History > 2006 > USA > Internet (III)

YouTube’s Video Poker

September 30, 2006
The New York Times
By SAUL HANSELL

Chad Hurley effects a calm, almost detached demeanor, even as the Web site he runs, YouTube.com, has provoked a frenzy of consternation among executives of record labels, TV networks and movie studios. For millions of Internet users, the site that opened to the public less than a year ago provides a daily fix of odd and interesting video clips, from White House speeches to frat house pranks.

YouTube has also become a vast repository of video taken without permission from television shows and movies, not to mention home movies constructed — with nary a cent paid in royalties — from commercial music and imagery.

Mr. Hurley was surrounded by curious media executives at Allen & Company’s annual Sun Valley mogulfest in July. They wondered: friend or foe? Is he earnestly working to make YouTube and its exuberant users conform to the existing standards of copyright law and contractual obligations? Or is he cynically flouting the law to enable YouTube to grow rapidly, calculating that he will be able to cut a more advantageous deal later, or perhaps sell the company to someone else who will be able to sort through the mess of liabilities?

In an interview this week, Mr. Hurley, not surprisingly, portrayed himself as mainly trying to improve the site for its users while working to find arrangements that will satisfy Hollywood.

“There’s going to be bumps along the way, but we’re trying to make an effort to make the new model work for everyone,” he said. “We’ve been developing features and working on the problem. I don’t think we have been just sitting back and just buying fancy furniture.”

YouTube has started to attract mainstream advertisers and the site has become financially stable, Mr. Hurley said, despite the huge cost of showing more than 100 million video clips a day. Potentially most significant, Mr. Hurley pointed to a deal signed recently with Warner Music that he hopes will be a model for dealing with Hollywood and record companies from now on. YouTube is developing technology that will identify Warner music used in a video that is uploaded. When the site plays those videos, it will share some of its advertising revenue with Warner and others with copyrighted material that is used.

Moreover, Mr. Hurley says, there is much more to YouTube than piracy. And professionals are creating programs specifically for YouTube: the recent series of clips posted under the name Lonelygirl15, for example, showed an actress pretending to be a disaffected teenager.

Others are not so sure. Doug Morris, the chief executive of the Universal Music Group, said at an investor conference recently that YouTube and MySpace, the social networking site, “are copyright infringers and owe us tens of millions of dollars.”

And Mark Cuban, who founded Broadcast.com, an early Internet video site that was bought by Yahoo, argued on his blog that YouTube did not have a viable business other than piracy.

“It is absolutely reminiscent of Napster,” Mr. Cuban said in an interview. “It’s nice that they say ‘it’s different this time,’ but it’s not.”

Mr. Cuban argues that the deal with Warner is unworkable because it is too complex, with so many parties with potential claims on videos.

Alex Zubillaga, Warner’s executive vice president for digital strategy, said in an interview that these problems could be solved. “This is a framework that allows us to monetize our assets while we unleash the creativity of the user,” he said.

Warner, he said, is reaching out to other major media companies to negotiate how royalties from YouTube will be split in cases where more than one song or video program is included on one clip.

Still, Mr. Zubillaga said, dealing with YouTube “is not the typical situation we run into every day” because the company has not thought through many of the issues raised by its business. “Part of what we are doing is working with them to figure out what their business model can be,” he said.

Now 29, Mr. Hurley was a graphic designer at PayPal, the money transfer system. After it was acquired by eBay, he and Steve Chen, a former PayPal engineer, were looking for a new company to start. They decided to make a site that would help users exchange video files, much as many sites had been created to hold photographs.

Mr. Hurley found a backer in Roelof Botha, the former chief financial officer of PayPal and now a partner with Sequoia Capital, the powerful Silicon Valley venture capital firm that had backed Yahoo, Google and others. Sequoia is betting so heavily on YouTube that it has provided all of the company’s financing so far, rather than bringing in other firms, as is common.

This was hardly a unique idea. There are several hundred video sharing sites. But YouTube took off quickly. Its technology was simple and easy to use. In addition, it tapped into the rapid growth of MySpace. YouTube developed a system that would allow anyone to insert a video directly onto a Web page. MySpace users leapt on this technology to show videos to their friends, and in turn they spread the YouTube logo throughout MySpace.

Last year, MySpace provided some 20 percent of the visitors to YouTube. That proportion has fallen sharply, in part because MySpace now offers its own video storage system. In the meantime, YouTube has established itself as the best place to look for videos, especially from professional programs.

YouTube gained a lot of notoriety as the place where users traded copies of “Lazy Sunday,” a sketch that appeared on “Saturday Night Live” and became a cult hit. And much of the activity on the site is watching clips from “The Daily Show,” “The Colbert Report” and other broadcast programs.

YouTube is relying on the Digital Millennium Copyright Act, which in general does not require Internet companies to screen material they store in advance. Rather, the law says Web sites must remove content when a copyright holder informs them of a violation.

But there are many who wonder how safe YouTube’s position is. The Supreme Court ruled in the MGM v. Grokster case that music file sharing systems could be held liable for inducing users to violate copyrights. That said, many other mainstream sites, like MySpace and Yahoo, also post videos without trying to screen out copyrighted material. (Most do scan for pornography, though.)

Yet even Hollywood executives interested in finding a way to work with YouTube are perplexed about how to go about it. They are happy to use YouTube as a free place to distribute movie trailers and TV clips, but users prefer the very best bits of hit shows.

“The yin and yang of working with YouTube is you want to use them as a way to promote our programs but we don’t want to give away the store,” said John Miller, the chief marketing officer of NBC Universal television. NBC has bought advertising on YouTube and uploaded clips promoting shows like “The Office.” And it has also actively demanded that the site take down clips from “Saturday Night Live.”

Mr. Hurley hopes to be able to solve this concern by offering studios a share of ad revenue as it has for Warner Music. But for now YouTube does not have much advertising revenue. It displays graphical banner ads on some pages and text ads on its search pages. But Mr. Hurley rejects inserting commercials in front of video segments, an increasingly common advertising format.

Peter Levinsohn, the president of Fox Digital Media, the News Corporation unit that looks after Internet distribution of movies and television programs, said that YouTube’s advertising revenue, typically measured in cost per 1,000 views, or cpm, appeared to be low.

“If they get a relatively low cpm, and give us the majority, there won’t be enough left for them to sustain themselves,” he said.

Mr. Hurley responds simply that the company is developing new, more engaging advertising formats that will lure people to watch commercials that interest them. And he argues that YouTube’s bargaining power with Hollywood will increase along with its popularity.

“We have the most content and we have the largest audience,” he said. “When people are making the decision to put a piece of content online they really do truly want to get it in front of the largest audience.”

    YouTube’s Video Poker, NYT, 30.9.2006, http://www.nytimes.com/2006/09/30/business/30tube.html

Rural Areas Left in Slow Lane

of High-Speed Data Highway

September 28, 2006
The New York Times
By KEN BELSON

CANAAN, Vt. — For most businesses, the goal is to attract as many customers as possible. But in the fast-changing telephone industry, companies are increasingly trying to get rid of many of theirs.

Bill and Ursula Johnson are among the unwanted. These dairy farmers in bucolic northeastern Vermont wake up before dawn not just to milk their cows, but to log on to the Internet, too.

Their dial-up connection is so pokey that the only time they can reliably get onto the Web site of the company that handles their payroll is at 4 in the morning, when it is less busy. Mr. Johnson doubles as state representative for the area, and he doesn’t even bother logging on to deal with that. He communicates with colleagues in Montpelier, the capital, by phone and post instead.

The Johnsons’ communication agony could soon get worse. Instead of upgrading them to high-speed Internet access, Verizon, their local phone company, is looking to sell the 1.6 million local phone lines it controls in Vermont, New Hampshire and Maine. The possible sale is part of an internal plan called Project Nor’easter, according to a person with knowledge of the details.

A Verizon spokesman, John Bonomo, would not comment on the plan, but said the company “continually evaluates the assets and properties in our portfolio for strategic fit and financial performance.”

Verizon is not alone in its desire to reduce the number of landlines it owns. Big phone and cable companies are reluctant to upgrade and expand their networks in sparsely populated places where there are not enough customers to justify the investment. Instead, they are funneling billions of dollars into projects in cities and suburbs where the prospects for a decent return are higher.

But those projects are unlikely to reach rural areas of Vermont and other states, leaving millions of people in the Internet’s slow lane, just as high-speed access is becoming more of a necessity than a luxury. The United States already lags behind much of the industrialized world in broadband access.

The lack of broadband has preserved places like Bessie’s Diner as Canaan’s de facto meeting hall. Over burgers and turkey club sandwiches, local residents swap tidbits that, in a more wired world, might end up in e-mail and instant messages.

Helen Masson, who lost her job at an Ethan Allen furniture factory a few years ago, grumbles that the lack of broadband has made it harder for her to find work, despite taking computer classes. Mr. Johnson, sitting nearby, nods in agreement. “The staff at the statehouse shudder when I’m on a committee because they have to lick a stamp instead of pressing a send button,” he said.

Verizon has sold phone lines before. In 2005, the Carlyle Group bought its business in Hawaii. Verizon also sold 1.3 million lines in Alabama, Kentucky and Missouri in 2002.

Others have followed. In May, Sprint Nextel spun off its local phone division with 7.1 million lines and renamed it Embarq. In July, Alltel spun off its local phone group and merged it with Valor Communications.

If Verizon does sell the New England lines, it would most likely be to a smaller company or private equity group that could be even less capable of offering fast Internet access. That prospect has Vermonters fearful that the exodus of jobs and employers from the state could accelerate.

“We have companies that lose money because they don’t have broadband,” said Maureen Connolly, a director at the Economic Development Council of Northern Vermont. “We’re not a third world country. We shouldn’t have to beg for service.”

While selling off slow-growing landlines in New England may please Verizon’s shareholders seeking higher returns, the company’s plan has reignited long-simmering political and economic debates about whether the region is being left behind as wealthier states nearby pull further ahead.

The proceeds from any sale of New England lines would help Verizon pay for the potentially more lucrative fiber optic network it is building in and around cities like New York and Boston.

