Mobile Misconception: The Multiple Obstacles Frustrating Cell Phone Advertising

Size matters.

And that is one of the reasons why mobile advertising has not delivered the financial results expected from it.

The fact that it matters for this platform at this stage in the economic cycle has implications for innovation, investment, growth, job creation and a host of other factors that may not have been apparent to technologists when they first began to understand the size of the market.

Let's start with geography. By which we mean screen size. There isnt much to work with. Which results in a need for boldness, simplicity and brevity. Narrative volume and text size get in the way. This is one reason why design is so important.

Let's also talk about the audience. Boomers continue to comprise the largest age cohort on the planet. Though they may not be as facile as their children and grandchildren, they have phones and they use them. A lot. But there is this aging problem: their eyes are getting weaker. Which means small screens are even harder for them to comprehend. And they are not able to navigate small-ish keyboards as well, further complicating the ability of marketers to convey sometimes multi-dimensional messages designed to compensate for the smaller space available.

Finally, there is the matter of cookies. The memory function that enables advertisers and marketers to capture data and more effectively target their ads. Cookies don't work with phones. Which is why despite all the eulogies written for the computer, it still attracts more advertising revenue and profit than do smartphones.

Tablets are a compromise solution but in much of the world, the phone is going to be the computer for some time to come. Which limits the growth of the mobile ad market.

And therein lies the probably solution. Mobile is the present and the future. The financial incentives are such that enhancements and technical adjustments will be created. But until that happens, the mobile market is kind of like China: yeah, it's big. But getting there takes time, it's hard once you're in and you may not speak the language as well as you thought you did. JL

Randall Stross comments in the New York Times:

AT two inches wide and one-third of an inch tall, a display ad shown on a smartphone isn’t much of a canvas for a creative marketer seeking to promote a product or service.

That’s one reason smartphones are not working well as a medium for many advertisers.

Should YouTube Censor the Anti-Muslim Video Sparking World-wide Violence?

YouTube and its parent, Google, are faced with a difficult choice.

Their policy has always been quite publicly defined. Nothing will be censored unless it contains hate speech, advocates violence against others or is the subject of a local law banning specific content.

The video "Innocence of Muslims" is subject to none of those conditions. But it has sparked rioting and violence around the world that have left four American diplomats dead as well as rioters and security personnel in a growing list of countries.

The dilemma is whether to moderate its own policy in the face of the physical dangers to human beings the video has sparked - or whether to stand firm in honor of the best traditions of free speech, civil liberties and civilized discourse.

Most of the commentary on the 'net has castigated YouTube for taking the video off in Egypt and Libya where the violence began. The critics' claim is that YouTube and its parent company, Google, have already violated their principles by caving in to extremists' cynical manipulation of popular will in those nations. But then it is easy to be critical when you are sitting in the air-conditioned comfort of your handsome, comfortable office or home in the placid safety of New York or San Francisco.

Others believe that extraordinary circumstances require extraordinary action. You take the video off the net as a matter of public safety in a volatile world. And then, of course, there are many Muslims who claim to be genuinely offended by a deliberate attempt to insult the holiest evocation of their faith.

The challenge is that in a world of global communications, certain messages may seem obnoxious but tolerable in some parts of the world but terminally offensive in others. This controversy is exacerbated by the fact that some of the protest is now and has been in the past (such as the cartoon controversy in Denmark a few years back), manipulated by elements intent on using it to further their political, ideological and military ends.

The free speech advocates are right to be concerned about the longer term implications of censorship. Is every image or statement offensive to one group automatic grounds for deletion? And is it utterly self-serving? Will Muslim groups support the deletion of images offensive to Judaism? We already know the answer to that question is a caustic no.

The problem is that many governments are using the riots as a way of currying sympathy with the mob. They claim, wink-wink, that they'll move their security forces in when things have calmed a bit. The manipulation of public opinion against 'the other,' any other is as old as history. It has had its most recent, horrific uses in Germany, Bosnia and Rwanda, among others.

YouTube is not the UN. But it has derived much of its success from its globalism. In the world of modern, instantaneous communication but ancient cultures and beliefs, it may have to consider revisiting its standards to reflect its arguably unwanted but undeniable power. JL

Ari Melber comments in The Nation:

The protests against the now infamous YouTube video disparaging the Prophet Mohammad have thrust YouTube, and its parent company Google, into a tough situation.

