Today's Wall Street crash

Quote of the day:

“This is a huge cow patty with a piece of marshmallow stuck in the middle of it and I am not going to eat that cow patty,” said Representative Paul Broun, Republican of Georgia.

The U.S. House of Representatives today rejected the $700 billion financial rescue plan, resulting in the Dow plummeting by 777 points, its largest single-day drop ever. The market lost $1.2 trillion in value. Just 1/3rd of Republicans voting backed the plan, which was proposed by their own President Bush.

Part of the reason for the failure in my opinion was wrong messaging. The rescue package was treated as a bailout for the wealthy Wall Street bankers at the expense of taxpayers. This is not entirely true. Credit squeeze due to toxic mortgage assets on the balance sheet of banks will affect the common person, at some level, more than wealthy bankers who have resources available for a rainy day. If banks freeze their lending, it'll impact car loans, small business loans, college tuition loans, and may also cause serious layoffs as firms cut projects due to capital shortage.

I believe some sort of rescue plan will be passed eventually. But the Federal rescue package in itself, though required, does not guarantee a sustainable recovery. My fear is that the American financial turmoil would spread over to Europe, which seems to be where the U.S. was a year back, and maybe the rest of the world. Though several emerging economies (BRIC nations) have domestic markets to sustain some of their growth - the "de-coupling" theory between developed and developing world markets that economists talk about - America and Europe are still the primary drivers of the global economy. If they sneeze, rest of the world will catch cold. U.S. mortgage-backed securities also found their way into the books of several global banks, not just those of Wall St firms. And many European banks are just too big for their individual governments to be able to bail them out. And a pan-European rescue, existence of the European Central Bank & European Union structure notwithstanding, would be extremely difficult due to the complexity of working through different regulations and political issues of individual countries.

Japan took more than two decades to recover from its similar real estate collapse driven economic meltdown of the 80s. I suspect U.S. will face the same fate, but we're clearly entering a highly uncertain economic environment.

Tracking Chrome's adoption

Google launched its Web browser Chrome, one of its most important products ever, on September 2, 2008. As users study and test Chrome's features, I'm going to regularly start tracking its user adoption over two-week periods using the browser traffic source to my blog.

For the first data point, I'm picking the two-week period starting one week after the Chrome was launched. Chrome has already gained a 3.4% browser market share amongst my blog's readers. Since most of them obviously belong to the digital media/consumer Internet industry, they're expected to be early adopters. Still, I think these results are impressive. We'll see if Chrome's numbers are sustainable.

Percentage, by browsers, of the total visits to this blog
Period: Sept 9, 2008 - Sept 22, 2008

1. Firefox 61.0%
2. Internet Explorer 30.5%
3. Chrome 3.4%
4. Safari 1.7%
5. Others 3.4%

To keep things in perspective, here is the global market share for browsers:

Source: Net Applications, August 2008

Quote of the day on Sarah Palin

Jimmy Kimmel:

"John McCain showed up (for the Washington DC meeting to discuss the financial rescue package) without running mate Sarah Palin, which is a shame because she actually has a lot of experience with financial matters. You know, she lives right next to a bank."

Kimmel obviously is doing his job as a comedian. People will however continue to poke fun at Palin's questionable qualifications as McCain's vice presidential nominee as long as she continues to outrageously claim that one of her main foreign policy credentials is the fact that she can see Russia from Alaska.

Scenes from India

The Boston Globe has tried to convey the spirit of India and its fascinating diversity through 34 pictures. While it's impossible to capture the essence of a huge and complex country like India in 34 pictures, these images are nevertheless impressive.

Few selected ones, mostly depicting the country's religious diversity, are below:


Devotees carry a statue of the Hindu elephant god Ganesh, the deity of prosperity, for immersion in the sea, on the last day of "Ganesh Chaturthi", in Mumbai September 14, 2008. Clay statues of Ganesh are made two to three months before this popular religious festival in India. The idols are taken through the streets in a procession accompanied with dancing and singing, to be immersed in a river symbolizing a ritual sendoff on his journey towards his home. (REUTERS/Punit Paranjpe).



