I just got a direct message from someone im following on Twitter that said:

hey! check out this funny blog about you…
http://jannawalitax.blogspot.com/

If you click the link it takes you to a Twitter login page. If you “login” on the page, it will capture your username and password, and then login to your account to send the same direct to everyone that follows you. Do not click on the link or login!

If you already logged in, the worm may have changed your password. Immediately go to  Twitter’s lost password page and request that your password is changed.

Anyway, i guess you can’t really call yourself a serious internet platform until you’ve been hit with a major/viral security exploit. Congrats Twitter you’ve made it to the big leagues!

TechCrunch is running a story claiming that Google’s FriendConnect is being referred to as FriendSense internally. In other words, FriendConnect isn’t just a way to feed better ads to Google users, it’s another way to target ads to people on third party sites. No doubt, this is exactly what Facebook is thinking with Facebook Connect as well.

What’s really interesting about these moves is that they add an entirely new technology to help everyone monetize online content. Today, Adsense chooses ads largely based on the text content of a page. This works in some situations, but fails in many others. Adding demographic / social network targeting creates another set of correlation points to weight against.

Of course there are other data sets that can increase the effectiveness of ad serving as well. As Google, Facebook and others create new legs for ad networks over the next couple of years, targeting will continue to improve. As this happens, the value of online content and online applications will increase as well. In the same way that Google and Adsense reinvigorated the entire Internet sector after the dot.com crash, these new ad technologies may help reinvigorate the sector after the 2008 crash. Think of it as a stimulus package for the web.

Feedback? Write a comment, or e-mail the author at lee(AT)squawkingbaseball.com

On 60 Minutes tonight, Arnold Schwarzenneger said that he believes the future is in making the big cars that people want, but also making those cars environmentally friendly.

While I’d like to toot my own horn for having promoted the same idea for quite some time, Arnold apparently took things into his own hands. To prove his point, he personally had several Hummers retrofitted to run on green technology. And according to 60 Minutes, this isn’t the first time he’s done this. A decade ago, Arnold suggested that the auto industry should make a street legal version of the then army-only Hummer. When they told him it wasn’t technologically feasible, he personally had one developed (and thus the consumer Hummer was born).

So making the Hummer street legal was a technological challenge for the US auto industry, but Arnold Schwarzenneger was able to do it out of his Hollywood mansion. Good thing we gave the auto industry $17 billion to reinvent themselves.

BusinessWeek has an article in its latest issue about patients banding together on the internet to take treatment into their own hands. While there are certainly issues with self-empowered care, I can’t help but think this is absolutely the future of medicine.

Among the examples BW cited was a case where 250 ALS sufferers recreated a small clinical trial using lithium to treat ALS symptoms. The patients communicated with each other on a social network, PatientsLikeMe, followed the recommended dosages individually, and then shared their vital signs and symptoms in an online spreadsheet. While BW acknowledges that this would never meet “rigorous scientific standards,” the self-initiated study was five time larger than the only other one that had been done on the subject, and it showed statistically significant evidence that Lithium is not an effective treatment.

I’ve written before about advances in medical technology solving the health care cost issue in the long run, but this type of distributed knowledge and treatment is something that has enormous potential right now.

The technology world of course is already used to this type of approach. Veritocracy is built on a foundation of open source software. While we have hired expert consultants when absolutely essential, the majority of the time when we have problems, we find answers from other developers using the same technologies in online forums and mailing lists.

One of the biggest barriers to this type of distributed knowledge sharing in the medical world is the rigid control placed on medical professionals, as well as drug and medical technology companies. It’s legally risky for a medical expert to dispense advice to strangers online, and it’s completely illegal for patients to access most medical treatments without a doctor’s supervision and prescription.

While there’s an argument to be made that people need protection from themselves, in many cases these well-intentioned, rigid rules increase the cost of medicine by several orders of magnitude. The cost of an FDA-approved medical study can be millions of dollars. The cost of seeing and consulting a doctor can be hundreds of dollars. While both may serve specific purposes, limiting all medical progress to these methods is certainly retarding progress and increasing overall costs.

Of equal importance, the emphasis on “certified” care, sometimes even inhibits optimal treatment. Case in point, a close family member of mine has suffered from a chronic illness for many years. Despite consulting several top doctors that specialize in treating the illness, no one was able to treat his debilitating symptom. Last year, I sat down and decided to do my own research and see what I could find. Sure enough, after several hours of browsing forums, I found many others suffering from similar issues. More importantly, they had found a non-conventional solution. Within a month of trying the recommendation of these fellow patients, this family member saw an enormous improvement.

