buying YouTube (although Facebook’s acquisition of Instagram is looking like it may be another one). The question for Yahoo and Mayer is whether Tumblr can be kept as a distinct entity and yet still monetized, as YouTube has been, or whether the process of monetization will inevitably turn Tumblr into the latest example of a MySpace-style failure.

Can Yahoo do what Google did with YouTube?

Former YouTube exec Hunter Walk took a look at what Google did right in the case of YouTube, and boiled it down to five factors, including keeping the product from getting too intertwined with the parent company and maintaining a separate physical identity. But to me the most important ones were:

Protect Tumblr from “helpful” Yahoos: This is where the accidental destruction of acquisitions often comes from — people who just want to help, but whose requests for features and other attempts at integration wound up almost “hugging us to death,” as Walk puts it. There is a powerful desire to get efficiencies out of acquisitions, but many of those attempts fail badly and ruin the thing they were trying to monetize or grow in the first place.

Stop short-term monetization that won’t scale: Walk talks about how YouTube managed to avoid the natural desire to build all sorts of easy-win monetization methods into the platform, and focused instead on longer-term approaches that were harder to sell in the early going but built more value. If Yahoo sees Tumblr as a way to bulk up its banner ad or other programs, it could wind up making the exact same mistake that YouTube was able to avoid.

In the end, much of the answer to the question about Yahoo screwing up Tumblr rests on Marissa Mayer, and her ability to stave off the desires of both the board of directors and the other senior managers who see Tumblr as either a distraction or a digital cow to be milked and then sent to the abattoir.

Post and thumbnail photos courtesy of Flickr / Stephen Brace and Getty Images / Chris Jackson and Pamuk Sekerli Tardis

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Why Yahoo acquiring Tumblr for $1 billion makes a certain horrible kind of sense

May 18, 2013 - 11:41am

According to a blizzard of anonymous news reports, Marissa Mayer is working feverishly to land the biggest fish of her career as CEO of Yahoo: namely, the $1-billion-plus acquisition of New York-based Tumblr, the ultra-hip blog network — the two are reportedly involved in discussions that could come to fruition as early as Sunday. Although Tumblr fans seem horrified by the idea, this one makes a substantial amount of sense for both sides.

Of course, as Om and others have already mentioned, there’s no guarantee this deal will actually be consummated: it could fall apart on valuation, as so many deals do — or Facebook could swoop in with a much higher offer and snatch Tumblr out of Yahoo’s clutches, the same way it did when it stole Instagram away from Twitter last year for close to $1 billion.

Update: According to the Wall Street Journal, the Yahoo board of directors has approved a $1.1-billion all-cash bid to acquire Tumblr.

It makes Yahoo look desperate — because it is

Even if the deal does get done, one of the risks for Mayer and Yahoo is that the company could look desperate by paying more than $1 billion for a site that had revenues of less than $15 million last year (although CEO David Karp has said that figure should hit $100 million this year). That’s an almost bubble-like multiple for a company, and there will likely be plenty of criticism from investors who believe that $1 billion could be better spent elsewhere — in other words, on businesses that would make Yahoo a better return.

But the painful fact is that Yahoo doesn’t just look desperate — in many ways it is desperate. Mayer has made some changes since she took over the ailing former web portal, including the acquisition of Summly and a number of other mobile-focused startups and services, but the company still needs to make some aggressive moves if it is going to jump-start any growth at all. And since Yahoo has about $4 billion in cash on hand, it can arguably afford to make a big bet.

Yahoo buying Tumblr makes sense. Tumblr is only big, cool, newish social platform that Yahoo can afford.—
Henry Blodget (@hblodget) May 17, 2013

For Yahoo, the addition of Tumblr would do a number of things: because of the size and profile of the deal, it would make a major statement about Mayer’s intention to do whatever it takes to revitalize the company, and it would also send a signal to Facebook and Google — and even Apple — that Yahoo is a potential force to be reckoned with when it comes to potential acquisitions. Is doing that worth $1 billion? That’s for Yahoo’s investors and board of directors to decide.

Just as important, it would inject some much-needed life and energy into the somewhat stale lineup of content that the company currently relies on, which caters more to the over-50 set than it does to anyone in the much-desired 18 to 25 demographic. More than any other network, Tumblr is the platform of choice for media-obsessed teens and 20-somethings, who spend massive amounts of time sharing photos and videos and animated GIFs on the site — an engine of potential value that Yahoo desperately needs.

Tumblr gets a massive exit

This doesn’t come without its own risks, of course: As a number of observers have noted, Tumblr’s content contains a large quantity of not only mature or arguably offensive content but outright pornography, which many argue is the source of its massive traffic numbers. How Yahoo (or Facebook for that matter) would deal with this kind of content remains to be seen.

3 q's for Yahoo: 1) Can you convert Tumblr users to Yahoo products? 2) Can you monetize Tumblr PVs? 3) What to do w/ all that Tumblr porn?—
Mark Zohar (@markzohar) May 18, 2013

For Tumblr, meanwhile, being acquired would solve a number of problems — the main one being that the company has gone well beyond the “we’re a startup so we don’t really have to make money” stage, and is facing increasing pressure from the investors who have given CEO David Karp more than $125 million in venture financing, an investment that values the company at about $800 million. Accepting a giant check from Yahoo would take care of that problem in one fell swoop, especially if it was all in cash.