Catholic nuns from the Missionaries of Charity order sing hymns for a special prayer during the eleventh anniversary of the death of Mother Teresa in the eastern Indian city of Kolkata September 5, 2008. Mother Teresa was a Nobel Peace Prize-winning nun who died in 1997, and was beatified by Pope John Paul II in 2003 at the Vatican. (REUTERS/Jayanta Shaw)



Hindu devotees, try to form a human pyramid to break an earthen pot filled with honey, milk and curd, as part of festivities to celebrate Janmashthmi, or the birth anniversary of Lord Krishna, in Mumbai, India, Sunday, Aug. 24, 2008. (AP Photo/Rajanish Kakade)



A view of the illuminated Golden Temple, Sikhs holiest shrine, in Amritsar, India, Monday, Sept. 1, 2008. This year, Sikhs mark the 404th anniversary of the installation of the Guru Granth Sahib, the sacred book of the Sikhs. (AP Photo/Aman Sharma)



Performers dressed as tigers take part in Pulikali, or tiger dance, during festivities in Trichur city, in the southern Indian state of Kerala, September 15, 2008. The ceremony was organised to mark the end of the annual harvest festival, "Onam". (REUTERS/Sivaram V)



Forestry workers look on as a male Royal Bengal Tiger leaps off a boat into the water after being released back into the wild in The Chamta Forest District of The Sunderbans, in India, on September 4, 2008. The tiger was declared fit for release by veterinarians after it was recently rescued from a nearby village. (HO/AFP/Getty Images)

Ambient Awareness - Social scientists explain Facebook & Twitter

Clive Thompson at The New York Times has provided a sociological & psychological analysis of microblogging tools popularized by Facebook and Twitter in his wonderful essay Brave New World of Digital Intimacy.

I'd highly recommend everyone, whether you lead a digital life or not, to read the full article - especially older people (over thirty) who are puzzled by the phenomenal success of microblogging.

Here are my highlights from the article, though it does not capture the storytelling essence that the full article would provide:

Social scientists have a name for this sort of incessant online contact. They call it "ambient awareness." It is, they say, very much like being physically near someone and picking up on his mood through the little things he does — body language, sighs, stray comments — out of the corner of your eye. Facebook is no longer alone in offering this sort of interaction online...

For many people — particularly anyone over the age of 30 — the idea of describing your blow-by-blow activities in such detail is absurd. Why would you subject your friends to your daily minutiae? And conversely, how much of their trivia can you absorb? The growth of ambient intimacy can seem like modern narcissism taken to a new, supermetabolic extreme — the ultimate expression of a generation of celebrity-addled youths who believe their every utterance is fascinating and ought to be shared with the world...

This is the paradox of ambient awareness. Each little update — each individual bit of social information — is insignificant on its own, even supremely mundane. But taken together, over time, the little snippets coalesce into a surprisingly sophisticated portrait of your friends' and family members' lives, like thousands of dots making a pointillist painting. This was never before possible, because in the real world, no friend would bother to call you up and detail the sandwiches she was eating.

Facebook and Twitter may have pushed things into overdrive, but the idea of using communication tools as a form of "co-presence" has been around for a while. The Japanese sociologist Mizuko Ito first noticed it with mobile phones: lovers who were working in different cities would send text messages back and forth all night — tiny updates like "enjoying a glass of wine now" or "watching TV while lying on the couch." They were doing it partly because talking for hours on mobile phones isn't very comfortable (or affordable). But they also discovered that the little Ping-Ponging messages felt even more intimate than a phone call.

