Alexis C. Madrigal

You know who is happy about Facebook's IPO, aside from its investors and fanboys? The state of California. The Golden State has been plagued by bad news about its budget, but a new estimate from the state of California's Legislative Analyst's Office suggests that the Palo Alto company's move to public markets could drop an extra $2.5 billion into the state's coffers, including a whopping $1.5 billion in 2012-2013.

The LAO made sure to caveat its estimate with all detailed notations of the uncertainties in their model. "As we discussed in the Overview of the Governor's Budget, the Facebook impact on state revenues cannot be predicted in advance and will never be known retrospectively with any degree of precision," they wrote. "Yet, given that an IPO clearly would benefit state revenues, we believe it is appropriate for policymakers to incorporate this into their budgetary discussions."

Even if it will be hard to quantify the impact of a Facebook IPO, the bottom line is clear to the LAO: Facebook going public will be great for a state that needs to close a multi-billion dollar budget gap over the next couple of years.

In a reminder of just how fragile this web we've weaved across the globe is, a ship dropped anchor outside the Kenyan port of Mombasa and happened to hit a bundle of undersea fiber optic cables connecting east Africa to the Internet. Now, the BBC reports, six countries -- Kenya, Rwanda, Burundi, Tanzania, Ethiopia, and a piece of South Sudan -- are going to experience Internet slowdowns as less pipe is available to carry the same amount of traffic.

The slowdown, which could take two weeks to repair, could be particularly tough for Kenya's burgeoning tech scene, which locals felt was going to be at its strongest yet in 2012.

As much as Alaska Senator Ted Stevens was mocked for calling the Internet "a series of tubes," the Internet's physical manifestation looks a lot like (surprise!) a series of tubes.

It's difficult to find great photos or descriptions of laying undersea cable (i.e. tubes), but Alcatel-Lucent released a video of one of its ships being loaded up with cable to an epic soundtrack. The most mindblowing shot comes about 1:45 into the video in which we get to look at the GIGANTIC spool off which the cable is pulled. It's 20 feet tall and wound many feet deep.



The art and science of laying underwater cable have been around since the days of the telegraph, when Americans tried desperately to connect themselves to Europe via an underwater link. Here's what the old apparatus used to look like.



Since then, cables running under the ocean have been improved and better armored and -- like all cables -- made to carry far more data. The ships carrying them are much larger and carry a lot more cable. Nonetheless, as you can see in the video below, some things haven't changed much in the century and a half we've been sending messages under the sea. In essence, cable is fed onto a spool and dropped into the water. Nowadays, the cables are buried under the ocean bed. But still, everyone has to hope that nothing heavy enough to damage the cables falls into the depths. And these undersea cables are still one of the most vulnerable pieces of our information infrastructure, as millions of east Africans just found out. 
 

We're all familiar with American team building. Perhaps you go on a ropes course or do some trust falls. Or everyone happily participates in an "icebreaker" during which you reveal what kind of kitchen utensil you would be, if you were, in fact, a sentient kitchen utensil. (I would be a microplane.) It all feels a little bit silly, but perhaps, at the end of the day, you know your coworkers a little better and that's fine.

Take a look at the video above, which Chemical and Engineering News posted this week. It takes you inside the Chinese drug R&D lab run by HEC Pharm just outside Hong Kong. At about the 1:30 mark, C&EN's reporter spies some HEC employees doing the kind of left-right-left drilling that we associate with the military. That's the HEC sales force, it turns out. Call it team building with Chinese characteristics. 

More generally, this video is an unusual peek into yet another arena -- pharmaceuticals -- where Chinese companies are moving up the value chain from production to research and branding. 45 seconds in, there is a "forest" of high-pressure liquid chromatographs, which help scientists identify what's actually in a chemical mixture. The scale of the facility, which already employs 1200, is impressive.

Companies like Lenovo and ZTE have already shown that Chinese outfits can be competitive globally, even though pharma continues to be dominated by American and European concerns. What's fascinating is that as these companies compete on a technological level, they bring their cultural weight and norms with them. That is to say, just as European drug salesman had to get used to American companies' icebreakers, our sales people better polish up their boots if Chinese corporations end up dominating pharma.

Intelligence officials seem to be polishing up their case to take on Anonymous like a 'stateless' terrorist group.


The director of the National Security Agency, Gen. Keith Alexander, told various high-level audiences that the loosely affiliated group, Anonymous, would soon have the capability "to bring about a limited power outage through a cyberattack," according to an anonymously sourced article in the Wall Street Journal today.

The Journal admits that Anonymous "has never listed a power blackout as a goal," but warned that "some federal officials believe Anonymous is headed in a more disruptive direction," anyway.

The Anonymous-affiliated Twitter account, @YourAnonNews, responded with a blunt denial. "NSA head engages in alarmist rhetoric & fear-mongering," they wrote today. "Why would Anons take out power grids when lives depend on them?"

Security expert Christopher Soghoian displayed skepticism about the NSA warning, too. "I'm confused," he tweeted, "What will happen in next year or 2 to give anonymous ability to hack power grid. Either the grid is secure or insecure."

The Journal article, following the line of "U.S. intelligence officials" lumped together Anonymous into a new cyber axis of evil that consisted of al Qaeda operatives, Chinese cyberspies, Russian cyberspies, and ... a bunch of random people in IRC rooms using relatively unsophisticated denial-of-service attacks.

U.S. intelligence officials already have found what they say is evidence of Chinese and Russian cyberspies snooping in computer systems that run the electric grid, possibly in preparation for a conflict with the U.S. The governments of China and Russia have denied any involvement.

