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Afghanistan’s TV Phone Users Offer a Lesson

By Jeremy Wagstaff

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There’s something I notice amid all the dust, drudgery and danger of Kabul life: the cellphone TVs.

No guard booth—and there are lots of them—is complete without a little cellphone sitting on its side, pumping out some surprisingly clear picture of a TV show.

This evening at one hostelry the guard, AK-47 absent-mindedly askew on the bench, had plugged his into a TV. I don’t know why. Maybe the phone gave better reception.

All I know is that guys who a couple of years ago had no means of communication now have a computer in their hand. Not only that, it’s a television, itself a desirable device. (There are 740 TVs per 1,000 people in the U.S. In Afghanistan there are 3.)

But it doesn’t stop there. I’ve long harped on about how cellphones are the developing world population’s first computer and first Internet device. Indeed, the poorer the country, the more revolutionary the cellphone is. But in places like Afghanistan you see how crucial the cellphone is as well.

Electricity is unreliable. There’s no Internet except in a few cafes, hotels and offices willing to pay thousands of dollars a month. But you can get a sort of 3G service over your phone. The phone is an invisible umbilical cord in a world where nothing seems to be tied down.

Folk like Jan Chipchase, a former researcher at Nokia, are researching how mobile banking is beginning to take hold in Afghanistan. I topped up my cellphone in Kabul via PayPal and a service based in Massachusetts. This in a place where you don’t bat an eyelid to see a donkey in a side street next to a shiny SUV, and a guy in a smart suit brushing shoulders with a crumpled old man riding a bike selling a rainbow of balloons.

Of course this set me thinking. For one thing, this place is totally unwired. There are no drains, no power infrastructure, no fiber optic cables. The cellphone is perfectly suited to this environment that flirts with chaos.

But there’s something else. The cellphone is a computer, and it’s on the cusp of being so much more than what it is. Our phones contain all the necessary tools to turn them into ways to measure our health—the iStethoscope, for example, which enables doctors to check their patients’ heartbeats, or the iStroke, an iPhone application developed in Singapore to give brain surgeons a portable atlas of the inside of someone’s skull.

But it’s obvious it doesn’t have to stop there. iPhone users are wont to say “There’s an app for that” and this will soon be the refrain, not of nerdy narcissists, but of real people with real problems.

When we can use our cellphone to monitor air pollution levels, test water before we drink it, point it at food to see whether it’s gone bad or contains meat, or use them as metal detectors or passports or as wallets or air purifiers, then I’ll feel like we’re beginning to exploit their potential.

In short, the cellphone will become, has become, a sort of Swiss Army penknife for our lives. In Afghanistan that means a degree of connectivity no other medium can provide. Not just to family and friends, but to the possibility of a better life via the web, or at least to the escapism of television.

For the rest of us in the pampered West, we use it as a productivity device and a distraction, but we should be viewing it as a doorway onto a vastly different future.

When crime committed is not just saved on film—from Rodney King to the catwoman of Coventry—but beamed live thro to services that scan activity for signs of danger, the individual may be protected in a way they are presently not.

We may need less medical training if, during the golden hour after an accident, we can use a portable device to measure and transmit vital signs and receive instruction. Point the camera at the wound and an overlay points out the problem and what needs to be done. Point and click triage, anyone?

Small steps. But I can’t help wondering why I’m more inspired by the imaginative and enterprising use of cellphones in places like Afghanistan, and why I’m less than impressed by the vapid self-absorption of the average smart phone user in our First World.

Now I’m heading back to the guard hut to watch the late soap.

Media’s Future: Retail

(This is a copy of my weekly newspaper column, distributed by Loose Wire Service)

By Jeremy Wagstaff

As you no doubt know, Rupert Murdoch has decided to put up a front door on the The Times’ website, demanding a modest toll for reading the online content.

Needless to say this has prompted laughter among those who think that content should be free. This is silly: Someone needs to pay for this stuff at some point. And no one else has any better ideas right now, so good luck to them, I say.

Though I would counsel them to be smarter about the way they make folk pay. Demanding a credit card in the age of PayPal, as well as lots of other personal data is old wave. If you want to make light of the pay wall, make scaling it easy and simple.

(Disclosure: I worked, and occasionally work, for another Murdoch company, The Wall Street Journal.)

But what disappoints me elsewhere is the limited range of options being discussed. For most the question is: how do I charge for what we do? This is not the right question—or at least not the only question.

Think about it. We’re in the midst of some of the most exciting viral experiments in the history of the world. Twitter, Facebook, Ning, flickr are all evidence of the extraordinary effects  of high viral coefficients—in other words, the ability to expand users exponentially.