"It's an aggregate phenomenon," Marc Davis, a chief scientist at Yahoo! and former professor of information science at the University of California at Berkeley, told me. "No message is the single-most-important message. It's sort of like when you're sitting with someone and you look over and they smile at you. You're sitting here reading the paper, and you're doing your side-by-side thing, and you just sort of let people know you're aware of them." Yet it is also why it can be extremely hard to understand the phenomenon until you've experienced it. Merely looking at a stranger's Twitter or Facebook feed isn't interesting, because it seems like blather. Follow it for a day, though, and it begins to feel like a short story; follow it for a month, and it's a novel.You could also regard the growing popularity of online awareness as a reaction to social isolation, the modern American disconnectedness that Robert Putnam explored in his book "Bowling Alone." The mobile workforce requires people to travel more frequently for work, leaving friends and family behind, and members of the growing army of the self-employed often spend their days in solitude. Ambient intimacy becomes a way to "feel less alone," as more than one Facebook and Twitter user told me.

Online awareness inevitably leads to a curious question: What sort of relationships are these? What does it mean to have hundreds of "friends" on Facebook? What kind of friends are they, anyway?

In 1998, the anthropologist Robin Dunbar argued that each human has a hard-wired upper limit on the number of people he or she can personally know at one time...psychological studies have confirmed that human groupings naturally tail off at around 150 people: the "Dunbar number," as it is known. Are people who use Facebook and Twitter increasing their Dunbar number, because they can so easily keep track of so many more people?

Many maintained that their circle of true intimates, their very close friends and family, had not become bigger. Constant online contact had made those ties immeasurably richer, but it hadn't actually increased the number of them; deep relationships are still predicated on face time, and there are only so many hours in the day for that.

But where their sociality had truly exploded was in their "weak ties" — loose acquaintances, people they knew less well. It might be someone they met at a conference, or someone from high school who recently "friended" them on Facebook, or somebody from last year's holiday party. In their pre-Internet lives, these sorts of acquaintances would have quickly faded from their attention. But when one of these far-flung people suddenly posts a personal note to your feed, it is essentially a reminder that they exist.

This rapid growth of weak ties can be a very good thing. Sociologists have long found that "weak ties" greatly expand your ability to solve problems. For example, if you're looking for a job and ask your friends, they won't be much help; they're too similar to you, and thus probably won't have any leads that you don't already have yourself. Remote acquaintances will be much more useful, because they're farther afield, yet still socially intimate enough to want to help you out. Many avid Twitter users — the ones who fire off witty posts hourly and wind up with thousands of intrigued followers — explicitly milk this dynamic for all it's worth, using their large online followings as a way to quickly answer almost any question.

It is also possible, though, that this profusion of weak ties can become a problem. If you're reading daily updates from hundreds of people about whom they're dating and whether they're happy, it might, some critics worry, spread your emotional energy too thin, leaving less for true intimate relationships. Psychologists have long known that people can engage in "parasocial" relationships with fictional characters, like those on TV shows or in books, or with remote celebrities we read about in magazines. Parasocial relationships can use up some of the emotional space in our Dunbar number, crowding out real-life people.

Psychologists and sociologists spent years wondering how humanity would adjust to the anonymity of life in the city, the wrenching upheavals of mobile immigrant labor — a world of lonely people ripped from their social ties. We now have precisely the opposite problem. Indeed, our modern awareness tools reverse the original conceit of the Internet. When cyberspace came along in the early '90s, it was celebrated as a place where you could reinvent your identity — become someone new.

"If anything, it's identity-constraining now," Tufekci told me. "You can't play with your identity if your audience is always checking up on you.

...Leisa Reichelt, a consultant in London who writes regularly about ambient tools, put it to me: "Can you imagine a Facebook for children in kindergarten, and they never lose touch with those kids for the rest of their lives? What's that going to do to them?" Young people today are already developing an attitude toward their privacy that is simultaneously vigilant and laissez-faire. They curate their online personas as carefully as possible, knowing that everyone is watching — but they have also learned to shrug and accept the limits of what they can control.

It is easy to become unsettled by privacy-eroding aspects of awareness tools. But there is another — quite different — result of all this incessant updating: a culture of people who know much more about themselves... The act of stopping several times a day to observe what you're feeling or thinking can become, after weeks and weeks, a sort of philosophical act. It's like the Greek dictum to "know thyself," or the therapeutic concept of mindfulness.

