Tuesday, 31 May 2011

Pulling Down the Big Bucks

On average, CEO pay increased some 32% from this time last year. That's going to hurt a few people when they read that.

Are these guys worth it? I mean, as a customer, when was the last time you got visited or called by a CEO of one your suppliers? When did they last even get visibility of your complaint let alone help with it?

Instead, low paid, often offshore staff get the blunt end of the customer wrath when things go wrong and all they are equipped with is a few scripts to handle supposedly every situation. Not one of them is empowered to make a decision and none of them are allowed to escalate something beyond a local supervisor. You want to speak to a Director? Oh dear, they don't take calls, I'm afraid, sir.

Hearing that makes me so angry.

So what precisely do Directors and CEOs do while these poor wretches have to deal with unreasonable people like me who don't take their fob-offs?

Let me give you three examples that occurred to me recently.

1) The Good

Step up Virgin Media. OK we got off to a bad start as they took my order to change from Sky and then found out their records were wrong and my house was not served by fibre. I complained and some offshore chap said a new installation would be arranged. The engineer came and reaffirmed that no fibre came to the house. The cable pit was 5 metres from my front gate but a small private road was in-between. So no go. That's it - no services and you can go and re-order Sky, pal.

Never to take things lying down, I Googled CEO email addresses and there is a super site that gives you them. The CEO at Virgin Media is Neil Birkett. I dare say he did not personally handle my case but I got an email of apology back immediately and within a few weeks the road was dug up and I was cabled up too.

Damn good job, Mr Birkett. You deserve every penny you earn in my book for responding to customer needs and realising when mistakes are made they need to be rectified. For the cost of digging up a road he will probably get a lifetime's loyalty and some.

2) The Bad

I fell for it. I bought one of those cheap and nasty Apps on my iPad that tells you they can make the thing print on any WiFi printer. Like heck they do.

So I emailed support as phones do not exist on this App world. Someone responded soon enough and told me to install something called 'WePrint' on my PC and this would solve it. Err, not as such. Now my iPad recognises my printer is there but the signal gets lost in the ether somewhere and WePrint sits there doing naff all.

It's not a great deal of money at stake but, frankly, if something doesn't do something it should do then do not have the gall to charge, I say. Not so, Print Central was a waste of a few quid and nobody was happy to refund me. Now EuroSmartz Ltd the software writers can suffer by having their name mentioned negatively in a user's blog. The software was rubbish and the support was hopeless. And you had the cheek to keep my money.

Shame on you. Where was the CEO when I asked for them? They don't get involved in such trivia. Ah well, my mistake.

3) The Ugly

There had to be a humdinger. Step up Charles Dunstone and his Carphone Warehouse crew. Let me explain, I have been a customer of theirs via a single number my wife uses for over 12 years, always upgrading and spending £thousands with them over time.

The love affair ended abruptly last year, sadly. My wife took an upgrade and got a Sony Ericsson phone - nice too. Within a year the thing could no longer be charged up. It still worked fine, just the external copper connecters had a short on one of the prongs and would no longer accept charge. So we took it for repair to the CPW shop in St Albans and my wife, as she runs her entire business from her mobile in terms of contacts etc, explicitly pointed out that the phone worked fine and that the data on the phone should be preserved, i.e. do not zap it. This was typed onto the Work Docket and signed by my wife.

Two weeks later the phone came back. It still worked but all the data had been zapped off it. With it came a diagram with an arrow pointing to the charging connector saying it had shorted. The genius engineer stated that 'water damage' had caused this and therefore it invalidated the warranty and the phone was now 'Beyond Economic Repair' (BER in their parlance).

The kid in the shop said the only remedy now was to buy a new phone at £350+. At this point, I must admit, I lost my customary cool. To all the questions about why it had been zapped when we asked for this not to be done, why can't the connector be replaced, why can't we pay for the repair if no warranty, what does the manufacturer say was 'like it or lump it' in so many words.

I subsequently got the phone repaired for less than £40 at a shop around the corner. CPW somehow kept our memory card which they did return eventually but perhaps not before some enterprising person might have taken a peak as to what was on it as was revealed in a recent court case which CPW lost involving Chris de Burgh's daughter. I would never say such a thing but you wonder, don't you?

Some weeks and a verbal admission of blame by an engineering manager later which was subsequently denied, I got through to the 'Office of Charles Dunstone' no less. This is an elite team of 'fixers' who act in his name to remedy customer problems. Don't believe it.

By this time I had cancelled our remaining contract with CPW which happened to be with O2. I was charged the outstanding amount. So when I contacted Dunstone's office all I wanted really was my £40 and remaining contract money back - after all they had agreed not to zap the data and the phone could have been repaired. There was no need to try and scare us into buying a new phone and part with all that cash.

No way. A Neil Rosen actually called me a blackmailer over the phone for asking for my money back. It was as if I was extorting him by holding his family at gunpoint when I had paid them £135 for no service.

What possesses people to say such slanderous things to customers is beyond me - what did he hope to gain by doing so? Did he not know that it as actually something for which he or his company could be sued for? I even consulted a lawyer who said to take them to the Small Claims Court. But guess what? I didn't. Why? Because I could not be bothered even though it would have cost me nothing to do so. I simply did not have the time and energy. Dunstone won.

In the end, I lost the will to live. But I marked down this. To my mind Charles Dunstone and his Carphone Warehouse team tried to extort money out of me for a new phone when the one I had was less than a year old and still working save being able to be charged up. For the price of a new copper connector, the thing could have been repaired and I would still be customer today and set fair for another 12 years of coughing up money to them.

Instead, here I am blogging and tweeting about a bunch of nasties who even had the audacity to accuse one of their customers of 'blackmail' when raising a problem.

So there are CEO's and there are CEOs. Neil Birkett and Virgin Media could not get higher praise from me and they deserve any recommendations I can give.

Carphone Warehouse - don't touch them with a barge pole is my advice and the CEO is full of hot air in pretending to be involved in customer care. Count yourselves lucky you did not get a case raised for slander.

Blackmail, my backside. It was my money - perhaps we should look up the definition in the dictionary.

The Point

All these situations can be avoided. Empowering front line employees is a brave act but giving them the power to make on the spot decisions that even cost money will save loads in the long run.

If you don't believe me, just try and it and see. Customer loyalty doesn't cost that much when you do it right. Do it wrong and it costs a bomb.

- Posted using BlogPress from my iPad

Xooming Marvellous

Up front, I will admit I am an Apple iPad man. I bought my iPad 2 about a month ago, upgrading from the iPad in the process. And I love it.

Now here's a curious thing. Chatting to a high-up-in-Microsoft mate of mine recently, he basically said that the iPad would get swamped by the Microsoft combatants. I poo-pooed his argument as usual as just MS bluster version 3.5.