A stateless group like Anonymous doesn't yet have that capability, officials say. But if the group's members around the world developed or acquired it, an attack on the power grid would become far more likely, according to cybersecurity experts.

Note the use of the word "stateless." While it *can* apply to refugees and other entities, government officials tend to apply that adjective to a specific set of groups: People the American government labels terrorists, most particularly al Qaeda. Here's the normal deployment of the word from the 9/11 Commission report:

Our enemy is twofold: al Qaeda, a stateless network of terrorists that struck us on 9/11; and a radical ideological movement in the Islamic world, inspired in part by al Qaeda, which has spawned terrorist groups and violence across the globe. [emphasis mine]

So, now we know the frame through which the intelligence community sees Anonymous. That helps make sense of the scenarios that officials floated linking Anonymous to enemies of the United States.

"Possible scenarios discussed, the former official said, included one in which a foreign government developed the attack capability and outsourced it to a group like Anonymous, or if a U.S. adversary like al Qaeda hired hackers to mount a cyberattack," the article continued.

The overheated cyber rhetoric reminds some of the way the Bush Administration used yellowcake uranium in the lead-up to the Iraq war.

"Evidence to sustain such dire warnings is conspicuously absent," wrote George Mason's Jerry Brito and Tate Watkins last week in Wired's Threat Level. "In many respects, rhetoric about cyber catastrophe resembles threat inflation we saw in the run-up to the Iraq War. And while Congress' passing of comprehensive cybersecurity legislation wouldn't lead to war, it could saddle us with an expensive and overreaching cyber-industrial complex."

The weird thing is that the thinking in the Journal piece, which seems to place Anonymous somewhere between Iran and a Colombian drug cartel on the danger scale, seems to garner serious consideration from our national security officials, perhaps because the word 'cyber' sounds so scary. The article concludes:  

White House spokeswoman Caitlin Hayden said she couldn't discuss details of internal deliberations, but she said the administration "has made cybersecurity a top priority, and we are working tirelessly to protect ourselves from the threats we face, whether they come from other nations, cyber criminals, or from stateless activist hacker groups."

Note that word again, "stateless," and ask yourself if Anonymous should be deemed a terrorist group. Who has Anonymous hurt? What kinds of laws have they broken? Are they pursuing weapons? Do they sell drugs? Do they have guns? What credible evidence do we have that they are trying to hurt regular citizens? If not, what is gained by lumping them in along with real and persistent threats to Americans?

Drone technology can easily erode the scraps of privacy we have left, but the creepiness of the eyes in the sky could force us to rethink our current legal framework for data collection.

You know that animal feeling you get when you're being watched? That horror-movie tingle along the back of the neck, that neolithic desire to look around and find the pair of eyes that belong to the creature that's stalking you?

Well, you should probably experience that every day on the Internet, but you don't. That's always exasperated privacy advocates who wonder why we all don't care more about people tracking across the interweb. But that may change, if Stanford's Ryan Calo, who researches privacy at the Center for Internet and Society, is right.

Calo believes that drones could be a catalyst to update and increase our privacy protections. That's because drones are "the cold, technological embodiment of observation." They are easy to see and fear, unlike the servers that track your clickstream across the web. In essence, when people see what drones can do, they'll run screaming to the courts and legislatures with a ferocity that purely digital privacy erosion has never generated.

Flying drones are everywhere these days. Developed largely under the aegis of the military, they are making their way into civilian life, slowly but surely. Yesterday, the New York Times even hosted a roundtable discussion about the impact the robots are likely to have.

Drones, in my mind, make it clear how many of our feelings about privacy rest on the assumption that surveillance is time consuming or difficult. If someone smokes a joint in her backyard, she is making the (pretty good) calculation that a police officer is not watching. In our cars, we assume we can quickly send a text message at a red light or not wear our seatbelts for a few minutes or drive a few miles over the speed limit. We don't expect that someone is watching our every move and that gives the law some give, a bendiness that reflects it's a human construction.

But these little flying video and audio recorders, paired with powerful data analysis tools, make previously unthinkable levels of surveillance possible, even easy. Before the Internet, tracking someone's reading and shopping activities would have been nearly impossible without a private detective. Now, new online tracking tools make it possible to easily capture every page that you visit on the Internet. So companies do. Technology doesn't create entirely novel privacy questions, but it tilts the playing field towards or away from increased privacy without many citizens (or courts!) really noticing that anything had changed.

Let's look at one example of how drones change the privacy equation. We tend to think of our homes as having a perimeter. Property maps are two-dimensional, we talk about property lines as if they were burned into the ground. There are access points in two-dimensional space -- paths and roads -- that channel visitors through a small number of places. We can build fences or plant hedges and they need not be high to mark the territory out.

A flying drone with a zoom lens, though, makes that whole sense of two-dimensional privacy an anachronism. If one wanted privacy from the government or other citizens, one would have to defend the entire volume of airspace reaching up from one's property to several hundred feet up, if not much farther. This vastly increases the cost of physically hiding one's activities. And, vis a vis law enforcement, the idea of "plain sight" hardly even makes sense anymore, as Jonathan Zittrain pointed out yesterday:

The prospect of constant government surveillance of citizens through cheap drones tests the "plain sight" doctrine by which, under our Constitution, police are generally allowed to scope out whatever is in plain view, without requiring a warrant. Supercharged technologies face some limits -- extra-sensitive remote microphones, or heat signature detectors of the sort that might be pointed at the wall of a home to detect marijuana-growing lamps in use inside.

