by Dana Blankenhorn
  Volume VI, No. L

This Week's Clue: The Wheel's Still in Spin

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This Week's Clue: The Wheel's Still in Spin
SSP (Shameless Self Promotion)
SP (Shameless Promotion)
The Other Side of the Walled Garden
Time For Phony Christmas Stories
Hard Times Require Great Compression
Clued-in, Clueless
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For the Week of December 16, 2002

As optimistic as many friends were at the end of 1999, that's how pessimistic they are as 2002 draws to a close.

If two years of recession, an impending war, and public approval of all that weren't enough, there's always more. Moves favoring monopolies by the Bells, Microsoft, and Big Media have many liberals questioning the logic of capitalism itself. Others look at the budding "clash of civilizations" and wonder whether the world (or at least mankind) can survive the coming horrors.

To all these people I seem like a cock-eyed optimist. (This is funny, because back in 1999 I was considered a die-hard pessimist.) I refuse to accept that today's balance will hold forever. History tells me we've survived far worse Presidencies and (more important) that every political action creates its own reaction. It tells me that competition in every sphere - economic, political, and social - results in more, faster change and progress.

There are many forms of competition. There is not just political competition or economic competition. There is competition among nations, competition among institutions, competition among concepts, ideologies and (most important for our discussion) among technologies.

As I've said before, the Internet is important mainly because it accelerates all these other changes, delivering the benefits of competition. You can see this easily by going outside the borders of your own life, to China.

China's political center is having a very tough time holding as the Internet's reach expands there. Despite immense expense, China's "Great Firewall" is still full of holes . (For example, this site is still reachable there, and you can still get lots of porn .) All the fear over John Poindexter's "Total Information Awareness" proposal ignores this reality - it won't work because the job's too big. How do you expect a small bureau of the CIA to do what the vast bureaucracy of China has been unable to do?

Reporting on the Chinese Firewall said more about how publishers felt about China than anything in the Berkman Center report itself. The New York Times headline was "China Has World's Tightest Internet Censorship" (free registration required ). The same story was reported by IDC as "Internet Filtering Spotty, Widespread in China."

Look more closely at China. The headlines are all about the jailing of critics and activists, even those who just wrote something online, concerning topics the central government finds vital to keep a lid on, for the sake of its own stability. But underneath something else is going on. There's some local democracy. There are thousands of local people fighting local corruption (and sometimes winning). More important there's a huge, vital, growing middle class. What we treat as eternal slavery is in fact a great awakening, with hundreds of millions of people acquiring middle class comfort, education and (most important) values.

Against this urban success must be balanced a collapse of the agrarian economy, which is also leading to increased unrest . China's central government, in other words, is in a world of hurt. And it's in that trouble because the Internet accelerates the pace of change to the benefit of individuals and small, cohesive groups, away from central authority.

In other words, autocracy can't win in the age of the Internet. Autocrats of all kinds (business, political, religious) can run a pretty good race, but every oppression is felt, by people the oppressor can't stop from feeling the oppression. That not only creates enemies, but distracts from the search for economic growth (again, based on technology) that every nation seeks.

The only choice autocrats have is to halt Internet access entirely, as so many Arab states have tried to do. But that also halts economic advancement. It condemns the society to a medieval existence, making any competition (especially a military one) impossible to win. What Americans still fail to grasp is that the World Trade Center horrors were a sign of defeat. The terrorists couldn't even win on their own soil, which is why they tried to destroy ours. And (this is the important thing) they failed. They failed as the Grinch failed. Christmas came anyway. They also sealed their own doom, and that of their allies.

Even while all this is being proven, of course, new Internet-based technologies emerge. Just this year we've seen the rise of 802.11, the launch of Ultrawideband, the continued growth of Linux in the corporate market - and this was a slow year.

What wonders might come when broadband access is truly wireless, ubiquitous, available to any computerized device from the smallest cellphone to the most powerful server? What wonders might unfold from plastic chips and all the other technologies I've been detailing on my blog at Corante the last few months?

Stay tuned. But more important, stay upbeat. It's hard to do, when your political enemies hold the field, when it's hard to find a job, and when oppression seems to be advancing on every hand. But remember the words of the poet, Mr. Dylan. "Come writers and critics, Who prophesize with your pen, And keep your eyes wide The chance won't come again. And don't speak too soon, for the wheel's still in spin. And there's no tellin' who That it's namin'.

For the loser now Will be later to win..."

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SSP (Shameless Self-Promotion)

Great news. The book is here . The hard sell starts next week.

