A few weeks back Microsoft paid a large sum for a very small slice of Facebook. There has been a lot of commentary but this post makes the most sense and includes some very good underlying reasons for that deal.
My comment at the time was: (It seems like the deal is much more about the advertising rights than anything else. This paragraph below is a direct quote from one of the news.com reports.)
“In a conference call on Wednesday afternoon with press and analysts, Van Natta and Kevin Johnson, Microsoft’s president of platform and services, emphasized that this deal is all about the existing advertising partnership between the two companies, which has been going on for over a year now. Facebook founder Mark Zuckerberg, it should be noted, was not present on the call.”
However Marc Lehmann* has absolutely nailed it in his excellent post on the topic -Facetime with Facebook Bought Cheap. You should read his whole post - it is so good I wish that I wrote it.
(Marc is Founder of Saasu.com - and previously a Debt/Equity Trader at Deutsche Bank.)
Marc notes about 10 of benefits this deal achieves for Microsoft.
Buys probably the equivalent of 10’s or possibly close to 100 million dollars worth of PR. Online, paper and TV. Screen real estate for 3 months as people speculate. So their Facebook spend isn’t 260mio already it’s a lot less.
Wash Facebook brand onto Microsoft’s brand.
Makes it easier for Microsoft to buy a blocking stake later. They already have a start now.
These are just the first 4 -read the rest of his list. And even better -this paragraph near the end.
And the best M&A trick of all is… Microsoft pays up for the first chunk, then the seller/victim re-benchmarks price in their mind and any suitors that come along look cheap and nasty.
As a result new suitors say no to Facebooks attempts to get some price tension. The new suitors don’t even try. Then all of a sudden Facebook is left with their initial investor who has only bought a small percentage.
Time passes, more time passes and Facebooks business model of low cash and high cost is starting to show particularly as the US economic slowdown hits. What do you know Microsoft does not want to pay the same price any more.
There is a much bigger story on the Microsoft / FaceBook deal as Marc highlights extremely well.
Blog Note: If you spotted that my post frequency has been down lately - here is what happened. WordPress completed not 1 but 2 version upgrades (now at 2.3.1) recently and I thought my upgrade processes were at fault. Consequently have rebuilt the entire blog not once but 3 times!
After hours of testing on mirror sites and the live version finally concluded that at least one of my plugins was at fault. Today I found out which one that is - have now fixed the problem and there will be some catch-up posts including one on WP plugins and how you can maybe save some time if you have WordPress and run into similar issues.
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A quick note to say that this blog had a bit of a meltdown during an upgrade and had to be rebuilt. It may take a while to restore all the various options that were included before. Thanks for your support.
One of the joys of open source is that there are often multiple version upgrades within a short period of time. It doesn’t always pay to have the latest version and it is always a great idea to test first.
We also took the opportunity to strengthen security measures as any high traffic site attracts interest. Everything is back working better than before now.
I was at an recent event where (in passing) a presenter recounted her experiences at various TV conferences along these lines. She told us that many of the industry attendees were still asking variations of “Help the Internet is coming…what do we do?”
The question isn’t new and neither are the answers, but in 2007 the shape of both might look a bit different. Here are some ideas and observations on how content providers and publishers might answer that question and address current and future opportunities.
This has been happening for more than a decade now at various music, film, TV, media and publishing conferences.
The various incumbents are still struggling to transition their business models into a time where distribution is much less of a controlling factor due to the ubiquity of the internet. Even now it seems some media (music, TV and film) businesses are still scared of the future. Even book publishing is also facing big challenges despite the long tail theory.
This fear of the change and the new reminded me of various conferences I attended back in the early 90’s when multi-media CD, CD-i, and DVD formats were just starting to break ahead of the internet wave.
Some Conclusions on the Way Forward
The conclusions back in ‘92 and ‘93 were that anyone involved in publishing should have some kind of “digital soup” of original content that they could roll out as the public caught up with all the new format choices. Broadcasters now appear to be revisiting the idea of multi format content and platforms but to me 14 years seems a very long time for the penny to drop.
