Friday, September 30, 2011

Future of Employment II

Yesterday I talked a little bit about the future of employment. Apparently this isn't the most interesting topic. However, it's important. The Slate series ends with some startling research that shows even scientists could eventually be replaced. I think we are a long way from those things happening. In my opinion the first things that  machines will do in R&D is replace humans in the creation of incremental innovations. In fact, to some extent computers already do replace humans in some of these things. Computers do a great deal of CPU, DRAM and Flash designing. Typically, these are incremental innovations. They are building on a current technology and making improvements. Humans are required for the radical innovations, such as a new chip set, calculation methodology or what have you.

Even some advanced R&D work could easily be improved by computers. Researchers have to read a great deal of papers to keep up with the state of the art in research. As the slate series points out, this is a form of data mining and lawyers are currently using automated programs to find specific words. There's actually a branch of Science and Technology Studies that focuses on word analysis. They use similar programs and dump a few papers into it and figure out what verbal connections between the papers exist. This is a way of creating maps of knowledge. You are able to see through citations and similar word usage that a specific theory is prevalent or not. How would this apply to R&D? You could put in the materials that you're using the problems you're seeing and a bunch of papers that might be related and see what comes out. It could give you new materials new designs things of this nature. For this to work though, it's a ways away.

What does mean in the long run? That no position is safe. I don't think this will happen in our life time though. People are much too conservative to leave everything to computers. They just simply won't be accepted. Even by our generation there's too much distrust. It's going to take one or two more generations for there to be enough trust in computing and technology to allow more control to shift to them. Sure some companies will be on the cutting edge with accepting these changes, others will be laggers.

If computers can do everything why do we need any jobs, isn't the guy from CNN is right? I disagree. People will always want to work. People need to work. I'm not saying this because I'm hoping there won't be a robotic take over or anything, but because people will not allow it to happen. In general people like to feel in control. Even if you aren't the bus driver, knowing that it's a person that you can relate to makes you feel like your more in control. Leaving everything to computers requires a level of surrender. Many people will simply refuse to give up that level of control. We won't have fancy automatically driving cars for this very reason. People love to feel in control of where they go. It doesn't matter if they would be safer, save money and get places faster. They would rail against the change because they loose control.

Would we leave the future of our economy in the hands of machines? You could argue that some companies already have. For instance take the May flash crash on Wall street. This has been attributed to high frequency trading following logical algorithms, it wiped about $1 trillion in wealth, most of it was restored.

In much of my research on academic spin-offs and technology incubators there is an important component related to tacit knowledge. Know how of the inventor of a technology. This is something that we'd lose if all of our work was robotized. There's no difference in that than outsourcing. In developmental economics and innovation theories the ability to create copycat technologies is a precursor to developing their own technologies in that field. I think this is something we must keep in mind when discussing the reality of full automation. Without tacit knowledge and hands on experience with the devices and machines building the product it's very difficult to develop improvements on either.

I think that we'll have many legacy jobs hanging around for a long time. Simply because we need them to continue growing economically. Otherwise, we'll stagnate and keep producing the same technologies.

Thursday, September 29, 2011

The future of employment

I posted this Slate series a little bit ago on my facebook and twitter feeds. It's an interesting read about the future of robotics in the work place. Most people think of robots only in the automobile industry. However, they are in nearly every major industry now. All new semiconductor fabs can be run with only a handful of people over seeing the production of the product. The author notes that robots are making headway into pharmacies and other professions with menial tasks being a large component. In pharmacy computers also help ensure patients aren't on conflicting medicines, with medical records in the computer it can easily flag potential issues. You could argue that this isn't robotics it's automation, personally I don't see much of a difference. You use a machine to make a task faster and automated, it doesn't matter if there are moving parts or not.

This isn't the only recent discussion on the longevity of jobs. CNN had an opinion piece about 3 weeks ago discussing if jobs were obsolete. Which if this is the case we will have to take a serious look at our current capitalistic system. As an evolutionary economist (or at least having some training in it) I can see that this perspective is somewhat accurate. Between these two articles it really indicates that in the near future we'll have a great deal of mechanized labor through robotics and computer programs. We will need dramatically less and less people employed in the western societies. This will even eventually trickle down into the developing societies.

My roommate argued that we should stop creating pointless jobs. That we should create a system that supports these people that continually fall out of the labor pool through job type elimination. This would take a complete reworking of our society to make this sort of change happen. Also, for a huge amount of people this freeloading kills them. We hear anecdotal evidence about some old fart at a company that is forced to retire and then within the year is dead. Whether we want to admit it or not, for the vast majority of people employment is tied to self worth. There's increases in suicide rates when people aren't able to work and cannot support their families. Depression is also higher among the unemployed.