Now we know all about this, especially those loyal readers of this humble column.

But news organizations seem to ignore it.

They have readers. Lots of them. But the only thing that they can think of using that network for is to give them ads, or make ‘em pay.

A better question, then, is to ask: How can we make use of this network?

Well, one way to would be to sell them stuff.

Some news websites do this. The UK’s Guardian website offers books, CDs, gardening tools and holidays to its readers. Not that you’d necessarily know this to look at the website. The “readers offers” link is buried way down on the right hand side of the home page.

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In fact, I was surprised to find that the Guardian has a dozen self-contained mini websites, called verticals, that try to sell their readers stuff. From mortgages to hand trowels.

But I’m guessing this isn’t making a huge dent in the losses the company has been suffering. I couldn’t find anything in their annual report mentioning any of these websites or their contribution to the bottom line. (My apologies if I missed it.)

To me this is an opportunity lost.

Not least because the Guardian, as many English-language newspapers, are developing huge markets overseas. Of the main British newspapers, for example, more than half their traffic comes from overseas, according to Alexa data. For the Guardian, Telegraph, Times and Independent, a whopping two thirds of their readers are outside the UK.

The Guardian website has a quarter its readers from the U.S. For the Times it’s more than 30%. Even the Daily Mail, not known for its global view, has more than a third of its readers in the U.S.

These foreign-based readers are huge opportunities missed. Not for advertising, but for selling them stuff. After all, if people go there to read stuff, wouldn’t they also be interested in buying stuff?

There are signs that this is the case. The Guardian Bookshop, for example, delivers all over the world, and has more traffic from outside the UK (55%) than from within it, with the United States accounting for 17% of visitors.

But the actual volume of traffic is still tiny for these verticals, suggesting that they’re not really part of the Guardian vision of its future. Still, at least it’s trying. I couldn’t much except wine for sale on the Times’ homepage, and nothing on the Daily Mail’s.

To me it’s obvious that if you’ve got an audience you try to sell them stuff. Especially if you’re not charging them for what they are there to see. And ads aren’t filling the coffers. So somehow you’ve got to sell them something else. And if your audience is overseas then that’s a clue about what they might not be able to get where they’re accessing your site from.

Books is an obvious one. Food is another. More than 10% of Brits live overseas, so it’s fair to assume that a fair few of them miss their PG Tips and bangers. Indeed, there are dozens of websites catering to just that.

But of course it’s expensive. At one website I visited $20 worth of chutney will cost you $60 to ship to Singapore, for example. And many won’t ship to far-flung places that aren’t the U.S.

Which is where we come back to the network thing. Newspapers still don’t really understand that they have a readymade community in front of them—defined by what they want to read. So while I may not be willing to pay twice again to ship the chutney, I might be willing to split the shipping cost with others living nearby.

But whereas I may not be willing to take that risk with people I’ve met on eBay or a porn site, I might be more inclined to do so if they’re the kind of people who read the same paper as I. So it’s both common sense and good business sense for The Guardian, say, to leverage its existing network of readers and to use the data it has to make it easy for that community to make those kinds of connections.

The readers get their chutney at a reasonable cost, the paper gets a cut of the sale.

In short, a newspaper needs to think of itself as a shop. You may go in for one thing, but you may come out having bought something else. Indeed, online shops have already figured this out.

Take Net-a-porter for example. It’s a fashion clothing e-tailer, run by a woman who was a journalist and who wanted to be a magazine editor. Instead Natalie Massenet set up an online shop, but which is also a magazine.

A recent article (in The Guardian, ironically) quotes her as saying: “I hadn’t walked away from being editor-in-chief of a magazine – I’d just created a magazine for the 21st century instead, a hybrid between a store and a magazine that was delivered digitally.”

In other words, Net-a-porter goes at it the other way round: It’s a retailer that also informs. Newspapers could be informers who also retail. Of course fashion is relatively easy, and the road is littered with possible conflicts of interest. But probably fewer than the sponsored editorials we’re starting to see even among serious broadsheets.

There’s nothing wrong with trying to sell your readers something, if you feel that something reflects your brand and your commitment to quality. Indeed, your readers may thank you for it. The power of the network, after all, isn’t just about size: It’s about trust.

Driver Phishing

Maybe because it’s early in the morning, but I fell for this little scam pretty easily. I’m going to call it “driver phishing” because it has all the hallmarks of a phishing attack, although it’s probably legal.

I’m looking for the latest drivers for my Logitech webcam, so I type in Logitech QuickCam driver in Google.

An ad above the results looks promising: a website called LogitechDriversCenter.com:

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So I click on it.