These results are not abnormal. More and more patients are taking treatment into their own hands, often finding far better solutions than their doctors had ever offered. In some cases, it has saved their lives.

The point is that like all knowledge, medical information and treatments are evolving at such a rapid and exponential pace that most doctors simply cannot keep tabs of  it all. The Internet has exponentially increased the availability, access, and speed of knowledge and information. It’s time we start using its power to do the same for medicine.

Feedback? Write a comment, or e-mail the author at lee(AT)squawkingbaseball.com

Chris Anderson wrote a post on The Long Tail Blog a little while back about The Miraculous Power of Scale, in which he explained why the ‘freemium’ business model is increasingly effective online. The point he makes is that technology enables businesses to give away products and services to 95+% of customers, because they can generate more than enough income on the remaining 5%. Reading the post, I couldn’t help but think a very similar thing is happening in the entertainment world.

Jeff Zucker of NBC was famously quoted some time back saying that entertainment companies are “trading analog dollars for digital cents.” His point is that the entertainment industry used to sell a TV show DVD for 32 dollars, now they stream the show on Hulu for 50 cents in advertising revenue.

Jeff makes a very salient point, one that a number of people seem to be concerned about. How can the existing entertainment industry sustain itself on mere cents when they are used to making dollars? The short answer is they can’t. There are significant inefficiencies in the industry from the past that will need to go away.

However, for the entertainment industry as a whole, the “miraculous power of scale” offers enormous potential. Far from heading to its demise, we are quickly moving toward an entertainment renaissance. In a world where most entertainment is consumed for free, billions of people will have access to vast catalogs of media. And amazing new music and film projects will arise, as brilliant new artists find inspiration and audiences in this unfettered marketplace.

Of course all of this is only possible if the economics support it, and this is where Chris Anderson’s analysis plays an integral role. In the new entertainment industry, producers will increasingly derive small incremental revenue (advertising, modest subscription fee, tiny rental fee) from vastly larger numbers of people. Hulu is a brilliant example of this, where less than 6 months after launch, it was serving over 100 millions streams to more than 3 million people.

More interestingly, the same dynamics actually apply to compensating artists as well. For the creators of entertainment and media, a big component of compensation will likely come as a byproduct of their exposure to large volumes of consumers.

We already see this today in the blogosphere where an emerging class of Internet Celebrities (Fred Wilson, Robert Scoble, etc…) create information and entertainment product for free, yet increasingly make money off the value of their names, and ability to market to their audiences.

For emerging artists and writers, this will increasingly mean putting music or books out for less pay, in order to generate significant income from live concerts or speaking engagements. Of course, fame and notoriety, even within specific circles, will also create significant opportunities for endorsement and marketing deals.

The overarching point is that freemium as a business model works not only for the entertainment/media industry, but for the artists and producers within it. While musicians may have to spend 95% of their time on non-revenue generating activities, and a tv show may be streamed 95% of of the time to users that dont click on ads, the miraculous power of scale will make the revenue generating 5%, very profitable.

Yesterday, the New York Times added “related content” as a test feature. The move was generally panned across the blogosphere, and for good reason: it’s not particularly useful. The interface is cluttered, and the related content isn’t really interesting.

Nonetheless, the NYT continues to move in the right direction. Related content is going to play an increasingly important role in the content world, it just needs to be structured correctly.

The amount of content being generated online is growing at an exponential pace. The very nature of having more content, means that readers should get better information and a more complete picture of any subject they read about. At the same time, because there are now many more ways for a reader to find an article on any subject, publishers that have the best related content should generate massive amounts of traffic.

In an ideal world related content would provide a list of the best articles (blog posts, comments, mainstream articles) from anyone in the world writing on the specific subjects being discussed.

The reason that no one offers this today, is that it’s virtually impossible for algorithms alone to understand and group articles in detailed and specific topics. You can find generally related articles from the last few days, but not articles about specific topics. For example, an article about the Supreme Court upholding second amendment rights should link to the best articles about this ruling, as well as the best perspectives about “Gun Control” (which might have been written three hundred years ago).

The other key issue is that “popularity” algorithms cant distinguish quality. What this means is that most times you see “related content,” it’s just a bunch of mediocre related articles, not specific and high quality articles that provide additional or more complete information.

Overall, these reasons are a big part of why related content engines haven’t taken off.

We’ve spent a lot of time working on this at Veritocracy, and have found that a big component of solving these issues involves optimally combining humans with algorithms. We use algorithms to recommended “topics” to each author, and then let the author approve the specific classifications. In return, authors get “other perspectives” for their content, as well as a whole new channel for readers to find their articles. All of this, of course, is layered on top of our personalization system, which learns which topics a given user or publisher will find interesting, and which articles with in that topic the user will consider useful, interesting and high quality.