If a drone with a zoom lens happens to be cruising by your 100-acre farm and spots you smoking a joint on it, were you in plain sight? What if it were technically outside your property line or far above it?



Calo doesn't think we can look to the current body of privacy law for much help in keeping our lives private.

There is very little in our privacy law that would prohibit the use of drones within our borders. Citizens do not generally enjoy a reasonable expectation of privacy in public, nor even in the portions of their property visible from a public vantage. In 1986, the Supreme Court found no search where local police flew over the defendant's backyard with a private plane. A few years later, the Court admitted evidence spotted by an officer in a helicopter looking through two missing roof panels in a greenhouse. Neither the Constitution nor common law appears to prohibit police or the media from routinely operating surveillance drones in urban and other environments. [emphasis mine]

Yet we know that if drones are operated in populated areas, they will end up doing all kinds of collateral surveillance. And nothing legal stands in their way. 

If anything, observations by drones may occasion less scrutiny than manned aerial vehicles. Several prominent cases, and a significant body of scholarship, reflect the view that no privacy violation has occurred unless and until a human observes a person, object, or attribute. Just as a dog might sniff packages and alert an officer only in the presence of contraband, so might a drone scan for various chemicals or heat signatures and alert an officer only upon spotting the telltale signs of drug production.

Calo, for one, is not despairing. The types of privacy issues drones create are easier to parse than ones that occur between you and your web browser, so are more likely to create a public outcry. Online privacy violations "tend to be hard to visualize."

Maybe somewhere, in some distant server farm, the government correlates two pieces of disparate information. Maybe one online advertiser you have never heard of merges with another to share email lists. Perhaps a shopper's purchase of an organic product increases the likelihood she is a Democrat just enough to cause her identity to be sold to a campaign. At most one can picture the occasional harmful outcome; its mechanism remains obscure.

But drones are a whole different story, Calo argues. If drones were to come into common usage, "people would feel observed, regardless of how or whether the information was actually used," he wrote. "The resulting backlash could force us to reexamine not merely the use of drones to observe, but the doctrines that today permit this use." In other words, perhaps the creepiness of drones would cast wider doubt on the enterprise of personal data collection.

That's the optimistic scenario. The other one you may have already read:

The black mustachio'd face gazed down from every commanding corner. There was one on the house front immediately opposite. BIG BROTHER IS WATCHING YOU, the caption said, while the dark eyes looked into Winston's own... In the far distance, a helicopter skimmed between the roofs, hovered for an instant like a bluebottle, and darted away again with a curving flight. It was the police patrol, snooping into people's windows.

Piotr Czerski is a Polish writer and commentator. Here, he lays out the kind of political/literary manifesto that seems to pop up from time to time, usually in Europe. The essay, as translated by Marta Szreder, was posted to Pastebin under a Creative Commons license. I repost it here with the first several paragraphs excised, so that we can hasten to the meat of Czerski's analysis about how the expectations of young people have been conditioned by their experiences of the Internet.

1. We grew up with the Internet and on the Internet. This is what makes us different; this is what makes the crucial, although surprising from your point of view, difference: we do not 'surf' and the internet to us is not a 'place' or 'virtual space'. The Internet to us is not something external to reality but a part of it: an invisible yet constantly present layer intertwined with the physical environment. We do not use the Internet, we live on the Internet and along it. If we were to tell our bildnungsroman to you, the analog, we could say there was a natural Internet aspect to every single experience that has shaped us. We made friends and enemies online, we prepared cribs for tests online, we planned parties and studying sessions online, we fell in love and broke up online. The Web to us is not a technology which we had to learn and which we managed to get a grip of. The Web is a process, happening continuously and continuously transforming before our eyes; with us and through us. Technologies appear and then dissolve in the peripheries, websites are built, they bloom and then pass away, but the Web continues, because we are the Web; we, communicating with one another in a way that comes naturally to us, more intense and more efficient than ever before in the history of mankind.

Brought up on the Web we think differently. The ability to find information is to us something as basic as the ability to find a railway station or a post office in an unknown city is to you. When we want to know something - the first symptoms of chickenpox, the reasons behind the sinking of 'Estonia', or whether the water bill is not suspiciously high - we take measures with the certainty of a driver in a SatNav-equipped car. We know that we are going to find the information we need in a lot of places, we know how to get to those places, we know how to assess their credibility. We have learned to accept that instead of one answer we find many different ones, and out of these we can abstract the most likely version, disregarding the ones which do not seem credible. We select, we filter, we remember, and we are ready to swap the learned information for a new, better one, when it comes along.

To us, the Web is a sort of shared external memory. We do not have to remember unnecessary details: dates, sums, formulas, clauses, street names, detailed definitions. It is enough for us to have an abstract, the essence that is needed to process the information and relate it to others. Should we need the details, we can look them up within seconds. Similarly, we do not have to be experts in everything, because we know where to find people who specialise in what we ourselves do not know, and whom we can trust. People who will share their expertise with us not for profit, but because of our shared belief that information exists in motion, that it wants to be free, that we all benefit from the exchange of information. Every day: studying, working, solving everyday issues, pursuing interests. We know how to compete and we like to do it, but our competition, our desire to be different, is built on knowledge, on the ability to interpret and process information, and not on monopolising it.