Laura Fitton, the social-media consultant, argues that her constant status updating has made her "a happier person, a calmer person" because the process of, say, describing a horrid morning at work forces her to look at it objectively. "It drags you out of your own head," she added. In an age of awareness, perhaps the person you see most clearly is yourself.

Google Chrome may re-ignite the Web browser war

Google yesterday launched its Web browser called Chrome. Compared to dozens of products that Google now offers in its mission "to organize the world's information and make it universally accessible and useful," Chrome may be one of the company's most significant launches since Google Search, the company's debut product which generated 99% of its total revenue of $16.6Bn last year.

If Internet is the revolutionary land of new opportunity, browser is the "car" everyone needs to explore the "land" and enjoy the journey. The Web browser therefore is the ultimate Trojan horse a company can use to influence users' online experience and introduce new products & services. Chrome will enable Google to tie together its major products into a seamless user-friendly experience (e.g., Search, Gmail, maps, docs, analytics, etc). Some of its products will work more efficiently with Chrome. For example, Google Analytics has relied on server-side information to provide analytics data to clients. Chrome will allow Google to gather and provide much stronger analytics data by grabbing browsing information from the client side.

Additionally, by developing its own browser, Google can speed up releases of its own Web software, which have always hinged on working with Internet Explorer and were therefore dependent on Microsoft's development cycles. Now, Google can release new applications that initially run just with Chrome, providing it an alternative product launch platform, and simultaneously driving Chrome's adoption through popular Google applications.

On aggregate, Chrome should increase adoption of other Google products and significantly boost its revenue potential beyond Search. The ultimate mission for Google is to optimize revenue streams by having all of users' data all the time - search data, publisher ad-serving data (thru DoubleClick) and now browser data.

Why now? While above reasons sound quite compelling, some may wonder why did not Google develop a browser sooner. There are new browsers on the market and in development (Microsoft's Internet Explorer 8) which give consumers the option to surf the Web in anonymity. Anonymous browsing, which allows users to have an online experience without leaving any trace/digital footprints, is probably the single biggest threat to Google's monetization model. Its revenue generation is based on its ability to collect information from its users as they search, and serve them targeted ads and search results.

Microsoft IE 8, expected to launch in Q1 09, has developed "InPrivate Browsing," a feature that allows users to surf in private. There has been a long-expected threat that Microsoft (IE) or Apple (Safari) could mess with the Web cookies that are critical to the functioning of online advertising networks/exchanges, such as DoubleClick (now owned by Google). Competitive threat, including recent U.S. government efforts to make a stink about Google's privacy policies, probably pushed Google to make a proactive effort in launching Chrome and including its own "incognito mode" in the browser.

Chrome in all likelihood will be the default browser on Google's soon-to-be-released Android mobile operating system. The launch timing therefore makes perfect sense.

Google apparently had been working on the browser for two years, and the launch over the long weekend was leaked through its comic explaining the product rationale.

Chrome, an open-source Web browser, faces a tough market with three players currently controlling 98%+ of the browser market. Microsoft's Internet Explorer (IE) has a dominating 72%+ share, which has however decreased from over 90% share during the past three-four years due to the success of Mozilla's open-source Firefox browser.


Source: Net Applications, August 2008

I know a bit about the Web browser space. I led the marketing and distribution of AOL's Web browser (one of my several roles at that "constantly transforming" firm).

Yes, AOL did launch a Web browser in late 2004. The goal was to promote AOL.com when AOL opened its content walled garden for free consumption through an open portal. The secondary goal for AOL Browser was to generate search revenue through AOL Search. Microsoft's IE at the time commanded a powerful 90%+ global market share (post Netscape's demise), but had not introduced a major new version after IE 6 for over three years - a lifetime in the Web world. That's what monopoly does. The AOL Browser was built on the IE 6 rendering engine, given IE's ubiquity, and a royalty free license that AOL won from Microsoft. AOL introduced several industry leading features in its browser - a separate search box, tabbed browsing, back/forward preview button, arguably the fastest speed for browser launch and page rendering, separate pull-out side panel for bookmark management & previews, etc. Initially Microsoft openly encouraged AOL to innovate, and later on copied most of the AOL Browser features when it rolled out IE 7 almost a year and half later - a typical Microsoft response.