There are further problems with this future. The CNN article discusses how we should be ok with just a white collar work force. I completely disagree. When I worked at Samsung some great ideas came from the technicians fixing our tools. The greater the variety of knowledge sets the higher the number of ideas. Sure a great deal of them may be really crappy, but the ones that end up surviving through the competition end up being better ideas. Make the workforce more homogeneous would reduce this affect.

I don't have an answer to this. We need to be realistic and try to understand the fundamental changes that our economy is going through. If we see that jobs are in fact going the way of the dodo we basically have to throw out all free-market economics. Why? Because there's no one to buy anything except an elite few and they just do not have the buying power to keep an economy of this size going. We will have to evaluate our morals, ethics and goals in life. It will not be easy.

Wednesday, September 28, 2011

Accessibility to Copyrighted Content

Torrent Freak had this article today that discusses how the amount of piracy in Sweeden. In fact, it discusses how it has dropped with the introduction of Spotify. This isn't the only case where access to material impacts piracy. Hulu (US only) has introduced an 8 day waiting period for new Fox episodes, this has lead to an increase in the amount of pirating of Hell's Kitchen. If people are going to pirate Hell's Kitchen, HELL'S KITCHEN!, then why wouldn't they pirate just about all Fox episodes? Limiting access drives people to pirate.

Why are people willing to use Spotify over other streaming services? For one, it's free with ads, but people are also able to share. They are able to share legally too. I am able to access music, which my friends on facebook have shared, from friends back in the US. From people that I only talk to on an irregular basis. My friends are able to share with me, where before I would have had to ask them for music and either bought it or download it. Since, I've decided to forgo using Apple products I'm limited by what is on Amazon or other music sites. Not all of the songs that my friends listen to are on those services. They like a lot of indie music.

I think that it's time for copyright holders to wake up to the fact that people don't really want to illegally acquire music. Sure they'd like to pay as little as possible, but they are willing to have ads, visual or audio, to listen to the music they like. The other good thing about a service like spotify is the fact that on your phone, if you pay, you can access your music there. Access is the important thing. If I've bought something once I should be able to access that product on any device in any manner that I want.

The differences in ability to view copyrighted material drives piracy. If copyright holders want to reduce piracy they need to increase accessibility for users. Users are willing to put up with a great deal of things if they are able to easily access content they want. Copyright holders, like Fox, should figure out a way to include online viewership into their rating system. People don't want to be forced to watch shows when they are on TV. They want to watch shows when they are able to.

Tuesday, September 27, 2011

Frivolous Science? Pfft

Today I saw this post on Reddit. Long story short this guy was asking the r/askscience subreddit why we do research like the CERN experiments, as it has no practical use. There are several reasons. I've mentioned some of these on here before, but they can always be mentioned again. First, research that we conduct now that is interesting only to a small subset of people may be applied for other things later. Second,  furthering our understanding of the world isn't frivolous. Third, in many cases basic research must be completed at universities because industry will not pay for it.

Some examples, bird migration research that told us a lot about birds historically probably wasn't very interesting to much of the scientific community. However, it's become more important of late. One of my friends commented to me about how in Europe during the Avian flu, migration patterns became extremely important for predicting where the next could be. There are further uses, those migration patterns are being used to determine where to place wind mills, because we don't want to put a wind farm in the middle of a bird migration path. The slaughter would be horrifying. Finally, changes in migration patterns may represent a shift in local climates. If birds take longer to migrate south, it indicates that the weather isn't changing as fast as it used to. Over time this data could indicate a trend and we should look for further evidence of climate change.

In 2009 there was a rash of articles that questioned the importance of scientific research in some cases. This isn't really new, even at that point there'd been the infamous McCain bear comments. Even scientists make fun of some of the more obscure types of research with the Ig Noble Awards (One award was given to a research that only cracked the knuckles on one hand to test for arthritis differences (there wasn't any)). Despite this, some of this research is interesting and could be useful in the future. Take the recent finding that fish are angry in boring fish tanks. This research is pretty much useless unless you're a fish fan. However, it also shows us that we clearly don't understand animals as well as we think we do. Even popular stories about the memory span of gold fish was shown to be wrong by the MythBusters. These examples indicate that many people don't understand the importance of research and that even scientists don't. However, even seemingly pointless research can illuminate our understanding of the world. People love to know nearly pointless facts. This also ties back to the my first point above, we never know when something seemingly useless can suddenly have an importance beyond the scope of the original study. It may save lives. That finding about fishes could help build better large scale aquariums where it is safer to interact with dangerous fish, like killer whales and sharks.