2. Participating in cultural life is not something out of ordinary to us: global culture is the fundamental building block of our identity, more important for defining ourselves than traditions, historical narratives, social status, ancestry, or even the language that we use. From the ocean of cultural events we pick the ones that suit us the most; we interact with them, we review them, we save our reviews on websites created for that purpose, which also give us suggestions of other albums, films or games that we might like. Some films, series or videos we watch together with colleagues or with friends from around the world; our appreciation of some is only shared by a small group of people that perhaps we will never meet face to face. This is why we feel that culture is becoming simultaneously global and individual. This is why we need free access to it.

This does not mean that we demand that all products of culture be available to us without charge, although when we create something, we usually just give it back for circulation. We understand that, despite the increasing accessibility of technologies which make the quality of movie or sound files so far reserved for professionals available to everyone, creativity requires effort and investment. We are prepared to pay, but the giant commission that distributors ask for seems to us to be obviously overestimated. Why should we pay for the distribution of information that can be easily and perfectly copied without any loss of the original quality? If we are only getting the information alone, we want the price to be proportional to it. We are willing to pay more, but then we expect to receive some added value: an interesting packaging, a gadget, a higher quality, the option of watching here and now, without waiting for the file to download. We are capable of showing appreciation and we do want to reward the artist (since money stopped being paper notes and became a string of numbers on the screen, paying has become a somewhat symbolic act of exchange that is supposed to benefit both parties), but the sales goals of corporations are of no interest to us whatsoever. It is not our fault that their business has ceased to make sense in its traditional form, and that instead of accepting the challenge and trying to reach us with something more than we can get for free they have decided to defend their obsolete ways.

One more thing: we do not want to pay for our memories. The films that remind us of our childhood, the music that accompanied us ten years ago: in the external memory network these are simply memories. Remembering them, exchanging them, and developing them is to us something as natural as the memory of 'Casablanca' is to you. We find online the films that we watched as children and we show them to our children, just as you told us the story about the Little Red Riding Hood or Goldilocks. Can you imagine that someone could accuse you of breaking the law in this way? We cannot, either.

3. We are used to our bills being paid automatically, as long as our account balance allows for it; we know that starting a bank account or changing the mobile network is just the question of filling in a single form online and signing an agreement delivered by a courier; that even a trip to the other side of Europe with a short sightseeing of another city on the way can be organised in two hours. Consequently, being the users of the state, we are increasingly annoyed by its archaic interface. We do not understand why tax act takes several forms to complete, the main of which has more than a hundred questions. We do not understand why we are required to formally confirm moving out of one permanent address to move in to another, as if councils could not communicate with each other without our intervention (not to mention that the necessity to have a permanent address is itself absurd enough.)

There is not a trace in us of that humble acceptance displayed by our parents, who were convinced that administrative issues were of utmost importance and who considered interaction with the state as something to be celebrated. We do not feel that respect, rooted in the distance between the lonely citizen and the majestic heights where the ruling class reside, barely visible through the clouds. Our view of the social structure is different from yours: society is a network, not a hierarchy. We are used to being able to start a dialogue with anyone, be it a professor or a pop star, and we do not need any special qualifications related to social status. The success of the interaction depends solely on whether the content of our message will be regarded as important and worthy of reply. And if, thanks to cooperation, continuous dispute, defending our arguments against critique, we have a feeling that our opinions on many matters are simply better, why would we not expect a serious dialogue with the government?

We do not feel a religious respect for 'institutions of democracy' in their current form, we do not believe in their axiomatic role, as do those who see 'institutions of democracy' as a monument for and by themselves. We do not need monuments. We need a system that will live up to our expectations, a system that is transparent and proficient. And we have learned that change is possible: that every uncomfortable system can be replaced and is replaced by a new one, one that is more efficient, better suited to our needs, giving more opportunities.

What we value the most is freedom: freedom of speech, freedom of access to information and to culture. We feel that it is thanks to freedom that the Web is what it is, and that it is our duty to protect that freedom. We owe that to next generations, just as much as we owe to protect the environment.

Perhaps we have not yet given it a name, perhaps we are not yet fully aware of it, but I guess what we want is real, genuine democracy. Democracy that, perhaps, is more than is dreamt of in your journalism.

___
"My, dzieci sieci" by Piotr Czerski is licensed under a Creative Commons Uznanie autorstwa-Na tych samych warunkach 3.0 Unported License: http://creativecommons.org/licenses/by-sa/3.0/

Contact the author: piotr[at]czerski.art.pl

Five minutes and four seconds into the flight of the Friendship 7, as John Glenn prepared to become the first American to orbit Earth, he radioed to NASA, his capsule turned and brought the Earth into sight. "Oh, that view is tremendous," he said.

In this post, I'll try to recreate some of Glenn's experience using imagery from our satellites and astronauts. It won't be a perfect recreation, but we'll have some chance of understanding what that first orbit must have been like.

Shortly after reaching orbit, his gave his first description of an earthly phenomenon from orbit. "This is Friendship Seven," he said, "Can see clear back; a big cloud pattern way back across towards the Cape. Beautiful sight." It might have looked something like this:

Meanwhile, back at Mission Control, things looked like this:

After a series of technical exchanges with Mission Control, Glenn returned to describing the scenery. "The horizon is a brilliant, a brilliant blue." We don't know exactly what he was looking at, but this might give you a sense of what he might have seen:



As he continued in orbit, he began to finish the journey across the Atlantic Ocean. "There, I have the mainland in sight at present time coming tip on the scope, and have Canaries in sight out through the window and picked them up on the scope just before I saw them out of the window," he said. "Over." 18 minutes into the mission, Glenn spotted the coast of Africa.

