abundance

Content is free. Formats are not

Content may be free, but the format in which we buy it certainly is not. As Apple, Google, Red Hat, and others increasingly demonstrate, consumers and enterprises are happy to pay for "free" when packaged in convenient formats that add value to digital goods.

Over the years, I've paid Morrissey several times for his Bono Drag album: cassette, CD (twice), iTunes, concerts. I'm reading Moby Dick (again), and have bought it in hardback and paperback, not to mention Kindle, formats. The Economist? I pay for the right to read it in magazine format, because I hate … Read more

The more Hadoop grows, the better Cloudera looks

The Internet largely abolishes scarcity in digital goods, shifting competitive advantage to those that can profit from abundance, not scarcity, like Red Hat, Google, and Facebook. For this reason, the more Hadoop grows as a community, the better the business opportunity for Cloudera, the start-up that distributes a commercial version of Hadoop.

Let me explain.

As CNET's Tom Krazit explains, "Hadoop is essentially an open-source version of the software Google uses to run its Web indexing servers." Yahoo also uses it internally for roughly the same reason, and has released its own open-source version of Hadoop to … Read more

Google: Social networking pays poor advertising dividends

Google has come out and said something that many in the industry - including I - have long suspected: Social networks are poor advertising platforms. For those who can't get beyond the advertising fetish, here's a critical data point that suggests you'll need to indulge that fetish elsewhere. Whereas search is a great indicator of customer interest, social networks are not. Said Google's CFO:

We have found that social networking inventory is not monetizing as well as we would like.

Of course it isn't. The model for monetizing them should be much different. Advertising is not the be-all, end-all for the web.

Nick Carr thus correctly asks of Facebook:… Read more

The increasing marginal return on open source

In perusing Nick Carr's blog today, I read his analysis of Google's voracious appetite for data and, in so doing, bumped into this exceptional blog post from Brad Burnham in which he dissects the importance of data to Google.

In the course of his argument, Burnham says something that hit me like a thunderbolt:

Data has this really weird quality. In economic terms data has an increasing marginal utility. Anyone who took Econ 101 knows that most physical objects have a decreasing marginal utility. When it is raining my first umbrella keeps me dry, a second may be handy if the first blows out, but a third is unlikely to be used. This is true of shirts, steaks, houses, of almost anything you can think of except data.… Read more