BUT, whilst my MS friend version 2.0 maybe wrong on one count he may be right on another. You see, I also recently received an upgrade on my mobile phone and went from a steam-driven pseudo Nokia smartphone to the HTC Desire Z. Oh my, what a spanking phone - if you will forgive the battery from not lasting anything like it says on the tin, that is.

OK, battery aside, the phone is superb. And that's because of its Android operating system from Google. There are tons of brilliant Apps, the Wifi linkage is brilliant and even the retractable keyboard for idiots like me is actually fairly redundant as the touchscreen works really well.

What is more, the operating system seems stable and quick. The graphics are dazzling and it's a dream to Twitter, email, text and all else from. In short, it's the cat's whiskers in smartphones, in my humble opinion.

So enter the Motorola Xoom, the Android 3.0 (honeycomb) driven tablet. Even the marketing blurb is wonderful simply saying 'It supports Abobe Flash Player 10'. If only Apple could say that for the iPad - it continues to be a rusting nail in a festering wound for them.

There's more. The Xoom has a 10.1" display at 1280x800 WGA screen. What does that mean? It's bigger and better definition than the iPad 2. The onboard cameras are better than the iPad's too. Better still, you can buy nice accessories like a portfolio case rather than useless and expensive Smart cases that the iPad 2 has. Mine went straight into a cupboard and I stuck with my nice, leather and expensive yet not dimensionally correct 'Snugg' case bought by my family on my birthday.

If there is going to be a serious threat to Apple, I think it will be Android that will bring it on. If nothing else, we are all a bit jaundiced by the Microsoft 'catch up and botch it' syndrome. In this case they cannot simply buy the company to compete as Apple and Google are just a little beyond reach on that front.

There are a few drawbacks at this stage. Models available are Wifi only so far, with external 3G Mobile broadband extra which is a shame and it looks slightly pricey at the moment although you do get bigger memory for your bucks.

I would like to see one in action to validate my argument but on 'paper' the Motorola Xoom with Android looks pretty darn hot.

- Posted using BlogPress from my iPad

LinkedIn IPO - Did They Get it Wrong?

On the first day of trading, LinkedIn was valued at $45 a share by its lead bankers, Morgan Stanley, Merrills, BoA and JPM raising some $352m for the company. However, by the end of that first day its stock price had risen 100% netting $millions for the select clients of those lead banks and the day traders who hiked up the price.

One of the Facebook founders, Peter Thiel, basically said this was typical of Wall Street not taking Silicon Valley companies seriously, intimating that the east Coast fuddy-duddies refuse to believe in those 'fly by night' West Coasties and all their new fangled technology, internety things. Why he should complain, I don't know as he was one of LinkedIn's early investors and has already made unbelievable stacks on Facebook and PayPal. I mean, he has become even more filthy rich as a result of this tomfoolery.

He has a point in some ways as the average price hike on day 1 of an IPO is about 15% which seems a fair valuation with a bit of premium for subscribers to the underwriting banks for their share of the risk. In that, context it's a fair accusation that banks got it wrong.

However, given LinkedIn now has an earning multiple of 1,000 it would also be fair to say that those hiking the price are nuts. Surely, at some point there has to be a fall back down to the reality earth?

It seems Web 2.x is well under way and we can feel those bubbles expanding all over again. Veritable Professors are coming out and decrying this 'under valuation' as a crime that should be outlawed when perhaps simple folks in armchairs think, 'Has anyone ever told them that LinkedIn is unlikely to ever be worth 1,000 times its profits ever again?'

Beware, as there are plenty more of the babies on the way - Zynga, Twitter, Groupon and Facebook to name a few. Some would say that the Google method of auctioning stock is the fairest way of doing this as making 100% in a single day is just daft.

I harp on about it but tears will flow sometime. This kind of valuation cannot be sustained.

- Posted using BlogPress from my iPad

Will The Cloud Change Distribution?

One of the most popular Channel debates right now is, 'How will The Cloud impact large distributors?'

The assumption is that smaller, specialist distributors will actually be able to change more quickly and take advantage of the possibilities that the Cloud opens up and so largely they are left out of the question. I think that's actually misunderstanding what is going on because the problem for smaller distributors is their capital base which may hold them back from delving into The Cloud whereas this is something bigger distributors may find quicker to cover.

The Cloud is really good for SMEs and there are thousands of those sorts of companies out there. In fact, 97% of all companies in the UK actually qualify to be called SMEs and they employ the most number of people in Britain in aggregate. This represents a juicy opportunity for resellers and distributors alike. Big vendors and distributors have traditionally tried various methods and schemes to try and focus on this large sector of the market as they realise that they can only expand so far in the overcrowded large Corporate sector where so much of their business comes from today. So that's why everyone is getting excited. At last the world of possibilities opens up for SMEs and vendors should be interested.

What does The Cloud Mean?

But what does it mean for SMEs? Well, traditionally growth in IT spend in SMEs is small. In reality, they try to make do with as little outlay per year as they can and it's why the more budget style products and consumer aimed bundles by vendors are very popular down at the SME level which is a bit of a nightmare for third party maintainers as configurations are not steady but are 'Offer du jour' offerings usually.

With bitty spend and no real IT strategy at the SME level, it's very difficult for serious vendors to get their 'Big Company' messaging such as virtualisation and BURA taken credibly as they are costly, industrial grade types of solutions. More nimble vendors offer solutions which may not be as good but fit most of the bill and are a fraction of the price. And this fits for the most part for SMEs. Why buy industrial strength solutions when 90%+ of their needs are met by much lower cost solutions that are just as reliable in most cases?

So how does The Cloud change this? The biggest problem for an expanding SME is making the leap from small to bigger in terms of IT and infrastructure. Where SaaS based Cloud models really help is providing scalability to small companies. Rather than have to leap from one size to another in terms of IT spend, The Cloud offers the possibility of growth via incremental spend. Concepts like 'Pay as you Go' or 'Concurrent user licences' are a godsend to small companies. What The Cloud does is to leverage the overall spend of small companies to provide growth at a stepwise and manageable cost rather than big outlays in capital spend each time they meet a vendors band of user licences or different solution level.

This opens up a world of possibilities. What if you could buy software licences for major applications for your business at an economic price without having to buy industrial grade servers to run them or vast arrays or expensive storage to back the data up with? If only you could leverage the economy of scale and critical mass that pooling with several other companies in the same position brings? That's where The Cloud changes the game. It allows small companies to behave like bigger companies without the need for quantum leaps in IT investment. IT spend for growth can be smoothed and proportional to growth.