"Have beautiful view of the African Coast, both in the scope, and out the window. Out the window is by far the best view." Perhaps that looked like this:

"I can see dust storms down there blowing across the desert, a lot of dust; it's difficult to see the ground in some areas," Glenn continued a few minute later. "Over."



More health and ability checks took up most of Glenn's communications with the ground, but after 40 minutes, he indicated that he "had a beautiful sunset." He described it a couple of minutes later: "At this, MARK, at this present time, I still have some clouds visible below me, the sunset was beautiful. It went down very rapidly. I still have a brilliant blue band clear across the horizon almost covering my whole window. The redness of the sunset I can still see through some of the clouds way over to the left of my course. Over."

Despite the company's protests to the contrary, Pinterest already knows how to make money, and may already have a model that would work for users, retailers, and itself. 

Over the past few weeks, we've seen Pinterest rise out of the pack of next-next-next-gen social networks after humming along in relative obscurity for a couple of years. We presented our take on the visual bookmarking site a few days ago. Along with the explosion of interest, the company's sole source of revenue came into the spotlight: affiliate links. Pinterest had been using a service called SkimLinks, which is helmed by Australian native, Alicia Navarro, and which, has been in business itself for several years without a bunch of hoopla. SkimLinks' software looks at links users post to websites, determines if there is an affiliate program to which they can be linked, and appends a code that ensures Pinterest gets credit for (and data from) the referral.

To be honest, I don't see much wrong with this practice. The only people it could possibly hurt are merchants who are posting things to Pinterest and then having people click through the site, picking up an affiliate code that costs them a small percentage of the sale. For the average user, it's a non-invasive way to generate revenue for a site they like that doesn't require putting up with advertising.

Nonetheless, once the story broke that Pinterest was quietly making money off its users (the horror!), the company started to backpedal on its practices. That reached full bloom in a Wall Street Journal article yesterday in which various Pinterest parties (CEO, board member) fell all over themselves to declaim that the company knew anything about making money.

"Pinterest's monetization strategy isn't in the oven and it's not even off the baking table. We have one hundred ideas but no execution as of yet," Jeremy Levine, a board member of Pinterest and a venture capitalist at Bessemer Venture Partners, told the WSJ.

Ben Silberman, Pinterest's CEO, struck the same "Money, well, golly?!" chord. "My hope is that if we build a service that a lot of people use to plan and discover things, that will be really valuable," Silberman said.

Now, all of this is pretty standard Silicon Valley speak. They pretend that they don't care about making money off of users and we users pretend that we aren't the product. It's all about "building value" and "creating a better experience" and all that. Which is fine and good. I find the Valley's deep and starry-eyed belief that money flows to all the right people to be very endearing.

But let's get real here: Silberman's company had been happily using and making money with SkimLinks for 2 YEARS. Then, suddenly, $37 million of venture capital falls into their hands and suddenly all they care about is building that "a lot of people use to plan and discover things."

An anonymous source also told the WSJ that the company, VC-valued at $200 million, "isn't yet making much revenue and is unprofitable" and furthermore, "affiliate marketing isn't a major part of Pinterest's business model right now, according to the company and its venture capitalists."

This is a bit strange because:

1)We know Pinterest is driving truly massive traffic to retail sites, by some accounts more than YouTube, LinkedIn, and Google+ combined. It is, after all, a platform that's perfect for shopping!
2) We know Pinterest used SkimLinks to add affiliate links.
3) Affiliate links generate revenue.

Should this add up to chump change? Let's do the math just to get an order of magnitude estimate.

Commissions on sales for affiliate links vary widely, but they average around 5 percent. After SkimLinks cut, that'd be 3.75 percent (although SkimLinks says they can sometimes negotiate deals that would keep the percentage closer to the original number).

So, Pinterest has 10 million users. Let's say that the average across all of them is that they buy items valued at $10 in a month through affiliate links on Pinterest. That's $100,000,000 of sales for which Pinterest would get credit. That's $3.75 million in monthly revenue, or $45 million of annual revenue.

Is that going to make you the next Facebook? It doesn't look like it when your user base is 10 million. But what about when the site has 100 million users? Assuming revenue scales linearly, affiliate revenue would stand at $450 million. And if the site had 800 million users like Facebook? That revenue would go to $3.6 billion, just $100 million less than Facebook's 2011 haul.

These numbers are far from exact, but they aren't totally out there, either. The key to this model here is the Superman III principle: they are making pennies on a retail shopping market that is truly gigantic, and they are taking their cut from the top-line. Forrester estimates that the online retail market, in the US alone, will total $279 billion in 2015.

And really, what a win for everyone. Users get a great service and don't have to look at advertising. Retailers get a new outlet for marketing. Pinterest connects all these buyers and sellers.

I don't know Pinterest's financials, but I can't think of a time when a company has run harder away from what seems like a good business model that I don't think its users would object to.

What I think is going on here is that Pinterest's backers don't want the company's revenue engine (i.e. SkimLinks) to be located outside the company. Because while there's no doubt Pinterest is a viral product, the actual IP for generating data and affiliate income was located in Navarro's, not Silberman's. 

Do you expect different kinds of advertising from news sites than from other web content?

An image of a well-lit portrait of Kim Il Sung in a dark Pyongyang is a stunning lens into what the arrival of electric light on American soil might have felt like.

Ubiquitous technologies never seem miraculous. Who could possibly be impressed with a car or a light bulb? Yet we know that people once were. A book we talk about a lot around here, David Nye's American Technological Sublime details the way that light blew people's minds when it began to arrive on the scene in the late 19th century.

