by Dana Blankenhorn
  Volume VII, No. XV

This Week's Clue: The Making Of An Internet President

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This Week's Clue: The Making Of An Internet President
SSP (Shameless Self Promotion)
SP (Shameless Promotion)
Media Faces Quickmire
The Biggest Broadband Opportunity (So Far)
Post-War Recession
Clued-in, Clueless

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For the Week of April 14, 2003

A few years ago I wrote that 2000 would be the last time a President was elected based on television. The Internet, I said, will revolutionize politics in the next cycle.

I'm not taking back that prediction. The momentous events of the last two years have activated people politically as nothing has since the 1960s. However you feel about the present policies, you feel it, deeply. That is a key ingredient for successful Internet organizing.

I got a small taste of this last week, when I showed up to watch a Howard Dean "Meetup" at an Atlanta coffeehouse. The event cost nothing to create - an announcement on a Web site (also used by many non-political groups), some e-mail confirmations, and a few activists to lead it. About 60 people showed up. Nearly a year before a vote, that's awfully good for a man considered "second-tier" by the pundits.

The "money primary" is also moving ahead more quickly than ever. Two candidates (Dean wasn't one of them) raised over $7 million each in the first three months of the year. And these candidates - Dean, John Kerry, and John Edwards - are just three among many, in a field that seems dwarfed by the popular incumbent. The point is many people care about politics right now and are looking to show it.

An Internet campaign demands more of individuals than a media campaign. A media campaign requires just your checkbook, your vote, and your participation in an audience. An Internet campaign will require that you talk to people, that you show up to demonstrate your support. It will also demand discipline, because individuals' actions can help or hurt. I wouldn't be surprised to see some old-fashioned torchlight parades before this is through.

At its heart an Internet campaign is an exercise in database marketing. Gathering supporters, organizing them, activating them, and getting them to talk to others takes a relational system holding over 100 million records. You need an e-mail effort that eventually scales to that level (although it will have to start small), an e-commerce system, and extensive moderated interaction capabilities. (If Democrats are smart, they will work to negotiate technical standards among their candidates. If the Bush people are smart they will set such standards alongside their party.)

But that's like saying a corporation needs hardware, software and routers. To scale to Presidential size an Internet campaign must be organized like a military operation. It needs a bureaucracy, a hierarchy, a plan, and discipline. It needs incentives, rewards, a system of promotions (and demotions), and (unlike the military) it needs to be able to move in Internet time.

We have already seen what can be done on a small scale. Falun Gong scared China to death with something much like Meetup, but it couldn't scale, and the Chinese bureaucracy crushed it. The same thing happened to the Internet campaigns of 2000. Lawyers and party discipline met early online successes by Bill Bradley and John McCain. Bradley was frightened by claims that amateur Webrings might be counted as campaign donations. (A lawyer letter to the FEC concerning Meetup would be an interesting test of Dean's Internet strategy.) Party regulars (and irregulars) destroyed McCain in South Carolina, on the ground.

Many different types of lists must be activated in order to fight such a ground war. You need to know which organizations are on your side, which are persuadable, and intelligence in addressing both. You also need (for now) enough over-the-air marketing so your troops will be convinced you're viable.

So-called experts in Washington (who always fight the last war) remain skeptical about all of this. They look at the dollar figures in the money primary as key, forgetting that such Presidents as John Connally and Steve Forbes have won such primaries before and failed at the ballot box. They look for early momentum, forgetting that Presidents Gary Hart, Paul Tsongas and John McCain also had that. They look to armies on the ground, something President Pat Robertson and President Pat Buchanan both had in spades.

Victory comes partly from message, partly from a disciplined organization, partly from money, partly from endorsements, and partly from tactics of the candidates themselves. Ronald Reagan demanding the microphone, Bill Clinton defending himself alongside Hillary, Bush activating his troops in South Carolina - success or failure is determined in key moments.

So no database, no e-mail system, no organization, and no amount of military discipline alone will win an Internet campaign. The 2004 result will be determined entirely by how Americans feel about George W. Bush (assuming he's on the ballot) when the time comes. An approval rating of 50 can't lose, while one under 40 can't win, in the week before the people vote.

What I will predict, based on what I saw last week, and what I see online every day, is that candidates who marry a compelling message to Internet organization and discipline will do better than those who rely on the tools of the TV age. (Consistency may be the hobgoblin of little minds, but when every statement you make can be Googled, it's also vital.) So push the yard signs and bumper stickers now. Get their e-mail addresses. Scale some moderated discussions so your people feel safe and opponents are minimally antagonized. The Internet Party will win next year, and by 2008 every party will be one.


SSP (Shameless Self-Promotion)

The reviews (well, some of them) are in. "Dana, it is GOOD," raves Pete duPont, lawyer, futurist and once a candidate for President. "This is some really powerful 'stuff.' I think you've got a winner," says Drew Kaplan of DAK Catalog fame.

Find out what the excitement is about. Buy The Blankenhorn Effect at Amazon.Com , then go back and say nice things. You can use the ASIN number, 1553953673, and recommend it to readers of other, similar books. You can also save on shipping when you buy the book at Amazon, over the cost of buying it elsewhere.

If you can convince some more published reviewers to read The Blankenhorn Effect and recommend it to their readers, please send me a name and address. In exchange, you'll get the PDF version of my second book, The Blankenhorn Effect: Boom, Bust & Beyond. This is a collection of columns from, organized chronologically and by subject, with additional commentary from yours truly.

I have begun working full-time for MediaPost , but I have also written lately for BtoB Boardroom and Mobile Radio Technology . You can follow the continuing story of The Blankenhorn Effect on my "Moore's Lore" blog . I also contribute to NowEurope and GreaterDemocracy .