The New Model

As an early day SaaS person, I saw the look on people's faces when you explained how concurrent licensing could save them money. Most were blank looks. Today, there are consultancies making small fortunes simply auditing licence spend to reduce cost for Corporates. Guess what? Vendors don't like it. For the most part, large companies actually, at any one time, are over-licenced rather than under.

SMEs should never have this problem - in fact, they usually are under-licenced if truth be told. But The Cloud again allows them to get the optimum number of licences at the right price and smooth the payment of them and build in upgrades and support into the monthly costs. If they want a new employee to have a licence and they go over the server limit, The Cloud allows them to do it for only the cost of the new user licence.

It means that every big software vendor should be looking to get their act together and get a Cloud version out there as now is their opportunity to persuade SMEs to buy in early and grow smoothly and not wait for them to be big enough to invest in, say, SAP.

Microsoft are investing heavily in this and you can now get Cloud versions of their entire Office Suite for a small monthly cost. They see that over 50% of their licences they sell in the next few years will be via The Cloud. That's a big bet by the biggest software vendor. It validates this whole area for the doubters to see.

Where Does Distribution Play?

So what of the distributors who make a significant portion of their revenue on shifting traditional boxes of software and benefit on the complex licencing structures in today's world? Are they dead in the water? Does The Cloud mean hardware is done for?

Clever distributors will see the new world as a major opportunity. They, like the vendors, have been looking for an economic way to get into the untapped SME market and here's their chance. Of course, the problem is the model. For the most part, massive logistic operations and ERP systems don't really lend themselves to monthly annuity-model billing or hosting applications and having storage farms. It's a very different world.

Quantum Leaps are Required

That's the first quantum change to contemplate. The second is profit and loss. Today, distributors simply look at the volume of 'boxes' sold and know that they make some front end margin and some rebates at the back end. Add those together and look at how much cash is used in buying, selling and financing credit and you can even work out your Return on Capital Employed. That's easy. So looking at high capital investment on server and storage farms and charging monthly for licences is a very alien model. For a start, how do you work out what to pay your salespeople? How do you work out how much margin you make? At least the debtor days should be more positive as this world could make life simpler there.

But the biggest quantum change is management. For most distributors, the well-honed machine lumbers on and if you can keep all the equations in check while you grow, the hardest decision is which competitor to buy to consolidate the market. The disturbance of The Cloud is almost some ethereal thing that is just swirling around at the moment that somehow will sort itself out. The model looks so alien that it's almost not worth thinking about.

Danger lurks for those who aren't making plans today because The Cloud will be important to a lot of SME companies out there and the supply chain has yet to be crystallised. But many vendors may choose very non-traditional options to service it and that is the biggest risk to distributors today. So avoiding The Cloud and waiting, will cost vendor relationships and that is a long term risk to big distributors.

Dead Ducks or Wild Geese?

But let's not also get too alarmist. One thing I learnt from SaaS in its early days was that, as pleasant and refreshing the argument can be, there are two major issues companies face in deploying Cloud based applications.

1) Infrastructure & Reliability
2) Security

The second is obvious - storing more data offline gives most IT managers the wobbles as they think the world outside their network is infinitely less secure then within their network. But the reality is not quite what they think in both their understanding of their own network and certainly of the world outside. The world has moved on.

The first is the bigger issue. Automatically, network managers will think suck their breath in and think that at minimum their WANs will not be man enough to have applications served externally. Secondly, they will feel that reliability is an issue. After all, they will argue that the internet can go down and that is something they cannot control. They will conveniently forget the number of times that their own network has caused outages for either all or a subset of users and particularly in accessibility for those on the road. The Cloud can be actually far more reliable and easy for everyone to access - wherever they may be.

In reality, this is where distributors have an edge. Infrastructure is a big problem to overcome and this will need network skills with the appropriate hardware and software sales to help SMEs be man enough to take advantage of The Cloud. This also means that distributor sales staff need to have a better understanding of the financial arguments for the SaaS vs Premise business cases and this calls for a better quality of sales training. But the opportunities are there.

You could argue that for the clever distributor, there are MORE sales opportunities and at better margins because of the value that is required in the business case because of The Cloud. And that's where forward thinking management needs to come to the fore.

Forward Thinkers to the Fore!

One thing is for sure, ignoring The Cloud will be a big mistake. To my mind, this is a chance for the real Channel innovators to come back into fashion. There was a time when entrepreneurial ground breakers changed the world in getting products to market. Now is the time for those characters to come back or for new ones to crop up. Certainly, it is not the place for traditional thinking.

The Cloud is a very different place.

- Posted using BlogPress from my iPad

Thursday, 26 May 2011

LinkedIn - $10 billion

So LinkedIn is now traded on the stock market and the current valuation is some $10 billion. That's a mere 600 to 1,000 times its earnings, depending on who you listen to.

To be fair LinkedIn makes a profit. I use it daily to network and it no doubt is very useful. It is the recruiter's godsend in terms of a quality repository of current players in various industries who want to be seen and approached for potential new roles. It is very good in reverse, and I know several people who have got themselves very swanky new jobs after being approached by a recruiter on LinkedIn. Even highly paid boutique Headhunting companies use LinkedIn as a base for their research which brings into question their fee sustainability but that is subject of an earlier blog by me.

There is no doubt, also, that LinkedIn has merit in building 'private networks' for either Corporations or institutions like the IOD to create Groups of like-minded or connected individuals. There is also a growing revenue stream for advertising both generic and job related. These are all revenue generating activities which are sustainable in the long term, so LinkedIn has a definite money-making strategy for the future. Like other largely B2B sites like Ecademy, the question is what percentage of the millions of LinkedIn users would be prepared to pay a regular fee for the 'services' as the vast majority of users are at the basic, free level.

Of course, this the $10 billion question. Can LinkedIn ever generate the kind of profits over the long term which would sustain this kind of market valuation?

Reading the Forums on LinkedIn this morning shows a general opinion that such predictions are not based on reality. Many compare the valuation to those in Web 1.0 but some point out that at least LinkedIn is currently delivering profits which is more than can be said of Twitter. LinkedIn users generally are not amenable to paying a fee for just posting their profile on the site. After all, there should be a quid pro quo here - the profiles and users themselves have created the value within LinkedIn for which they have gotten zero return while the shareholders of LinkedIn are creaming off their share of the $10 billion right now. Rather like Twitter, charging users generally may be killing the goose that lays the golden egg.

As with Web 1.0, it is the potential that everyone is speculating on. LinkedIn has two options - either it tries to extract a great deal more revenue from its current users or it continues to accumulate users and hype its value by appending potential value to each user. This latter strategy will undoubtedly achieve the potentially more satisfying goal of having someone bigger acquire LinkedIn - much like Microsoft has just acquired the long term profitless Skype.

