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Posted Thursday, May 30, 2002 Corporate ProfitsWhy is it a safe bet that corporate profits will grow at about 6 percent on average over the next several years? Read my latest essay. . . . . . .
Cloning, Genetic Engineering, and CompetitionIn a new essay, I argue that cloning and genetic engineering could lead to an outbreak of competition among parents to enhance their children. Unlike most forms of competition, this prospect makes me uncomfortable. The essay is called Keeping Up with the Cloneses. . . . . . .
Posted Tuesday, May 28, 2002 Speaking of CarsRobert Cringely has a terrific column on what technology does and does not fit well with cars. Hard drives are a problem, because of heat, cold, and vibration. But then he has a really creative idea.
The idea is to turn every car into a relay station for a wireless network. And then you really will make satellite radio obsolete. I told you so! . . . . . .
Dissing Satellite RadioAlex Rubalcava sees hope for satellite radio.
Er, none. But I'm not after "100 channels of commercial-free audio." If I want music without commercials, I can pop in a cassette or a CD. In the long run, a car stereo with a built-in hard drive pre-loaded with tunes would seem to be the most cost-effective solution. But most of the time, I don't have any "entertainment" going when I drive, other than my own thoughts and daydreams. I'm probably weird that way. We don't get cable TV, either. . . . . . .
Lessig Gets FlakLawrence Lessig generally gets better press than the Pope, but the folks at premiumblend found somebody who is not genuflecting. William F. Adkinson, Jr., writes
Adkinson is saying that copyright owners have a legitimate claim to property rights. He argues that their maximization of the value of their copyrights is likely to lead to better outcomes than government regulation. I believe that the issue is more one of convenience than of copyright. That is, the Internet enables more convenient technologies for distributing content, but the incumbent intermediaries are reluctant to embrace Internet technology. Eventually, marketplace reality will force their hand, perhaps along these lines. To the extent that government gets involved, it is likely to be on behalf of the legacy entertainment industry, rather than along the idealistic lines proposed by Lessig. In other words, I believe that Adkinson has a point.
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Posted Friday, May 24, 2002 No-hopersSeeing an advertisement in today's newspaper for XM Satellite Radio made me think of other business models that are no-hopers. You can bet that anything based on satellites (apart from GPS) is a no-hoper: by the time you can get the satellite-based system deployed, the technology for bandwidth and data storage back here on earth will have made 90 percent of your potential applications obsolete. Here are some other examples of things you should never base a business on:
What's the absolute champion No-Hoper Basis for a Business? The competition is difficult, but my nominee would be, "Consumers actually like banner ads that are targeted." . . . . . .
Posted Monday, May 20, 2002 Entrepreneurs are LiarsFrom the always-interesting Megan McArdle, I picked up a link to a venture capital blog.
Several years ago, I was surprised to hear a real estate agent say that the reason that people need real estate agents is that "Buyers are liars." The point being that professionals know how to recognize a genuine buyer, as opposed to someone feigning interest. Venture capitalists face a similar problem. There really are very few business opportunities that have the kind of home run potential that VC's look for. Yet every entrepreneur throws in the chart with the hockey-stick growth and bazillions in revenue in five years. So the VC's job is to figure out which one of these liars might actually manage to create a real business. . . . . . .
Put These TogetherPut together the miniature radios, described by Technology Review,
with the wearable computer monitor described in the Boston Globe.
To me, this sounds like ubiquitous computing. Stick one of those little radio thingies into the glasses, and just jack right in. As to the Attention Deficit Disorder culture this is likely to create, I saw it coming when I wrote this essay. . . . . . .
Stock Options and Earnings OverstatementFor established companies, stock options provide a way to overstate earnings. As this article points out, though, the issue is getting attention.
If stock options really are a superior form of compensation, then they will survive an honest accounting treatment. However, my prediction is that once the accounting profession agrees to treat stock options as an expense, within three years we will see the value of option grants drop by at least 80 percent. . . . . . .
Posted Thursday, May 16, 2002 Stock Options and Start-upsWhy are stock options so popular in the venture capital community? I'm a cynic, so I think that the reason that VC's like stock options is that they use them to extract a larger share of a start-up for a lower cash outlay. Here is how that works. . . . . . .
Posted Wednesday, May 15, 2002 Crocodile TearesKen Teare, the founder of Real Names is crying because Microsoft no longer is supporting the service. The idea of Real Names was to replace the www.whatever.blah addressing scheme with its own addressing scheme that would use "real names." I never liked it, because I thought it was biased in favor of bricks-and-mortar companies and against web-based businesses. And I didn't want a proprietary naming scheme to take over the Web. Anyway, Microsoft got behind the idea, and now they are backing away. Teare sees this as the Evil Empire dealing a setback to the Web. I see it differently. We don't need Real Names, because we have Google. The market has spoken, and Real Names lost. End of story. . . . . . .