Back in the 30’s sheet music publishers controlled the music business. They were mostly displaced by recorded music and recording industry companies. Those companies kept getting confused on the strategic intent of their industry and we all know what happened to them, just like now.
In a world where everyone can be a content producer and a consumer at the same time - publishers need to learn from history, rethink their business models and adapt. Follow the money, Andrew Dubber is brilliant at deciphering the business side of this. See also the future of music.
The music industry refused to recognise a legal digital music format for some years until iTunes partially rescued them. Now a generation has got used to not paying because they couldn’t - even if they wanted to.
Multimedia History
However, back in ‘93 no one really had an idea of how big and how much the internet would change things as modems at the time were running at 1200/2400bd and only used by geeks on bulletin boards for help desk style services. Even then, some people could see the ability to deliver 600Mb + of content on a CD of some kind would be mean industry transformation would be needed.
Perhaps the difference with those multimedia conferences, was that for the most part we were outsiders to the publishing world. I had the pleasure of presenting at a conference in Melbourne where I talked about exploding value chains and other “MBA speak” with growing excitement..little did we know the full implications.
During a coffee break I also showed a music video clip of the Emma Paki song - “System Virtue” by arrangement with her record company as an example of future media content. If you’ve seen the video it has various staunch East coast references which to a middle class white audience was quite a shock.
My thesis was, that given access to a new distribution format which could hold video we would see the music industry trying out new things including new artists. I was only going on instinct and guess work but I believed better access to a suitable medium / or media might allow us to hear different voices, and different politics - such as Emma Paki.
Key question: Do you think that we’ve run out of songs that sound new?
She added these song references to her question from one of Pat’s former students.
“There’s gotta be a song left to sing
Cause everybody can’t of thought of everything
One little song that ain’t been sung
One little rag that ain’t been wrung out completely yet
Gotta a little left
One little drop of fallin rain
One little chance to try again
One little bird that makes it every now and then
One little piece of endless sky
One little taste of cherry pie
One little week in paradise and I start thinkin’ “
Here are some of Pats answers (from about 15minutes into the audio) as transcribed by me.
“Even if every song has been written’ - every song hasn’t been written by me. And in the journey of writing a song, one discovers things on a deeper level.
No matter whether that idea has been written a thousand times before.
And so songwriting is certainly a process of self discovery and in terms of it being something has never been done before,
I really loved Bob Dylan in the ‘No Direction Home” Scorsese DVD; who says - There I was in the ’60’s, ….I was doing something that nobody had ever done before. He paused and said -”I think I was wrong about that.”
New question by Kim on - The use of the senses in songwriting?
Pattinson’s answer:
You need to stimulate your listener to get / make the listener involved in your song.
There is a difference between saying “Somethings changed between us” which is sort kind of telling and abstract and..
When you can stimulate your listeners senses
They put their stuff into your words and the song becomes theirs.
Ain’t that the truth; and best of all his insights are valuable to all content communicators including marketing contact.
Great songwriting is distilled experience with a personal flavour. The connection is that like a great song our insights can help our customers if we are open to that possibility.
Every new generation appears to collectively relearn things some of us have forgotten and that is why reflecting on the history of everything is so important.
The other day my daughter (just turned 6) said that she wanted to be a scientist because she liked mixing things up and watching the colours change. That comment reminded me of the time she turned almost half the kitchen blue playing with blue food colouring. Cool! I can see the attraction.
Most interesting to me, was that she equated science with a practical, and physical use rather than some technical definition that an adult might come up with.
“Carl Sagan once said, ‘We live in a society exquisitely dependent on science and technology, in which hardly anyone knows anything about science and technology.’
If he meant that we are unfamiliar with the principles on which the technology around us works, he was right—there’s an enormous gap between the knowledge of makers and the knowledge of users—but this is exactly as it should be.
As users, we typically want our technology to be a black box; we don’t want to be bothered with adjusting it, monitoring it, repairing it, or knowing about its inner workings. A sure sign of the success of a technology is that we scarcely think of it as technology at all.”
And later on….
“Knowing about technology is not the same thing as understanding the scientific theories involved.