The network is part of Verizon’s push to transform itself into a fast-growing technology company and shed its image as a stodgy utility.

The possibility that Verizon would sell local lines is another sign of how much the phone business has changed in the last half decade. Verizon and other former local phone monopolies argue that since the cellphone, cable and Internet companies that are luring away millions of their customers are not compelled to serve remote and rural places, then they should not have to bear that burden either.

In Vermont, Verizon has broadband available on just 56 percent of its 330,000 lines, compared with 95 percent for most local phone companies, which receive substantial federal subsidies. Without the same aid, Verizon must bear more of the financial burden to upgrade its network.

“Vermont — like all rural states — has higher fixed costs of providing service,” said Polly Brown, president of Verizon Vermont, where the number of landlines has declined 9.1 percent since 2002. “You’re spreading those costs over fewer customers, who are located far and wide, and you’re dealing with topographical challenges such as mountains and a rock base.”

Residents, unions and politicians in Vermont do not dispute that the phone business is a challenging one, but they say that residents will have a harder time telecommuting or home-schooling their children. Towns like Canaan will not have access to the growing number of government records kept online, they say, and hotels and other tourist attractions will have a harder time attracting outsiders.

Take Michael and Louise Kingston, who have had a summer home in nearby Averill for the last 35 years. Owners of a grape-growing company with vineyards in Chile and California, they often cut their vacations short and return home to New Jersey because they cannot run their business on the 26-kilobit dial-up line — a speed considered fast in 1993 — in Averill.

“It means we can spend less time here, which means you spend less money here at a time when the local economy needs it,” Mr. Kingston said.

Connections are so slow that their son drives 25 miles south to Island Pond to find a broadband line. There is no cellphone service either, so when locals go to areas where there is reception, they take along other peoples’ phones to retrieve their voice mail for them. In places where Verizon does not sell high-speed Internet, some people have the option of getting broadband from their cable provider. But in Vermont, cable companies have focused on more populous towns like Montpelier and Burlington, the state’s largest city. Cable coverage in the northeast part of the state is spotty.

Several rural phone carriers have spoken to Verizon about its lines in New England, including Fairpoint Communications, CenturyTel and Citizens Communications, according to people with knowledge of the discussions. Buyout firms may also be considering the business.

Rural phone lines can be profitable because the basic infrastructure was paid for years ago, there are often few competitors and subsidies from the Universal Service Fund, which helps carriers provide service to hard-to-reach consumers, can be substantial.

But the subsidies do not benefit all carriers equally. For example, Vermont Telecom, which has 21,000 phone lines in the state, will receive $24.34 a month per line in the fourth quarter from the fund, money that is credited to customers on their bills.

But as a larger carrier, Verizon will receive one-tenth the subsidy, or $2.42 per phone line. Any company that buys Verizon’s lines will inherit the same subsidies, making such a deal a less attractive investment. Verizon could compensate by lowering its sale price, at the risk of disappointing shareholders.

The economics of providing broadband in rural areas are discouraging, too. The cost of upgrading an existing copper line that runs from switching stations to remote homes can be as much as $5,000, according to the National Exchange Carrier Association. Such costs are prohibitive for phone companies, which typically want to make back their money within three years, said Victor Glass, the director of demand forecasting at the carrier association.

Though frustrations with Verizon run high in places like Canaan, the alternatives are more alarming. Since it took over Verizon’s lines in Hawaii, the Carlyle Group has had billing problems that caused a fourfold spike in consumer complaints.

Carlyle’s experience could presage what rural areas like northern Vermont might face if Verizon departs, particularly if the buyer sharply cuts costs and jobs.

“We would rather deal with Verizon because there’s a process in place and people up and down the food chain that we know,” said Darlene Stone, an operator at a Verizon call center in South Burlington and chief steward in the Communications Workers of America, which represents 135 Verizon employees in Vermont. “Private equity funds are not people who are going to be interested in our opinions.”

The possibility that a sale could lead to worse service has put regulators in the uneasy position of trying to pressure Verizon to do more while not alienating the company, which invested 37 percent less in its network in Vermont last year than in 2001.

In 2005, the Public Service Board fined Verizon $8.1 million for providing inadequate customer service in Vermont. This year, regulators also got Verizon to agree to expand its broadband coverage to 80 percent of its phone lines by 2010.

That holds out some hope for isolated areas, but there is no guarantee that any particular customer, like the Johnsons, will be among the 80 percent and there is no guarantee that Verizon will still be in Vermont by then.

Alternative broadband providers who could fill that gap face problems, too. Jake Marsh, who runs Island Pond Wireless, a company that beams high-speed Internet signals over strings of antennas, has signed up 250 customers and has a waiting list just as long. But to expand, he is counting on towns getting state funds to help defray the installation costs.

Yet officials in Norton, 15 miles west of Canaan, could not download the 20-page grant application because their dial-up line was so slow.

    Rural Areas Left in Slow Lane of High-Speed Data Highway, NYT, 28.9.2006, http://www.nytimes.com/2006/09/28/technology/28vermont.html

Click Fraud Is Growing on the Web

September 23, 2006
The New York Times
By KAREN J. BANNAN
 

A year ago, DiamondHarmony.com, an online jewelry store, decided that it had outgrown its sole source of advertising, which was eBay. The company added an elaborate marketing effort on search engines that included a pay-per-click advertising campaign based on keywords and phrases. For its trouble, DiamondHarmony became ensnared in click fraud.

Instead of actual prospects, the clicks were coming from fraudulent sources. The fraud, which cost DiamondHarmony $17,000 over seven months, was uncovered through analytical software the company installed from ClickTracks of Santa Cruz, Calif.

Click fraud most commonly happens when renegade partners, who get a portion of the fees earned by a search engine each time a paid link is clicked, deliberately generate excessive clicks with no chance that any of the clicks will result in a sale for the business that is paying for them.

The spurious clicks can be generated through automated programs or by paying people to spend time clicking over and over on a link.

As for DiamondHarmony, the company was initially spending about $45 to $50 a day on each of the eight search engines where it placed advertising, said Joe Tedd, its manager for search strategies.

The week before Thanksgiving, however, Mr. Tedd started seeing a large increase in clicks from one engine in particular, while its corresponding conversion rate — the number of sales in relation to clicks — kept going down.

“In November, we saw the number of searches going up on all the engines we had placement on,’’ Mr. Tedd said. “But while all the other engines were seeing higher conversion rates, this one engine was doing so poorly, we actually took the campaign offline.”

“The search provider was syndicating the keyword to partner publishers, but while the clicks were being counted on the publisher’s site, they weren’t coming through to our site,” he added.

Businesses can also fall victim to click fraud at their competitors’ hands. Companies vying for the same position on a list of paid search results may click often enough on a competitor’s ad to push the rival over its spending limit — knocking them out of paid search listings temporarily.

Companies typically set a daily budget for individual search terms as well as their entire campaign.

This year eMarketer Inc., a research firm, estimated that the overall online advertising market for 2006 would be $16.7 billion; paid search was expected to reach $6.9 billion by the end of the year. The company on Monday will revise those figures.

The overall online market is being re-evaluated down by 3 percent to 6 percent. Search engine marketing’s share of that market, however, remains constant.

The scope of the problem depends on who is describing it. Business owners like Iain Burton, the chairman of Aspinal of London, a manufacturer and seller of fine leather items, says click fraud is much more pervasive than the search engines acknowledge. Mr. Burton, who spends about $50,000 each month for paid search advertising, said he was amazed at how blatant it could be.

“I used to make money on pay-per-click advertising; I’d say it used to be really good. But it has become ridiculously expensive. I’ve lost tens of thousands on click fraud over time.”

Search engine providers disagree and say the overwhelming majority of fraudulent clicks were never seen by advertisers because they were discovered and removed. A Yahoo spokeswoman, Gaude Paez, did say, however, that click fraud is a serious, but manageable, challenge.

“We believe that our entire industry must be vigilant in staying one step ahead of spammers,” said John Slade, senior director for Yahoo’s Clickthrough Protection.

Click Forensics, a consulting firm based in San Antonio, puts the number of fraudulent clicks at about 14 percent of total clicks, based on a recent survey of more than 1,300 online marketers.

The truth probably lies somewhere in between, said Danny Sullivan, the editor of SearchEngineWatch.com, an online industry newsletter.

Google, the search leader, agreed to pay $90 million to settle a click fraud class-action suit — with up to $30 million of that allocated for legal costs. In July, Google’s proposed settlement was approved by an Arkansas judge who called the ruling “fair, reasonable, and adequate.”

Still, 556 advertisers opted out of the class-action suit, leaving the door open for additional lawsuits. And in June, Yahoo agreed to pay litigants’ legal fees, estimated at $4.95 million, and provide credits to any company that could prove it was a victim of click fraud from January 2004 through this year.

What makes the problem worse, industry followers say, is that many instances of click fraud go undetected. “We’re not at a point in Internet history where we can easily point to a number and easily point to a solution,” said Dana Todd, president of the Search Engine Marketing Professional Organization. Moreover, “the technology solutions out there to combat the problem are neither free or easy, especially for small businesses that are already overwhelmed by search engine marketing.”

Indeed, while larger companies expect — and can usually afford — to pay for some measure of click fraud, smaller companies have no choice but to ferret out inaccuracies, Mr. Sullivan said. The best way to start, he said, is to measure conversions to see if the ads are working.

But for many smaller business, Ms. Todd says, the only way to monitor the problem are either manually auditing clicks or using campaign management software or services. And often that seems not worth the bother.

“You have to look through all your data and see what clicks came in from where, and why they didn’t convert, which is fairly time-consuming and technical,’’ she said. “You can use some of the freebie trackers, but they may not give you the level of transparency to be able to understand what’s happening on your site.’’

“We believe that some of the biggest offenders,’’ she added, “are doing it in such minuscule amounts that it stays below the radar — a nickel here, a penny there — but it adds up in a huge way.”

Mr. Burton of Aspinal said he was forced to hire a professional pay-per-click management company to address the issue, and found that he had lost $10,000 over three months to click fraud.