Regardless of how it ends up being implemented (or whether it’s us or somebody else, for that matter), we are ultimately moving towards a more open, integrated Web. Related content will be a large piece and driver of this new organization. Like any marketplace, by increasing order in the market for content, everyone will end up with a better result. Better, more complete information, and more traffic for the people producing that information, are all around the corner.

Conventional economic wisdom says that physical infrastructure (roads, bridges, hospitals) is essential for a society to flourish and grow. The prevailing sentiment today seems to be that significant spending on physical infrastructure will kill two birds with one stone. The objective is to put money in people’s hands (which will hopefully stimulate the economy), while simultaneously building more infrastructure to support the longer term growth of our economy. On the surface this seems quite smart, but in an increasingly digital and services-based economy, is building physical infrastructure really an efficient way to accomplish either objective?

In the 1930s, ’40s, and ’50s, when the government implemented significant infrastructure programs, most people were physical laborers: assembling parts in a factory, delivering goods, building roads. Today, most people work in offices, use a computer, and provide services.

The question is, what impact does physical infrastructure spending have in this type of world? No doubt we still need roads, bridges, and public services. And by many accounts, our infrastructure is in a state of disrepair. But in a world where resources are very limited (given our enormous and rapidly growing national debt), is this really the optimal way to resolve the problems in our information based economy?

On a practical level, intellectual innovation is what drives our economy forward. Creating new technologies and services that allow us to do more with less, is what creates exponential economic growth. On a relative basis, will building a new bridge or a new road, really be the most efficient way to help innovative biotechnology startups, marketing services companies, or electric car companies grow and flourish?

While President Elect Obama believes spending on physical infrastructure will create two million new jobs, the reality is that injecting money into any sector will likely create new jobs. But in order for these jobs to last, they must provide real growth to the economy long term. While I’m not convinced the government can ever efficiently determine where dollars are optimally invested, if it plans to invest tax dollars into a specific sector, the objective should at least be to get a maximum total economic return on those dollars. In other words, the objective should be try to increase efficiency, and create more new businesses and jobs in the future.

Physical infrastructure is not likely to be that key growth engine for our information economy moving forward. And in fact, these types of projects are largely done by unionized labor, which in general is neither the most efficient, nor the most innovative multiplier of capital.

And so we arrive back at the question: why physical infrastructure spending? The answer might be that our roads and bridges are in such disprepair that without the spending our economy will suffer even more than it has. The other answer might be that its a politically tasteful way to attempt to address the problems at hand, although it may be one based on an outdated vision of our economy.

Feedback? Write a comment, or e-mail the author at lee(AT)squawkingtech.com

On Friday I caught a short segment on CNBC about a device that apparently kills blood borne viruses using light. The idea is that a patient infected by a serious disease (AIDS, Hepatitis, SARS), would have their blood drawn out and passed through this machine, and the machine would shine specific frequencies of light on the blood to kill the virus. All of this happens, apparently, without effecting anything else in the blood. I’m a bit skeptical, but the video still reminds me why health care costs eventually will start to subside.

While double digit increases in short-term health care costs seem inevitable, the likelihood is that we will hit a fulcrum point in the not-too-distant future, where advances in technology start to significantly reduce costs.

As Ray Kurzweil has so eloquently explained, technology is, by definition, deflationary. The cost of everything from TVs to iPhones, drops in price by 50% every 12-18 months. Ignoring inflation in any specific currency, this means that for every $1, we will get twice as much value (or the same value at half the cost) from a given technology in 12-18 months.

Health care is very technologically driven, and therefore should be bound by similar trends. The problem is that there are very definitive barriers that have obscured technology-driven deflation.

The first is that health care technology allows us to live longer. Technically, this means we are getting more “value” in the form of “longer life”. However, this “longer life”, is currently accompanied by greater total demand for health care. Since medicine is largely socialized for the sickest citizens, people living longer without paying more, simply translates into overall rising health care costs.

The other abstractions in health care are regulation and price controls (this comes in the form of direct regulations, patents, and government ownership of key pieces of the health care industry). This isn’t to say that regulation, redistribution of wealth, patents, or socialization of medicine don’t serve positive social purposes, but they do retard raw growth and innovation.

Despite these “negative” forces, health care technology continues to give us more for less. You used to have to have a surgery to fix an ulcer, now you take a pill. That pill may be expensive, but it’s a lot cheaper and more beneficial to the patient than a surgery.