It takes me to a site with a Logitech logo, lots of shareware and PC Magazine stars, Logitech product photos and three options for getting the right driver:

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DriverRobot, the first one, sounds promising. Maybe, I think, Logitech have consolidated all their driver downloads into one program. Good idea, given I’ve got quite a few of their products hanging around the computer. So I download and install it.

Looks OK so far. A window appears prompting you to start scanning your computer. Lots of green arrows and ticks to reassure you:

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Once the scan is done you’re told how many drivers you need, with another green arrowed button indicating what you should do to get them (“Get drivers”):

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(I should have been forewarned at this point. Plenty of warnings, but one key one: None of the drivers it suggested were Logitech ones. Certainly nothing to help me with my webcam.)

Click on that and you’re told you’ve got to “Register” which is “quick and easy”.

Notice there’s no other option, unless you can see the little Close Window X in the top right corner of the window:

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Try to click on the other radio button (“Allow 11 drivers to remain out of date (not recommended). Critical updates for your computer will not be installed. Your computer may be vulnerable to crashes, performance problems, freezes and “blue screens.””) and then click Continue and the window disappears, but nothing else. It’s like those supermarkets where you can’t get out unless you buy something.

Click on the Continue button and your browser fires up with page requesting your Name and Email to register:

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Notice all the seals, locks, starts and 100% guaranteed things going on. Reassuring, eh? Except there’s no link on the page, nothing for the casual user (or a slow-witted guy who got up too early) to click on to get more information.

So the slow-witted guy enters his name and email address, thinking that’s going to get him registered. Of course not. Instead he’s asked to shell out cash–$30—for the software:

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Once again, no links to explain who is behind this, or what other options there may be.

As far as the casual user knows, this is either a Logitech product or one approved by them.

But it’s not. The software comes from a company called Blitware. The Complaints Board website has several complaints about the company and software:

The Driver Robot software does not work and the company tricks consumers in to believing that it is freeware. Am trying to get a refund of my purchase price now.

And worse: For some of those who do buy the software and follow its driver updates, it only makes things worse:

My computer completely crashed after using driver robot when it installed a generic mouse driver every time I touched my mouse I had a blue screen crash with a driver check sum error … It has also installed an elan touch tablet driver which is now in the toolbar. I dont have this device on my machine. This software is completely useless and will be going for a refund.

Others found they had no way of getting support:

Useless garbage–no contact info given. I attempted use and could see it doing nothing. What now, am I really out $39.90?

So who is Blitware? Its website says

Blitware (or Blitware Technology Inc., to be precise) is a small Canadian software vendor from Victoria, BC, Canada. Blitware’s mission is to take great software products to market and bend over backwards for our partners who help promote them.

(Notice how the company doesn’t say it’s a developer, and stresses the marketing, rather than the consumer, in its literature. That should probably tell you all you need to know, if you hadn’t gotten up too early.)

There is an encouraging link on the home page inviting you to click for Support (“Need support for a Blitware product? Our expert technical support staff is standing by to help you”) —

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— but far from take you to that helpful support staff, the link takes you to a Frequently Asked Questions page, and only at the bottom to a link for contacting technical support.

That in turn takes you to a link demanding you register at Blitware first, and then, when that is done, to a page for you to file your question.

Do that and you’re told:

We will reply to this message soon! You will receive an email when we do.

OK, so, what’s wrong with all this, and why call it phishing?

Well, phishing is the art of using social engineering tricks to lull a victim into thinking s/he is interacting with a legitimate site/product and to get him/her into coughing up passwords or cash.

Usually with banks, or emails, or accounts etc.

To me this Driver Robot is no different.

From the Google search—where a website with the word Logitech in it—everything is designed to make you think you’re dealing, if not with Logitech, then at least with a company/product that Logitech has endorsed.

The website’s title—the bit that appears in the browser’s top-most bar indicates it’s a Logitech site:

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Even the website’s favicon—the little log before the web address—is Logitech’s:

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To me this is no different to a scammer putting “Citibank” or “Paypal” somewhere in a web address to fool the user into thinking they’re dealing with someone kosher.

Anything the tricks the user, either into thinking they’re dealing with the real thing, or thinking they have no other option, is, in my view, a scam.

That the software doesn’t seem to work—it found no Logitech drivers or updates, and seems to crash computers—only makes matters worse.

I’m going to find out what Logitech make of their logos and name being used for dodgy purposes.

(more on Driver Phishing here.)