“It’s a bigger problem with companies outside of Google,” he said. “When you look at your stats and find that — with a popular keyword — some smaller engine is sending through 10 times more traffic than Google, which gets by far the largest amount of traffic, then you know there’s a problem.”

Shuman Ghosemajumder, Google’s business product manager for trust and safety, said a company’s search provider should do the sleuthing.

“We’ve got a system of real-time detection filters that constantly scan for suspicious activity based on the rules we’ve set up,” he said. “The vast majority of invalid clicks are handled by them. We’re also manually reviewing to detect publishers who might be generating fraudulent clicks. When we do find out, we terminate that publisher.’’

    Click Fraud Is Growing on the Web, NYT, 23.9.2006, http://www.nytimes.com/2006/09/23/technology/23click.html

Yahoo Woos a Social Networking Site

September 22, 2006
The New York Times
By SAUL HANSELL

Mark Zuckerberg is a member of the Google generation, one too young to remember all the ambitions dashed and fortunes lost when the last dot-com boom ended.

That may be one reason Mr. Zuckerberg, the 22-year-old founder of Facebook, a social networking Web site, has so far shied away from selling his company, rejecting offers that would have made him several hundred million dollars.

“We’re focused on building the company for the long term,” he said yesterday.

When Viacom offered $750 million for Facebook in January, he asked for $2 billion and was rebuffed, according to a person involved in the negotiations. Now, he remains undecided about the latest offer, made in the last few weeks by Yahoo. That offer, first reported by The Wall Street Journal, was confirmed yesterday by two industry executives, one briefed on the deal by Facebook and the other by Yahoo. Both spoke on the condition of anonymity because the negotiations are continuing.

To woo Mr. Zuckerberg, Yahoo has offered about $900 million for Facebook and says it will keep the company somewhat independent, with Mr. Zuckerberg in charge. This has been its model with other acquisitions like Flickr, a photo-sharing site, and Del.icio.us, a social bookmarking service that lets members share lists of their favorite Web sites.

“A lot of people say there are problems with having a 22-year-old C.E.O., but one thing that is good about it is that he doesn’t remember the boom and the bust that followed,” said an adviser to Facebook. “That has distorted the thinking of a lot of people. If they have a good product or service, they sell way too early and they don’t stick with it.”

The adviser spoke on the condition of anonymity because of the sensitivity of continuing negotiations.

Mr. Zuckerberg, through a spokeswoman, declined to comment on any potential acquisition offers.

Money, at least so far, does not seem to draw him. He lives in a barren apartment in Palo Alto, Calif., a short walk from Facebook’s office. He only bought a stereo recently at the request of his girlfriend.

“Mark is the kind of guy you worry needs to get other things in his life,” said David Sze, a partner with Greylock Partners, one of Facebook’s venture capital investors.

By all accounts, Mr. Zuckerberg is motivated by his passion for his invention, which he created less than three years ago as a Harvard undergraduate. The site quickly became an electronic bumblebee, pollinating many American colleges with gossip, flirtation and news of the next fraternity party.

He said the minimalist design sensibility of Google, and also Apple, influenced how Facebook should look.

“I can remember the time when Yahoo was the coolest company, but for me and a lot of people my age, that is how people feel about Google,” Mr. Zuckerberg said in an interview earlier this month.

He also modeled his management style as Facebook’s chief executive on that of Google’s founders — Larry Page and Sergey Brin — as well as Steve Jobs of Apple.

Mr. Zuckerberg keeps tight control over the company’s activities. He still writes some of the site’s program code, designs most of its features and represents the site in public.

And he has been able to keep an unusually high share of the stock in Facebook, giving him the dominant say in its fate.

For Yahoo, an acquisition of Facebook would solve many problems. Yahoo has been trying, with little success, to build its own social networking service called Yahoo 360. Its brand is not seen as relevant by younger people, something the company has been trying to fix. Most of all, its growth has been slowing, increasing the gap between Yahoo and Google, which has become the largest Internet company.

“Yahoo is losing its grip on the younger demographic,” said Jordan Rohan, an analyst at RBC Capital Markets, who said he thought that Yahoo should buy Facebook, even at a high price. “It needs to buy its way out of this.”

Yahoo itself has been inconsistent about its pursuit of Facebook. It made an offer last summer, then withdrew it in July, the day after it announced disappointing second-quarter earnings. And Yahoo, which has prided itself on financial discipline, is still unsure exactly how much it wants to pay for such a small business. Facebook will have revenue of less than $50 million this year, according to two people briefed on the company’s finances, and hopes to take in more than $100 million next year. It has been profitable.

A similar problem faces many large companies these days, both traditional media companies that want to follow their audiences online and older Internet companies that want to reverse their slowing growth. They are interested in buying some of the new crop of Internet companies that have emerged in the last two years. Many of these, from YouTube, the user-contributed video site, to Digg, a news site, have attracted large audiences but little revenue.

In some cases, the larger companies are willing to gamble on growth — as eBay did when it bought the Skype chat service last year for $2.6 billion. But in other cases the asking prices of the entrepreneurs and the offers of their potential acquirers have failed to line up.

For Facebook the key question is whether it will be able to find ways to weave advertising into its site in a way that its audience will accept.

Its larger rival, MySpace, is on a track to do so, spurred on by the News Corporation, which bought it last year. Google recently agreed to pay MySpace at least $900 million over three years to sell text and banner advertisements on its site.

Facebook has recently made a similar but smaller deal with Microsoft. And it is working to create special sections, called groups, for advertisers. But Mr. Zuckerberg’s focus on uncluttered design, like that of Google, is keeping the advertising on each of the site’s main pages far smaller than on MySpace.

Much of Facebook’s hope for growth rests on a planned expansion beyond its core audience in the college market. Sometime soon, it will open up membership to anyone in the world, a change that may alienate its existing members, who have become used to its exclusive college-only atmosphere.

As students returned to campus this fall, Mr. Zuckerberg introduced a new feature meant to give users easer access to what they wanted most from the site. When they log on, they see an up-to-the-minute list of everything their friends have done on the site: made a new friend, posted new pictures, even declared their allegiance to a political cause.

For many users, this took the site, which was already tending toward voyeurism, to an unacceptable extreme. And by the hundreds of thousands, they used Facebook itself to organize a mass protest.

Two days after the changes were introduced, Mr. Zuckerberg came back to a hotel room after a day of press interviews, and at 1 in the morning, made final tweaks on hastily conceived changes to the new feature. The next afternoon, after just a few hours of sleep, Mr. Zuckerberg joined a live discussion with hundreds of Facebook members.

He read their comments while sprawled on a hotel bed, wearing gym shorts and a T-shirt, tapping on a computer while propped up on his elbows. Some members told him they liked the new features or appreciated the modifications, but many expressed their anger in the sort of sharp words the Internet fosters.

“Wow,” Mr. Zuckerberg muttered, as he read one particularly personal comment that began “Mark Zuckerberg is a pretentious Harvard” and ended with an expletive.

“Normally I talk to people, but not everybody at once,” he said. “It’s a bit overwhelming.”

Then after a pause, he added, “It’s neat.”

    Yahoo Woos a Social Networking Site, NYT, 22.9.2006, http://www.nytimes.com/2006/09/22/technology/22facebook.html

Ad assignment goes awry on MySpace

Posted 9/22/2006 7:34 AM ET
AP
USA Today

RICHMOND, Va. (AP) — A university student appears to be responsible for an advertising class assignment that went awry when the teacher's pug was threatened to be killed online, the school said.

Virginia Commonwealth University had previously said it did not suspect a student was behind the posting on networking site MySpace.com in which someone identifying himself as Jason threatened to kill the pug, Oscar, online this week.

The school later traced the postings to a school computer. It refused to identify the suspect because of federal privacy laws regarding students.

Mike Lear, an adjunct professor at VCU's Adcenter, last week gave his class an assignment to make his 6-year-old pug famous. While most students posted fliers around campus with the pooch's picture on them, the MySpace user opted for a more shocking approach.

It worked, as animal activists and others around the globe called the Adcenter and local police to report the threat. After investigating, Richmond police issued an alert saying, "this threat is the result of a VCU student's assignment that went awry. We want to stress that at no time was any animal in danger."

The assignment had made it clear that students could not harm or kill the dog or threaten to do so.

"The VCU Adcenter is very upset about this incident and will use 'Oscar' as an example of what not to do for classes in the future," Rick Boyko, Adcenter's managing director, said Thursday in a statement from the school.

Although charges won't be filed against the student, the university said the postings violate VCU's honor code and rules regarding the use of university computers and that the student could receive sanctions, including expulsion.

    Ad assignment goes awry on MySpace, UT, 22.9.2006, http://www.usatoday.com/tech/news/2006-09-22-myspace-pug-prank_x.htm

Advertising

Marketing on Google: It’s Not Just Text Anymore

September 22, 2006
The New York Times
By STUART ELLIOTT

Just as Madison Avenue once helped convince consumers that orange juice is “not just for breakfast anymore,” Google is turning to Madison Avenue to help convince marketers that Google is not just for text advertisements in tiny type that appear adjacent to the results of searches on google.com.

Google is teaming up with Goodby, Silverstein & Partners in San Francisco, an Omnicom Group agency known for offbeat creative work, on a project for one of the agency’s largest clients, the Saturn division of General Motors.

The project begins today with a test of a campaign for Saturn, bundling together several Google products and services like clickable video clips, the Google Earth satellite mapping tool and geographic finding of computer users.

Visitors to a variety of Web sites in six cities around the country that are home to 22 Saturn dealerships will see what look like typical banner ads for Aura, a new Saturn midsize sedan. Clicking on an ad will produce a view of the earth that zooms in on the dealership nearest to the computer user.

The doors to the virtual dealership fly open, revealing the general manager, who introduces a brief commercial about Aura. After the spot ends, the general manager returns, standing next to an Aura and offering choices that include spinning the car 360 degrees, inspecting its engine, printing a map with directions to the dealership and visiting the Web sites of Saturn (saturn.com) or the dealer.

The project is intended to stimulate demand for Aura test-drives with a twist: the dealerships will deliver the cars to the homes of consumers. The theme of the project is “Take the 250,000-mile test drive.”

