by Dana Blankenhorn
Volume V, No. XXXIX
For the Week of October 1, 2001

This Week's Clue: Winners in the Wreckage

This Week's Clue: Winners in the Wreckage

SSP (Shameless Self Promotion)

SP (Shameless Promotion)

Innocent Bystanders Drilled

The Web-ization of TV

Valley Wanted

Clued-in, Clueless

The new world has winners as well as losers. Some are obvious to list. Consumer businesses, travel businesses, hotels, destination resorts, they're all losers. Security companies, defense industries, those are the obvious winners. 

What about on the Internet?

Videoconferencing companies are obvious winners. The sight of President Bush meeting with his national security team via videoconference instantly created huge volumes of orders from businesses of all sizes for similar services. The stocks of videoconferencing companies actually rose in price in the first week of trading after the disaster.

Companies dealing with biometrics, smart cards, identity assurance and access control are also obvious winners. The U.S. and British governments are talking seriously of requiring "electronic papers" of all residents, not just citizens. Oracle chairman Larry Ellison is aiming at becoming a winner from all this .

All sides in all political debates have taken their lumps. Civil libertarians are seen as traitors, but conservatives can no longer preach about "limited government." Deficits are in and balanced budgets are out. Love is out and hate is in. (Someone I have known and trusted for some time sent a .jpeg of the Statue of Liberty raising her middle finger.) 

Travel is out but virtual travel is in. Business trips are out but b2b buying online is in. Trust is out but dependence with authentication is in. ISPs are going to see a flood of new business, and anyone with the necessary expertise will have more work than they can do over the next months. This changes the industry's dynamic - financial strength is out and expertise is in. 

At some point it will dawn on policy makers that the real problem with the online world isn't security, but the sheer volume of traffic being transmitted. There were indications before the attack that something was coming, but the data wasn't analyzed until too late. That data stream wasn't encrypted. 

It is when this realization dawns that the real danger will come. Calls will be made to restrict communication, not just encryption, in the name of world security. The result would be the return of a frightened, isolated world. There's an important Clue here for all of us. The final victory of world terrorism, if it comes, won't come with a bang, but with the whimper of governments and their citizens knuckling-under to their cyber-fears. 

SSP (Shameless Self-Promotion)

I accepted an assignment to create a white paper for a vendor recently and found, to my shock and surprise, that I actually enjoyed the work. I believe even white papers need a story, and that story must be told well. My weakness is on technical accuracy, but it you want your materials to be worth reading let me give you a hand.

You can join the A-Clue.Com discussion at I-Strategy , our shared e-mail digest produced with Adventive.Com. You can also read me at ClickZ , B2B, and Boardwatch, as well as the new paid version of WorkZ. "Living on the Internet: How to Make Money, Live Right, and Fight For the 21st Century" is now in the hands of the folks at eBookAgent, which is arranging for electronic distribution. Remember that it's journalism that keeps the Clues coming...

Shameless Promotion

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Permission is just the first step. An audit is the second step. Building interactive relationships with every name in your database is the greatest business asset you can have.

You can take the first step toward making your little list truly valuable with help from my friends at Whitehat Interactive - click here to begin that journey.

Takes on the News

Innocent Bystanders Drilled

Several issues were shelved by Congress or dealt with in a perfunctory manner after September 11. Online businesses will suffer from the consequences.

The big headline is that bills to prevent a moratorium on Web sales taxes from ending on October 1 are now dead. This leaves state and local governments free to search for and destroy both the Web and mail-order catalog industries. (In many states, like Georgia, rates vary by county, and even within counties.) The next move you hear will be L.L. Bean and Amazon.Com begging for mercy, offering to accept rationalized, uniform state sales taxes along the line of a compromise the Gilmore Commission failed to approve.

The worst danger is that a ban on encryption unsupported by backdoors for government investigators, as proposed by New Hampshire's Judd Gregg , just might pass. In the battle to find scapegoats for the unthinkable happening, encryption has been ceased upon as a target of convenience.

We all nearly became victims as Congress came close to abdicating its responsibility and approving a "Christmas Tree" of security measures that don't just address terrorism, but are actually a wish-list of police power against drugs and music-swapping as well. The far-left and far-right are uniting against this crap, and my guess is the Bush people will finally make a deal with one side against the other.

Phil Zimmerman, creator of PGP, is another innocent who has been drilled by the events of the last week . He found it impossible to react to some hate mail he received blaming him (and his encryption advocacy) for the attacks. Guilt always follows grief, along with recrimination and rage. When cooler heads fail to prevail, people die and rights are lost.

The Web-ization of TV

Few people have noticed it, and fewer yet have remarked upon it. But one of the Web's greatest impacts has been in what you see on TV.

Financial news channels like CNBC and Bloomberg were among the first to break the screen into pieces. They created crawls of stock quotes, bugs of stock averages, and sometimes broke the remaining space in half to either get both sides of a conversation or a speaker's chart. The cable industry, fearing "piracy," also branded all their shows with network logos in a corner of the screen. Soccer telecasters were also early users of half-tones and split-screens, in order to place advertising into a game where any commercial break could mean fans miss the goals.

This has spread throughout the dial. In the wake of 911 even the broadcast networks created crawls. ESPN crawls news during its newscasts, so any tension you feel on seeing a highlight can dissipate as you watch, by the final score flashing at the screen's bottom. Where networks like CNN Headline News and ESPN News once changed their looks by changing desks and backgrounds, this year they redesigned their screens as though they were Web pages, which in fact they are. (Unfortunately CNN didn't update its news delivery systems at the same time. Many headlines in its boxes are as much as a day old.)

All this makes it incumbent upon Web designers to find new ways to break up their screens, and show TV the way to the future. You'll still find things on this medium first, but that will no longer be where our innovations stay.

Valley Wanted

Silicon Valley was transformed in the 1990s from a production center to a management and marketing center. It was thought that pure brainpower would drive prices ever-upward, and a host of media companies - Business 2.0, Upside, the Industry Standard, etc. - rose to meet the insatiable demand.

Now, with the death of the last of those magazines the time has come to re-evaluate the entire Valley-Alley axis and wonder where we go from here. (Silicon Alley's demise had one beneficial impact - it allowed many employees displaced by the bombing to stay in-town.)

The fact is that production, management, financing and marketing should not be separated. Those New York industries - finance, media, and advertising - that kept those operations together will stay there. The corporate suites serving distant production were (and are) expendable. (New York's fall in this was eased in that so many of them already moved, in the 1970s.) An office or agent can suffice in those places that offer technology (the Valley) or finance (the Alley). Everything else is ego. The Santa Clara Valley may be about to learn New York's old lesson.

But the way has been cleared for the creation of a new Silicon Valley, combining production, engineering, marketing and management in one location. Austin will grow, San Jose will fade. New Jersey will rise as New York falls. This is a mega-lesson, a Clue about civilizations, of their rise and fall.

Clued-in, Clueless

Clued-in is Gartner analyst Joe Pescatore , who acknowledged that continued worm and virus attacks make it incumbent on business to move away from Microsoft's Internet Information Server and .Net initiative. He suggested Apache or iPlanet instead.

Clueless is the move to ban encryption, because here's how the terrorists actually communicated . Badda-bing, badda-boom.

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