This kind of strategy is very convenient for the founders and the Venture Capital guys in at the start who stand to gain most. It means there is no requirement to have any real sustainable business plan other than to accumulate users, make the services generally cool and innovative, consume plenty of cash and then sell the whole shebang to someone else who can inherit the problem of what to do next to release all that 'potential value'.

Like Skype, it could become a 'musical chairs' to see who is left holding the shares when the cycle of sales stops. If it is someone with deep pockets and who buys into this whole 'untapped potential' ruse like Microsoft, then so much the better. But the reality is that the original investors and founders are now happy as sand boys. Their job is done and they have their rewards. there is no longer a requirement to ponder the problem of the future - someone else will sort it out. Some time.

As a LinkedIn user, I see its merits. But I also see its pitfalls. Scams and ruses are on the up, spam is increasing and the Forums are getting dominated with agendas. And like Twitter, the general noise level of the banal is increasing - with people telling us where they are travelling to, what they are Tweeting, posting irrelevant slideshows and more. It had to happen, I suppose. Whether there is an appetite to take LinkedIn to a new level by the existing management remains to be seen. I dare say though that it would be at a price to the loyal freebie users.

Until then, LinkedIn will bumble on its merry way as the recruiter's dream. Fill your boots while you can.

- Posted using BlogPress from my iPad

Tuesday, 24 May 2011

"Twitter Ye Not"

Perhaps Frankie Howard knew something we didn't when he uttered the famous catchphrase.

However, Twitter is fast becoming the centre of attention for all sorts of reasons. Let's face it, for sheer utter banal drivel you would have to go a long, long way to beat it. Time and again I try my best to get into it but time and again it beats me back with unimaginative cods wallop, noise and constant retweets which are both unoriginal and unhelpful. Trying to filter out the guff is just too time consuming to warrant my attention but Lord knows I have tried. Life is too short to spend that much time on the valueless.

I read stuff from Thomas and Penny Power of Ecademy fame about the new age of the internet is about 'Being followed'. Some people have postulated that future CVs should be correlated by against your Peer Score on Klout.

But are people upping their self-importance and getting an ego boost or are they talking common sense?

One advantage of Twitter is the ability to follow famous people who you may be interested in. This has its upside and I do follow the likes of Shane Warne, Graeme McDowell, Jonathan Agnew etc and I actually quite like to see what they say. However, the very same stars see the downside.

Lee Westwood has recently said he is reconsidering his membership of Twitter after several Tweeters started to give him serious abuse. Ian Poulter has considered the same while Paul Lawrie has classed his account. Wayne Rooney has been the centre of a Tweeting storm in some of his retorts to an abuser. This has prompted Sir Alex Ferguson to even possibly impose a blanket ban on all his stars using the service. Which may come as some relief to Ryan Giggs - no pun intended.

The problem with accessibility to the stars is that while it can massage their egos and satisfy the genuinely interested, it also is open to abuse. This may be no worse than the intrusion of the media but it has an immediacy and directness which I am sure must be disconcerting.

For me, I have to say I am sanguine about Twitter. I cannot see how on earth it will further my career and I don't see the advantage of people following me or for me following them in most cases. If only people had something original and incisive to say maybe it would a different experience. Right now it's just hyped up garbage for 99% of all the Tweets.

That can't be a good model for the future. At some point, Twitter has to become something of real use other than the mundane.

- Posted using BlogPress from my iPad

Google Android & Your Data

Eric Schmidt (Chairman of Google) has recently tried to allay fears that Google Android devices are accumulating our location data and backing it up to storage devices. He says that, 'Google is on the side of the consumer'.

Of course, Google would claim that we opt into such features. Note that whenever an Android App asks you to switch on your location indicator, such information is being relayed back to Google's servers and is stored - allegedly.

Microsoft have made great play on this - almost to the point of slander. But the reality is that they are not far wrong. Google claims that by storing and using such location data that it can produce 'Better targeted search'.

That phrase is in fact a euphemism for 'Making more money' - that is selling highly specific target information such as user location to advertisers so that they can more accurately tailor an advert to us and therefore increase their chances of a hit and possible sale.

As an example, just this morning I received adverts from Zoopla for postcodes near where I was sitting, not my home address. That's highly specific and very much dependent on my current location.

It is noticeable that Google tries to hide the fact that it will 'sell' the location information to advertisers and not a penny of that increase in revenue comes back to us as individuals. Perhaps, if Google wants to use this data in the future, we should charge them for every time they sell it or get a cut in the advertising revenue. After all, we are becoming the moving billboards upon which they can mount their adverts to woo us.

Google, as we are becoming aware, are not the nerdy, friendly cool guys we once thought they were. Their revenue figures and profitability are simply astounding. They are a fantastic money machine and we are the ones who make it happen.

We are all stakeholders in the Google phenomenon. Perhaps we should rise up and ask for our share of the money they are making out of us?

- Posted using BlogPress from my iPad

Information Leakage

One of the confounding things about calling up a supplier whether that be an insurance, telecom or TV company is that there is always the series of silly security questions at the start which are supposedly there to prove your identity, protect your data and comply with certain laws about data protection. We should, in the face of such questions, laud our suppliers for their diligence.

So I was sitting at a client's desk yesterday in an office some distance from my designated home office with a very different postcode. As a background to this, I had recently updated my mobile phone with my small business supplier, Vodafone. While I am working away, my mobile phone rings with an 'Unknown Number' which is not unusual so I answer it.

Amidst a great deal of background noise that sounds like a busy call centre, a young lady a foreign accent says, 'Hi, I am calling from Vodafone. Have you upgraded your mobile handset in the last 12 months?'

Thinking that this is indeed Vodafone calling, I answer, 'Yes'.

'And are you at RG2X XXX?' she asks. This is a full and specific postcode she has mentioned. Spookily, this postcode is not the one coinciding with my business or even home address. This happens to be the exact postal code of the specific building I am sitting at the very instant I am taking the phone call.

Thinking she is asking about my contract, I answer, 'No.' Before I could qualify that as I thought she meant my business address, she rang off. Alarm bells rang. How on earth would this person know my mobile number and my exact location at that specific instant?

The reality is that it would be easy to know my exact location at that time. She already somehow knew my mobile phone number and my provider. She must then have had access to one or two or possibly both feeds of my cellular signal and/or my GPS location - at that time. The cellular location is likely to be reasonably accurate but may not get me down to the exact postcode. But GPS would.

I called Vodafone immediately and they confirmed that as a company they had not called me. When I explained what had happened, they investigated further by looking on their network systems. From these they could actually recognise the number which had called me. They even dialled it while I waited. They told me that it was a mobile number, not on the Vodafone network and that it went immediately to a non-descript answer phone message.