Sellers of online advertising are seeking to persuade mainstream marketers to devote more of their ad dollars to new media. That mission took on added resonance this week when a Google competitor, Yahoo, disclosed an unexpected softening of ad sales in two major categories: automotive and financial services.

Of course, some forays into the online media go more smoothly than others.

For instance, the Air Force this week decided to take down a profile it put up last month on MySpace, the social networking Web site (myspace.com), partly because of concerns about inappropriate content that could be linked to the profile. The decision was reported by AirForceTimes.com.

Colonel Brian Madtes, strategic communications director for the Air Force recruiting service, said yesterday that the Air Force would probably continue to run banner ads on myspace.com but was unlikely to run profiles again. The profile was intended to generate interest among computer users ages 18 to 24 in new Air Force commercials created by GSD&M in Austin, Tex., also owned by Omnicom.

Google is known for its expertise in what is called search engine marketing, epitomized by the text ads that appear next to results from online searches. Google sells the rights to present the ads onscreen when computer users type in keywords.

Google now wants to call attention to its more elaborate types of online advertising, like click-to-play video, and to encourage marketers like General Motors to buy those as well.

“We’ve been out there meeting with a lot of agencies and clients so they understand at a brand level, at a creative level, at a media-planning level, how they can use the palette we have,” said Tim Armstrong, vice president for advertising sales at Google in Mountain View, Calif.

Out of those meetings came the idea to “let the creative brains at Goodby look across our suite of products and services and think about ways those could work for specific clients,” he added. In addition to General Motors, clients of Goodby, Silverstein include Anheuser-Busch, the California milk producers (“Got milk?”), Comcast, Emerald Nuts, Frito-Lay, Hewlett-Packard and Motorola.

Rich Silverstein, co-chairman at Goodby, Silverstein, said the decision was made to have Saturn take part in the test because the local nature of its dealerships meant the brand would be a good guinea pig for the geo-targeting elements of the campaign.

“Google wants to prove it’s an effective way to market,” Mr. Silverstein said. “Saturn wants to sell Auras. And we want to show how we can tell good stories in a 21st-century way.

“The world doesn’t need another area to run a commercial; we’ve got plenty,” Mr. Silverstein said.

“I am so excited,” Mr. Silverstein, who is usually not given to hyperbole, said of the project. “I feel 10 years younger.”

The 22 Saturn dealers involved in the test are in Buffalo; Dallas (Irving is a suburb); Harrisburg, Pa.; Indianapolis; Las Vegas; and Raleigh, N.C. The six markets were chosen because they, and the dealerships, are among the best performers for Saturn.

“We have a key focus on digital this year,” said Dave Smidebush, marketing director at Saturn in Detroit, “and when Goodby approached us with this opportunity after Google approached them, we thought it was a very innovative initiative.

“Seventy percent of all new-car buyers go to the Web for information,” he added, “and the Google Earth technology takes you right through the dealer’s front door.”

The test will run for a month, Mr. Smidebush said, and after that Saturn executives will evaluate “how it drives traffic and how it affects sales, and then we’ll decide next steps from there.”

One possibility would be to roll out the project to the 25 largest markets, Mr. Smidebush said, and another would be to introduce it nationally. The project may be used, he added, to help Saturn bring out another new model, Outlook, a midsize sport utility planned for 2007.

Saturn is paying Google for the test, but Saturn and Google executives would not discuss the budget.

Teams of employees from Goodby, Silverstein visited all 22 dealerships to obtain the video clips of the stores and the general managers.

“Some were ready for prime time,” said Guy Seese, a creative director at Goodby, Silverstein. “Some nailed it in five takes.”

“One poor guy kept us after hours and did it in 22 takes,” he added.

The agency has ideas for Google projects for other clients, Mr. Seese said, declining to discuss them until they are further along.

By that time, there may be additional elements to incorporate into the projects, he added, because “Google is constantly coming up with new technologies.”

    Marketing on Google: It’s Not Just Text Anymore, NYT, 22.9.2006,http://www.nytimes.com/2006/09/22/business/media/22adco.html

Warner to Send Videos Through YouTube

September 18, 2006
By THE ASSOCIATED PRESS
Filed at 12:06 a.m. ET
The New York Times

SAN FRANCISCO (AP) -- Warner Music Group Corp. has agreed to distribute and license its copyrighted songs and other material through online video trendsetter YouTube Inc., marking another significant step in the entertainment industry's migration to the Internet.

Under a revenue-sharing deal to be announced Monday, New York-based Warner Music has agreed to transfer thousands of its music videos and interviews to YouTube, a San Mateo, Calif.-based startup that has become a cultural touchstone since two 20-something friends launched the company in a Silicon Valley garage 19 months ago.

Perhaps even more important for YouTube is that Warner Music has agreed to license its songs to the millions of ordinary people who upload their homemade videos to the Web site.

''We are very excited,'' YouTube co-founder and CEO Chad Hurley said in a phone interview Sunday. ''This is a real landmark for our company.''

Warner Music ranks as the country's third largest recording company with annual revenue of $3.5 billion.

Besides it namesake label, the Warner Music family includes Atlantic, Asylum, Elektra and Rhino -- a group that includes vintage recording artists like Led Zeppelin, the Doors and Ray Charles, as well recent hit makers like Linkin Park, Green Day and Faith Hill.

Privately held YouTube is hoping the Warner Music deal will serve as a springboard for similar alliances with other long-established media outlets looking to connect with the Web site's audience, which watches more than 100 million videos per day.

''Technology is changing entertainment, and Warner Music is embracing that innovation,'' said Warner Music Chairman Edgar Bronfman Jr. ''Consumer-empowering destinations like YouTube have created a two-way dialogue that will transform entertainment and media forever.''

Many of YouTube's most widely watched videos already include copyrighted music, raising the specter of a legal showdown with record labels and artists seeking to protect their right to be paid for the material.

Universal Music Group CEO Doug Morris signaled the industry's exasperation with YouTube just a few days ago when he indicated the world's largest record label is prepared to sue the site unless it does a better job of preventing copyright violations.

Other labels, though, have recently been experimenting with releasing some of their commercial videos on YouTube. Capitol Records recently posted videos by The Vines, Cherish and OK Go on YouTube.

On the television front, NBC has been using YouTube to promote its fall programming under a partnership announced in June.

Even as rampant copyright violations have popped up on the site, Hurley and his partner Steve Chen have insisted that they want to work with music, movie and television executives to help them take advantage of a new distribution channel as YouTube tries to translates its popularity into profits.

YouTube so far has been subsisting on $11.5 million in venture capital, spurring predictions that the company either will have to raise more money or sell out to a deep-pocketed buyer as it tries to fend off increasing competition from Internet powers Google Inc. and Yahoo Inc.

In Sunday's interview, Hurley reiterated YouTube's intention to remain independent -- a goal that may be even more realistic if the Warner Music deal pays off.

The financial terms of YouTube's arrangement with Warner Music weren't disclosed.

Both companies are betting they will be able to make money from the ads that will show up alongside Warner Music's own videos as well as amateur videos featuring copyrighted material.

To make the deal happen, YouTube developed a royalty-tracking system that will detect when homemade videos are using copyrighted material. YouTube says the technology will enable Warner Music to review the video and decide whether it wants to approve or reject it.

    Warner to Send Videos Through YouTube, NYT, 18.9.2006, http://www.nytimes.com/aponline/arts/AP-YouTube-Warner-Music.html?_r=1&oref=slogin

What’s Online

The Story Behind MySpace

September 16, 2006
The New York Times
By DAN MITCHELL

TRENT LAPINSKI, a 20-year-old blogger and journalism student, has been investigating the social-networking site MySpace since July 2005, when the News Corporation bought it.

This week, Valleywag, a Silicon Valley gossip blog, published Mr. Lapinski’s long, critical examination of MySpace. According to Mr. Lapinski and Nick Douglas, Valleywag’s editor, an unidentified “online publisher” that had contracted Mr. Lapinski to write the article balked based on “groundless legal implications” after News Corporation complained (valleywag.com). Mr. Lapinski said the News Corporation declined to comment on his article.

But News Corporation is not the focus. It is the tale of MySpace’s founders, who, according to Mr. Lapinski’s report, came from companies involved with spam, spyware and adware.

The article was “professionally fact-checked,” Mr. Lapinski wrote, and although Mr. Douglas wrote in the introduction that it reads “like a conspiracy theory,” it is based mostly on information that has been in the public record all along, though never assembled in such a comprehensive fashion.

According to the article, and many sources to which it links, MySpace began this way: “Headed by C.E.O., founder, and chairman Brad Greenspan, eUniverse (now Intermix Media), was a multimillion-dollar marketing and entertainment company known for sites like Skilljam.com, pop-up advertising, unsolicited mass e-mails, spyware, and the adware behind controversial peer-to-peer file sharing network Kazaa.”

Two men from a company called ResponseBase — which, like eUniverse, was the target of many complaints about spamming — came to eUniverse when that company purchased ResponseBase in 2002. They were Chris DeWolfe, the current chief executive of MySpace, and Tom Anderson, the first “friend” of MySpace members.The three men were members of Friendster, the social-networking site that preceded MySpace, and they used that site as a template for MySpace, but with the focus on commerce rather than networking, Mr. Lapinski said.


Mr. Lapinski said MySpace’s initial popularity came not from word-of-mouth, as is often assumed, but from an intense e-mail campaign. From there, Mr. Lapinski details the already well-known, drama-fraught deal to sell Intermix to News Corporation last year. He describes the current MySpace as more of a marketing tool than a social-networking site.

Loren Baker of Search Engine Journal wrote that nearly everything in the article is old: It is “well known in the marketing world that the parent company which sold MySpace to News Corporation was not a band of do-gooders.”

“Does this mean that MySpace will spam you now?” Mr. Baker asked. “Not really, as Fox Interactive is not going to ruin a good thing.”

JUST ANOTHER WORD The Cato Institute this week published its annual Economic Freedom of the World report, which “seeks to measure the consistency of the institutions and policies of various countries with voluntary exchange and the other dimensions of economic freedom.”