My final point is that some basic research will not be conducted by industry players. There's no guarantee on any return on some scientific investigation. However, it can be incredibly important for the advancement of industry. Quantum computing could be the next big thing for computing, however it's being researched by a combination of industry and universities. Most of the money and risk is on the university side though. Our understanding of particle physics helps us understand how quantum computing can help. Eventually we may be able to use this neutrino finding, if it pans out, in communication systems. There's no reason why we wouldn't be able to use the spin of a neutrino to transmit information.

Seemingly frivolous research is an important part of the scientific process. Enjoy it.

Monday, September 26, 2011

On Being the Product

Today I've read and reposted a few articles (another) about users being the final product for several companies. These of course are facebook, twitter, google (in various forms including plus), yelp and the list goes on. Personally, I think that the claims that we are only the product is a bit of simplification. There is no doubt that we are the product, however, it's also a matter of to whom are we the product? For instance, my blog, which I post on facebook, twitter and Google Plus allows others to be consumers of my content. The people who are my friends, followers or in my circles are able to consume my content. We are not merely products to companies, but we are products for other people as well.

We consume what are friends put out there. We have habits an manners in which we'd like to be able to consume that information. However, we're running into a bidirectional problem. We're losing control over what information we're sharing and we're losing control over how we consume this information. In Tom Anderson's (of myspace fame) post about the changes in facebook, he mentions something called seamless sharing, where you have to do nothing and it's instantly shared. This, to me, raises all sorts of privacy concerns. In this TED talk the speaker addresses the problem of filtering algorithms in google and facebook.

I think it's very obvious that Facebook still realizes that we're consumers of the information. For without our work as the product, posting links, pictures and statuses, there'd be no facebook. However, without us as consumers reading various different posts and clicking related links there'd also be no facebook. The product we are to non-fellow consumers comes down to our network, what the people in our network are interested in and whatever information that is automatically shared with facebook through our web browser.

We need to be aware that this trend is going to continue. We as users and consumers need to fight to get control over our data and the right to control what we share when we share it. This gets back to my points in my earlier blog posts about pseudonyms and truly being anonymous on the web. If you are interested in knowing at least some of the information that you've shared on facebook over the years in some countries you are able to download a copy of your facebook history. I haven't done so yet, but I plan on it. If it is not available in your country, try to get the rights to your data.

While facebook is using you as a product, you still should have the right to demand the information they have on you and are selling to 3rd parties. Being the product isn't fun, however, it's nothing new. We've been the product for years and have never really complained. The difference now, is that the information about your personally has never been better and is only going to get better the more you give them. For free.

Saturday, September 24, 2011

They've gone PLAID!! or CERN finds faster than light particle.

Yes, CERN has claimed that the speed of light has been broken by Neutrinos. What is exactly does that mean and why is it a big deal? First why is breaking the speed of light a big deal? According to the theory of special relativity, the speed of light is the maximum speed that something can accelerate to. Because of the famous equation E=mc2 it would require an infinite amount of energy to accelerate an object beyond the speed of light.

What is a Neutrino? A neutrino is one of the particles that make up other particles. It's part of the building blocks of atomic theory. Neutrinos carry no charge, so they are different than the electron. Since they have no charge they are able to pass through matter. Neutrinos also require very special detection mechanisms. Neutrinos also have mass. 

This is why it is a big deal to have detected the speed of a neutrino at greater than the speed of light. Either the neutrino always has traveled faster than the speed of light or they were somehow able to accelerate to a speed greater than that of light, which requires infinite energy under our current model of physics. Since we're talking about a particle accelerator here it can be assumed that the collision created the neutrino, thus we know that it is impossible for infinite energy to have be entered into the system.

Now that we understand what is going on, what is at stake here? A particle that is able to accelerate to a speed faster than the speed of light completely shifts our understanding of subatomic particles. Actually, it obliterates it. We will have no clear understand of what is going on at these particle sizes. 

Could this be the greatest finding in the 21st century? Yes. All physicists believe it would be. Are people just accepting these findings? No. There is a great deal of skepticism, and it's not just from the broader community. The scientists that are presenting the results are basically issuing a challenge to the scientific community to show that they are wrong! Based on their findings these results are in fact statistically significant. 