And there's more good news. I've gotten my first big new gig in years, at MediaPost commenting on, of all things, the off-line media. (What fun!) This goes alongside new orders from BtoB and Mobile Radio Technology . Things are indeed looking up.

My book, "The Blankenhorn Effect: How to Put Moore's Law to Work for You," should be available in just a few weeks from Trafford Publishing . You can pre-order a copy with no obligation by sending me an e-mail . I'll let you know as soon as it's available.

You can follow the continuing story of The Blankenhorn Effect on my "Moore's Lore" blog . I still write for Boardwatch , Boardroom , Marketing Profs and Thom Reece's eComProfits . I still produce I-Strategy for Adventive

Tell your friends, clients, partners, and Congressperson about a-clue.com. You have my permission to forward this newsletter widely. And if you have trouble subscribing let me know .

Remember: it's journalism that keeps the Clues coming...

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Shameless Promotion

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Takes on the News

The Other Side of the Walled Garden

Antonia Zerbisias of the Toronto Star is all a-twitter over AOL pulling Time content behind its firewall . I've written favorably about this move in the past, but if that's all AOL does they're Clueless.

Many papers have created ways to provide access to their stories after they go behind firewalls. Subscribers are offered the chance to e-mail stories to friends. The "Wall Street Journal" re-prints some of its stories, after a decent interval, on a publicly-accessible Web site. Stories are sold to other publishers with public Web sites on a syndicated basis. I found another method while coding this issue. "The New York Times" allows unregistered access to specific stories from "partners" like Google.

There are good reasons for this. If a story falls in the media forest and no one hears it, it makes no sound. If you want influence throughout society, you must participate in it. You can't do that from behind a firewall.

There are other things AOL can do. The "Time" or "CNN" sections of AOL could be sold separately, say for $5/month (about the cost of a print subscription). This would bring more people to AOL content (and its format) while undercutting MSN's $10/month cost for "bring your own access," where subscribers get MSN software and services while retaining their current ISP. (AOL currently charges $15/month for this service.)

One move is never the end of the world, unless of course it is. But critics need to understand this key point. If AOL hurts Time-Warner and doesn't gain traction in six months, the company could well be spun-off and lose access to the content entirely. That should concentrate its mind on imaginative routes to profit.

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Time For Phony Christmas Stories

There is a pattern to reporting on Christmas season sales. In November we get the predictions of doom. Then, once the season starts rolling come the stories that say "hey, it won't be so bad." That's where we are right now . One caveat - gains in this recession year are strongest at big-name sites like Amazon and eBay . But we all expected that.

If you're a serious analyst, please ignore these stories. If you trade these stocks, in fact, this might be a good time to lighten up. Because when we get near the end of the season and right after we cross the line will come all those stories about how bad things were, and how much inventory is left. Some time in January we'll learn what the truth was (probably somewhere between the extremes). That's just the way it goes.

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Hard Times Require Great Compression

In terms of economic history the Great Depression was also the Great Compression. Salary differences between rich and poor narrowed considerably, so that everyone was able to participate in the post-World War II boom that made America great.

There seems little threat of that right now. Ken Lay still hasn't done his perp walk, and there have been few convictions, just a few guilty pleas. But 2003 could see a bit of income compression in the field where I work, journalism.

CNN and MSNBC are both hurting because in the battle of the cable network stars Americans prefer the naked bigotry of Fox' radio talk-show hosts to the alternatives. Meanwhile print journalists are questioning the high salaries in their profession while unemployment (and underemployment) among the rest of us remains high.

The likely result is someone with a budget is going to stretch that budget, hiring a lot of people at low salaries rather than very few at high salaries. It's not only a way to save money, but a way to differentiate.

All it takes is one successful launch of a lower-cost salary structure, or a "lower tier" for new hires at an existing outlet, and salaries in journalism will start to fall, as they have in transportation and other industries. This is not altogether a bad thing. Median income in the U.S. right now is at about $36,000. If you make more you're lucky. Why should all journalists be lucky?

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Clued-in, Clueless

Clued-in would be Microsoft following the prediction of the META Group and supporting Linux , especially with its back-end server software. (Microsoft spokesmen are denying the idea, but they're always the last to know.)

Clueless is the Australian High Court which allowed an Australian millionaire to sue an American company, Dow Jones, in his local court over a story it published on the Barron's Web site. But don't write the Web's obituary yet. My guess is this moron will still lose, and perhaps lose a counter-suit for malicious torts and libeling Dow Jones. No one likes a bully, even the local bully.

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