"Dramatic demonstrations of arc lights began in the late 1870s and seemed to offer visible proof of coming changes. The Brooklyn Bridge or a skyscraper, when studded with electric lights, took on an entirely new appearance," Nye wrote. "As these changes filled the urban night, a shimmering new world came into being. The electrified urban landscape emerged as another avatar of the sublime."

A technology that, for Americans, allowed a particular kind of mediated sublimity takes on a different cast in this photograph, which I plucked from Alan Taylor's spectacular collection of images from the World Press Photo Contest. It shows an area of Pyongyang without a single electric light except that used to illuminate a portrait of Kim ll Sung, North Korea's founder.

We're so immersed in electric light at all times; this photograph may be the closest that I can get to thinking about what early Americans might have thought of lighting demonstrations at government and corporate buildings. The technology, in its specific association with power, seems to infuse it with a kind of other-worldliness. Such a demonstration has been impossible in the United States for decades and decades, but its effect is still visible in this photograph. Light and power go perfectly together when everything else is dark.

Image: AP Photo/Damir Sagolj, Reuters

E-books are beginning to get their due, even from the guardians of intellectual life.

If I were someone who believed that culture was solely something that rode atop the more important economic and social structures of the world, I might believe that as soon as book sales began to tilt towards the electronic variety, the world's cultural critics would begin to pay homage to the new king. I'd expect to find essays in the great literary magazines about how reading e-books was commendable, salutary, even salubrious! These arguments, of course, would be made on the merits of the reading experience and not on the economic necessity of supporting the new form or the technological appeal of the gadgets in which the books are found. No, these arguments would be made solely within the bounds of the bookish and according to the rules of engagement long-ago established.

Completely unrelatedly, here is a quite wonderful essay in the New York Review of Books about the value of e-books:

The e-book, by eliminating all variations in the appearance and weight of the material object we hold in our hand and by discouraging anything but our focus on where we are in the sequence of words (the page once read disappears, the page to come has yet to appear) would seem to bring us closer than the paper book to the essence of the literary experience. Certainly it offers a more austere, direct engagement with the words appearing before us and disappearing behind us than the traditional paper book offers, giving no fetishistic gratification as we cover our walls with famous names. It is as if one had been freed from everything extraneous and distracting surrounding the text to focus on the pleasure of the words themselves. In this sense the passage from paper to e-book is not unlike the moment when we passed from illustrated children's books to the adult version of the page that is only text. This is a medium for grown-ups.

E-books, then, are the soul of the book freed from the wood flesh! They are one step closer to the telepathic ideal of idea transmission.

I agree with most of this, of course, but, my, what a difference a year makes. Here's the NYRB in February of 2011, in which e-books were going to be for all the crap while "content worth keeping" would continue on in paper form:

The two-thousand-year-old codex--printed pages, bound between covers--therefore will not go the way of vinyl and the compact disc but will survive for content worth keeping while the e-book/ e-pad formats and their future iterations will be more and more widely used, particularly for ephemera including soft-core pornography by women,the fastest-growing e-book category, and most reference works, such as encyclopedias, atlases, manuals, and so on that are constantly revised and may now be downloaded item by item.

I say all this not as a digital triumphalist. I like a good paper reading experience, too. But more to note that as the prices of e-book readers drop and the experience improves and the publishing business shifts to the electronic side of the house and brick-and-mortar retailers continue to go bankrupt, the guardians of culture will have less and less reasons to defend the establishment just to defend their livelihoods. Paper will keep its partisans, but I don't see the bulk of the cultural class sticking with them. Things that belong in paper -- beautiful things, things better read with heaps of context, things designed to take advantage of what print can do -- will remain in paper, but the workaday reading experience (i.e. the bulk of the business) will move to a screen. We won't go paperless, but, to steal Tim Maly's wonderful line, we'll have a new relationship with paper.

Image: Alexis Madrigal.

Will the hundreds of millions who have a phone (but not a computer) take up the keyboard when they have the money?

The research firm Forrester projects that by 2016, one billion people will have a smartphone.

One. Billion. Smartphones!

That got me thinking about a Twitter debate I had with Paul Kedrosky recently. We both agree that in the next half decade or decade, many hundreds of millions of people will see their phones as their primary conduits to the world's information. Unlike those of us who grew up with desktops/laptops and then got mobiles later, these are people who will be mobile-first hardware, software, and Internet users. Their expectations will be conditioned by the devices they first owned and that will have a huge impact on their future purchasing decisions and design preferences.

However, we diverge on a key point. I maintain that the current explosion of mobile products, which far outstrips the diffusion of computers, is merely an artifact of poverty. That is, if people in rural India or the suburbs of Shanghai could afford a MacBook Air and a phone, they'd prefer to use the MacBook Air for their computing needs. As incomes rise, particularly in Asia, and computers' prices keep coming down, I fully expect that computers will diffuse throughout every society. The keyboard and mouse/touchpad paradigm will find a home everywhere people can afford such a machine.

Kedrosky's argument, in Tweet form, was, "The fixed desktop device is already anachronistic in much of world." I responded that it was more economic necessity than preference, and Paul rejoindered, "I used to think [it was] a necessity, but recent travel has made me less certain it's not more of a preference."

We agreed to disagree and make a bet that no one would remember. My guess is that we still won't, but at least this blog post will be a good reference when I win.