While the company says it values free speech and usually only removes videos that violate its policies, it is experimenting with a deliberately inconsistent approach to the crisis surrounding the video, “Innocence of Muslims.”

How the Peripheral Becomes Central: Apple, Islam, Economics and the Unified Theory of Everything

Second year in a row: Apple introduces a new phone. Which, in many ways, is not all that different from last year's model.

Except for one thing, that most people think is peripheral, literally and figuratively. Until it becomes The Point.

Last year's controversy was about SIRI, the voice-activated assistant that was considered a toy-like after-thought. Except that it dominated the conversation and defined the new model.

This year? The new adapter. Which renders obsolete all previous adapters as well as all the connections to all the other Apple devices you might own, never mind the adapters in all the hip hotels and clubs in the world that finally got around to providing universal Apple connectivity.

Meanwhile, back in the rest of the world that doesn't orient its life around new phones (shrinking though its size and influence may be), there are riots in what last year were considered those brave and praise-worthy peripheral societies that produced the Arab Spring. In Europe, the affluent, central countries like Germany, France and the Netherlands are trying to figure out what to do with the nations no the periphery - Greece, Portugal, Spain et al - that are imploding economically.

So, maybe Apple is doing this as part of some global deep wave theory of change. Maybe the periphery is where the future gets revealed. We thought that convergence was where it was at. The end of history. Universal power sources. One platform fits all. But maybe that was bunk. Maybe Steve was right. His way or the highway. You dont want to fork over another $29 on top of whatever you're paying in yuan, euros, pounds or dollars? Fine, flash your Nokia and Android to your friends and watch them grimace at your humiliation.

Maybe all these seemingly peripheral changes in peripherals reveal something profound about the future as well as conceal something not so profound about the present. Like, that we're not quite ready for whatever the next big thing is but we have to produce a new phone or a new government or a new economic plan to keep our customers/voters happy.

Politics, economics, technology and $29 adapters. Who knew?JL

Andrew Leonard comments in Salon:

A hotly contested presidential election hits the stretch run, a deadly foreign policy crisis breaks out in the Arab world, new census figures prove that the richest Americans are still gaining on everyone else… and yet one of the most alarming stories of the week (judging by my perhaps unbalanced Twitter feed) appears to be the news that Apple’s iPhone 5 will come with a brand new dock connector

What's the Difference Between Invention and Innovation?

The history of technology is replete with stories of companies that had a great idea but didnt know quite what to do with it.

Xerox PARC, the celebrated Silicon Valley-based R&D center is the most famous of these. Its staff and the creative genius they unleashed are legendary in the tech community, both for the brilliance of their inventions - and for the fact that others often benefited far more than did the parent company that paid for it.

There have been other fonts of innovation over the last century including RCA and Bell Labs. But the increasing prominence of Apple's SIRI has drawn attention to a once secretive company whose primary function is to win government contracts in order to help the US military realize its technological dreams.

SRI International, the company that spawned the idea that became SIRI has a distinguished provenance. SRI originally stood for Stanford Research Institute and was the university's research arm. It was eventually spun off in order to provide greater opportunity to become profitable and it has achieved that goal.

SIRI is emblematic of the company's focus on innovation rather than 'mere' invention. The notion is not so much to be the cleverest (though that doesnt hurt)or to come up with cool new stuff, but to be sure that whatever is being created is intended for a market that enables both SRI and its clients to secure a financial return while solving a problem that may enhance other commercial opportunities.

This focus on practical applicability has assured a steady stream of new business while financing ever more audacious experiments that lead to even newer and potentially profitable new fields. It is quite an innovative business model. JL

Dan Friedell reports in Fast Company:

SRI International, the brains behind Apple's Siri, has launched a dozen consumer products since its digital assistant got famous. We venture inside SRI's labs to find out why you haven't you heard of any of them.

Tilt: High Frequency Traders Are Buying Data Ahead of You. Legally.

It is conceivable that some day in the future historians will look back on this era and shake their heads in wonder at the blatantly anti-competitive behavior permitted in the name of efficiency or capitalism or whatever misleading euphemism suffices.

But they wont dare do so now as many of their positions are funded by contributions from the financial services industry.

When even the Wall Street Journal finds it impossible not to comment on the notion that market-moving information is being sold for competitive advantage by the companies that produce it and some of the market makers that regulate and manage it, one begins to sense the size of the current standard deviation from what used to be considered fair play.