Power of default: The best way to distribute a new, free, utility software is to make it the default application on the hardware users buy to use that software. Web browser is a classic example of such a software. The majority of users don't actively pick their Web browser - it's an utility application to surf the Internet, and as long as the default browser on their PC does an OK job, users do not actively download and try a new browser. And the default browser on almost 100% of PCs is Microsoft's IE. Even though the U.S. Justice Department has clearly mandated that Microsoft cannot use its monopoly power in one area, say, the Windows Operating System, to bundle new Microsoft products in a manner that limits competition, PC OEMs, who have 100% freedom to choose the software they bundle with new PCs, hesitate to take on Microsoft head-on unless the stakes are very high. Almost all PC OEMs therefore make the Microsoft IE the default browser, not least because its monopoly power is self sustaining - since IE is the dominant browsing platform, all Web sites and third party applications are designed to work on IE, which is not true even for Firefox, the #2 browser. Even if OEMs bundle a new browser, it is added as the second browser to IE, and IE is the default browser, the definition of which is the browser launched by default if the user, say, clicks on a Web link in a Word document. Some PC OEMs let users choose their default browser (if more than one are bundled) during the set-up process of their new PC when it's taken out of the box.

Since browser is a free product (ever since Microsoft started distributing IE for free in order to kill Netscape, the first Web browser), its distribution economics are governed by Web search generated through the browser. We had built a separate search box in the AOL Browser chrome. Revenue share with OEMs for distribution was therefore based on search revenue through the browser. Having a persistent and separate search box right at your finger tips on the browser chrome was a big convenience for users (no need to open another window and go to, say, google.com), and the default search engine in that box ended up being a big winner (again, the power of default). Even though users could change the default search to the search engine of their choice, most never did. Google therefore made a huge fuss when Microsoft made its MSN Search as the default search engine in IE 7 when it was launched in 2006.

It'll therefore be interesting to see how Microsoft responds to Google making its search as the default search on Chrome, which has also merged the browser address and search box into one. We should not expect any complaints from Microsoft until Chrome gets some traction.

While Chrome may seem a threat to Microsoft given IE's 72% market share, I believe Chrome's adoption, at least initially, will come at Firefox's expense. As discussed above, only tech savvy users will experiment with Chrome in the beginning - the kind of users who switched to Firefox from IE at the first place.


On my first use, Chrome provides a very clean experience and appears fast. While Google may offer better features rolled out with faster frequency, better technology does not necessarily guarantee a win in the browser war (remember, Netscape). The power of default as discussed above and the entrenched distribution of IE present a tough hurdle.

While Google has not discussed Chrome in relation to social networking, where Google has been a laggard in the U.S., making a user's "social graph" (network of contacts) as part of the browser, and allowing 3rd party plug-ins and applications can be an easy product extension. Users potentially can access their social graph from a variety of Web services such as Facebook, MySpace, Flickr, Twitter, etc., all hooked into the browser itself. Chrome can shift the battle for the default Web platform from social networks to Web browsers.

Theoretically, a browser is a better platform compared to social networking sites like Facebook to aggregate various Web services. But it still faces all the basic challenges discussed earlier, that have to be overcome in order for browser to become the default platform on the Internet. However, Chrome's attempt to become users' and developers' common platform on which Web applications & services can be aggregated and built on may be another of those futile efforts from companies that have tried their proprietary products to become the common standard on the Internet. As argued earlier, the Web itself is the ultimate Internet platform, that is open and free for anyone and everyone without any potential conflict of interests. Having said that, Chrome may have a better shot than any other product thus far to become the Web operating system.