Verisign Slapped on the WristIn February, I received a notice from Verisign warning that my domain registration was going to expire in March and saying that I needed to send back my renewal form right away. Two problems with that:
I did not return the "renewal notice." Now, a judge has slapped Verisign with a restraining order, saying that they must stop sending out such deceptive notices. I think that they need to be hit harder, but I do not know the law on deceptive marketing. . . . . . .
Posted Monday, May 13, 2002 Deep Linking and Property RightsI argue that deep linking ought to be legal. James Miller argues that deep linking is like trespassing, and a web site has a right to stop it. Interestingly Miller and I both are Econobloggers. UPDATE: Brad DeLong writes in an email
Miller's argument is that you don't have to put up a fence to be entitled to stop trespassers. But my position is the same as Brad's. Moreover, I think that the trespassing analogy is misleading to begin with. Miller's and my articles are a sort of "point/counterpoint" . . . . . .
Posted Friday, May 10, 2002 The Linux EmpireLinux has no clothes. There. I said it. Every once in a while, someone else says it. For example, here is Fiona Harvey.
As I warned years ago, open source software's lack of usability is intrinsic. The open source process insulates programmers from non-technical users. To programming snobs, this is a feature. To ordinary users, it is a bug. Open source software is not a blow against greed. It is a blow against ordinary users. (I found Fiona Harvey's piece via Brendan O'Neill via G. Harlan Reynolds, the Linus Torvalds of the blogosphere.) . . . . . .
Posted Thursday, May 9, 2002 Stock Options AgainHal Varian thinks that the accounting treatment for stock options is ok, but investors need to pay more attention to diluted earnings. I disagree. See post number 171. For a large, publicly-traded company, I do not think that stock options are a particularly useful way to share risks or to align employee compensation to corporate performance. For such a company, too much of the risk in stock options has to do with general stock market performance. Instead, executives should receive performance-based bonuses that can be tied in part to the company's stock price relative to the market. What is unique about stock options as a method of compensation is not that they are the only way to align the interests of shareholders with those of executives. What is unique is that they are the only method of compensation that does not count against earnings in corporate accounting statements. That is why stock options are an accounting scandal. . . . . . .
You Will be Assimilated
Andrew Sullivan, commenting on the incorporation of Mickey Kaus' blog into Slate. . . . . . .
Posted Monday, May 6, 2002 Of Kafka and VerizonDoug Rushkoff describes his Kafka-esque dealings with DSL "service" (which I assume means Verizon).
My experience was even more absurd. In my case, I had DSL through another provider. But Verizon started billing me. When I complained, they did some research and found out (correctly) that I did not have an account with them, and they did the next logical thing: disconnect me! Indeed, they were able to disconnect it--even though I never asked to be disconnected. Once I was disconnected, I was told that they would not restore my service through the other provider, but only through Verizon. I refused. But I still got billed, and in trying to correct this I encountered the same Catch-22 as Rushkoff. I came away from this with a view that local phone service is the second industry for which I am willing to abandon my laissez-faire principles. (The first is major league baseball, which I would like to see socialized, with cities owning teams.) The way I see it, since the Baby Bells already are Kafka-esque bureaucracies, then they might as well be run by the government. If the government chooses to confiscate them, that's fine. If the government wants to force vertical divestiture (so that the wholesale provision of phone lines is separate from the retail provision of services), that's fine, too. The point is, when you have someone like me saying that the government could not run your business any worse than you run it, you've really hit bottom. (I found Rushkoff's article while ego-surfing at the idiotprogrammer weblog.) . . . . . .
Posted Thursday, May 2, 2002 The Deep Linking ControversyIs it unethical to link to a page on someone else's site that is not their home page? Some people think so, and recently the Dallas Morning News made a legal issue out of it, as picked up by this story in Wired online. (The preceding link is an example of a deep link.) Speaking from my experience running the Homefair site, I cannot believe that you would send lawyers out to do this. On Homefair, the "star attraction" was something called the Salary Calculator. Most of the thousands of incoming links to our site went to the Salcalc as opposed to our home page. That was fine with me. However, it meant that from a design perspective, I had to make sure that when people came to the Salcalc page we conveyed our brand and the overall context of our site, so that visitors could choose to explore other areas. But we saw all of the links into our site as a strategic advantage. If the Dallas Morning News does not want people coming to their site except through the front door, there are technical ways that they can do that. They can take care of the problem themselves, without imposing restrictions on other webmasters. But frankly, if that's their philosophy, I think they should shut down their web site. The whole point of the web is that there are multiple doors and multiple paths to pages. If you don't grasp that, then your web site is sure to fail, and you might as well shut it down now and put your shareholders out of their misery. . . . . . .
Copyright 2002-2003 Arnold Kling. All rights reserved. Terms of use |
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