Why this is considered reasonable, let alone permissable, remains something of a mystery. Raw financial power explains some of it. The palliative impact of 'market smoothing' allegedly engendered by such sales is another potential benefit often touted in defense of the practice.

But whatever the excuse, the declining participation by retail investors in the equity markets suggests that while the short-term results may be profitable to a few, the long term impact on the market may be less positive for companies looking to raise capital and the nations hoping to see their economies prosper from those investments.JL

Geoffrey Rogow reports in the Wall Street Journal:

Fitch Ratings became the latest provider of market-moving news to streamline a path to high-frequency traders.

You Are What You Retweet: Twitter Presents New Targeting Method for Advertisers

You are the key to you. And to others you know.

This is the essence of the new targeting capability Twitter is providing advertisers. Whether by interest or device or a host of other factors, advertisers, whether commercial or political, can target the audience most likely to be susceptible to their message.

The targeting is based on the preferences of the individual user and those in his or her network. Those preferences may also permit the advertiser to know whether Android, iPhone or Blackberry users are more or less likely to vote or buy what's being sold.

No consent is required - yet. Privacy advocates are, once again, raising concerns about the implications for misuse or abuse of the data. But consumers have steadfastly ignored all previous entreaties in this regard. Given the choice between a discounted latte and protecting personal information, that'll be half-caff soy milk, thanks.

Twitter is rather late to this party. Google, Facebook and others have already taken the leap, with mixed results. But it is clear that the trade of information for service is considered a fair one by consumers, so far. And that both the targeting and the sale of that information will only escalate. JL

Steve Friess reports in Politico:

Twitter is finally joining its competitors in making money off of what it knows about its users.

The booming microblog quietly rolled out to advertisers earlier this month a new targeting method, one that helps campaigns and companies reach people based on what users they follow and what they retweet

Could Technology Kill the Asian Growth Miracle?

What goes around comes around.

China and many other locales in Asia have grown dramatically over the past three decades by providing the manufacturing platform for the western technology boom. Economies have grown, incomes have increased and the global commercial playing field has leveled more than a bit.

But as so often happens, the forces that unleashed this wondrous growth spasm could also be its undoing.

The Chinese are running out of people. As hard as that may be to believe, the increase in incomes across their economy decreases the incentives to move to the huge factories in coastal cities where much of the manufacturing takes place. Reports have already surfaced that Foxconn, chief supplier to Apple, Samsung and other tech companies, has been unable to hire enough workers so has pressed Chinese students to work in its factories involuntarily in order to meet demand for the debut of the latest iPhone.

What this means is that the Asian labor cost advantage is disappearing. Among the solutions is the replacement of workers with robots. Foxconn has stated it plans to install 1 million of them over the next few years.

In addition, as the following article points out, there is a cultural impediment to the sort of innovation that sparked the Silicon Valley/Route 128 revolution of the past few decades. Incremental change is valued more highly than radical change of the sort that sparked the internet era. Though China leads the world in patent applications, many of those are not globally protected, meaning that they are derivative or less impactful than those coming out of western countries. The solution of strong-arming western companies into surrendering intellectual property rights in return for access to the Chinese market is causing disquiet. In the meantime, businesses in the west have used this period to figure out how to prevail using technology to offset their labor cost disadvantage.

Ironically then, the very technological revolution that drove Asian growth may now be sapping its future prospects. JL

Izabella Kaminska comments in FT.com/Alphaville :

We’ve noted on more than one occasion that economists may be missing a trick when it comes to how technology is changing the global economy. More so, that developments like 3D printing, could even pose a black-swan risk for Asia in their own right.

Google and Dynamic Pricing: Patenting Your Propensity to Overpay

This 'dont be evil' thing turns out to be, well, pretty open to interpretation.

Lots of people overpay. Or feel that they do. Buyer's remorse is a common emotion. But it turns out that the propensity to overpay can be identified, managed and even predicted. To the point where Google has patented a means of doing so.

In our current socio-economic state, living by the Golden Rule about doing unto others or being your brother's keeper are about as popular as submitting to the dentist's drill without novocaine. We dont appear to have a lot of sympathy for anyone else. Could be due to our straitened economic circumstances. Or maybe a couple of generations of prosperity have just coarsened us. Whatever the reason, taking advantage of others appears to be considered a fair part of the bargain between buyer and seller.