Are other scientists going to test these results to verify it? Well, there are only two other places in the world that could have the capabilities to test it. Fermilab in Chicago and a Japanese lab that was damaged by the earth quake and tsunami. However, Fermilab's equipment isn't sensitive enough to detect the difference in the speeds. Basically, the speed difference is so small it is within the margin of error for the detection equipment.

What's this all mean to me though? Well, for us non-physicists life goes on as normal. We can't suddenly travel faster than light. However, this is a case of good science at work. We should seriously pay attention to what happens here. This type of science happens all the time at a smaller scale. For evolution this type of science is happening. Some extraordinary claim is made, which requires extraordinary data to support it, then is tested by other people. IF the claim withstands additional scrutiny the claim is accepted. In some cases where the claim is so extraordinary that the people making the claims don't really buy it, then it is the duty of the scientific community and the larger community to give them the support they need to determine the validity of the results.

Here's some comments from British CERN physicists Brian Cox.

Thursday, September 22, 2011

Technocrats and Technology II

In my previous post I outlined some of the problems facing the energy sector in terms of determining the best course of action in the wake of the Fukushima reactor disaster. One of the solutions was to create a group of experts to determine the best mixtures of technologies and sources of energy. However, there are clearly flaws with this methodology. First, there's the problem of trust in these experts. Second, there's obviously a lack of input from the general public. Third, there's problems with selecting technologies themselves.

As I mentioned yesterday, experts can claim many different things and using the right language can make something that's incredible sound credible. When these experts put out information or opinions how can we trust it? Can we be sure they aren't on the pay roll of big oil or big coal? If these experts are university professors how can we be sure they aren't part of some global warming conspiracy? I think that it's obvious there will be influences from oil and coal. These are to be expected and the goal should be to actually welcome them into the discussion. We should attempt to include them, however we need to give them the same weight of opinion with their obvious bias as any other expert on the panel. The difference is that we want it to be known that they are going to be rooting for oil/coal. Why? because we can more easily critically analyze their economic data knowing for sure where it comes from. This goes the same for a scientist that is heavily pushing solar or wind energy. We should know that they support it so we can have an honest discussion.

Public participation is a huge problem as well. Without proper support from local groups, agencies and governments a promising energy program and be killed. "Not In My Back Yard" (NIMBY) is always a hugely successful counter attack to many of green energy programs. People don't want to have giant windmills over looking the beautiful landscape or oceanscape they cherish. Understanding these concerns and getting input into the the process from the public can lead to greater social acceptance of a plan. Also, making it clear who the information is coming from also will improve the tone of conversations. Without the clarity of information sources public opinion can quickly turn from a project.

Finally, what technologies should we use? Public opinion and vested interest in legacy technologies is very difficult to overcome. Especially when a technology like solar energy is more expensive than coal power, and has less consistent energy profiles. Of the solar technologies how do we select which technology is the best? How do we pick the right nuclear power plants? There are many different technologies out there competing. There is not a clear which technology a government plan should invest in. We are likely to pick a loser technology. However, we still need to choose something. I have mentioned it previously some ways to select technology. I'll discuss more of that in my next post.

Wednesday, September 21, 2011

Technocrats and Technology

On my way back from Oktoberfest, which was awesome, my fellow car passengers discussed the decision by Germany to phase out nuclear energy over time. We all felt that this was an incredibly stupid long term decision. We agreed that it was a knee jerk reaction to the nuclear disaster at Fukushima. However, this raised some other questions about how to enact energy policy choices as well as other technology/science policies. We mostly focused on energy as that was the topic of interest, but it really does spill over to most scientific/technology policies at a national level.

The obvious solution to most engineers is to set up a panel of experts and have them come up with the best choices for energy sources. There are some flaws to this line of thinking, sadly. First, who selects these experts? Let's use the US as a model country in this regard. There will be a huge battle over what experts should be included in the panel. If it has to be split 50/50 between experts selected by the Republicans and Democrats we'll most likely have a group of lobbyists for the Oil and Gas industries from the Republicans, and a mixture of wind and solar experts from the Democrats. Nuclear energy maybe completely left off the radar. Even though there are tons of technologies out there that are hugely safer than the Fukushima nuclear reactors.