The costs of AIDS medications and treatment today can range up to $30,000 per year. One day we will find a cure, whether it be a machine that uses light to kill the virus, a pill that selectively targets the virus, or a gene therapy that blocks the virus’ ability to replicate. In any case, the treatment and cure will be very expensive, but the relative cost of that treatment will be exponentially lower than the alternative today.

At some point our technology will hit an inflection point, where growth becomes even more exponential, and our technology starts solving significant and costly problems with simple, efficient, and ultimately cheaper solutions. As this happens, medecine will make us all healthier and less burdensome to the health care system. At the same time the declining costs of treatments will further reduce overall costs. Call it “peak health care costs”, there will be a day when technology solves the problem of healthcare costs.

The last couple days have seen big news in the iPhone app world. On Monday, Google officially announced its Speech To Search iPhone app. Yesterday Ocarina reached number one on the list of top paid iphone apps. While neither program is truly a killer app, both represent a glimpse of big things to come.

Google’s foray into internet searches powered by speech recognition is interesting because it pairs voice recognition with Internet data. The idea of retrieving important information by command has enormous potential.

The problem, beyond the technology not being accurate enough yet, is that voice recognition is not suited to the phones (or smartphones) we have today. There is not much value in offering spoken commands into a phone that you have to hold while speaking into it or seeing the results on it. In other words, for voice recognition like this to go mainstream, the system has to be able to either speak back to you, or display data to you in a hands free manner.

We’re several years away from seeing products capable of doing this in a useful manner, but you can get a glimpse of what this may eventually be like in a cutting edge new technology called Jarvis.

Ocarina, the second iPhone application from Silicon Valley based Smule, is far less practical or productive, but it’s also more impressive. Ocarina is perhaps the first significant new musical instrument for the iphone. While people have tinkered and played with creating new electronic instruments for years, the iPhone makes the cost of creating and distributing these instruments virtually zero. It is, in effect, the digitization of music instruments, and Ocarina will surely not be the last.

Looking forward, Ocarina (or an app just like it) will probably offer downloadable “karaoke” songs at some point, a la Guitar Hero. Having these cues as you listen and play along with songs would be an amazing tool for to help people learn to play it. This functionality will also undoubtedly accelerate adoption.

Feedback? Write a comment, or e-mail the author at lee(AT)squawkingtech.com

After being mocked by the tech world before even launching, Hulu is now the toast of the Internet. In less than a year, the company convinced old-world media companies to play by Web 2.0 rules. In doing so, Hulu has created a fantastic entertainment experience for everyone. The company is now also saying that its revenue is coming in far ahead of expectations. But while CEO Jason Kilar deserves a lot of credit for what he’s done, the company as a business has a lot of challenges ahead.

Hulu’s long-term success depends on its competitive advantages. These currently fall in three key categories: its brand, its media partnerships, and its innovation. All three face stiff resistance ahead.

To start, while the name Hulu may be as prominent as the name Coke in the Internet world, it’s still very weak amongst the general population. This will change if Hulu continues its exponential growth, but Hulu has a long way to go before its a bankable household name.

More importantly, in order to continue to realize this growth, Hulu is dependant on its main asset, its distribution partnerships with major content producers. By some sheer force of god (and ownership stakes by NBC and Fox), Hulu has made deals with a number of major movie and TV studios. Since no other site has a library like that at their disposal, this represents an incredible competitive advantage

Unfortunately for Hulu, licensing this content also represents its biggest weakness. No matter how successful Hulu becomes, studios will likely always hold the power, and therefore the profits. If Hulu begins to make significant money, studios will almost certainly squeeze them for every bit of profit possible. If Hulu refuses, the studios will simply take their content elsewhere.

Unlike Apple, which wields significant power over the music studios because consumers have invested in their iPhone/iPod monopoly, Hulu’s web site may never be able to hold a similar lock on consumer attention. The cost of switching from iPod/iPhone/iTunes to another platform is significant. The cost of switching from Hulu to another web site is not. The truth is, as intelligent and well designed as is Hulu is, I don’t really care if i watch the latest episode on Hulu or NBC.com if they both offer a similar end user experience.

In fact if the studios get really smart, they will eventually license their content to everyone that wants to distribute it online. This will further squeeze Hulu on the profit end, while putting the company smack in the center of a very competitive marketplace.

So where does this leave the company as a long term business? As is usually the case, they will likely win or lose on their innovation. To win long term, Hulu will have to create unique value that no one else can match. This could come in the form of compelling and unique personalization technology, or perhaps highly effective ad serving technology.

No matter what Hulu does though, it has already created a great service, and raised the existing standards for online video. The question is, how much money can it make, and will it be able to create a fantastic business for the long term?

Feedback? Write a comment, or e-mail the author at lee(AT)squawkingtech.com