This is particularly interesting in the internet context: Nigerian investment scams, Chinese IPOs and American political promises all vie for the consumers' attention. But actually patenting ways in which people can be targeted to overpay seems a mite predatory, even by today's morally flexible standards.

The advantage the net has had over tangible, retail commerce is its transparency, convenience and generally lower costs. They are mutually supportive and deeply interwoven. As soon as it is perceived that one of them has been undermined, the others may soon follow. JL

Timothy reports at SlashDot:

A newly-granted Google patent on Dynamic Pricing of Electronic Content describes how information gleaned from your search history and social networking activity can be used against you by providing tell-tale clues for your propensity to pay jacked-up prices to 'reconsume' electronic content, such as 'watching a video recording, reading an electronic book, playing a game, or listening to an audio recording.'

Is Your Workplace Industrialized or Humanized?

The soul-deadening nature of traditional management practices is an easy target.

In fact, it has become a cliche. Insensitive bosses with anger-management problems, inflexible rules, calcified procedures and an overarching culture ripped right out of 'Father Knows Best.'

It is hard to know to what extent that ethos has survived the past 20 years of technological innovation, globalized competition and tsunamis of downsizing that have left a few stunned survivors to complete with the help of a random laptops the tasks that dozens used to accomplish. Certainly the selfishness of senior executive compensation in the face of almost universal economic suffering suggests that the mindset exists even if the practices have been papered over by facile references to team work.

But those who work now, even in the hip, open, collaborative workplaces personified, at least theoretically by Google et al, also risk a different kind of threat. It's root is that very technology and the flexibility it offers. 24-7 can be an opportunity to manage one's own time - or it can mean always on, always tethered.

The notion that Apple products somehow represent freedom of thought and action is more than somewhat diminished by the knowledge of incandescent Jobs-ian verbal abuse of underlings and his demand for total control of the business' every aspect.

The stories coming out of Zynga about megalomaniacal founders and the equally searing management horror stories from a host of other allegedly 'new economy' avatars suggest that the twists of human personality and emotion can transcend even the coolest, most bleeding edge atmosphere.

Technology can set us free. But it can also enslave us. Whether it humanizes or industrializes a workplace has less to do with the devices than with the mindset of those who use them. JL

Jody Thompson comments in the Cali & Jody Blog (hat tip Greg Satell):

Are you a PC or a Mac?

You remember those commercials, right? Talk about the ultimate way of "humanizing" your company. Apple personified it's product as a hip young person you could relate to (at least, who their target market would relate to), and personified their competitor as a stiff, boring spreadsheet geek who didn't "get it."

FBI's Nationwide Biometric Facial Recognition System Ends Anonymity As We Knew It

Not that we are convinced anyone will really care until they or a close relative runs afoul of the system, but the FBI is deploying a bleeding-edge facial recognition software tracking capability across the US.

According to reports, once the FBI has your faceprint, they can match against their data base and begin tracking. And just in case you are thinking that cosmetic surgery is the answer, the next stages involve DNA analysis and voice identification.

For those who think, oh, it's the government they'll never get it right, there will be cost overruns and the whole thing will be scrapped: newsflash; it is on budget and already 60% deployed.

Privacy advocates are, of course, alarmed. But then they have been in a constant state of alarm for years. And that is not a put-down. It is just a reflection of the relative lack of concern the average citizen has demonstrated for the actual or potential loss of privacy they have experienced. The reason is probably that it is not always apparent this tracking is happening, there is no obvious loss of freedom of movement or action - and it is not costing them anything explicitly.

The announcement is unlikely to spark massive protests from a population more concerned about putting food on the table than whether someone is watching them. Especially as so many invite that attention every day via social networks, YouTube, Twitter, et al. You dont know what you've lost till it's gone, indeed. JL

Michael Kelley reports in Business Insider:

The FBI has begun installing state-of-the-art facial recognition technology across the country as part of an update to the national fingerprint database,

Young Adults Are Dropping Out of the Job Market

Is it any wonder?

Almost five years into the post-crash recession there arent many jobs available and those that are tend to be in food service. Living at home because they cant afford their own place, reducing auto purchases because the price of gas, insurance and the cars themselves is becoming unsustainable, young adults have - in some cases quite sensibly - either gone back to school if they can afford it - or are working in the gray economy where their efforts and pay can not be tracked.