Just as innovators commonly understand the fundamentals of a technology better than subsequent users, so users can acquire knowledge that would never have occurred to the innovators.”
And thank goodness for that. Many innovations have a serendipitous accident somewhere in their product history. The famous 3m Post-it notes apparently came about when the product team were trying to make a different kind of glue - among many other innovations.
The Shapin piece is actually a book review called “The Shock of the Old: Technology and Global History Since 1900” (Oxford; $26), David Edgerton who makes a strong case for technology evolving through use rather than design however I think it doesn’t matter either way.
“He thinks that traditional ways of understanding technology, technological change, and the role of technology in our lives, have been severely distorted by what he calls “the innovation-centric account” of technology”.
Technology in Education?
Some time back in Creativity & Innovation Linked I looked more closely at the work of Sir Ken Robinson on reshaping the education architecture. Hopefully, current and future generations of students will be better prepared for the type of world they are going to be working in. We live in a world where technology of all kinds is driving change, regardless of design intent and Robinsons creativity boosting seems like the right approach.
One of the wonderful things about being a parent is seeing the world through your children’s eyes. There seems to be so many possibilities for them to discover ways of working and engaging with the future - most probably in jobs we haven’t thought of yet.
Consequently the Edgerton book sounds like it is a bit stuck in the past to me; I hasten to add I have only read this essay about it. I do support the idea of learning from history but the impact of technology is far greater than it was a few decades ago; and I’m not so convinced that an opinion on whether use or innovation drives technology is even a useful question.
We only have to go back 10 years when the public internet was just starting for most people to see how ideas on the role of technology in society have changed dramatically.
Here is an book review of ‘Technolopoly: The Surrender of Culture to Technology‘ by Neil Postman as reviewed by Glen Engel-Cox in 1996. I also remember Postman’s most famous book called ‘Amusing Ourselves to Death’ in 1985 which he broadly said that anything on TV had to be entertainment because that was the nature of the medium to reduce everything down to that level. Postman died in 2003 and was a media theorist and a conservative on many levels.
“Postman proposes a goal for American education — no longer, he says, can we simply train people for employment (the current state of education), but we must instill in people a purpose. His proposed goal is the betterment of humanity.
To achieve this goal, he suggests that we get back to the basics in our schools, but by this he means the study of the underlying assumptions of our culture rather than just basic skills. That is, he posits a curriculum that includes the history of every subject as part of that subject, including the history (or ideology) of history itself.
Only by understanding how we came to be in the place we stand now, will we be able to move forward.”.
So far so good - but the general thesis of the book exaggerates the negative impacts of technology on society while missing many of the benefits.
Sometimes people wonder why I blog on so may different areas of interest when much of my work time, is spent on sales and marketing activities usually connected with some new software project or s/w application.
Well, I even wonder about that myself (the topic range) but in essence some of my key skills are in research and analysis and lateral thinking is almost a hobby. On a good day I am happy to work on applied research for clients. Delighted would be a better word for it. However much of the time, clients are more interested in other services.
One of my most enjoyable jobs ever was as Research & Analysis Director of a small merchant banking company I helped to start-up back in the early 90’s. It is one thing to enjoy learning and thinking but quite a different matter to get paid for it. Being paid for research was my dream role and still is.
My daughter sometimes asks me about my work and I do find it hard to explain how lots of thinking, talking and listening with other people is work but it is. Knowledge based work is the new reality for us and the next generations as well.
I’d like to think (sorry bout the pun) that one of the benefits I can bring to work projects is the creative generalist focus wrapped around some very specialised and focused subject matter skills and wide ranging experience. That includes extended musical performance experience and a keen interest in fractals and other patterns to really get the neurons jiving.
Maybe, just maybe, Edgerton and Postman were both missing the refractive highlights of that “most beautiful obsession” - music as described in a new book below.
“I began to wonder why some musicians become household names while others languish in obscurity. I also wondered why music seemed to come so easily to some and not others. Where does creativity come from? Why do some songs move us so and others leave us cold? And what about the role of perception in all of this, the uncanny ability of great musicians and engineers to hear nuances that most of us don’t?