Reforestation, Google Earth Style

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Here’s a very cool way to mix technology and environmental stuff, via the Google Earth Blog. (Interest declared: It’s part of the NEWtrees project, the brainchild of my publisher and friend Mark Hanusz):

The World Wildlife Fund (WWF) offers you the opportunity to buy a tree which will be planted in a rainforest in Sebangau National Forest in Central Kalimantan, Indonesia. In return, they not only plant the tree, but give you a Google Earth KML file in return with the location coordinates of your tree. Theoretically, as Google continues to update with higher resolution satellite and aerial imagery, you should be able to watch the growth of your tree (and the others who donate trees) over the coming years. To get started, you simply go to the web site mybabytree.org. They have a very cute animation that will guide you through the process, and you can use Paypal to make your donation. You can see the location and list of trees purchased so far here . Borneo is another location, like the Amazon, where rain forests are disappearing due to logging at a freightening pace. I hope WWF will extend the concept to the rapidly declining rain forests in the Amazon.

Why’s this so good? Because it leverages straightforward technology — GPS, Google Earth — to make the global significant on an individual scale. I remember when I was a kid my dad planted a tree for me in Northampton as part of a local Men of the Trees project (now the International Tree Foundation). Sadly the project was bulldozed to make way for a bypass, but hopefully that’s not likely to happen in Kalimantan. Certainly I could relate a lot more to one tree than a forest.

 

Google Earth Blog: Buy a Tree for the Rainforest – Get a KML

Skype, PayPal and eBay

There’s quite a bit that’s interesting in all this Skype/eBay business. I know others have raked over all this before, but now it’s official I’ll weigh in too.

The release is quite informative. It says “Skype, eBay and PayPal will create an unparalleled ecommerce and communications engine for buyers and sellers around the world.” How, exactly?

Well, “Skype will streamline and improve communications between buyers and sellers as it is integrated into the eBay marketplace. Buyers will gain an easy way to talk to sellers quickly and get the information they need to buy, and sellers can more easily build relationships with customers and close sales. As a result, Skype can increase the velocity of trade on eBay, especially in categories that require more involved communications such as used cars, business and industrial equipment, and high-end collectibles.”

That’s straightforward enough. Buyers and sellers can hook up via a SkypeMe button which lets them instant message, or talk to one another, presumably for free. Or does it?

“The acquisition also enables eBay and Skype to pursue entirely new lines of business. For example, in addition to eBay’s current transaction-based fees, ecommerce communications could be monetized on a pay-per-call basis through Skype. Pay-per-call communications opens up new categories of ecommerce, especially for those sectors that depend on a lead-generation model such as personal and business services, travel, new cars, and real estate.” This, I take it, means that beyond merely providing a market-place of sellers and buyers of goods, eBay hopes to become a market-place of services, whether they’re pure consulting, travel agencies, or selling things that require a degree of expertise (cars and real estate are mentioned, but they could as easily be careers.

Then there’s paying for Skype’s services. “PayPal and Skype also make a powerful combination. For example, a PayPal wallet associated with each Skype account could make it much easier for users to pay for Skype fee-based services, adding to the number of PayPal accounts and increasing payment volume.” True: Skype’s payment system is awkward, if not disastrous for many folk living off the beaten track. But PayPal’s isn’t much better. Both services need to get with the program on that, or face the growing wrath of people in the world’s more interesting regions.

I won’t get into the extraordinary cost of buying a company that made only $7 million last year. There’s no question there’s wonderful synergy to be had here. But there’s also the caveat that eBay should not underestimate the other lesson that the Skype revolution has taught us. People were willing to overcome all sorts of technophobia when they realised the enormous cost and social benefits of installing Skype. Now they’ve done so, they will more easily than ever before switch elsewhere if the appeal of Skype diminishes, either because of sneaky advertising, sneaky fees or if the remaining drawbacks of Skype — most particularly, but not exclusively, its payments system — are not tackled quickly.

Ebay to buy Skype: It’s Official

eBay Inc. has agreed to acquire Luxembourg-based Skype Technologies SA, the global Internet communications company, for approximately $2.6 billion in up-front cash and eBay stock, plus potential performance-based consideration.

Here’s the rest of the release:

The acquisition will strengthen eBay’s global marketplace and payments platform, while opening several new lines of business and creating significant new monetization opportunities for the company. The deal also represents a major opportunity for Skype to advance its leadership in Internet voice communications and offer people worldwide new ways to communicate in a global online era. Skype, eBay and PayPal will create an unparalleled ecommerce and communications engine for buyers and sellers around the world.

“Communications is at the heart of ecommerce and community,” said Meg Whitman, President and Chief Executive Officer of eBay. “By combining the two leading ecommerce franchises, eBay and PayPal, with the leader in Internet voice communications, we will create an extraordinarily powerful environment for business on the Net.”