The causes have been endlessly debated: technological advances in which many have not kept up; a generation's worth of cutbacks in education that have left emerging workers under-prepared; ideological opposition to the current President that has stymied attempts at government stimulus; loss of faith in the future by senior executives whose compensation is structured to reward them for risk avoidance - and, therefore, denies long term investments.

Whatever the combination of reasons - and all of those above plus others are candidates - the implication is that the societies emerging from this period will be less well equipped to seize the opportunities that may be coming. JL

Chris Isadore reports in CNN:

The drop in the unemployment rate in August isn't particularly good news for the economy -- it's driven mostly by nearly 400,000 people dropping out of the labor force, rather than more people finding jobs.

But those dropping out aren't so much the discouraged 30-, 40- or 50-year olds. In fact, the Labor Department said there was a modest decline in the overall number of discouraged job seekers. The drop is because so many young adults, aged 16 to 24, are no longer looking for work.

How Digital Is Changing the Nature of Movies

The history of movie-making is contemporaneous with the history of technology. Silent to sound. Black and white to color. Mechanical to digital.

But this latest application of technological advancement is also changing the experience of movie-going which, given the co-evolutionary nature of the medium and the emotional response to it, may affect the way movies are made, felt, acted, directed, heard, viewed and appreciated.

Movies have been, first and foremost, a primarily shared experience. We have gone to the theater to escape and to partake with others we know - and many we do not. Even when the shift to big screen TVs and home theaters emerged, the notion was that the audience became more select, but it was still an audience of more than one. That may be changing.

As in so many other aspects of entertainment, news, literature, art and the rest of the visual arts, watching by oneself - on a plane, in bed, at the gym - wherever - may increasingly be a solitary pursuit. This is probably neither good nor bad, it just is, as convenience increasingly dictates our choices. But it is a profound change from the context in which filmed entertainment has traditionally been experienced. And since film-makers are acutely conscious of the competition for eyeballs and for appreciative ones, at that, this may cause them to rethink the meaning of audience and how it responds.

Technologically, the impact of digital effects enables the creation of fantasy worlds that were previously unattainable. But experts also worry that the use of digital 'washes out' the texture of actual film, often presenting a flimsier image. We suspect that technology will eventually be able to recreate whatever feel the auteur wants but the concern that having too much license may initially cheapen the effect - as it has done in almost all of the other arts where it has been applied.

Ultimately film-makers will find their audience and audiences will continue to find their films. It is too much a part of our common cultural heritage to die away entirely. But the nature of the stories told may well change as the society which they both reflect and challenge is doing so as well. JL

Manohla Dargis and AO Scott comment in the New York Times:

IN the beginning there was light that hit a strip of flexible film mechanically running through a camera. For most of movie history this is how moving pictures were created: light reflected off people and things would filter through a camera and physically transform emulsion. After processing, that light-kissed emulsion would reveal Humphrey Bogart chasing the Maltese Falcon in shimmering black and white.

More and more, though, movies are either partly or entirely digital constructions that are created with computers

Tech Design and Human Behavior: When Did Addiction Become a Good Thing?

Ethics and design.

The issue has been lurking out there for a while but we've ignored it, largely because we're so fascinated by the marriage of technological wizardry with behavioral manipulation. It's astonishing what people can be convinced to do without their realizing it.

But how is this different from what marketers have done for ages? From the earliest dealers in grains and fruits, to rug merchants, encyclopedia sales and TV pitchmen ('call now, operators are standing by...'). And why now?

Well, scale is one reason. The 'net has given us the ability to reach vast new audiences instantaneously. Unlike TV or radio or other media, there is no regulatory oversight governing truthfulness. So, the impact may be greater and the damage, when it occurs, both more widespread and harder to correct.

Secondly, there is that queasy human reaction to being manipulated without realizing it. Tell us partial truths, disguise the downside? Caveat emptor; let the buyer beware. Do your homework, check your sources, take responsibility. That is the mantra of the new age. Corporations have offloaded that burden on the rest of us, claiming somewhat virtuously, that self-governance makes for a stronger economy and probably makes us better people, too.