“This year’s report,” according to the introduction, “notes that economic freedom remains on the rise,” though the average score is still only at 5.1 out of 10. The highest-scoring country is Hong Kong, with a score of 8.7, followed closely by Singapore (showing that economic freedom is measured here in strict isolation from other kinds of freedom). The United States scored 8.2. At the bottom are countries like the Central African Republic, Algeria and Venezuela. The report can be downloaded from cato.org .

NOSTALGIA BREAK Nostalgic types and ironic hipsters will love the set of 1970’s toy commercials on YouTube (search for “70’s toy commercials”). The spots for games like Bing Bang Boing and for toys like the Water Wiggle are fun to watch, but the most striking thing about these commercials is how long they were. At a full minute each, they might lose most of today’s attention-short youth (youtube.com)

DAN MITCHELL

    The Story Behind MySpace, NYT, 16.9.2006, http://www.nytimes.com/2006/09/16/business/16online.html

Philanthropy Google’s Way: Not the Usual

September 14, 2006
The New York Times
By KATIE HAFNER

SAN FRANCISCO, Sept. 13 — The ambitious founders of Google, the popular search engine company, have set up a philanthropy, giving it seed money of about $1 billion and a mandate to tackle poverty, disease and global warming.

But unlike most charities, this one will be for-profit, allowing it to fund start-up companies, form partnerships with venture capitalists and even lobby Congress. It will also pay taxes.

One of its maiden projects reflects the philanthropy’s nontraditional approach. According to people briefed on the program, the organization, called Google.org, plans to develop an ultra-fuel-efficient plug-in hybrid car engine that runs on ethanol, electricity and gasoline.

The philanthropy is consulting with hybrid-engine scientists and automakers, and has arranged for the purchase of a small fleet of cars with plans to convert the engines so that their gas mileage exceeds 100 miles per gallon. The goal of the project is to reduce dependence on oil while alleviating the effects of global warming.

Google.org is drawing skeptics for both its structure and its ambitions. It is a slingshot compared with the artillery of charities established by older captains of industry. Its financing pales next to the tens of billions that the Bill and Melinda Gates Foundation will have at its disposal, especially with the coming infusion of some $3 billion a year from Warren E. Buffett, the founder of Berkshire Hathaway.

But Google’s philanthropic work is coming early in the company’s lifetime. Microsoft was 25 years old before Bill Gates set up his foundation, which is a tax-exempt organization and separate from Microsoft.

By choosing for-profit status, Google will have to pay taxes if company shares are sold at a profit — or if corporate earnings are used — to finance Google.org. Any resulting venture that shows a profit will also have to pay taxes. Shareholders may not like the fact that the Google.org tax forms will not be made public, but kept private as part of the tax filings of the parent, Google Inc.

Google’s founders, Larry Page and Sergey Brin, believe for-profit status will greatly increase their philanthropy’s range and flexibility. It could, for example, form a company to sell the converted cars, finance that company in partnership with venture capitalists, and even hire a lobbyist to pressure Congress to pass legislation granting a tax credit to consumers who buy the cars.

The executive director whom Mr. Page and Mr. Brin have hired, Dr. Larry Brilliant, is every bit as iconoclastic as Google’s philanthropic arm. Dr. Brilliant, a 61-year-old physician and public health expert, has studied under a Hindu guru in a monastery at the foothills of the Himalayas and worked as a Silicon Valley entrepreneur.

In one project, which Dr. Brilliant brought with him to the job, Google.org will try to develop a system to detect disease outbreaks early.

Dr. Brilliant likens the traditional structure of corporate foundations to a musician confined to playing only the high register on a piano. “Google.org can play on the entire keyboard,” Dr. Brilliant said in an interview. “It can start companies, build industries, pay consultants, lobby, give money to individuals and make a profit.”

While declining to comment on the car project specifically, Dr. Brilliant said he would hope to see such ventures make a profit. “But if they didn’t, we wouldn’t care,” he said. “We’re not doing it for the profit. And if we didn’t get our capital back, so what? The emphasis is on social returns, not economic returns.”

Development of ultra-high-mileage cars is under way at a number of companies, from Toyota to tiny start-ups. Making an engine that uses E85 — a mixture of 85 percent ethanol and 15 percent gasoline — is not difficult, but the lack of availability of the fuel presents a challenge, said Brett Smith, a senior industry analyst at the Center for Automotive Research in Ann Arbor, Mich.

Another barrier, Mr. Smith said, lies in the batteries for so-called plug-in hybrids, which require more powerful batteries that charge more quickly than the current generation of hybrid batteries.

There are skeptics, too, among tax lawyers and other pragmatists familiar with the world of philanthropy. They wonder whether Google’s directors might be tempted to take back some of the largess in an economic downturn.

“The money is at the beck and call of the board of directors and shareholders,” said Marcus S. Owens, a tax lawyer in Washington who spent a decade as director of the exempt organizations division of the Internal Revenue Service. “It’s possible the shareholders of Google might someday object, especially if we go into an economic depression and that money is needed to shore up the company.”

And there is the question of how many of the planet’s problems can truly be addressed by a single corporate entity.

But even while expressing reservations about Google’s approach, Mr. Owens said that the structure of Google.org “eliminates all the constraints that might otherwise apply.”

The only conventional part of Google.org is the Google Foundation, a nonprofit with an endowment of $90 million that is constrained in how it spends by the 501(c)(3) section of the Internal Revenue Service code.

Google’s big philanthropic experiment lies in the part of Google.org where the bulk of the funding now resides. This part of Google.org will be fully taxable, with the ability to invest in a full spectrum of programs and companies.

All of Google.org’s spending, Dr. Brilliant said, will be in keeping with its mission, and there is to be no “blowback.” That is, should Google.org make a profit with one of its ventures, those funds will not go to the search engine business, but will stay within Google.org.

Google had existed for only six years, when, in advance of the company’s initial public offering in August 2004, Mr. Page and Mr. Brin told potential investors that they planned to set aside 1 percent of the company’s stock and an equal percentage of profits for philanthropy. By the end of 2004, Google.org was formed.

The company has said it plans to spend the money over the next 20 years, and the Google board recently approved a more rapid disbursement rate, $175 million over the next two years.

“Poor people can’t wait,” Dr. Brilliant said. “Dying people can’t wait for some 20-year plan. It’s not what we’re doing here.”

Ventures that grow out of Google.org could be seen to have a competitive edge because they do not need to show a financial profit. But financial returns from a project like the high-mileage car are not necessarily the aim.

“I think how you count profit is the issue here,” said Peter Hero, president of the Community Foundation of Silicon Valley, a charitable foundation with about $1 billion in assets. “Google.org is measuring return on cleaner air and quality of life. Their bottom line isn’t just financial. It’s environmental and social.”

Once Google.org was formed, the company spent months searching for an executive director. There was no lack of interest in the job.

“Literally thousands of people worldwide got in touch with us,” said Sheryl Sandberg, the Google vice president who led the search. “We’d get someone who was an amazing technology entrepreneur but who didn’t know anything about the developing world.”

Then along came Dr. Brilliant, an affable man generous with bearhugs and self-deprecating humor whose unlikely résumé looks like a composite career summary of multiple high achievers.

After receiving his medical degree, Dr. Brilliant studied for two years with Neem Karoli Baba, a famous Hindu guru.

As Dr. Brilliant tells the story, in 1973, shortly before the guru’s death, he told Dr. Brilliant to “take off the ashram whites” and use his skills as a physician to help eradicate smallpox, which was devastating India at the time.

Dr. Brilliant joined a team of United Nations workers who painstakingly worked their way through India inoculating people against the disease. In 1980, the World Health Organization declared that smallpox had been eradicated.

In 1978, Dr. Brilliant started the Seva Foundation, which focuses on preventing and curing blindness throughout Asia and Latin America. In 1985, Dr. Brilliant was a co-founder of the Well, a seminal online community. Throughout the 1990’s and early 2000’s, he ran several high-tech companies in Silicon Valley.

Dr. Brilliant first heard about Google.org in early 2005 while lying in bed in India, sick with dysentery. He had gone there to work with the polio eradication program of the United Nations and, while recovering, he saw news of Google.org in a local newspaper.

He sent an inquiry to the only e-mail address he could find: info@google.com. He got no response.

This year, Dr. Brilliant was awarded the TED Prize, an award given at the annual Technology, Entertainment and Design conference, a gathering of leaders from the technology and entertainment industries. The prize awards three recipients $100,000, and a “wish” for how to change world.

Dr. Brilliant’s wish was for the creation of an “early detection, rapid response” system for disease outbreaks. The idea would be an open-source, nongovernmental, public access network for detecting, reporting and responding to pandemics.

Some Google insiders heard about the award and invited Dr. Brilliant to give a talk at the company. Mr. Page and Eric E. Schmidt, Google’s chief executive, were in the audience as Dr. Brilliant described the polio eradication efforts of the United Nations. They agreed they had found their director and began to recruit him.

At first, Dr. Brilliant said, he was thrilled. But then he turned skeptical, largely because of the for-profit structure of the organization.

“I got weak knees,” he said. “It was weird. It was precedent setting.” After several lengthy conversations with executives at Google, Dr. Brilliant changed his mind. Six months into the job, he has traveled to India to visit eye clinics and polio vaccination projects with Mr. Page, and to China to discuss clean energy alternatives. Next week, he leaves for Africa to visit Google grant recipients in Ghana.

Dr. Brilliant said he had no desire to “reinvent the wheel” by working on projects others are already involved in. And although Google is a high-tech company, that does not mean that Google.org will be throwing around high-tech solutions.

“Why would we put Wi-Fi in a place where what they need is food and clean water?” he said.

    Philanthropy Google’s Way: Not the Usual, NYT, 14.9.2006, http://www.nytimes.com/2006/09/14/technology/14google.html?hp&ex=1158292800&en=0715e3c0dff465e2&ei=5094&partner=homepage

When Information Becomes T.M.I.

September 10, 2006
The New York Times
By WARREN ST. JOHN

IF there is a single quality that separates those in their late teens and early 20’s from previous generations of young people, it is a willingness bordering on compulsion to broadcast the details of their private lives to the general public.