These questions led me back to school for some answers. While still working as a record producer, I drove down to Stanford University twice a week with Sandy Pearlman to sit in on neuropsychology lectures by Karl Pribram. I saw that psychology was the field that held the answers to some of my questions - questions about memory, perception, creativity, and the common instrument underlying all of these: the human brain. But instead of coming away with answers to my questions, I came away with more questions - as is often the case in science. Each new question opened my mind to an appreciation for the complexity of music, of the world, and of the human experience.”
and later in the same Chapter
“The mind has been opened up in the last few years by the exploding field of neuroscience and the new approaches in psychology due to new brain imaging technologies, drugs able to manipulate neurotransmitters such as dopamine and serotonin, and plain old scientific pursuit.
Less well known are the extraordinary advances we have been able to make in modeling how our neurons network thanks to the continuing revolution in computer technology. We are coming to understand computational systems in our head like never before.
Language now seems to be substantially hardwired into our brains. Even consciousness itself is no longer hopelessly shrouded in a mystical fog, but is rather something that emerges from observable physical systems. But no-one until now has taken all this new work together and used it to elucidate what is for me the most beautiful human obsession.
Your brain on music is a way to understand the deepest mysteries of human nature. That is why I wrote this book.”
(Note: If you enjoyed ‘My Brain on Music’ you may also enjoy this video by Jeff Hawkins on How Brain Science Will Change Computing from TED. Hawkins believes that the human neocortex doesn’t work like a processor; rather, it relies on a memory system that stores and plays back experiences to help us predict, intelligently, what will happen next.
or Mike McCready and Malcolm Gladwell discuss how technology that analyzes the mathematical patterns in songs can help the music business identify potential hits.
or
The Stanford Medical “research team showed that music engages the areas of the brain involved with paying attention, making predictions and updating the event in memory. Peak brain activity occurred during a short period of silence between musical movements—when seemingly nothing was happening.” includes a 20 sec video of an MRI scan and other details - Daniel Levittin was a co-author of the study.)
Understanding the deepest mysteries of human nature sounds way more interesting; here is a video link to close out the post. Comments are from the 37 Signals blog post.
“The singer/songwriter/artist/author discusses music, science, memory, and more with the producer/neuroscientist. Fascinating discussion. Some idea I liked were ecological validity - looking at the whole experience in the real world.”
“I loved reading that listening to music coordinates more disparate parts of the brain than almost anything else–and playing music uses even more! Despite illuminating a lot of what goes on this book doesn’t “spoil” enjoyment- it only deepens the beautiful mystery that is music.”
And Salon Magazine, September 2006
“Neuroscientist Daniel Levitin’s wonderful new book explains why music is a critical step in human evolution and why the songs we loved as teens remain stuck on ‘play’ in our heads.. . ‘This Is Your Brain on Music’ is delightful. Levitin explains the intricacies of two difficult subjects — neuroscience and music theory — without ever losing the reader.”
and the Cincinnati Public Library
“Some scientists have the gift of writing so clearly that it’s like being taken backstage by a magician and shown all the tricks-oh, that’s how it’s done. Daniel J. Levitin writes lucidly and humorously. . . absolutely fascinating.”
and by Mark Coleman is the author of “Playback: From the Victrola to MP3, 100 Years of Music, Machines, and Money.”
“In the absence of a unifying theory as in Malcolm Gladwell’s “Tipping Point” or a conceptual hook as in “Freakonomics” by Steven D. Levitt and Stephen J. Dubner, Levitin’s book demands a reasonable level of reader interest in the subject. (Frankly, the author is better at breezing through Music Theory 101 or Brain Chemistry for Dummies than at keeping a personal anecdote on the leash.)” (all reviews of Your Brain on Music)
Does use drive technology more than innovation design and does it even matter?
As always let me know what you think.
Science is looking far more interesting these days especially when a dash of technology and a dash of music has been added. Who knows what uses our children will make of our experiences and our technologies.
I’m looking forward to more adventures in the science of food colouring! as my daughter continues defining and redefining her view of the world whichever way it happens.
“Gillian Welch”
Video: 
“Your Brain on Music”
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