We could quibble with that, but in the service of greater convenience we have largely capitulated. The problem in technology and internet commerce comes with the absence of transparency. The lack of any explanation, let alone sufficient. Is it legal? Probably. Is it moral? Depends who you ask. Is it a positive development? We'll have to see. But we have some experience with this in the world's housing markets: Ireland, Spain, China, the UK, the US. And it ended up crashing the economy. The questions raised by the article below therefore pose some worthy questions the implications of the answers to which hit us where we live. JL

Jason Dreha comments in GigaOm:

Tech companies have become increasingly adept at manufacturing desire, but to what end? Behavior designer Jason Hreha argues that the industry needs to seriously consider the impact of its products. Are we helping our users lead better lives, or are we making them compulsive, impatient and distractible?

How Green Is My Cloud? Tech Companies, Cloud Computing and Energy Use

This started as a weak signal. But the heavens are starting to rumble thunderously.

The questions about the energy usage required to power cloud computing were initially considered by many the concern of an obsessed minority. Their worries were sublimated by fascination with the technological potential, the financial opportunity and the strategic implications for corporate competition.

But this is becoming a mainstream concern. Executives take pains to address it even when not asked. Press releases emerge. Articles are written. Analysts assess the countervailing claims.

The reason, as so often happens with environmental and sustainability issues in business, has less to do with what is right and more to do with what is efficient. There are two primary impacts: one is cost-related. Energy use reduces margins, which reduces free cash flow and affects however one measures profit. Which, in turn, impacts stock price performance, compensation and executive longevity. Talk about hitting someone where it hurts...

The second set of issues has to do with brand and reputation. Most tech companies, more than other corporations, like to be thought of as clean. That is usually how their founders were brought up and how their education and their peer-group have inclined them. It is also how many of their customers and, increasingly, investors like to be perceived. So in the global battle for pre-eminence in the tech sphere, every new issue is an opportunity and a threat. The opportunity is to convince others that what you are doing is smart AND good. The threat is that something bad will happen, you will be blamed, your brand sullied, your honor besmirched. Which might also affect stock price and those related factors.

Instinct and self-interest will prevail. The companies are playing catch-up because this was not top-of-mind when the trend broke. But they get the message. And they know that if they falter, plenty of observers will feel free to announce it to the world. JL

Roddy Scheer and Doug Moss comment in Scientific American:

Why is Greenpeace upset with some leading tech companies for so-called “dirty cloud computing?

How Google Builds Its Maps - and What That Means for the Future of Everything

Why would you bother?

That is the question that arises when one realizes the effort, the sheer scale of the enterprise required to create, update and improve Google Maps.

And no, the answer is not that they think maps are cool. Or that the company is public-spirited and just want to help people. Though both may be true.

The answer, to the extent that it can be sussed out, is that Google is locked in a Death Match with the world's largest, most iconic brand. Apple. To survive, let alone prevail, it needs to optimize the variables that allow it to compete effectively in the race to global tech dominance.

For Apple, those assets include design, hardware manufacture and the execution of strategy that arcs from conceptualization to delivery of products that dont just work well, but invent and then set the standard for entire classes of technology. And to those who think that is not so special, the graveyard of entrepreneurship and innovation is overflowing with companies who managed to do one, but not the other.

What Google does really well is identify, collect and manage information. Lots and lots of information. Organizing and applying that information in ways that consumer/citizens can use it to their advantage is their strength. The advent of mobility as a Truth of modern living has helped their cause because it means that knowing where one is, where one wants to go and what one may find along the way is not just useful, but a source of revenue and competitive advantage.

Arch-rival Apple has sensed the same tremor, which is why it is morphing iTunes into networks. Control may be an outmoded concept, but maximizing one's leverage is still an imperative.

So, when you casually start figuring out where your friends are or where they might want to be, based on what you tell them, remember the vast quantities of intelligence and strategic direction encapsulated in those thumb-strokes. In the misty future you - or your offspring - may even be driving cars or traveling on other modes powered by that knowledge. Assuming Google plays it right, it's going to be a long, happy journey. JL

Alexis Madrigal reports in The Atlantic:

The company opened up at a key moment in its evolution. The company began as an online search company that made money almost exclusively from selling ads based on what you were querying for.

But then the mobile world exploded. Where you're searching has become almost important as what you're searching. Google responded by creating an operating system, brand, and ecosystem in Android that has become the only significant rival to Apple's iOS.

Buying Access to Innovation: Corporations Invest in Start-Ups

Make versus buy.

That is one of the classic questions posed to first year MBA students. The notion is whether it is more cost-efficient and effective to invent and create something or to simply buy it from someone else, presumably a smaller, nimbler and more focused entrepreneurial business. But the analysis is not simple, because it entails assessment of myriad inputs and outcomes that contribute to value - many of them intangible and reputational: employee motivation, inculcating a culture of innovation, strategic choices, competitive implications.