Through MySpace, personal blogs, YouTube and the like, this generation has seemed to view the notion of personal privacy as a quaint anachronism. Details that those of less enlightened generations might have viewed as embarrassing — who you slept with last night, how many drinks you had before getting sick in your friend’s car, the petty reason you had dropped a friend or been fired from a job — are instead signature elements of one’s personal brand. To reveal, it has seemed, is to be.

But alas, it turns out that even among the MySpace generation, there is such a thing as too much information.

That threshold was reached, unexpectedly, earlier this week when the social networking site Facebook unveiled what was to be its killer app. In the past, to keep up with the doings of friends, Facebook members had to make some sort of effort — by visiting the friend’s Web page from time to time, or actually sending an e-mail or instant message to ask how things were going.

Facebook’s new feature, a news “feed,” does that heavy lifting for you. The program monitors the activity on its members’ pages — a change in one’s relationship status, the addition of a new person to one’s friends list, the listing of a new favorite song or interest — and sends that information to everyone in your circle in a constantly updating news ticker. Imagine a device that monitors the social marketplace the way a blinking Bloomberg terminal tracks incremental changes in the bond market and you’ll get the idea.

But within hours of the new feature’s debut, thousands of Facebook members had organized behind a desperate, angry plea: Make it stop.

“You pretty much are being tracked with every movement you make on Facebook,” said Emily Bean, a pharmacy major and Facebook user at Ohio Northern University who signed an anti-Facebook petition on Tuesday, when the new feature made its debut. “It’s like someone peeking in on my conversations. People now know exactly when you became friends with somebody. When you hook up with somebody is now documented. Before it took some extra effort.”

While much of the anger was directed specifically at Facebook and its chief executive and co-founder, the 22-year-old Harvard graduate Mark Zuckerberg, some of the site’s users saw the episode in a broader context.

“Because our generation has been so obsessed with putting themselves up on the Internet and obsessed with celebrity, we didn’t realize how much of our personal information we were putting out there,” said Tim Mullowney, a 22-year-old aspiring actor in Brooklyn and a Facebook user. “This really shows you how much is out there. You don’t see it until you get it served on a platter to you.”

Mr. Mullowney said the Facebook episode had opened his eyes to a surprising conclusion: “I don’t need to know every little detail of everyone’s life.”

Mr. Zuckerberg could be forgiven for not anticipating the limits of his users’ desire for transparency. Since founding Facebook two and a half years ago, he has watched the site grow to more than nine million users, most in high school and college, on its power to help its users stay in contact with their friends.

Those who study social networking sites say that users’ comfort with revealing intimate details about themselves comes in part from a perception that in the din of life online, there is a kind of privacy through anonymity.

Similarly, a couple might feel comfortable having an intimate conversation at a crowded restaurant, for example, on the assumption that even though strangers could potentially tune in, none would care to. The new Facebook feature, though, was the equivalent of broadcasting that conversation over the public address system.

“The issue isn’t transparency but scope,” said Clay Shirky, who teaches in the interactive telecommunications program at New York University. “People are willing to be transparent to friends, as long as they are in control. Facebook violated both of those conditions.”

One perhaps unintended consequence of the Facebook feeds was that it allowed users to see when their friends were joining the rapidly growing anti-Facebook movement. In less than a day, the protest movement had fully galvanized, and had migrated offline as well. Marah Paley, a 17-year-old first-year student at the University of North Carolina in Chapel Hill, was in the middle of sorority bid week when the news hit.

“That’s all anyone talks about on campus actually,” she said. “My day was totally messed up because of the new Facebook.”

It hasn’t taken very long for Mr. Zuckerberg to respond. Only a day after the feature was launched and he was inundated by protests, he acknowledged the outcry on his Facebook blog.

He wrote: “Calm down. Breathe. We hear you.”

“A lot of this was a lot of confusion,” Mr. Zuckerberg said Friday. “We did a pretty bad job of communicating what we were actually doing with the information. In the absence of information a lot of times people assume bad things.”

Mr. Zuckerberg and his programmers spent two days working on a fix, and stayed up until 5 a.m. Friday on the project. At 2:48 a.m., Mr. Zuckerberg published a contrite “open letter” on his blog, which he sent to all Facebook users.

“We really messed this one up,” he began.

“This may sound silly, but I want to thank all of you who have written in and created groups and protested,” he added. “Even though I wish I hadn’t made so many of you angry, I am glad we got to hear you. And I am also glad that News Feed highlighted all these groups so people could find them and share their opinions with each other as well.”

The solution was a page of privacy options that allow Facebook members to opt out of the feed feature, or to shield specific bits of their lives from public broadcast.

“In general the more control you can give people the better,” Mr. Zuckerberg said. “If you give people control over everything they do, you’ll never put them in a situation that’s uncomfortable.”

The options were made available to users on Friday morning, and time will tell if they placate the mob. But in the meantime, Ms. Paley said she and her friends had come to a realization about their online lives.

“Translucent is good,” she said. “Not transparent.”

    When Information Becomes T.M.I., NYT, 10.9.2006, http://www.nytimes.com/2006/09/10/fashion/10FACE.html

Outsourcing Homework

At $9.95 a Page, You Expected Poetry?

September 10, 2006
The New York Times
By CHARLES McGRATH

THE Web site for an outfit called Term Paper Relief features a picture of a young college student chewing her lip.

“Damn!” a little comic-strip balloon says. “I’ll have to cancel my Saturday night date to finish my term paper before the Monday deadline.”

Well, no, she won’t — not if she’s enterprising enough to enlist Term Paper Relief to write it for her. For $9.95 a page she can obtain an “A-grade” paper that is fashioned to order and “completely non-plagiarized.” This last detail is important. Thanks to search engines like Google, college instructors have become adept at spotting those shop-worn, downloadable papers that circulate freely on the Web, and can even finger passages that have been ripped off from standard texts and reference works.

A grade-conscious student these days seems to need a custom job, and to judge from the number of services on the Internet, there must be virtual mills somewhere employing armies of diligent scholars who grind away so that credit-card-equipped undergrads can enjoy more carefree time together.

How good are the results? With first semester just getting under way at most colleges, bringing with it the certain prospect of both academic and social pressure, The Times decided to undertake an experiment in quality control of the current offerings. Using her own name and her personal e-mail address, an editor ordered three English literature papers from three different sites on standard, often-assigned topics: one comparing and contrasting Huxley’s “Brave New World” and Orwell’s “1984”; one discussing the nature of Ophelia’s madness in “Hamlet”; and one exploring the theme of colonialism in Conrad’s “Lord Jim.”

A small sample, perhaps, but one sufficient, upon perusal, to suggest that papers written to order are just like the ones students write for themselves, only more so — they’re poorly organized, awkwardly phrased, thin on substance, but masterly in the ancient arts of padding and stating and restating the obvious.

If they’re delivered, that is. The “Lord Jim” essay, ordered from SuperiorPapers.com, never arrived, despite repeated entreaties, and the excuse finally offered was a high-tech variant of “The dog ate my homework.” The writer assigned to the task, No. 3323, was “obviously facing some technical difficulties,” an e-mail message explained, “and cannot upload your paper.” The message went on to ask for a 24-hour extension, the wheeziest stratagem in the procrastinator’s arsenal, invented long before the electronic age.

The two other papers came in on time, and each grappled, more or less, with the assigned topic. The Orwell/Huxley essay, prepared by Term Paper Relief and a relative bargain at $49.75 for five pages, begins: “Although many similarities exist between Aldous Huxley’s ‘A Brave New World’ and George Orwell’s ‘1984,’ the works books [sic] though they deal with similar topics, are more dissimilar than alike.” That’s certainly a relief, because we couldn’t have an essay if they weren’t.

Elsewhere the author proves highly adept with the “on the one hand/on the other” formula, one of the most valuable tools for a writer concerned with attaining his assigned word count, and says, for example, of “Brave New World”: “Many people consider this Huxley’s most important work: many others think it is his only work. This novel has been praised and condemned, vilified and glorified, a source of controversy, a subject for sermons, and required reading for many high school students and college undergraduates. This novel has had twenty-seven printings in the United States alone and will probably have twenty-seven more.”

The obvious point of comparison between the two novels is that where Orwell’s world is an authoritarian, police-state nightmare, Huxley’s dystopia is ostensibly a paradise, with drugs and sex available on demand. A clever student might even pick up some extra credit by pointing out that while Orwell meant his book as a kind of predictive warning, it is Huxley’s world, much more far-fetched at the time of writing, that now more nearly resembles our own.

The essay never exactly makes these points, though it gets close a couple of times, declaring at one point that “the two works vary greatly.” It also manages to remind us that Orwell’s real name was Eric Blair and that both he and his book “are misunderstood to this day.”

The paper does makes a number of embarrassing spelling errors (“dissention,” “anti-semetic”) but William H. Pritchard, an English professor at Amherst, who read the paper at The Times’s request, shrewdly suggested that, in this day of spell check, they may have been included deliberately, to throw suspicious teachers off the track. If confronted with such a paper from one of his own students, he wrote in an e-mail message, he probably wouldn’t grade it at all but would instead say “come see me” (shuddering at the prospect).

The Hamlet essay was a trick assignment, or perhaps a poorly worded one. Ophelia’s genuine madness, as opposed to Hamlet’s feigned craziness, has become a touchstone in Shakespeare studies, especially among feminist and gender studies scholars who read in Ophelia’s songs and fragmentary utterances a coded response to the irrationality and sexual repression of the Elizabethan patriarchy.

The author of the four-page paper, supplied by Go-Essays for $127.96, approaches the question more literally and concludes, not incorrectly, that Ophelia is literally driven crazy by her father, brother and lover — or as the essay puts it: “Thus, in critical review of the play, Ophelia mentally suffers from the scars of unwanted love and exploitation rather than any singular or isolated cause.”

The paper goes on to repeat this point with so much plot summary and quotation from the text that it soars right to the assigned length. It’s also written in language so stilted and often ungrammatical (“Hamlet is obviously hurt by Ophelia’s lack of affection to his vows of love”) that it suggests the author may not be a native speaker of English, and even makes you suspect that some of these made-to-order term papers are written by the very same people who pick up the phone when you call to complain about your credit card bill.

