February 5, 2008
In case you missed on how human life is turned into data, Andrew Pollack signals the coming of watermarks for life, right there in the DNA (*). If you skipped what is pronaocracy, Adam Liptak reports findings by Professors Palmer and Levendis on whether Louisiana Supreme Court judges' opinions correlate with contributions by plaintiffs to election campaigns (**). If you did not know you are a pawn of power plays by corporate overlords, Nikki Tait lets you know that the European Court of Justice agrees that Internet service providers have the right to defend your privacy against the music majors (***).
As I compose isolated events into a meaningful symphony, the study of recommendation mechanisms remains one of my favorite themes. Savor Patti Waldmeir's story about what the judge tells the lawyer who complains about his ranking by Avvo.com (****). And if you think this is all rather humorous, what do you make of the belated discovery by eBay that it ought to refine its own recommendation engine, as reported by Richard Waters (*****)? eBay gives out stars and speaks of rating or ranking sellers, but for buyers it's all about searching for the right offer. Which of Google and eBay will extract the associated added-value? That is a high stake game (1).
Stars commonly convey recommendations. Lives may hang on a Michelin guide star, as Jan Moir reminds us (******). On the other hand, according to John Gapper's comment about superstars' behavior (*******), the rogue trader who punched a $7B hole at the Société Générale was no mad gambler, but a rational risk taker. While he surely lost his bid for internal promotion, he knew that fame would also rewards failure, as long as its scale was colossal. A win-win game plan.
Who settles for second best if one can have first choice? Stardom attracts popularity but popularity enters into many star-based ranking and thus sustains stardom. Worse, when the content delivered by the star to his or her following is pure information, industry puts almost no limit to the scale of the rewards. A Tom Cruise movie can be seen by the whole world for ever and ever. Jérôme Kerviel's bets may have concerned assets worth $70B. John Gapper's insight is that, while high entry barriers coupled to dizzying rewards encourage risk taking, the same scale which inflates rewards creates opportunities for fame fit to inflame a would-be Herostratus (2).
Whether consultants or live performers, stars cannot bill more hours than there is in a day and hourly rates cannot go higher than what kills excessive demand. When dealing with pure information, why not recreate some limits to curb excesses due to industrial scale, e.g. cap by law a song lifetime revenue stream? If banks factored rogue losses into their models, they may find it more profitable long term to rein in their star traders' salaries.
John Gapper talks about individuals. But why not extend his analysis to organizations? Why not indeed look at the star dispensers themselves, our beloved recommendation mechanisms? They deal with pure information and, sure enough, economies of scale have conspired to create dangerously dominant monopolies. Is Facebook bet any different from Kerviel's? It sinks its investors' fortune into a free service in the hope of entrapping enough personal profiles to become a star of targeted advertising. Its plan is to do a Google or at least a Netscape.
To curb runaway star power, decentralize. eBay is ranking sellers "on more detailed criteria". Excellent. But why create one more centrally planned monster? Why not invite third party recommenders to compete in ranking sellers? "The more voices, the better", says Derek Bulmer of Michelin.
- (*) .............. Synthetic Genome: Signed, Sealed, Decoded, by Andrew Pollack (New-York Times) - January 29, 2008
- (**) ........... Looking Anew At Campaign Cash And Elected Judges, by Adam Liptak (New-York Times) - January 29, 2008
- (***) ......... Court deals blow to copyright owners, by Nikki Tait (Financial Times) - January 30, 2008
- (****) ...... The internet should choose your lawyer, by Patti Waldmeir's (Financial Times) - January 29, 2008
- (*****) .... Ebay moves to protect buyers, by Richard Waters (Financial Times) - January 29, 2008
- (******) .. Cooking up a storm, by Jan Moir (Financial Times) - January 20, 2008
- (*******) The crazy world of the superstar , by John Gapper (Financial Times) - January 30, 2008
- (1) as a store, eBay is subject to the same encroachments by Google as audio and video content providers.
Margins made on capturing consumer attention as they search for the right deal are as significant as those made on mediating their online purchases.
- (2) to become famous, Herostratus set fire to one of the seven marvels of the world.