Additionally, nuclear energy has a stigma associated with it due to Three Mile Island, Chernobyl and now Fukushima. It doesn't matter that coal is as destructive or that oil and natural gas extraction causes almost immediate negative impacts in the local environment. Why? Because these are huge job creation industries and also have been legitimatized over the course of the past 100+ years in many regions. For example in Pennsylvania, where Three Mile Island resides, coal is a way of life for many people. It has been an occupation that many people have been doing all their lives. There are nuclear facilities in the state still, but they are viewed with much more skepticism, lack of trust and fear by local residents.

Many engineers are something of a technocrat, where they believe that technology can solve a huge number of issues and that technology experts should be making many policy decisions related to technology issues. These technocrats are viewed with skepticism from the broader public. In many cases there are huge debates over the sources of the data and the reports which accompany many of these technology experts. In the case of GMO, even when the public is given information from both sides it is not trusted. Why? because people have lost faith in their governments and believe that there are scientific conspiracies to enact practices that are dangerous.

In my next blog I'll discuss some more issues with these topics. I'll go into some detail of cases where large differences in views were eventually over come.

Thursday, September 15, 2011

Productivity Gains from Fiber networks

This is going to be a bit of a random post based on a seminar I went to today before a meeting with two of my professors. The idea is that an increase in internet speed will lead to productivity gains at corporations, which of course will lead to a growing economy. First, why do we care about this? Well, in small countries like New Zealand and the Netherlands as well as South Korea and Japan where there is an extremely high broadband penetration there is discussion of using public money to build fiber networks. What's the difference? Broadband basically means anything faster than dial-up internet. If you have DSL, aDSL or cable, you have a broadband connection. What I mean by penetration, is that a high number of users in many different areas have access to broadband connections. This means there are enough providers that the majority of users are able to access the internet at high enough rates to be able to stream videos and download pictures at reasonable rates.  What is fiber though? Fiber optics, because that's what it is, are networks that use lasers to communicate information rather than electrons. On a cable line there are changes in voltages that indicate a one or a zero, whereas with fiber it's either a light on or off (one or a zero). This is able to be transmitted at a much higher rate.

Based on productivity data and information about different firms the study indicated that the largest productivity gain was seen in the shift between dial up and broadband. It also indicated that firms that used fiber and firms that used broadband did not see any difference in productivity. A follow up study indicated that if there was any difference it was related to size and to industry. This basically showed that there is no reason to subsidize fiber. That the government should not try to force telecoms to lay down fiber networks and that individual firms will that require fiber should pay for the investment themselves. The study also indicated that there may not be the applications, for firms, that require fiber networks.

Personally, and the author agrees with me, I think this leads to a chicken and the egg problem. If there is no fiber network how do you create an application with a wide enough audience that requires fiber when there are few customers to use it? It also puts a large burden on firms that require the network, especially if they are a smaller firm. Larger firms would be better positioned to afford the cost of the fiber line to their office as well as the equipment to utilize it. Although, in many cases they will have to worry about their old equipment from the broadband system they used.

In all, I felt it was a very interesting talk that discussed various problems with trying to get the government to subsidize the creation of a broadband network. The author also suggested if you are trying to stimulate the economy by building the network, there might be better targets for the subsidy dollars.

I'll try to post next week. I'm heading to Munich tomorrow morning.

Monday, September 12, 2011

Technological Layers and Layer Ownership

This ars technica article outlines in extraordinary detail what is at risk in the smart phone wars. It discusses the various different layers involved with the smart phone industry. These layers are extremely important. Control of a layer allows you to move into another layer and can help you extract monopoly rents* from those layers as well. My friend Sean was complaining about bloatware** earlier today that comes a computer supplier. They are actually attempting to get into a different layer. If a PC company is able to provide support which can allow them to get money from a customer on a returning basis, monthly or yearly, they can help ensure return purchases on more expensive purchases as well as getting a lot more money out of first sale. Additionally, the manufacturer may also be using the bloat ware they install to subsidize the cost of the product you bought. If a third party asks to have software pre-installed the manufacturer could ask for money to put it on, which may be passed to you as a consumer, so you could get a computer at a slightly lower price.

Ars Technica, isn't the only group of people that views this phenomenon as a stack with different layers in it. This is actually an economic model as well. Which was used in the original Microsoft EU case explaining how these different layers can be leveraged to foreclose on a new market.

Another way of looking at this is in a traditional manufacturing sense. When you are making a car you have many different suppliers. You have paint, tires, batteries, steel, etc... There are several different ways to make it cheaper for you to produce a car. You can become vertically integrated, with a very high production level, where you make the steel, tires, paint and the full car. If you were extremely good at producing steel you would be able to get the steel at cost whereas traditionally you would have to pay a higher cost so the producer could earn a profit.