Another example of the same issue is that my wife and I get texts continually from either single or multiple companies telling us that we could be liable for compensation of very specific amounts from an accident either one of us is meant to have had. As it happens, we made a claim over a year ago on an insurance policy. However, since we initiated that claim we have changed insurers.

So the party texting must have pretty current access to real data on not just accident data, but insurance holders and their personal data like mobile phone numbers.

The point I am making here in the wake of, at one end of the spectrum, Sony's embarrassing XBOX network hacking and at the other, the 'outing' of Ryan Giggs as the holder of the Super Injunction to protect his privacy, our data is both at the mercy of able thieves who want our data and the companies who would claim legal access to our information.

To some extent, our data is always at risk from malicious hackers and the like and there is only so much protection we and our suppliers can take. For the most part, data protection systems are reasonably robust. But what is more worrying is what our suppliers are doing with our data willingly.

You see, we often, when buying services online or otherwise, tick boxes accepting either the terms and conditions of a company or even some extra agreement on the use of our data. Because of the positioning of that tick box, most of us would believe that we must accept those terms in order to buy the service. In fact, most supplier systems would stop the transaction at that point and you would end up without the product or service. In other words, you are compelled to tick the box and accept the terms if you what that item. What we don't know is whether we have just waived our rights to certain aspects of the law, particularly Consumer Law but usually Data protection.

If you read such conditions avidly, you may find prominently or otherwise that the firm is inviting you to allow them to share the data with other parties who may either have a legal requirement to access the data or not. The fact is, you tick the box and you have given free rein. What companies are doing here is forcing you to waive your rights.

In practice, they have no right to force you to waive your rights to proper use of the law and that should not be a condition of trading with them as they too are under legal obligation to trade within the confines of the law.

How else does my insurance data end up in the hands of companies who want to sell me an extra service? How else can someone have my mobile number and know my exact location at a given time when calling? How else can maintenance companies know exactly when my Sky Digibox has come off its 3 warranty and call me up the week before it ends purporting to be from Sky? I don't remember being asked if this data could be shared but you can bet your bottom dollar it will be imbedded in the conditions you and I don't bother to read.

The fact is that the rarity is the XBOX network getting hacked. The norm is for companies like Vodafone to allow pretty free access to paying third parties to our data. While they make life improbably and unnecessarily hard for us to access our own accounts, it's easy for third parties to legitimately buy access to our information and plenty of it.

Before we tackle the absurdity of Super Injunctions which, let's face it, are a low number and involve only the rich and are no more than titillation value, why don't we get down to the mundane, everyday misuse of our data from the very companies we contract to, pay the through the nose to, for mundane everyday services.

This is the real problem we face about invasion of our privacy.

- Posted using BlogPress from my iPad

Monday, 23 May 2011

Bad Judgement Day

Ever had a real hunch about something? You know the sort of hunch where you not only felt something was going to happen but all the tell-tale warning signs were there?

Well that's how Evangelist Harold Camping felt. He not only had a hunch that it would be Judgement day on Saturday when at precisely 1800 various volcanos around the world would simultaneously erupt and non-believers would be incinerated or similar but he also asserted that the bible gave us the warnings too.

So convinced of this was he that many of his followers spent a great deal of money on adverts to forewarn us all, mostly paid to his own radio station, I believe.

Imagine the surprise of the believers when 1800 came and went and there wasn't so much as a simultaneous fart around the world. Now, perhaps understandably, many believers of his are miffed or confused. Maybe his watch had stopped and he got the wrong time? Maybe he used an out of date calendar and the day was wrong? Anyway, suffice to say Jesus did not come again and many non-believers continue to thrive in their ignorant way.

When I was a kid and my parents lived a while in Canada and Alaska, we got bombarded with the lucrative Evangelist TV Channels with their toothy and booby preachers charismatically tricking $thousands out of people's pockets. It was both funny yet disturbing. You feed people what they want to know and they will pay you handsomely for it.

I suppose that Harold Camping's problem was that at 89 he was probably at the tail end of his scam. At that ripe old age there probably wasn't much point in keeping the whole thing going and so he could have a reason to retire which is why he preached a definitive end to his preachings and the world, perhaps. In any event, now that the date has past and there is little point in believing any further, there is always the Scientologists or Adventists to give the last of their money to.

Still, he did map out a timescale that went onto 21 October for the destruction of non-believers so there is still time yet.

Curiously, Harold Camping was unavailable for comment.

- Posted using BlogPress from my iPad

Poison Chalice

It's a fabulous opportunity. You are going to be paid higher than any other executive in a similar role, you will have limitless cash to invest and some of the best team members in the world already there. The job is yours for the asking.

Sounds good.

What's the job? Manage Chelsea Football Club.

Err, no thanks.

It's ridiculous. Carlo Ancelotti was on his way out the moment he stepped into the job, as have been all the others who tried it. Last season he won the 'Double' of Premier League and FA Cup, this season he finished runner up. Possibly the day he spent £60 million on a dead striker he knew his days were numbered but, to be honest, it was long before then.

The fact is he was hired and fired by a person whose only qualification in the job is that he has a great deal of money. Roman Abramovich wasn't a professional footballer, has never coached or managed a team and hasn't really owned a club until he came along at Chelsea. Yet he sacked one of the previous managers for ending as runner up, even though Avram Grant lost out in the Champions League on penalties only. While he then brought in Felipe Scolari who probably had the right mercenary attitude.

And here's the rub. The top two teams in the English game for the last 10 years have been managed by the same two men the whole time - Ferguson and Wenger. Both have finished runner up or worse and only one has won the Champions League. The point here is that if you have a strategy and you trust your executives, then stick with it and stay true to your plan.

With Abramovich there is only the goal - no plan. Scolari came in with the right attitude. Give it a go, if it doesn't work out I will be set up for life in terms of money and there's always another club or country to manage. As for Chelsea success? Who cares?

The players must be getting tired of all this. A Chelsea die hard in Ray Wilkins was summarily dismissed earlier in the season who would have had the respect of all the players. That was a vital link lost in a foreign management world.

As with Jose Mourinho, Ancelotti had all the credentials with two Champions League wins at AC Milan. Mourinho has proved his skills were no fluke in winning the Champions League again at Inter Milan (and he proved that it was his genius after Benitez succeeded him and Inter died a death). In both instances, the depth that each club sank to was that Tottenham were able to take effectively 7 out of 12 points against them in the Champions League this season at their first go. The two mighty Milan teams would never have been so generous under Mourinho and Ancelotti.

The whole point here is that Abramovich will reap what he sows. If he doesn't make and back a plan then he will only ever get mangers who come in with a mercenary attitude. It is probably easier, quicker and less painful to fail early than to stay a while and win something. No one will think the worse of you for doing so. In fact, you will have a perfectly decent or better career afterwards. For those who think Avram Grant has gone down a peg after managing West Ham, remember that no one had ever even heard of him before he surfaced at Chelsea.