Stephen Greenblatt, a Shakespeare scholar at Harvard and a confessed “soft touch,” said the grade he would give this paper “would depend, at least to some extent, on whether I thought I was reading the work of a green freshman — in which case I would probably give it a D+ and refer the student to the writing lab for counseling — or an English major, in which case I would simply fail it.”

He added: “If I had paid for this, I would demand my money back.”

As it happens, a refund is just what Superior Papers offered, along with a 10 percent discount on a new paper. Term paper writing is an arduous business, we need to remember, and we shouldn’t expect too much. As the author of the Orwell/Huxley essay says: “It is so often that one wants something and in wanting romanticizes it, thus bringing disappointment when the end is finally obtained. They serve as a reminder that it is necessary to have pain to compare with joy, defeat to compare with victory, and problems in order to have solutions.”

    At $9.95 a Page, You Expected Poetry?, NYT, 10.9.2006, http://www.nytimes.com/2006/09/10/weekinreview/10mcgrath.html

Google dips into the past with archive news search

Wednesday September 6, 2006
MediaGuardian.co.uk
Mark Sweney

Google is expanding its controversial Google News service with a searchable archive that spans articles from the past 200 years.

The Google News Archive Search, which launched today, will allow consumers to find articles on historical events of interest - such as the England 1966 World Cup win or President Kennedy's assassination - that were written at the time.

Searches can be expanded to show coverage from a time period, or be narrowed to articles from a particular publication.

The current Google News service offers only a 30-day archive, while the archive service offers access to articles as far back as "the mid-1700s".

Partners in the project include the Wall Street Journal, New York Times and Washington Post. Other sources include aggregators such as Factiva, owned by Dow Jones & Reuters, and LexisNexis.

Anurag Acharya, a Google engineer who worked on the project, said the aim was to allow people to "explore history as it unfolded".

Google has sought permission from news sites that have paid-for content requirements - such as the WSJ.com website - to display extracts from their articles so users can then decide if they want to pay for the whole piece.

For other free access sites Google uses web trawl technology to pull results from archives automatically.

The archive service searches hundreds of different news sources to answer a user's query, although the exact number of sources is confidential.

In February, the World Association of Newspapers announced it was considering legal action against Google News.

It argued that the global aggregation service, which displays major news headlines and a snippet of text, was "building a new medium on the backs of our industry, without paying for any of the content".

Jim Gerber, the content partnerships director at Google, argued that the extension did not pose a further threat to news companies.

"The gut instinct may seem like it is positioned as competitive to aggregators but as you can see we have aggregator partners on board. At the end of the day, this points traffic back to partners and that can be very valuable," he said.

The new service will be accessible at Google News and through a dedicated link to the archive.

Crucially, in terms of potential traffic to partner sites, if the service proves popular, selected queries on the main Google search page will integrate the top three relevant related partner articles with results returned.

    Google dips into the past with archive news search, G, 6.9.2006, http://media.guardian.co.uk/site/story/0,,1865925,00.html

An Online Game, Made in U.S., Seizes the Globe

September 5, 2006
The New York Times
By SETH SCHIESEL

SEOUL, South Korea — At 10:43 p.m. one recent Saturday, in a smoky basement gaming parlor under a bank in this sprawling city’s expensive Daechi neighborhood, Yoon Chang Joon, a 25-year-old orc hunter known online as Prodigy, led his troops into battle. “Move, move!” he barked into a microphone around his neck as a strike team of some 40 people seated at computer terminals tapped at keyboards and stormed the refuge of the evil plague lord Heigan, fingers flying.

As Mr. Yoon’s orders echoed from speakers around the room, Heigan reeled under an onslaught of spells and swords. In six minutes he lay dead. The online gaming guild called the Chosen had taken another step in World of Warcraft, the online fantasy game whose virtual, three-dimensional environment has become a global entertainment phenomenon among the cybersavvy and one of the most successful video games ever made.

Less than two years after its introduction, World of Warcraft, made by Blizzard Entertainment, based in Irvine, Calif., is on pace to generate more than $1 billion in revenue this year with almost seven million paying subscribers, who can log into the game and interact with other players. That makes it one of the most lucrative entertainment media properties of any kind. Almost every other subscription online game, including EverQuest II and Star Wars: Galaxies, measures its customers in hundreds of thousands or even just tens of thousands.

And while games stamped “Made in the U.S.A.” have often struggled abroad, especially in Asia, World of Warcraft has become the first truly global video-game hit since Pac-Man in the early 1980’s.

The game has more players in China, where it has engaged in co-promotions with major brands like Coca-Cola, than in the United States. (There are more than three million players in China, and slightly fewer than two million in the United States. And as with most video games, a clear majority of players worldwide are male.)

There is a rabid legion of fans here in South Korea, which has the world’s most fervent gaming culture, and more than a million people play in Europe. Most World of Warcraft players pay around $14 a month for access.

“World of Warcraft is an incredibly polished entertainment experience that appeals to more sorts of different players than any game I’ve seen,” said Rich Wickham, who heads Microsoft’s Windows games unit. “It’s fun for both casual players and for the hard-core players for whom the game is more just than a game: it’s a lifestyle. Just as important, Blizzard has made a game that has a broader global appeal than what we’ve seen before.”

Perhaps more than pop music or Hollywood blockbusters, even the top video games traditionally have been limited in their appeal to the specific regional culture that produced them. For example the well-known series Grand Theft Auto, with its scenes of glamorized urban American violence, has been tremendously popular in the United States but has largely failed to resonate in Asia and in many parts of Europe. Meanwhile many Japanese games, with their distinctively cutesy anime visual style, often fall flat in North America.

One of the main reasons Western software companies of all kinds have had difficulty in Asia is that piracy is still rampant across the region. Games like World of Warcraft circumvent that problem by giving the software away free and then charging for the game service, either hourly or monthly.

Since the game’s introduction in November 2004 the company has expanded to more than 1,800 employees from around 400. Almost all of the additions have been customer-service representatives to handle World of Warcraft players, helping them with both technical advice and billing concerns.

“Ultimately, what I’d like is for the user to feel like they are having a very polished entertainment experience,” said Mike Morhaime, 38, Blizzard’s president (and a gamer since he first encountered Pong in 1976). “We’d like players to associate our name with quality, so if they see a box on the shelf and it says Blizzard Entertainment, they don’t need to know anything more than that.”

The basic genre that World of Warcraft belongs to is called the massively-multiplayer online game, or M.M.O. The “massive” refers to the fact that in an M.M.O., thousands of players simultaneously occupy one vast virtual 3-D world. (In a more traditional online game like Quake or Counter-Strike, there are generally fewer than a dozen people in each arena.)

Blizzard runs hundreds of copies of the Worlds of Warcraft universe, known as servers, and there might be a few thousand players on any server at any given time. There are servers customized for six written languages: English, both simplified and traditional Chinese, Korean, German and French. Spanish is in development.

To begin, a player creates an avatar, or character, customizing its physical appearance as well as race and profession, each of which has different skills and abilities. An elf druid might specialize in healing, for example, while an orc rogue could be an expert in stealth and backstabbing. The player is then set loose in a huge colorful fantasy world with cities, plains, oceans, mountains, forests, rivers, jungles, deserts and of course dungeons.

The players can explore on their own or team up with others to conquer more imposing challenges. As a character completes quests and defeats monsters, it gains new abilities and collects more powerful magical equipment that in turn allow it to progress to the next set of challenges. Players can fight other players if they choose, but much of the focus is on teaming up with other users in guilds like the Chosen to battle automated foes.

There were massively-multiplayer games before World of Warcraft, just as there were MP3 players before Apple’s iPod. Like the iPod, World of Warcraft has essentially taken over and redefined an entire product category.

“I think the real key to WOW’s success has been the sheer variety and amount of things to do, and how easy it is to get into them,” said Kim Daejoong, 29, a doctor of traditional herbal medicine in Iksan, Korea, who had traveled to Seoul for one of the Chosen’s regular in-person sessions.

“Hard-core gamers will play anything, no matter how difficult it is,” Mr. Kim said. “But in order to be a mainstream game for the general public, it has to be easily accessible, and there have to be lots of things for you to do, even alone. What WOW has done better than other games is be able to appeal to both audiences — hard-core players and more casual players — all within one game and bring them together. That’s why you’ve seen people all over the world get into the game.”

Hours after the Chosen finished their raid in Seoul, a United States guild called Violent stormed Blackwing Lair, home of the black dragon Nefarian and his minions.

One of the players was Jason Pinsky, 33, the chief technology officer for an apparel company in Manhattan. Mr. Pinsky is not unusual among serious players in that he has logged more than 125 days (3,000 hours) on his main character, a hunter.

“I play this game six nights a week from 8 p.m. to midnight,” he said in a telephone interview. “When I say that to people, sometimes they look at me a little funny. But then I point out that most people watch TV at least that much, and television is a totally mindless experience.

“Instead of watching ‘The Lord of the Rings’ as a three-hour experience, I am now participating in the epic adventure.”

It is rare for guilds in North America and Europe to get together in real life, partly because of geographic distance and partly because of the social stigma often associated with gaming in the West.

In Asia, however, online players like those in the Chosen often want to meet in the flesh to put a real face on the digital characters they have been having fun with. Even in the United States, more and more players are coming to see online games as a way to preserve and build human connections, even if it is mostly through a keyboard or microphone.

“Think about it: I’m a 33-year-old guy with a 9-to-5 job, a wife and a baby on the way,” Mr. Pinsky said. “I can’t be going out all the time. So what opportunities do I have to not only meet people and make new friends but actually spend time with them on a nightly basis? In WOW I’ve made, like, 50 new friends, some of whom I’ve hung out with in person, and they are of all ages and from all over the place. You don’t get that sitting on the couch watching TV every night like most people.”

    An Online Game, Made in U.S., Seizes the Globe, NYT, 5.9.2006, http://www.nytimes.com/2006/09/05/technology/05wow.html?hp&ex=1157515200&en=9d3b5750e6f5e8bc&ei=5094&partner=homepage

MySpace Music Store Is New Challenge for Big Labels

September 4, 2006
The New York Times
By ROBERT LEVINE

So far none of the companies that sell music online have emerged as serious competitors to the iTunes Music Store of Apple Computer. But not one of them has an audience like MySpace, which millions of teenage and twentysomething music fans visit every day.