We can see this same sort of thing happen within IT. There is serious concern with corruption of content and content providers, like Comcast, purchasing a wide range of companies. If they control the material and access to the material they could control what people can access and impact society in a serious manner.

I don't think that Comcast is going to be able to significantly impact the smart phone layers as they have with TV. However, a company like Google or Apple definitely could. Google is actually attempting to get into every single layer in this market. They tried to purchase wireless spectrum (they are also installing a super fast network in Kansas City), they are going to purchase Motorola, they have an OS and they are an app provider.

I think that other technology companies are aware of this. This is part of the reason why Google is being attacked on all sides. While until Google gets a hold of Motorola, they will be mostly in the top most two layers, OS and Applications. Google is clearly trying to move into every layer possible. This will allow them to have the greatest likelihood of a customer going onto a website and click an ad to give them money.

To prevent this, almost everyone is suing Google or some aspect of their technologies. Google is trying to get around this. They want the control.

I'm going to be gone for a little while. My brother is coming into town and I'll be in Amsterdam for the next few days and then Munich this weekend. Hopefully I'll have a post up Thursday or early next week.

Further Reading: The New ICT Ecosystem by Martin Fransman

*monopoly rents means higher prices from controlling the market. It allows a manufacturer to sell a product for a higher price than they would be able to do under a competitive market. Microsoft is able to do this with Windows. However to protect themselves from other OS providers undercutting their prices, MS sells the same OS at lower price points. They give discounts to students and charge a lower price in poor countries. This allows them to increase their monopoly to new markets.

**excess software which slows down a computer or smart phone.

Saturday, September 10, 2011

Antitrust and Cell Phones

In my last three posts (onetwo and threeI have been discussing the risks of antitrust for Google. With Android Google controls what applications are installed as the base as well as the search function. In South Korea apparently this is a big deal. Which took me the points of IE and WMP in my last post. Most people use the default programs on their computer or phones unless they have some external reasoning to use a different product. In the case of iTunes and WMP it was the iPod which drove the usage away from the default. However for many people that don't have an iPod there isn't much point is using anything else. Especially if you only play CDs on your computer or you have a very small MP3 collection.

There are, of course, other factors which may drive users to other products, such as seeking the ability to play lossless files instead of MP3s. On computers, in my opinion, it is much easier to take control over the device and install other applications or systems to replace the default. You just need to know how to find the program you want and install it. With phones this is much more difficult. I think that the Google Search functionality is going to be the first of many of these investigations.

For other applications that serve the same function as the search, it may be difficult to acquire a different app. At the app store for whatever phone you're using, there's a gate keeper (is there a confused keymaster too?). In the case of Apple they reject applications that duplicate a program which comes preinstalled on the phone. I'm fully expecting that these rejections will eventually become the target of some antitrust investigation. Google is better than Apple in this regard, however there is control over what goes into the app store. Interesting note there are at least 4 Bing search apps in the Android market place.

Google does allow third party app stores on Android. I think that this is a really smart move. This will actually prevent some future antitrust investigation that I think Apple will have to face. There will be a market of app market places that cater to different kinds of needs or may be phone company specific. For instance Samsung has their own app store on my Galaxy S. I would not be surprised if Steam, EA and other digital content providers are already planning on creating app stores for the phones. While some of the major game developers aren't creating games for phones yet, I believe that will change in the future. With Windows 8 going to be used for PCs, Tablets, and phones why wouldn't larger game developers created stripped down versions of their games to be played on phones?

However, I've wandered a bit from my initial point. While phones are different than computers in some pretty significant ways, they are small computers. They are more powerful than the computers I grew up with. Google will need to be aware of this and will need to evolve how it deals with the android system. The controls put on users in phones will eventually be forced out of existence by law suits and users demanding more freedom over their phones. Eventually, phones will require as much freedom as a PC, especially as we start to bridge between the two platforms.

Thursday, September 8, 2011

Google's Anti-Trust problems III

In my last two posts (one and two), I've been discussing the current problems as well as potential problems that will be facing Google in the antitrust arena. Yesterday I mentioned I was going to discuss Windows Media Player (WMP) and how this pertains to Google. However, I realized I need to go one step back first. First, we need to look at what happened with Netscape and Internet Explorer (IE). Initially Netscape was THE internet browser. It was the browser to program websites to be displayed on, IE wasn't even really on the radar. Also, at this time with the web, these programs were being sent out by CD, it would take an extremely long time to down load this application. Why? because it was over a telephone line. A modem that was getting about a tenth or less of the download speed you have now with whatever your broadband connection is. That and your mom would probably pick up the phone to call some one while you were trying to download the software, or while playing War Craft 2 against a friend.

