Technostalgia and Human Computers

 
Technostalgia

 A few weeks back, I went to a Christies auction on the history of
cyberspace.  In front of me was Mark Stahlman,
one of the earliest cybergeeks in New York.  To my right, with his wife,
was Mitch Kapor.  Kapor of course invented Lotus 123, the precursor to Microsoft
Excel, which was ultimately sold to IBM for a
lot of money.  In any case, he was aggressively bidding on the first
computer business plan by Eckert and Norbert Weiner’s entire library of strange
scientific studies.

I bid for a couple of interesting things that
weren’t quite as famous (or expensive), like an early 19th century british
study on early automata (with extended commentary on the Turk, the "magic" chess machine that
revealed a dwarf inside) as well as examples of the first programming language
guides (for a language called Algol).

When I brought my
collection home,  I opened one of the oldest items which was a book from
1833 on Zerah Colburn who was one of the
first human computers.  He could calculate in his head
so quickly that crowds were literally amazed. I do not think that former AOL
biz dev exec David Colburn is a descendant, although I am
not sure of this in so far as he too could calculate accretive partnerships
with unnatural alacrity. The book is so old that its spine has basically turned into
dust and so all of the pages are barely caked together.  A last remnant of
the first human powered computer.

It is now 2005, more than 50 years since the
first electronic computer was built, and we have a massively popular open
computing program that is the internet.  It is generating more than $100
billion in annual online ecommerce and more than $10 billion in advertising
which is rapidly growing.  It has become an automatic part of our daily
lives, converting the 5-10 physical interactions that we
might have had during a work day in the past into a constant interactive stream
of tens if not hundreds of conversations.

A few weeks ago, Jordan Rohan a solitary sell-side analyst came out with a note that claimed paid search keyword prices were
rapidly declining. this appears to have been based on a single anecdotal
conversation with a 3rd tier search engine off-the-record.  The entire
sector plummetted. 

"Checks
indicate pricing has shifted from robust to weaker-than-expected," Mr.
Rohan said of Google, adding the pricing shortfall will
prove difficult to make up in the last six weeks of this quarter. Advertising
prices have fallen 10 per cent this quarter, and the company’s profit margins will narrow as hiring
continues in the face of slowing sales growth, he said. Shares of Google fell
$5.06 to $188.89 on the Nasdaq Stock Market yesterday after earlier dropping as
low as $182.23. AP

Investors are
gasping at any evidence of a turn for the worse (or the  better) for GOOG
and YHOO, and to a lesser extent, EBAY and AMZN.  Almost a quarter-trillion dollars of market capitalization is
currently being waged on the fortunes of these companies.  They are
perceived in terms of "platforms, networks, marketplaces"
central to the future of the Media and Technology markets.  Just like
Compuserve Netscape, Excite, and of course AOL before them.  What is
defensible now is the "critical mass" of the consumer audience base
(250 million or so) and the highly scalable merchandising, advertising, and search
systems that have evolved to support their needs online.

The Reintermediation of  Community into the Online Equation 

What is curious when you press investors as to
why really these businesses can continue to scale, their answers somehow point
to the participation of the community in the production
process.  They talk about the "sellers" of EBay.  For
Google, they talk about the buyers of adwords and the small
site owners that can stick ad-sense (and soon YPN) easily on their sites.  Yahoo and Amazon suffer because
they haven’t figured out how to syndicate peoples’
desires to sell to others as well as they
have done with consumers themselves.

It was interesting to see About get bought for
$400m from the New York Times.  Have you been to About.com recently?  It is
riddled with highly curated ads.  Cheezy, but satisfying in terms of answering
certain kinds of commercial problems with human experts.

What I heard was
that the digital gray lady was more interested in About.com’s
ability to generate highly popular organic search results than it was in
About.com’s content.  The New York Times has figured out,
correctly, that it may not be able to afford keywords on search engines for
placing its stories.  Since so much internet activity starts with search,
and the engines control so much inventory, ny times
content therefore needs to show up algorithmically: About.com as New York Times
in-house SEO platform.

When Scott Kurnit
started the mining company in 1997, he was late to the party and I thought that
the idea of hiring actual guides to curate
content was silly.  Boy, was I wrong!  Well, it was silly.  And
opinion-driven, amateur, and limited relative to the breadth of the automatic
directories and engines.

And so now, the
traditional elite editorial voices of the times, are being undermined by a content management
approach that in some strange way reintermediates human agency in a distributed
fashion.  How many guides are there, 500 or so?  Perhaps this is the face of a new kind of media machine. You can download a presentation that I gave to the Stanford Media Center in early February with data supporting this thesis: Download sethgoldstein.mediacenter.2.9.pdf.

The Four (New) A’s of Internet Advertising:

And so from Van Kempelen’s
dwarf hidden within his chess-playing machine the Turk, to Kurnit’s human guides
powering the SEO efficacy of About.com, there would seem to be a long history of computing
machines exposing their human qualities as core to their effectiveness.  In proposing a framework for online media futures, it is critical to incorporate the consumer as
both creator of content and a subject of
advertisements at the same time. The next post will be an attempt to do so, along the following lines:

1. Automata
2. Algorithm
3. Alchemy
4. Arbitrage