With a major company like Yahoo as a partner, Tumblr could connect its massive audience of users to the firehose of ads and other monetization methods the giant web portal has, and potentially generate much more revenue than it could have by itself. The only lingering question at that point is whether Tumblr fans decide that Yahoo is poisoning the well of social content and community on the site, and decide to flee for greener pastures. In other words, does Yahoo make Tumblr into YouTube — a successful standalone network that can grow and prosper on its own — or does it become MySpace?

The only scenario where a Yahoo-Tumblr combo works is if Yahoo keeps Tumblr separate in the same way Google managed YouTube.—
Mark Birch (@marksbirch) May 18, 2013

Post and thumbnail photos courtesy of Shutterstock / ollyy and Albert Chau

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Crowdsourcing is here to stay — now it’s about building tools for networked journalism

May 14, 2013 - 2:06pm

As the media have become more social and thereby more “networked” — whether they like it or not — smart publishers like The Guardian and ProPublica have taken advantage of this phenomenon to crowdsource knowledge in a variety of ways. A decade or more after the concept started to become commonplace, the battle over whether it has journalistic value seems to have been mostly won. Now it is about developing a shared vocabulary and methods for helping journalists do it.

New York University professor Jay Rosen has spent almost 15 years working on this idea, work that has included projects like NewAssignment.net in 2006 and a joint venture with The Huffington Post called OffTheBus, which originally launched in 2008 and had at least one spectacular success). More recently, he has built a kind of real-time journalism lab at NYU called Studio 20, and is helping his students not only develop new ideas for networked reporting, but work with a number of media companies to actually implement those ideas.

The shock of inclusion is not as severe

Rosen isn’t just leaving this to his students: he himself is also working on a joint venture with Quartz, the business site that is part of Atlantic Media, to explore the best ways to do “networked journalism” in real time — a venture he launched on Monday night. In a somewhat unusual partnership that seems more like a consulting arrangement than a typical journalism-school role, Rosen asked Quartz for the “specs” of what they were looking for, and then tried to meet them.

Sort of like a consultancy that gets paid in puzzles. My idea of journalism research: these "specs" from @qz editors. studio20nyu.tumblr.com/post/503459375…—
Jay Rosen (@jayrosen_nyu) May 14, 2013

In the specifications, Quartz says it wants “to put together a suite of tools and techniques for quickly booting up a network around a fast-moving, ongoing global news story that cuts across traditional beat boundaries.” Gideon Lichfield, the site’s global news editor, has written in the past about how Quartz sees its reporters and writers as indulging in or exploring “obsessions” rather than typical beats, and Rosen said it saw the need for new tools to do that.

In an IM interview (which is embedded in full below, with edits made for clarity) Rosen said that he believes the cultural barriers to seeing the crowd as having something to contribute to journalism — what media theorist Clay Shirky has called the “shock of inclusion” — have been lowered somewhat, so there is less of a sales job for journalists who want to experiment with these approaches.

“That is less of a factor than it was years ago. There are enough people who know what ‘readers know more than I do’ means, and they have experience with the reality of it.”

Remember the 90-percent rule

Rosen also said that there are enough journalists and others even in traditional newsrooms and media entities who are interested in new ways of reaching out to what Rosen calls “the people formerly known as the audience,” and are just looking for help. So Studio 20 has partnerships with outlets as varied as the Wall Street Journal, ProPublica and Mashable in which students work with the partner to develop and implement new tools and methods.

In terms of what media outlets need to know before they begin this process, Rosen said one important factor is knowing that whatever they do will be governed by the “90-percent rule” — a rule of thumb in social media that suggests most crowdsourcing projects will see about 1 percent of the participants contribute heavily and 9 percent contribute somewhat, with 90 percent just “lurking.”

“90 percent will never participate, so what do we have for them? 10 percent might engage, but you have to have the right ask, the right incentives, the right UI. One percent are your core contributors, but you have to find them, deeply engage them, compensate them. That is way harder than ‘let’s crowdsource this!’”

Sources can now go direct

In some cases, compensation might be monetary, Rosen says — or it might take the form of other rewards (The Guardian and ProPublica have both talked about their experiments with crowdsourcing projects in the past, and what they have learned about how to structure them so that people are encouraged to participate). Mayhill Fowler eventually left the Huffington Post project in part because she wasn’t compensated for her work.

Rosen also said that crowdsourcing doesn’t always have to involve building tools: for example, two of his students used Reddit threads (called sub-Reddits) and extracted information about specific topics that later turned into stories for Mashable.

The NYU journalism professor agreed that good beat reporters have always used some form of crowdsourcing in their work, but says it is much easier now to reach out and find high-quality sources of information in real time. And he added that there is one major difference between now and then: namely, that sources can publish themselves and “go direct,” as blogging pioneer Dave Winer has described it, and that changes the balance of power for journalists. If anything, he says, this makes the need for effective crowdsourcing even more acute.

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Post and thumbnail photos courtesy of Flickr users Christian Scholz and Jan Arief Purwanto

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