Since the medium of delivery for the browser was over CD it was a level playing field for both browsers to compete. You'd get one in the mail for whatever browser, Netscape, IE, AOL, etc. However, Microsoft realized the importance of this market. They figured out a way to leverage their desktop monopoly to foreclose on the browser market. They started installing IE onto all of their operating systems. Then went as far to integrate everything together to ensure market dominance. It worked because of slow connections and the fact that people are lazy. If something already works they will use it.

Flash forward about 5 years. MP3s have gotten popular through Napster and other digital Peer 2 Peer file transfer systems and the next big market is music players. Winamp was a major player at this time and WMP was not really any sort of competition for it either. In Windows XP WMP got a major over haul and was at least able to compete with Winamp. Microsoft decided to bundle the software in the same manner they had done with IE.

This is where the story changes though. The EU filed suite against this claiming this was anticompetitive. At this time the iPod had just come out and there was no reason to expect the product to come to the PC. It seemed like it was a long way from happening. Plus, even if the iPod was going to PC it was still going to be a niche market. So, the law suit. We all know now that because of the pace of technology and the fact that there were other factors involved with the selection of the music player it prevented market dominance of Microsoft. Without the requirement for iTunes with the iPod who knows what player would have won the market.

How does this relate to Google though? Well, looking at the search engine suit from Korea I mentioned yesterday, I think this has some pretty significant implications. Using a platform to control the method in which you use other functions can be shown to be anticompetitive. Google search engine is the first for mobile phones, however, I see no reason why it will be the last.

More on this topic in my next blog.

Wednesday, September 7, 2011

Google's Antitrust Problems II

I think that I started this discussion at just the right time. According to cnet, South Korean officials have raided a Google office over anti-competitive practices relating to Android. They claim that it's anti-competitive to force companies to use the Google search engine with Android if they want Google applications and the Google logo on the device. Personally, I'm not really sure how this is anti-competitive, or at least why Google is being singled out for this. Apple does the same thing, as does Nokia and Microsoft. When I still lived in the US, I remember Verizon forcing Bing on me and changed my default internet settings on my Blackberry (granted Korea couldn't go after that one) but the idea to me is bizarre.

However, this is a great way to discuss how Google, in a broader sense, is at risk for antitrust action from many national governments. In my last post I explained the idea of market foreclosure, which Microsoft used in an attempt to capture a monopoly in the server market as they had in the PC market. South Korea will most likely be arguing that Google is using a captive audience to force their search engine on their users. In the bigger picture, I think this sort of tactic will likely be used for other markets. For example, Google is using their large market share, and the social capital they've gain from being a trust worthy site, to build email products, then office suites, map and geolocation services (with recommendations), and of course blogging sites like the one you're currently reading. Since I have a google account, from way back when Gmail first was created, I've gotten all these additional features for free. i haven't had to do anything and they just appear as services that I can use.

Even if I'm not logged in to Google and I go to there's a huge selection of services that I can use without logging in. However, they become more powerful as soon as I log in. Google is using their monopoly of search engines to leverage users to use other products they've created. Let's say Yahoo! decided to try to create an office suit in the same manner as Google and basically try to emulate Google in every way with all of their products. I'm sure that some of the users there would take advantage of the free document services. However, I also believe that Yahoo! and Google cater to different portions of the market. Yahoo! has become the defacto home page to an older crowd than Google. Which could mean that the users of Yahoo! may not want the same products. I have a Yahoo! account, which I only use for Fantasy Hockey and Football. I never use it for email, I never search the web using Yahoo! I only use Google. Why? Because it gives me the results I want.

So, now that we understand that Google has been leveraging their search market share to move into other markets what kind of impact does that have? I think that it will actually prevent other people from using other services out there. However, I think that with internet systems there is no real reason to keep with one product family over another. It's a matter of trust. I think that people trust Google more than other companies, which is why they are willing to use them for other products. I couldn't imagine people using a Facebook Docs the same way that people use Google Docs.

In my next post I'll discuss more of these implications of these topics. I will also compare some of the Google products to Windows Media player and how something that seems like a big deal today, may not be a big deal in a year or two. Technology moves so fast.