Of course, it's also likely that mobile-first users will change computing paradigms so thoroughly that whatever the Chinese users of 2022 decide they want, it will look neither like today's phones or computers. Perhaps, as Kevin Marks put it, "The spectrum is shifting; we have non-phone devices like kindles and ipads too. Screen independence is coming."

Image: Reuters.

A Harvard dean reflects on the many attempts to build a Facebook at Harvard before Mark Zuckerberg succeeded.

The dean of Harvard College during Mark Zuckerberg's freshman year, Harry Lewis, has an intriguing duo of posts up on his blog. Lewis is a computer science professor at Harvard and has kept an extensive archive of his email. Last week, he decided to search through them for references to an online "facebook" or "the facebook." What he found is fascinating.

Before Mark Zuckerberg succeeded in building his remarkable site in early 2004, many attempts had been made by other students to get the university's printed book of photos of students onto the Internet. The earliest attempt was initiated in 1994 by James Gwertzman, an executive at PopCap Games, which was acquired by Electronic Arts. Over the next ten years, several groups of students came to Lewis and the university in an attempt to build a campus-wide facebook. None of them was successful, obviously.

On the basis of all these attempts, Harry Lewis suggests that something like Facebook was inevitable at Harvard in those days.

Readers of Kevin Kelly's "What Technology Wants" will see this sequence of events as fitting the pattern he describes. Technology wanted an online facebook... all that was needed to make it a reality was a student who was a bit less respectful of authority than the several wonderful people I have quoted or mentioned here!

The part that was not inevitable, it seems to me, is that Mark Zuckerberg's simple tool would grow into an 800-million user service.

My other favorite bit of all those old emails is that a 1996 meeting of the Harvard Computer Society recorded two, and only two, bulletpoints about an "online Facebook":

- idea is to have one main photo server that other people link to.

- Political issues will be most difficult.

Prescient!

Via Zak Stone

Image: Reuters.

It's been a huge day for the crowdfunding platform, Kickstarter, which saw its two most-backed projects reach $1 million in pledges within four hours of each other yesterday.

The first project to reach the one-million-dollar threshhold was the Elevation Dock, an iPhone dock, which got its million from more than 9,000 backers. It hit the number at about 2pm West Coast time.

Meanwhile, a fascinating-looking game from Tim Schafer and 2 Player Productions called Double Fine Adventures was on a tear. It had raised its $400,000 goal in its first eight hours. The explosion of interest kept many at Kickstarter and 2 Player up all night watching the money pour in from fans. By 6pm yesterday, the Double Fine Adventure project had received $1 million in pledges from more than 25,000 people.

Both the million-dollar projects offer a version of the "pre-purchase." That is to say, you don't just get cool "rewards" like stickers when you back the project, you get the product itself.

It was all part of a red-letter day for Kickstarter. On Thursday, Kickstarter's members pledged $1,605,981, more than doubling the previous record of $736,730, which had been set ... on Wednesday.

The Kickstarter team was very happy and possibly collectively inebriated:

An homage to the era when only the truly important could chitchat via space.

Images: COMSAT.

On the cold, crowded beach that is the Internet, another monster wave has been spotted on the horizon. This wave is called Pinterest and it looks like it could be -- or already is -- the Next Big Thing in social media. This week, Techcrunch blared, "Pinterest Reaches 10 Million U.S. Monthly Uniques Faster Than Any Standalone Site Ever," based on Comscore data. Last week, a study was making the rounds that claimed to show that Pinterest was driving more referral traffic than Google+.

We're getting to that point with Pinterest where (in tech circles at least) it feels awkward to ask what it is even if you're not exactly sure. This is your quick guide to the site.

What is Pinterest?

Pinterest is a social network currently in a loose invitation-only beta. It fits into the category of  "visual bookmarking." Like Tumblr (or Ye Olde Delicious), the service uses a browser bookmarklet, which makes it easy to post things from around the Interwebs. Pinterest's user gimmick/interface is that it lets you "pin" any photo from the Internet to a "board" on its site.

Why should I care about Pinterest?

Pinterest has broken out of the pack of new social networks to become a formidable source of traffic, particularly to retail sites. It has a very slick user interface and strong revenue model. And the site has a fascinating demographic breakdown: it's strongest among young women in the center of the country.

How does Pinterest work?

The genius of the UI is that when you hit the "Pin It" button, it pulls out all the images on the page you're visiting, allowing you to select just the right one. Using individual photos instead of the whole URLs means that Pinterest's boards end up slick and aesthetically appealing. Below, you will find a typical board, in this case, my homage to the French Press cozy, an accessory so bourgeois that it is battling the French aristocracy to enshrine capitalism at the heart of society. Also, they keep expensive coffee delightfully warm!

The late Apple leader's 1991 FBI file is now part of the public record.

When Steve Jobs was up for an appointment to the President's Export Council in 1991, the Federal Bureau of Investigation did what it does for all such appointments and went looking for dirt.

They want to know if you'll sell out the government, if given the opportunity. So they ask a lot of questions about the life and values of a prospective appointee.

The FBI conducts these background checks by going around and interviewing people who one has associated with. Did Steve Jobs live beyond his means? Has he done drugs or alcohol?
Did he have any deep, dark secrets?

What people say goes into a file, and Steve Jobs's (heavily redacted) file has just been released by the FBI. Cruising through its 191 pages, we find most of the biographical detail that we've come to expect. Jobs comes across as a reputable guy, but it's clear that if you did business with him, he would cut you.