So Chelsea could end up being nearly men. They might win the odd thing as spending such stupendous sums has to bring something. But they can't ever be a Manchester United or an Arsenal.

Why? Because the owner cannot forgive. Failure - and he won't tell you what that is - is not an option.

Without a plan, Chelsea will be just a club in a nice area of town with rich players. The New York Cosmos of British football.

- Posted using BlogPress from my iPad

Friday, 20 May 2011

Future Injunctive

Fred, Fred, Fred. Not content in ruining his bank he was set to ruin his life. But he got his cake - we paid for it and he ate it. If only we had known for sure he was as morally bankrupt as RBS was fiscally. We all suspected it.

The chin of the man was that as his company disintegrated around him, and we now know he was shopping around too, he had the utter disdain for everybody else that he sought to bargain for a super package on leaving the bank. As if he had done nothing wrong at all.

It's a different code. Whether it's money or power, there is something about the heady whiff of multiple noughts on currency bills that makes people do strange things. Morals go by the wayside, the common person in the street is made to feel we owe them and should cow tail to them while the build up of testosterone seems to make men believe that not only they can have who they like when they like but that they have to have some kind of outlet for their pent up manhood.

We have echoes of Strauss-Kahn as he slithers out on bail - it took him a long time to quit his post as Head of the IMF. Did he not think that his colleagues, world leaders and the public at large would think that his private dalliances and alleged criminal offences would not change his life forever? Did he not think that his wayward genitalia would master his downfall?

Is it denial that leads such people to ignore their shortcomings and make them believe that no one should judge them? Berlusconi, Max Mosley - I don't have to say anything more.

But you don't have to be a public name to be immune to this kind of thinking. Take a look at Munich Re - supposedly one of the most sombre insurance houses in the world. In 2007 the company threw a party in honour of a particularly successful salesman where around 100 guests not only enjoyed the thermal waters of a Hungarian resort but they also partook in the pleasures of 20 female prostitutes. In case you think this was some ad hoc affair caused by too many bottles of Krug champagne, the prostitutes wore coloured armbands to designate their availability and had stamps on their lower arm to tot up how many acts they had performed. German efficiency at its best - this might be a handy measure rather like a free bar with a limit. Let us not even consider the PC side of things as this story implies that the 100 guests were all men (please forgive me if I have omitted any ladies from that party).

The point here is that big money breeds a different code of behaviour. When we worry about bonuses, salaries the facts are that the super rich not only evade our taxes they also sidestep morals. And they think we do not have the right to judge them.

We do. They are in charge of our money and our future.

The code of Super Injunctions was put together only for these who could afford it. It is for those who live their lives so promiscuously that they do not want their shortcomings to affect their careers and they do not believe that we have the right to know. Not even their own families. How nice to be able to afford to wipe your moral slate clean.

It reminds me of Catholics buying their place in heaven. The world gets ever more sophisticated but the beast remains the same.

- Posted using BlogPress from my iPad

Thursday, 19 May 2011

Would you Ken it?

Ken Clark is an oaf.

He comes across as the man in the front bar who sups his pint and expounds his theories largely to himself and a quiet audience who all agree that things aren't the same as they used to be and a woman's place is behind an ironing board. His type of intellect and boorish delivery is best suited to the bar where, to be frank, you don't find many aspiring Minister's of Justice.

I actually listened to the Five LIVE interview yesterday and heard his 'gaffs' at first hand and it was dreadful to hear. Having just waffled on effectively saying that some rapes were worse than others, he patronisingly tried to get out of it by acknowledging that all rapes were traumatic to the women involved which then sounded 'Janet & John' stuff, reminiscent of Yvette Cooper's childlike explanation of the Economic Crisis for the benefit of the Nation's thick population.

A rape victim gave her harrowing tale of how her attacker had pleaded 'Not Guilty' for 688 days and then on the day of the trial changed the plea to 'Guilty' and got a 33% reduction in sentence for doing so. The attacker served 1.5 years of a 4 year sentence and went on to re-offend twice, having been convicted previously as well.

Clark's comment was, "I hope he's behind bars". To which I screamed in the car that 'He should have been there in the first place!'

Somewhere in all this chilling nonsense was a point that only 6% of all reported rapes end in conviction and, perhaps, the purpose of the proposal to reduce tariffs for guilty pleas was to increase the conviction rates. If you like, this was an encouragement for offenders to come clean.

But even that is indefensible. I may be wrong but it seems that the rape laws are written largely by men as they seem to easily allow the defence of 'she wanted it really' and 'the way she dressed asked for it' and allow benefits of doubt to get through. I don't agree with women lying to get people into trouble but the fact of the matter is that such cases are overwhelmingly the minority.

The reality is that when men get a 'rush of blood', animal instinct takes over and in the aftermath any number of excuses are invented to cover the facts.

In a world where equality is much sought after, rape is one territory where men have no clue and never will because we fail to share the same inner feelings toward rape. Until a time when our physical make-up allows us to we should not be making the laws on rape, in my opinion.

Meanwhile, pub boars should remain where they belong, supping ale in the front bar, talking bollocks to other boars who might listen.

Ken Clark is the sort of man that gives men a bad name.

- Posted using BlogPress from my iPad

Monday, 16 May 2011

IMF**k Up

The news that IMF chief Dominique Strauss-Kahn allegedly cannot keep his genitals to himself will come as little surprise to Tristane Banon who had claimed similarly before. But it may come as some relief to Angela Merkel, the German Chancellor who was to have met the old 'Hot Rabbit' over the weekend. At least she can take the padlocks off her bedroom door now. Ms Banon was 22 at the time of her alleged assault and only agreed not to bring charges at the time because her mother was a local politician and asked her not to.

France and the world markets are in shock, it seems. His wife has vowed to stand by him. All this seems weird enough.

But what gets me is that the man in charge of saving countries financially is bombing around the world on First Class flights and staying $3,000 a night rooms at top hotels. This 'suite' he had in New York had a conference room, a marble bathroom and a king-sized bed.

More than anyone, he should be aware of the need to stop spending vast amounts of money on things not needed. But, hey, it's the world of High Finance - mere mortals like us do not understand that in order to do that kind of job you need a vast expense account and access to the top lawyers when you make alleged misdemeanours.

That's why we are down here and they are up there, no doubt.

- Posted using BlogPress from my iPad

What the Future Might Hold

Listening to the radio this morning there was a report coming up that suggested that the gap between rich and poor in the UK might soon reach proportions last seen in Victorian times.

That is just startling considering the standard of living we enjoy at the moment. But it is also true. When see that the average salaries of senior executives vs the average salaries of their workers has now widened to sixfold (it's tenfold in the US), you suddenly realise that we are gearing for issues in the near future.