Tuesday, September 6, 2011

Google's Anti-Trust problems

When Google announced the planned acquisition of Motorola Mobile investors weren't exactly thrilled (see here here and here). Most of those investors are concerned over a lot of the issues i discussed in my last few posts (here and here), patents and potential issues with Android's future. There are also discussions online about different types of antitrust and privacy probes that Google is being subjected to.

Some of these privacy probes are from the EU, such as the German probe into the Google Maps cars connecting to open networks and keeping records of these networks. Another recent issue comes from Google Ads itself. Where Google was advertising for illegal pharmacies. This one Google settled for $500 million, which may have been an effort to keep away antitrust investigators or at the very least prevent their attorneys from being distracted.

In the previous article it notes that European regulators are looking into Google's ad practices to see if they are being anti-competitive. This could be a legitimate concern. Google has been purchasing a large number of ad related companies recently. However, in the long run I don't think that purchasing of companies will make that much difference as it's very easy to get into the internet ad game. New companies will be springing up on a routine basis.

I think that the EU will eventually look at Google in the same manner they looked at Microsoft in 2004. They were using an economic analysis tool called foreclosure. It's a fairly simple manner of looking at markets and market share. Let's say you have a monopoly in some market like desktop operating systems. You also know that the desktop market isn't the only market out there, there's another market related to servers. What are servers? Well they serve different functions but some of them are webservers, so when you go to a website that has some animation or data to be pulled there's a webserver there that is connected to the website. This webserver pulls the required data to be displayed and in many cases actually creates the desired images. Other cases are for databases. The computer is extremely fast and can handle a massive amount of data processing at a time. Facebook for example uses a large number of them.

So, you already have control over the desktop market, and you want control over the server market. You can make it easier or harder for your desktop machines to connect to another machine. Basically you control the language in which that happens. You can make it easier for competing operating systems to decode your language. If you want to make it easy to connect a windows desktop to a linux server, you basically give the linux OS guys the lanugage and words to use to make the connection happen. If you don't want them to connect you make it very difficult so they have to create their own rosetta stone to figure out how to connect to your machines. (I know this isn't a very technical way to describe what's going on here, but not everyone is computer literate that reads my blog)

Through this leveraging of your monopoly on desktop computers you can push your way into another market. In some ways Google is doing exactly this. In my next blog I'll discuss a little bit more about what happened with Microsoft and how Google is attempting to foreclose on other markets using their search engine monopoly as a starting point.

Friday, September 2, 2011

Google's Motorola Future

According to Eric Schmidt of Google the purchase of Motorola Mobile is also it's own foray into physical products. This is promising but it's also dangerous for Google. While 98% of Google's revenue comes from ads as of 2008, the majority of its revenue stream is free of a great deal of risk from patent infringements.  This is double true because the majority of Google's patents are related to search and locating data. The products that it produces that people use on a regular basis have been designed around open standards which enables them to get around patenting and use licensing instead. If any of these technologies are accused of patent infringement Google can pull up the original source code, the version and the date. While this may be more expensive than the patent examiner finding this during the patent examining procedure, it still can save Google millions of dollars in patent suits. However, it hasn't prevented them from having to pay a good deal in licensing fees despite this as I mentioned in my previous post.

Why is this a risk for Google? Well, every one of those patent lawsuits that were targeted at Motorola is now directly targeted at Google. Google is sitting on a huge pile of cash. Enough cash to outright buy Motorola. Additionally, any lawsuit that is directed towards an application of Android on a Motorola phone that Google will eventually be selling, is going to be directed towards Google now. Previously, when there was something infringing in an application on Android most of the risk was shifted towards the manufactures of the phones and away from Google. Google does have to pay Lodsys/Intellectual Ventrues for one of their patents which allows things to be purchased through apps. Like using the Android Market place. Google also has one other lawsuit related to Android at this point, which is related to a Java Patent. This is kind of an ongoing lawsuit, which Oracle has had to remove a blog post from a former Sun employee praising the use of Java in Android.

There's got to be some sort of potential for payout for Google to take this risk though. Yes, I do think there is. Despite the fact that Google is going opening itself to direct lawsuit battles with Apple, it also allows its engineers another outlet for creativity now that Google has shuttered Google Labs. Engineers from the Motorola Mobile side will be able to have more freedom and the engineers that work in Google will be able to play more with Android to make a more superior product. Google will have direct control over their handset opposed to farming it out to HTC like they did with the Nexus One.

Are there any other risks besides the ones you've mentioned already? I think there's one big one. Anti-trust case. Google is already in the cross eyes for an investigation. In my next blog I'll discuss the case against Microsoft which the US and EU handled and then how the precedence could impact Google.