One thing that stood out to me is that Jobs' so-called "reality distortion field" makes an appearance in the file. Steve Jobs ability to bend his teams to his chosen reality has been noted as far back as 1981, when Bud Tribble coined the phrase. In more recent years, the term was used to describe the way Jobs seemed able to effortlessly gin up attention and excitement about Apple's products. And now we know it will forever enshrined in the government's official repository of knowledge about the man.

On the standard 4.0 scale, Steve Jobs, master of the universe, got a 2.65 at Homestead High School from 1968 to 1972. For those who've forgotten the number-to-letter conversions, that means he got mostly Bs and Cs.

He earned this record while palling around with Steve Wozniak and other local nerds at the Homebrew Computer Club and working at Hewlett Packard.



This little tidbit is courtesy of Jobs' newly released FBI file, which was compiled in 1991 when the then-NeXT Computer chief "was considered for an appointed position on the U.S. President's Export Council." (If you'd like to verify the number yourself, it's on page 79 of the PDF.)

When we talk about the wonder of the United States' entrepreneurial system, I don't think we usually mean that we let kids who receive bad grades get ahead in the world. But perhaps the abilities it takes to get a perfect high school record do not perfectly overlap with the skillls it takes to build a $450 billion company. Or maybe it was just all luck.

As a tech writer, it is a good thing to remind myself that my habits are alien to most people in America. Not only do I pay for all my music, but I do it via the subscription service, Rdio, not Spotify or Pandora, or I get vinyl.

Meanwhile, out in America, there are people buying CDs. Even when these people go on to the Internet to buy music, they order the CDs and have them delivered. Billboard's latest numbers provide a perfect snapshot of the wide gulf in music purchasing behavior between (presumably) young and old. Fans of Lana Del Rey, whose album debuted at #2, one notch above Leonard Cohen's first studio album in eight years, bought downloadable music or a CD in a store. Cohen's fans were spread across brick-and-mortar retailers, downloads, and Internet CD sales.

Thirty-five percent of Cohen's new album's sales came from physical albums sold via Internet retailers. To compare, only 1% of Del Rey's first-week physical CD sales came from Internet sellers. On the other hand, 74% of Del Rey's sales were downloads, while digital sales represented 30% for Cohen.

I can understand brick-and-mortar purchases; I love a good music store as much as the next nerd. I can understand buying music for download: it's nearly instantaneous and usually a bit cheaper. But that last group, the big green slice of Leonard Cohen's pie. I do not understand them at all. Perhaps they are audiophiles who value the tiny difference between CD-quality and near-CD quality. Or perhaps they have dial-up modems that make downloading music difficult.

Whoever they might be, their consumption preference reminds us to think about the technologies that people actually use, rather than the ones they might use at some point in the future.

A newly public document provides a fascinating peek into the lives and gibes of the National Security Agency's cryptographers.

Every industry has its jargon. I'm sure yours does. In journalism, we call headlines "heds" and the little teaser sentence after that a "dek." No one knows why we misspell these things, and yet we do because this is our house and everyone must know the rules!

However, if you work for the National Security Agency, particularly in the realm of codemaking and codebreaking, your lingo is of more interest to the public than journalism's orthographic idiosyncrasies. And thanks to a recently declassified document that National Journal's Marc Ambinder dug up, we can now peer in at the secretive agency through the jargon used at Sigint City.

Following is a selection of definitions you can find in the full document, which was cheekily compiled by David Hatch, chief of the Operational History Division of the Center for Cryptologic History. Though, to be honest, we already whiffled the list to find you the good stuff.

Burn: to reproduce xerographically; a burn machine was an early office reproduction machine.
Consumer (aka Customer): those who receive NSA reports through regular distribution channels. This is an attempt to introduce terminology from business and commerce into the intelligence community.
Cryppie: shortened form of "cryptanalyst"; used (and taken) by some as affectionate, by others as derogatory -- listen carefully for the tone of voice and check to see if the speaker is smiling or not.
Day Lady: a mildly pejorative term used by workers on evening or overnight shifts to describe a person of either sex who works only "normal business hours"; often characterized by a compulsive concern for wearing a necktie or avoiding jeans.
Desk Rats: that's OK, you know who you are.
Diddy Bopping: copying manual Morse transmissions.
Flag Carriers: Agency senior executives, so named because the backdrop for their badge photographs includes an American flag.
Fort Fumble: a not altogether affectionate designation for Fort Meade and the NSA headquarters by those stationed elsewhere.
Ghost: to float among offices while awaiting a permanent position.
Hammered: describes text with a significant number of garbles, misprints, or omissions that render it unreadable or call into question its validity.
Hours of Boredom/Moments of Terror: an unofficial slogan used to describe duty in NSOC or other watch offices.
Knobbing: the act of searching for target communications by twisting a dial manually on intercent equipment.
Korling: acronym for "Korean lingust," an occupational specialty. It would look less like a Scottish sport or Canadian beer if spelled with a hyphen.
Mom's: a nickname for the cafeteria, possibly derisive.
Sigint City: a term that came into some currency at the end of the 1980s to refer to the complex of NSA buildings on Ft. Meade, a reflection of the number of facilities and the wide area over which they were spread. While catchy in itself, the term inappropriately slights other important aspects of the NSA mission, for example, information security.
Slip and Slide: to idle or waste time.
U Street U: nickname for the Agency training school overflow building located on U Street in the District of Columbia during the 1950s. In itself, this is a diminutive for the slightly disparaging nickname "U Street University."
Whiffle: to read rapidly through a stack of traffic to cull out usable items; this term is becoming obsolete as computerization reduces the amount of printed traffic routinely delivered to analysts.

Via Marc Ambinder