In the Industrial Revolution comparatively few people controlled the precious resources and manufacturing capability in Britain. In time, the exploitation of the masses by those few caused the rise of the Unions which fought hard to get fair deals for their members. As much as Unions have become bywords for bloody-mindedness and lack of business reality, they served the most vital purpose during those hard times and arguably paved the way for the lifestyles we all enjoy today.

Unions may yet have a say in this approaching issue of rich vs poor but I would suggest that the problem is more to do with the Invisible Earnings sector. The influence if the Financial Sector on the UK GDP we were reminded during the recent crisis was just 9% but the meltdown threatened to bankrupt us all.

So we learnt that measuring the Financial Sector against GDP had nothing to do with how dependent we are on the Sector. Just ask Greece and Ireland. What is clear is that a comparatively small section of our society working in this sector earn on average more each year that the vast majority of the rest of the citizens in Britain will earn in their entire lifetime.

We also learnt that Zero Sum Finance is a myth. Fortunes are made daily across the globe by trading in the debts that we all incur and repay. Each debt has a known profit over its lifetime but somehow that debt can earn even more if it is traded between other parties. And when we run out of money for these people to play with we simply create more out of thin air and euphemistically call it Quantitative Easingbased on Fractional Reserve Banking. The idea that if I have no cash in my pocket, I just touch a little stone and say 'Abracadabra' and I have a further £100 which I never repay to anyone. Yeah?

To the average person this makes no sense. And that's because we are right. The world of Finance is creating profits out of thin air daily. And at some point the frail house of cards will collapse as a whiff of wind of reality wafts by. We got a taste last time around but that was only the prelude.

It is sick to think that some people will earn £billions from Hedge Funds in a single year when a tiny child in Africa needs a cup of clean water just to stave off death.

That idiot Deepak Chopra said that everyone has the opportunity to earn a fortune. In his perfect world scenario he has no reality as the basic credence of Economics says that for every winner there has to be a loser. Over a third of the world population lives in poverty which proves his banal best sellers are as much based on thin air as the Financial Sector. Wait a minute, they might all read his book, find a vast supply of disease-free water and have access to the Rwandan franchise of McDonalds and rise up and become millionaires. Or they might find it more practical to use the pages to clear up the mess dysentery causes.

The winners are just gambling with our future and getting rich beyond all imagination and we are stupid enough to just sit here and let it all happen even when it presents itself in our faces.

Look on the bright side. Out of the incredibly dour and hard times of the Industrial Revolution we got Charles Dickens. That might be all we are left with this time around too.

- Posted using BlogPress from my iPad

Thursday, 12 May 2011

New Tablets? Keep Taking the Pills

As you can see from the footnote of this blog entry, I use the iPad. I am one of the growing army of suckers who believed that iPad 2 was better so I bought one of those less than a year after buying the original. The differences are small enough not to matter too much as only the camera and FaceTime make any real difference.

But what I can say is that I was previously an old cynic and believed the iPad and tablets generally were just some kind of fad. When I bought it I was furious as I had to have iTunes on my PC in order to even start it. I described it as an expensive memory stick that night to the Apple Support Engineer I called. The very next day I talked to my colleague in Germany who was ex-Apple and in a short taxi trip to the airport, I had my email set up and had been acclimatised to the simple most useful tool I had used in years.

The iPad is brilliant on the move and I love it for its sheer accessibility, small footprint and the plethora of interesting apps, most of which I have opened once only. But has it replaced my PC on the move? Truthfully, no. For presentations it's good but no good for more than a few people clustered around its small screen. Even the iPad 2 which has HDMI can only link to certain monitors. Pages, the alternative to Word is ok but not brilliant. Keynote for presentations is ok and Numbers, the spreadsheet, is a shadow of Excel in terms of importing and layout.

To my mind, these are comparatively minor issues. Now I carry the iPad everywhere and type straight into the Notes app and then email the minutes of meetings almost immediately rather than write them down and then onto the PC as before.

Photos and music are brilliant, videos excellent and blogging is simple on the move. Linking to WiFi networks is simple and you rarely get involved in the technicalities it's so easy to use.

So you would think that PC vendors coming out with tablets would leverage their skills in order to out-Apple Apple. Not so. Blackberry's new model, the PlayBook, needs to be paired with the Blackberry server for mail when the Apple can set up Microsoft, Google or any other type of mail easily and in seconds. The HP TouchPad will run its WebOS operating system which in inherited from Palm who they bought some time ago. Heaven knows how that will affect their business.

Motorola is launching the Xoom which will be an Android product (Google operating system). For me, Google are close to Apple. I use the HTC Desire Z Smartphone and it's brilliant with tons of good Apps similar to Apple and easy to download and use. The drawback is that the lack of compatibility with other devices.

Asus has one coming too to join Samsung. Both use Windows and here's an issue. Microsoft, who rabidly hate both Apple and Google, have no operating system for tablets. So you have Windows 7 which at least supports touch but it's essentially a PC product. There isn't even enhanced linking to Exchange - it's no worse or better than Apple.

So I sit here browsing mails from all my mail accounts on a single device, the iPad 2, mapping my MS Exchange account, a webmail account and Gmail. I have access to my client's Global Address Book, all my MS Outlook contacts and much more.

Apple are well ahead in the game but the disparate market entries are not going to help Microsoft grab back the ground lost to Apple and Google. Slowly, but surely, Apple and Google are infiltrating Microsoft's stronghold in the corporate market place and are entering via the backdoor.

This reminds me of IBM's miscalculation about decentralised computing. Will the mighty Microsoft fall? Stay tuned?

Stay iTuned.

- Posted using BlogPress from my iPad

Wednesday, 11 May 2011

Joined up Thinking

Doesn't management jargon drive you nuts?

Sadly, we're all at it. I recently talked to the Council's Planning Department who thanked me for 'reaching out' and 'engaging in dialogue' about a proposal.

What I did was I phoned them and I talked to them. That's it.

The person I spoke to was no more qualified to do the job than me and they seemed good at reading the regulations while hopeless at working out whether my proposed house extension breached any of them. However, what they were good at is giving me a whole load of meaningless guff that neither gave a full negative or a full positive but their use of jargon was meant to create a mystical air of obfuscation to the extent that I might go away thwarted, yet the person had not directly me told me to.

Enter the 'New World of Management Speak'. In this world we can have a meeting between departments and get some 'joined up thinking' or 'unwrite' a plan. We can 'open the kimono' or 'peel the onion' rather than say what we think. We can 'downsize' rather than make redundancies or we can 'put rubber on the road' rather than do something.

It's a world where we can create the illusion that we know what we are doing when in fact we don't. But keep repeating the vacuous phrases and pointing to some slides on the monitor and we can trick even the most wily business people into believing we are experts.