“Our vision for Skype has always been to build the world’s largest communications business and revolutionize the ease with which people can communicate through the Internet,” said Niklas Zennström, Skype CEO and co-founder. “We can’t think of any better platform to fulfill this vision to become the voice of the Internet than with eBay and PayPal.”

“We’re great admirers of how eBay and PayPal have simplified global ecommerce and payments,” said Janus Friis, Skype co-founder and senior vice president, strategy. “Together we feel we can really change the way that people communicate, shop and do business online.”

Zennström and Friis will remain in their current positions. Zennström will report to eBay CEO Whitman and join eBay’s senior executive team.

Online shopping depends on a number of factors to function well. Communications, like payments and shipping, is a critical part of this process. Skype will streamline and improve communications between buyers and sellers as it is integrated into the eBay marketplace. Buyers will gain an easy way to talk to sellers quickly and get the information they need to buy, and sellers can more easily build relationships with customers and close sales. As a result, Skype can increase the velocity of trade on eBay, especially in categories that require more involved communications such as used cars, business and industrial equipment, and high-end collectibles.

The acquisition also enables eBay and Skype to pursue entirely new lines of business. For example, in addition to eBay’s current transaction-based fees, ecommerce communications could be monetized on a pay-per-call basis through Skype. Pay-per-call communications opens up new categories of ecommerce, especially for those sectors that depend on a lead-generation model such as personal and business services, travel, new cars, and real estate. eBay’s other shopping websites – Shopping.com, Rent.com, Marktplaats.nl and Kijiji – can also benefit from the integration of Skype.

PayPal and Skype also make a powerful combination. For example, a PayPal wallet associated with each Skype account could make it much easier for users to pay for Skype fee-based services, adding to the number of PayPal accounts and increasing payment volume.

In addition, Skype can help expand the eBay and PayPal global footprint by providing buyers and sellers in emerging ecommerce markets, such as China, India, and Russia, with a more personal way to communicate online. And consumers in markets where eBay currently has a limited presence, such as Japan and Scandinavia, can learn about eBay and PayPal through Skype. Skype can also help streamline cross-border trading and communications.

With its rapidly expanding network of users, the Skype business complements the eBay and PayPal platforms. Each business is self-reinforcing, organically bringing greater returns with each new user or transaction. The three services can also reinforce and accelerate the growth of one another, thereby increasing the value of the combined businesses. Working together, they can create an unparalleled engine for ecommerce and communications around the world.

Transaction and Financial Information

eBay will acquire all of the outstanding shares of privately-held Skype for a total up-front consideration of approximately €2.1 billion, or approximately $2.6 billion, which is comprised of $1.3 billion in cash and the value of 32.4 million shares of eBay stock, which are subject to certain restrictions on resale.

The maximum amount potentially payable under the performance-based earn-out is approximately €1.2 billion, or approximately $1.5 billion, and would be payable in cash or eBay stock, at eBay’s discretion, with an expected payment date in 2008 or 2009. Skype shareholders were offered the choice between several consideration options for their shares. Shareholders representing approximately 40% of the Skype shares chose to receive a single payment in cash and eBay stock at the close of the transaction. Shareholders representing the remaining 60% of the Skype shares chose to receive a reduced up-front payment in cash and eBay stock at the close plus potential future earn-out payments which are based on performance-based goals for active users, gross profit and revenue.

The above-mentioned dollar and eBay share amounts are approximate, based on the Euro-Dollar exchange rate and eBay’s stock price as of September 9, 2005. The final value of the stock component of the consideration may vary significantly from this estimate based on the value of eBay stock at closing.

Skype generated approximately $7 million in revenues in 2004, and the company anticipates that it will generate an estimated $60 million in revenues in 2005 and more than $200 million in 2006. For Q4-05, eBay expects the acquisition to be dilutive to pro forma and GAAP earnings per share by $0.01 and $0.04 respectively. For the full year 2006, eBay expects the transaction to be dilutive to pro forma and GAAP earnings per share by $0.04 and $0.12 respectively, with breakeven on a pro forma basis expected in the fourth quarter of 2006. On a long-term basis, eBay expects Skype operating margins could be in the range of 20% to 25%.

The acquisition is subject to various closing conditions and is expected to close in the fourth quarter of 2005.

Email For A Survey

AlienCamel, the email service that does a pretty good job of keeping out spam and viruses I’ve mentioned in the past, is offering a year’s Clean Email in return for feedback:

We are looking for 50 special users who are willing to give us some feedback about our email service from time to time. In return, we will give you a year’s subscription to AlienCamel’s “Clean Email” service for free.

You must sign up, however, which means having a PayPal account.