For the music industry, which worries about Apple’s dominance of the online market, a MySpace music store could present difficulties of a different sort.

MySpace, the online community site owned by the News Corporation, said on Friday that it would sell music through a partnership with Snocap, a technology company started by the creator of Napster, Shawn Fanning. When the online store opens this fall, it will allow bands and labels of any size to sell songs online for whatever price they want.

For the independent-label bands and unsigned artists who have found MySpace to be an effective and inexpensive way to spread the word about their recordings and concerts, a store on the site will be an important outlet.

With more than three million pages devoted to a variety of performers, from unknown garage bands to Bob Dylan, MySpace is already an important online venue for musicians.

“Instead of going to iTunes and searching for music, which happens once in a while,” said Tom Anderson, president and co-founder of MySpace, “you can see the band and buy their music.”

But for the four major labels, which must approve each retailer that sells digital versions of their music, the new store could represent a challenge.

The MySpace store would let labels set their own prices for songs, which they have complained that iTunes does not let them do. And all of the major labels have put their catalogs into Snocap’s database, which uses an audio fingerprinting technology to prevent people from selling songs they do not own.

The MySpace store will sell music in the MP3 format, however, which allows them to be played on the Apple iPod but does not offer any copy protection. So far, the labels have been unwilling to sell music online in any format that does not allow them to restrict how many copies can be made.

At least one of the major labels, EMI, is in talks with MySpace, according to one person with knowledge of the negotiations who declined to be identified, citing the confidentiality of the discussions.

Chris DeWolfe, co-founder and chief executive of MySpace, said: “We’re hopeful that once we start getting adoption from smaller bands and labels, the major labels will want to participate. We’ll be talking to them continually, as will Snocap.”

Others are more skeptical.

“The majors aren’t going to distribute music unprotected on MP3,” said David Card, a senior analyst at Jupiter Research. Without their participation, he suggested, the appeal of such a store could be limited. Snocap has the ability to sell songs in other formats, but Apple has never let other companies sell iTunes files, and right now other restricted formats have little traction with consumers.

There is one other large online music store that sells songs in the MP3 format, eMusic. It offers a wide range of material from independent labels, but nothing from the four majors. As of July, it had almost 13 percent of the market for online music.

Snocap’s system can be used by anyone, which would let small labels and unsigned bands sell their music just as major labels do. Currently, iTunes sells music from most sizable independent labels, but many smaller ones go first through a digital distributor.

“It’s not that easy, if you’re an artist on the street, to get your music on iTunes,” Mr. DeWolfe said. “With Snocap you can upload your music, sign the contract and do everything online.”

For each track it sells, MySpace will charge a band or label a fixed fee of around 45 cents, which it will share with Snocap, according to Snocap’s chief executive, Rusty Rueff.

The iTunes store keeps about 35 cents from each purchase, according to Mr. Card, because Apple is willing to accept low profits from selling music to generate demand for the profitable iPod. MySpace, which currently brings in most of its revenue through advertising, views music sales as another source of profit. Its music store will accept PayPal, rather than credit cards, because the transaction fees are lower.

Potential customers will be able to buy music directly from the pages that bands have set up. “That’s consistent with MySpace’s mission to build a direct relationship with the audience,” said Luke Wood, a talent development executive at Interscope Records, which has a distribution deal with MySpace Records, a music label started by the site. MySpace will also let users link to a band’s storefront from their personal pages to recommend their favorite acts, which could drive consumers to buy music they might not otherwise.

With sites like MySpace becoming an important venue for music promotion, the labels may need to weigh risk of online piracy against the potential reach of a MySpace store.

“I think that kind of distributed retail could be really significant as a model,” said Eric Garland, chief executive of BigChampagne, an online media measurement firm. “More and more, we’re exposed to media by other people. If I learn about music from you, I should be buying it from you. I shouldn’t have to scribble it down in a note for when I go to Tower Records.”

    MySpace Music Store Is New Challenge for Big Labels, NYT, 4.9.2006, http://www.nytimes.com/2006/09/04/technology/04myspace.html

New Web Sites Seeking Profit in Wiki Model

September 4, 2006
The New York Times
By ROBERT LEVINE

Every day, millions of people find answers on Wikipedia to questions both trivial and serious. Jack Herrick found his business model there.

In 2004, Mr. Herrick acquired the how-to guide eHow.com, which featured articles written by paid freelance writers. Although the business made a profit, he realized that the revenue brought in by selling advertising would not support the extensive site he had in mind. “If the page were about how to get a mortgage, it would work,” he said. “But the idea was to be the how-to guide to everything.”

So in January 2005 he started wikiHow, a how-to guide built on the same open-source software as Wikipedia, which lets anyone write and edit entries in a collaborative system. To his surprise he found that many of the entries generated by Internet users — free — were more informative than those written by freelancers.

“Wikipedia proved you could get there with another method,” Mr. Herrick said. Several months ago he sold eHow to focus on the new site, which now has 10,000 entries in English, Spanish and German.

Mr. Herrick is hardly the only entrepreneur inspired by the efficiency and low cost of what has become known as the wiki model. Although Wikipedia is operated by a nonprofit foundation, ideas for advertising-based wiki sites are beginning to take their place alongside blogs and social networking sites as a staple of Silicon Valley business plans.

In addition to Wikia, a site devoted to topics judged too esoteric for the online encyclopedia, there is ShopWiki, for product reviews, and Wikitravel, for tourism advice. Several start-ups allow users to operate their own wiki sites.

“Wikipedia is an encyclopedia and this is about the other 999,000 books in the library,” said Ben Elowitz, chief executive of Wetpaint, a start-your-own wiki site.

Others wonder how big that library can get. All of the companies making consumer-oriented wikis are privately held and do not release revenue figures. But so far not one of them has come close to the popularity of Wikipedia, according to Nielsen/NetRatings. WikiHow had 1.1 million visitors in July, Wikia had just over 270,000, and several other wiki sites had too small an audience to be measured by the Nielsen/NetRatings methodology.

Andrew Frank, a research director at the Gartner Group, a technology consulting firm, said that all of this interest in wikis might rest on some naïve assumptions.

“The assertion that these sites are cheap to run is questionable,” he said. For example, to sell a substantial amount of advertising, wiki sites might have to filter for objectionable content. And he says he believes that ads on wikis could be worth less per impression than those on sites that aim at a more specific audience.

“I think there’s going to be a lot of wikis,” Mr. Herrick said. “But I’m not sure how many of them will make money. “

Others are more optimistic. Last month John Gotts, an entrepreneur known for buying the rights to domain names, agreed to buy the site Wiki.com for $2.86 million.

“I would never have paid this much for any other domain,” Mr. Gotts said. “I can’t think of one that would be worth more.” He pointed out that the site Wiki.com drew traffic before he bought it, even though it had little content.

The wiki concept was invented in 1994 by Ward Cunningham, a computer scientist who created a program called WikiWikiWeb as a way to share programming techniques. He named his creation after the Hawaiian word for fast.

“The subject I had in mind was the knowledge necessary to write good computer code,” Mr. Cunningham said, “but I realized it would have broader implications. It’s a medium that allows people to collaborate more easily than they could in systems that are modeled after the precomputer world, like e-mail.”

Over the last few years, wikis have gained traction as tools in the business world, where companies run them on internal networks to foster collaboration on complex projects. The Gartner Group has predicted that half of all companies will use them internally in some fashion by 2009. There has also been at least one failed experiment with wikis in journalism: The Los Angeles Times tried online “wikitorials” but quickly abandoned the idea.

Even Jimmy Wales, who founded Wikipedia, is looking for ways to broaden — and profit from — the wiki concept. With financing from technology luminaries like Marc Andreessen and Mitchell Kapor, he and Angela Beesley started Wikia, which includes 1,500 separate wikis, from the Star Wars-focused Wookieepedia to user-generated pages on depression. Although Wikia is a for-profit company, it was founded with some of the communitarian idealism of Wikipedia, and its business plan calls for it to donate money to that foundation.

“It’s never going to be a billion-dollar-revenue business,” said Gil Penchina, the company’s chief executive. He said that the site currently made less than a dollar a page per month, although the site’s growing number of pages could make that significant.

“It feels to me like Craigslist,” he said. “It’s a small business, but it’s a good business and it makes a lot of people happy.”

If wikis become a big business, some of that idealism may fade — and consumers may begin to resent contributing to the sites free. So far, though, the sites are growing fast, thanks to dedicated volunteers.

Sondra Crane, a 75-year-old retiree who lives in Altamonte Springs, Fla., has written scores of entries for wikiHow on subjects both practical (how to make pot roast) and profound (how to get old without feeling old). “I’ve been writing all my life and I always wanted to have my name known,” she said. “I’d like to get paid — I put a lot of hours in. But it’s nice to know that people are being helped.”

Wikia and wikiHow operate much like Wikipedia: they let all users contribute and stipulate that any content they generate may be used freely, much as open-source software is. Other start-ups, including Wiki.com, are departing from the traditional collaborative spirit of the wiki model, in that they will let users decide who has permission to contribute to the wikis they start.

Mr. Gotts, who has been paying for Wiki.com in $10,000 installments with a final payment of about $2.8 million due within six months, said that he intended to share revenue with those who used his site to start wikis. “The main way we’re going to make money,” he said, “is to lead the trend for users to make money.”

He said that he would let users register Wiki.com subdomains free on topics of their own choosing — he suggested that might be anything from soccer.wiki.com to smokedsalmon.wiki.com — in the hope they would attract advertising or e-commerce.

But Ramit Sethi, co-founder of PBwiki, another make-your-own wiki site, said that it was still too early to determine what model would turn wikis into money-makers.

“Nobody has found the de facto business model for wikis,” said “It’s kind of the Wild West.”

    New Web Sites Seeking Profit in Wiki Model, NYT, 4.9.2006, http://www.nytimes.com/2006/09/04/technology/04wiki.html