It is widely accredited that the reason IBM spectacularly imploded in the 80's is that the managers focused on avoiding bad news and were rewarded for giving positive messages. The vernacular phrase, 'he gives good slide' became the watchword for a good manager. They basically avoided the facts.

Nowadays, it's all about 'putting lipstick on the pig' perhaps. I find myself falling into the trap which is nauseating but it seems that the phrases are so widely accepted, yet mean little, that it's a wonder if anyone is actually communicating anything of real value anymore.

Coming back to Twitter. Rather than 140 characters forcing us to say something succinctly, the majority of tweets use tiny urls to reference material somewhere in the ether which could be pages long. It's so bad that most tweeters don't even have anything original to say so they just re-tweet or reference something someone else said or another article. Picking your way through the @so and so or has something drives me bananas.

Facts and original thought seem to be the last thing on people's minds. But if it keeps you in a job, who's knocking it?

- Posted using BlogPress from my iPad

Tuesday, 10 May 2011

Save a fortune on recruitment costs

You want to save on recruitment costs?

Simple. Hire an intern and give them the job description of every new recruit you want to find, give them a Premium LinkedIn account and then get them to contact all those whose profiles match and get them to send in their CVs.

Welcome to the world of high powered, expensive headhunting firms.

Surely that's not what these guys use? LinkedIn?

Oh yes. LinkedIn has is being valued at $billions for a reason. It's the recruiter's paradise. By the same token, anyone who wants to have their profile matched to new positions out there, LinkedIn is the perfect starting point because that's where all the most expensive, seemingly expert headhunters start from - earning fees from 20% upward to 100% of first year remuneration. Sure, they may do some steps afterwards to try to justify their fees, but rest assured their starting point is the same.

For the most part, recruiting firms do little more than what I have described above. Most candidates that get a first interview have rarely met the recruiter who has sent them and at best you may find that a cursory telephone interview has been conducted by the recruiter. Most simply cut and paste the candidate's CV onto headed paper and then seize upon a few points in the CV to justify their reason for sending the candidate along.

Few, if any, will have at that stage checked the candidate's credentials like their education, job tenures and achievements. Going down the line, recruiters usually absolve themselves of any any responsibility for cross checking the information in a CV and certainly they would be unlikely to take up references.

The fact is, beyond sourcing the candidates, little value is added particularly in the modern day Contingent Recruiter for fees up to around 33% of first year salary. And given the source is common to nearly all recruiters, virtually free via LinkedIn, then it is very difficult to understand why firms would pay such incredible amounts of money.

So why not cause a revolution and save yourself some money and hire your own research staff for little money? You would be surprised to find how easy it all is.

Then reinvest the money you save in a few shares of LinkedIn when it goes public, perhaps.

- Posted using BlogPress from my iPad

There ain't no money in Twitter, mate

Twitter in its current form will never turn a sustainable profit. You heard it from me.

Today, Skype is reputed to be under offer from Microsoft for $7-8 billion and you might argue that it's the same situation. But it isn't. Skype can morph and bridge the gap between mid-range business VoIP PABX type solutions and very small businesses who just want cheap, reliable business phone features and tariffs to make themselves global. Somewhere in there lies a large telecoms company with a global footprint already and millions of subscribers. Go figure.

Twitter, however, is a different beast. I would assert that over 98% of the tweets ever tweeted on Twitter (try saying that after a few drinks) are complete, banal dross. Irrelevant to 99% of the users of the Twitter platform. But that's why it is so popular - it's cool, it's freaky and you can do what you want without any cost and be seen to be a complete bore globally.

So imagine if a charge was introduced. As many as 98% of all tweets would disappear as no one would pay just to tell you they had eggs for breakfast. Which means that you would be left only with the worthwhile tweets which may be good but then no one would be on there to listen to them - so the initial value that it is big, cool and freaky has been destroyed. You are left with a talking shop, a coffee house, a club for self-opinionated people to expound amongst themselves. Twitter as we know it would implode.

The danger is that by charging Twitter loses its critical mass of users that make it the cool place to be and without users no one would want to pay creating a downward spiral. We have a precedent here. At the height of Web 1.0, online chatrooms were the rage. Loads of people got online in chatrooms large and small and conversed creating a whole new language and the rise of 'social networks'. Microsoft lead the way in providing free platforms across the world. Then one day they changed it all by taking the rooms private and charging for them. They didn't need the money but they needed the protection as these rooms were fast becoming the grooming grounds of social predators like paedophiles and scammers. The concept of the chatroom almost vanished overnight. The addicts stayed but the fun was gone as the numbers dwindled. Nobody wanted to pay to hear themselves talk to themselves. They got small and niche with little profit opportunity.

Twitter's biggest value is that we might get millions of would-be journalists reporting the news live, in situ as the chap did during the US SEAL raid in Abbottabad. Or people revealing wrongly that Jemima Khan has been cavorting lewdly Jeremy Clarkson - even I saw through that one. That set of tweets alone set the cat amongst the pigeons on 'Super Injunctions' as many would argue the law has little jurisdiction over the internet while the simple practical issue is that while the injunctions may have been violated, Twitter is served from the US and so is immune to UK law. The issues surrounding this may well come back to haunt the internet and Twitter. As much as we want freedom of speech we don't want prejudicial lies propagated.

Indulge me by considering gold. It is shiny and perceived to be precious because it has bulk. It has few real uses beyond the cosmetic yet it is one of the single most sought after commodities in the world even being the base of currencies until recently. It varies in price according to the economy and it has little practical uses. Yet gold is different as you can melt down an ingot, cut it into pieces, redesign it and then sell each piece so that the aggregate of the value of all the little pieces is many multiples the original ingot value. Gold has more value in its constituents than the whole.

Yet investors and financial people treat Twitter like gold. They are convinced the value is in every individual who uses it when the reason people use it is because of its sheer size. Cut Twitter in pieces and the value is diminished.

Is there a middle ground to create a real business case? To create a long term, sustainable and profitable business, Twitter has to change. The change cannot smash the reason why people use or it will implode.

So could Twitter be sold on an airtime-type model? Listening in is for free and then you buy a package which is dependent on the number of tweets you want to do. Because of the sheer volume of users and the their tweets, this may serve two purposes. 1) It monetises serious tweeters and 2) it cuts down the number of banal, useless tweets that serve as the irritating noise that puts many off using it regularly. The chances are that if the charge structure is sensible, you may still maintain a sizeable volume of subscribers and create a growing revenue stream.

The problem for investors is that Twitter may be fool's gold. It looks like it's worth something but the reality is that it isn't. Twitter is free today and it's worth every penny.

- Posted using BlogPress from my iPad