Recently the trend has been to buy. Investors want returns now. Bonuses, stock options and job security depend on short-term performance. Companies claim that they dont 'get paid' for sponsoring research with a medium to long range outlook.

So they become 'strategic investors.' Which is investment-banker speak for someone who will overpay because it is easier to do that than to actually go to the trouble of thinking up and producing the product or service themselves.

We have seen the results most clearly in the pharmaceutical industry where the cost and marketing effort are so gargantuan it is believed that only new drugs with billion dollar or euro sales potential - or higher - are worth the effort. So the big pharma companies invest in little bio-tech start-ups (or their somewhat more developed older siblings)in order to grab some of that performance on what they consider to be the cheap.

So now its tech's turn. And the timing couldnt be better! Facebook killed the IPO market. VC investors are in the fetal position. So who decides it's the perfect moment to catch some of that ol' Silicon Valley magic? Why it's corporate America. They are sitting on piles of cash, too worried about the future to risk their executives' compensation on the uncertain outcome associated with actually investing in something productive themselves. So they are opening offices in the Bay Area, taking lunches and breakfasts and generally letting it be known that they have cash to burn for the right idea.

How will this turn out? History suggests this is a transitional movement. The global corporations can not buy enough innovation to really gain strategic advantage. But it does give them something to do until their belief in the future returns. JL

Evelyn Rusli reports in DealBook:

New York, London and Hong Kong are common addresses for blue-chip multinationals. Now Silicon Valley is, too.

From downtown San Francisco to Palo Alto, companies like American Express and Ford are opening offices and investing millions of dollars in local start-ups

Digitizing Dollars: If You Don't Like This Price, Wait a Minute. Literally.

For all of our highly caffeinated 24-7 affect, when it comes to shopping for many items, we remain in horse-and-buggy mode.

Occasional sales at certain times of the year for specific items. Essential commodities whose price changes barely register.

But technology and the winner-take-all mind set are bringing the casino mentality to the retail environment. Tracking software enables companies to monitor their competitors and adjust accordingly. Those with the ability and the desire to take the lead in this movement - like Amazon - may changes prices on the same item numerous times daily.

If it sounds like the trading floor of an investment firm, that's because it should. The algorithmically-driven pricing gives businesses better control of their sales, market share and margins.

Research suggests that this approach is not yet so casino-like that the house always wins. Consumers and sellers are evenly matched in terms of whether they are buying or selling on an uptick or down - so far. Companies believe they are coming out ahead not because they are taking advantage of their customers (heaven forfend!) but because the ability to better manage inventories and margins enhances cash flow, receivables, payables and a host of other variables that impact the bottom line.

Consumers have become inured to the price fluctuations in airline ticketing and though resentful, have not revolted. We can probably expect the same in retail prices - as long as the buyers continue to perceive that the system gives them a fair chance of benefiting. The exit of retail investors from the capital markets provides a useful primer on what happens when that sense of fairness dissipates. JL

Julia Angwin and Dana Mattioli report in the Wall Street Journal:

The fast-moving Internet pricing games used by airlines and hotels are now moving deeper into the most mundane nooks of the consumer economy.

Deploying a new generation of algorithms, retailers are changing the price of products from toilet paper to bicycles on an hour-by-hour and sometimes minute-by-minute basis.

Chinese Market Success May Prove a Challenge for Apple

Size matters.

And in China, that has two implications. One has to do with market share. The other with screen size. One of which is decreasing and one of which is increasing - and they are most emphatically related.

Questioning Apple's success is generally considered the province of the ill-informed or intellectually challenged. The company simply doesnt lose - at least from the perspective of those whose world view encompasses the past five years and the continental confines of Europe and North America.

But the reality outside that happily affluent slice of demography is somewhat different. Apple's Chinese sales have risen consistently, as the company will be first to tell anyone who will listen.

Which has driven them to an exalted SEVENTH place in the Chinese market for mobile phones.

Yes, you read that right. Seventh. Behind Samsung, Nokia (!), Lenovo and a bunch of other Chinese brands.