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...


Shameless Promotion

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Takes on the News

Media Faces Quickmire

Wars have a curious effect of self-justification. Casualties actually make war supporters more intolerant, not just of those they're fighting but of any voice that might question the whole enterprise. This cycle is accelerated in today's war. The effect was dubbed "Quickmire" by the National Journal.

Media companies have to navigate through this. Radio consultants are encouraging their clients to go with the flow. Anti-war voices are being aggressively shut down, at least in the U.S., and even my voice has been attacked. (You know who you are.)

The problem for commerce is you have to make a living, even in a state of rampant McCarthyism. The use, or rather abuse, of the American flag by pro-war people reminds me of nothing short of America's Nazification. And everything you do is scrutinized - the stories you run, the ads you accept, and the products you pitch. The penalty for pissing-off the majority is extreme - bankruptcy, unemployment, and vilification. (Yes, I do expect violence. No, I'm not being paranoid .)

So what works? Travel ad pages are up, even though travel is down. Small luxuries are advertised, while big ones are dreamt of in the editorial hole. Self-absorption is in, while reality is out.

You can learn a lot about the media and war looking at old movies. Consider a scene in "It's a Wonderful Life," where young George Bailey brags "I've been offered membership in the National Geographic Society." He dreams and he yearns - but he never goes there. World War II movies themselves are also illustrative. I'm thinking of the big color musicals of the war years, B-movie stars hootchie-kootchieing up a storm, usually in South America, where the guns were not firing. Ricardo Montalban and Cesar Romero became leading men in those movies. Its' sheer self-delusion, but it's an effort to stay on-track and on-task when the body bags are piling up.

Old movies also tell us what to expect when the shooting stops. Life may turn darker, and more serious, like film noir. This can be true even as McCarthyism becomes more widespread. In the national mood disillusionment might replace patriotism, even in victory. After the war questions of why replace what, tension replaces reality, and murder happens in the dark, usually off-screen. Mathew Brady's Civil War photo plates are left to bleach clear in greenhouses. The "Scud Stud" has trouble finding new work. Popular culture seeks a new direction. A Gilded Age is sought and a Baby Boom begins.

The biggest challenge here is for magazines. If you play September as post-war and the war continues, in the form of a destructive occupation (or a second conflict) how can you sell it in June? But that's why magazine editors, and publishers, get the big money. There are a lot of good folks out of work right now. You can be replaced. Just kidding. (Not.)


The Biggest Broadband Opportunity (So Far)

While most reporters (including yours truly) are out chasing 802.11 rainbows, or streaming video that people can always watch free on TV, there is a huge broadband market developing in playing games.

Cahners' InStat has one of those swooping charts (you remember them from the 1990s) showing online gaming revenues exceeding $2 billion in 2007. Already, with "just" 350,000 signed-on to Microsoft's Xbox Live service, data transfers have reached the 1 Petabit per month level. (A Petabit is not a chomp taken out of the hide of a PETA activist - it's 1 quadrillion or 1,000 trillion bits.) Given the time my own son spends in online gaming (he's 11), I have no reason to doubt these numbers.

This is great news for companies like Level 3 , which despite an investment from Warren Buffett is in fact struggling to survive, through mechanisms like exiting the network hosting business. Just do the math. Microsoft thinks it can reach the 1 million-customer mark by the end of this year - that translates to 3 Petabits per month of core bandwidth demand. When the industry as a whole hits its targets, you're talking 400 Petabits per year.

This kind of growth is essential. The health of a competitive fiber core market is seriously at risk. Gamers can save the day. So keep playing our game.


Post-War Recession

The previous U.S. recession came in the six months following the successful conclusion of the First Gulf War. Morgan Stanley has now admitted that a worldwide recession is coming in the wake of the Second Gulf War.

Predictions like this tend to become self-fulfilling prophecies, but this one is easy to make. American intolerance for foreigners, and their intolerance of America, has to hurt global trade. The SARS scare, while overdone (a generic drug called Ribavirin seems to work well against it) is hurting growth throughout East Asia. South America is a continent-wide disaster area.

I was fortunate to find a job last month, and so far my wife's job is holding up as well. Whether you are as fortunate, I can't tell. But given the economic troubles going back three years (at least in this sector) there is an enormous pent-up demand opening up for things like travel. But we haven't even had the housing slump, which starts as soon as interest rates start rising again. (This could be happening as you read this.)

The recommendation here is the same as it was two years ago, when the tech wreck became apparent. Cash is king, you need to be diversified (Euros don't look like a terrible investment), and efficiency (as well as strong partners) are the key to making it through. But unlike the last recession, which was far more prolonged than it appeared, this one should be sharp and short (as the 1991 recession was). It may not look like a good time to invest, especially in long-term growth, but it is.


Clued-in, Clueless

Clued-in is this from Charles Cooper of C|Net. "The Internet has emerged as the best antidote to the numbing stupidity that passes for daily television coverage two weeks into America's battle with Iraq." The fact of foreign coverage online has allowed all the U.S. networks to target the same conservative audience without pressure from war critics, who have simply moved to another medium.

Clueless is Alan Greenspan, for this piece of stupidity regarding intellectual property. "Whether we protect intellectual property as an inalienable right or as a privilege vouchsafed by the sovereign, such protection inevitably entails making some choices that have crucial implications for the balance we strike between the interests of those who innovate and those who would benefit from innovation." The idea that patents and copyrights could be an "inalienable right" is an insult to the Constitution, and the Declaration of Independence (from which it is drawn). For a Fed chairman to suggest they might be is obscene.


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