Apple advocates anticipate that the iPhone 5 will change all that. Isn't there always a 'this time it's different' chorus? But there may be a structural challenge for Apple on top of the financial challenge. First, the Chinese economy has slowed demonstrably. This is not to say their run at global leadership is over, simply that it is taking a breather, like most economies must do from time to time. But Chinese consumers have less to spend and costs matter to them. Even in the affluent major cities.

A separate but related structural development may cement Samsung's lead. As the following article points out, the mobile phone is now, for all intents and purposes, the computer in China. Which brings us back to size and specifically to screen size. Apple's is among the smallest on the market. And it is also among the most expensive. Which is not a healthy strategic combination. On top of that, Asian support for Asian brands may be a significant force in determining retail success.

Apple has proved itself nimble, intelligent and ruthless when necessary. Adjustments will be made and the race is far from over. But nothing is forever and as in every aspect of life, little things matter. JL

Abe Sauer reports in Brand Channel:

If leading rumors are true and the iPhone 5 increases its screen size from 3.5 to 4 inches, it will still be smaller than Samsung's--as well as smaller than products from LG, HTC and Huawei.

Why does this matter? Because in China, the mobile phone is now the computer.

How Apple's and Google's Digital Mapping May Be Mapping Us

Privacy is no longer the issue.

We conceded on that one eons ago - or whatever measure is relevant in digital time.

But questions are being raised about whether the ubiquity of mapping technology and our dependence on it is changing the way we view the world economically, politically, militarily, diplomatically and, well, personally. In other words, are the assumptions that go into presenting maps and the data included with them - or left out - somehow altering how we think about the world around us?

It is probably too soon to answer the question. And this is not to suggest that either Apple or Google or any of their competitors (with the possible exception of Amazon...) have a conspiratorial master plan for global domination. But it is not clear that we want their assumptions to be our assumptions. Especially for those who live outside the United States and work outside the world of large corporations. Because the concern is that that is precisely the world view being communicated, however subtle and understated the presentation may be.

Whether this rises to the level of generalized, popular and, eventually, organized expressions of discontent remains to be seen. The likelihood is not great, given society's acquiescence to most other trends that enhance convenience. But it will be interesting to see whether the questions being raised are being heard - and that companies involved, given their focus on solving problems in order to expand market opportunities - may actually pay attention. JL

Oliver Burkeman reports in the Guardian:

Digital maps on smartphones are brilliantly useful tools, but what sort of information do they gather about us – and how do they shape the way we look at the world?

Can Electronics Stores Survive?

Labor Day has evolved over the years from a day of rest to a day of sales. Back to school, end of summer clearance, pre-Christmas.

Humans love to shop and they love gadgets. It is - or was - a match made for marketing. Some of the earliest innovations in consumer hard goods marketing came out of this industry. EJ Korvette, Kresge and Sears. Then came the major discounters like Crazy Eddie. His prices were insane, as the ads screamed, but so was the business. And it soon demonstrated just how much, by going bankrupt.

The ease of ecommerce - comparing, buying, returning when dissatisfied - has taken the rest of the pizzazz out of going to the store. So the retail industry - with its penchant for strip malls as well as the jobs and state and local tax payments that go with them - is powering down.

The initial counter-strategy was large screen TVs. Too bad virtually everyone had the same idea, prices plummeted, margins evaporated and everyone who wanted one, got one. Plan B? Mobile phones. And, what a surprise, everyone glommed on to that notion as well. Mere humans generally need only one, prices are consistent with a band of options, packages likewise and so much for that.

There may, eventually, be a market for used devices but Amazon is already on top of that one. GameStop grabbed first mover advantage with its iPhone resale concept, but the same dynamics apply: how many of the things do we really need, or where need is not part of the equation, want?

We suspect humans will always want to shop with other humans around. The concept of the market is as ancient as civilization. Surveys continue to report that shopping is the most popular form of entertainment in many societies. But the evolution must continue. Costs must come down. Real estate prices and taxes must moderate. Reliance on the auto must be supplemented. We love to look - but we also love convenience. There's a market opportunity in there for someone. JL

Ann Zimmerman reports in the Wall Street Journal:

Is there a future for electronics specialty stores? Not long ago, retailers such as Best Buy Co., GameStop Corp. and RadioShack Corp. were outmuscling competitors across America by offering one-stop shopping for the latest televisions, computers, videogames and gadgets.

Now all three are fighting to survive. The rise of online competitors like Amazon.com Inc. that offer low prices and downloadable products have siphoned customers and sales from these once-powerful retailers