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Copyright 2001 John Zipperer. 

From Internet World:

Internet Whirl
If Only We Had a Free Market in E-Business
By John Zipperer

(06/13/01) True or false: American businesses want laissez-faire, small-government treatment for the Internet? The answer is true, if you believe the general hype, and it's false, if you look at the Internet world the businesses are building.

These uncharitable thoughts come to me as a result of one of my hobbies: reading history, in this case, an essay by Harvard Law School professor Lawrence Lessig. "Cyberspace's Architectural Constitution" was written last year, but this is the Internet so that counts as ancient history. The jumping-off point for Lessig is his criticism of business people demanding faster patent reviews and less government, which is odd considering that patents are an explicit regulation -- and a promise of possible enforcement intervention -- by the government.

That leads into a more important point of his, which is that the Internet, a supposed bastion of independence and aversion to government intrusion, increasingly relies on the patent-granting and -enforcing power of the government to stifle competition and innovation.

He first relates the story of how in 1964 a pre-Internet Internet-like system was proposed to the government, which then had it reviewed by network experts at AT&T. AT&T said "Nope," which highlights for Lessig the dangers of having a communications infrastructure controlled by one company that is able to prevent potential rivals.

"Innovators knew that before their ideas about how a telecommunications network should be used would be adopted, AT&T would have to approve their ideas," Lessig writes. "They knew their ideas would need the permission of someone else before they would run, and they knew that this someone else had an interest in the existing model of telecommunications. Some new ideas would be consistent with that model; no doubt they would be embraced. But other new ideas would be inconsistent with this model. They had a snowball's chance in hell. Any rational innovator -- or at least, those with a bottom line to support -- would turn their innovative energies elsewhere."

Well, the Net eventually was born, AT&T was divided, and the Web came along to give everyone an easy-to-understand interface to the Net. The Internet, as you certainly don't need to be told, is famous for its decentralized nature and the opening it gives to innovators not only to play on it and make money off it, but to actually change it and improve it, such as by creating better ways to search it or speed it up.

And now we come back to the depressing part of the story, in which Lessig said we're turning the Internet back into a closed-system architecture, as the increasing strength of broadband kingpins is able to determine what gets transferred and how it gets transferred and who gets to transfer it.

"As the Net moves from narrowband to broadband, from telephones to fat pipe ... builders of that network are building it differently from how the original Net was built," Lessig continues. "They are building it to vest control in the network owner."

If you believe that innovation is most likely to come out of a free-for-all atmosphere of attempts and failures to improve or replace things, then Lessig's pessimism is troubling. When it comes down to it, almost every company in the United States playing in the Internet space talks about the need to let companies compete without government intervention, but their attitude changes if that government intervention helps them (whether in granting a questionable patent on business practice or handing out sweetheart tax treatments, or whatever).

I can get pretty skeptical, but I don't think I'm a pessimist in the end. I'm banking on my belief that all the new-business creation of the past decade in the Internet space gave birth to enough businesses -- that survived the past year -- to enable us to have a working constituency against closing down the Net as an innovative center. The skeptic in me only worries about whether they have the clout to be heard by the politicians and bureaucrats who formalize our nation's mix of laissez-faire mercantilism.

(06/07/01) An interesting facet of the globalization debate is the handling of language, with the need for multilingual Web sites and services growing ever larger. Big multinational companies may be accustomed to having offices in other countries and marketing products in those countries as well. But the Internet is changing things, increasing the speed with which companies are forced to confront global customers.

The example of Fork Unstable Media demonstrates how complicated things can get when one is trying to define things neatly in the e-business world. The definition of just what nationality a company is is blurred by multiple offices, an international staff, and clients in many markets. What CAN be neatly defined is a company's own strategy for approaching global markets, something Fork and many of its larger brethren are learning to do very well.

Though the company has an office in the U.S., it focuses on being a European company, and its main offices are in Hamburg and Berlin. And yet, "our Web site has always been in English," says Manuel Funk, a partner in the German-based Fork. "We don't even have a German edition anymore."

That goes in the opposite direction from what I'm hearing from other companies, and it's interesting because this small company is a German firm with a largely German client base. Though it also has an office in New York, it makes no attempt to be an American company or pretend that it fully understands the American market -- even though one of its founders is American.

Fork has a quirky approach, but it's well thought-out for what it wants to do, which is attract American clients for its German offices. Larger companies may find that the Internet thrusts upon them the issue of internationalization of some their products before they are prepared for it.

"A lot of companies are in a sense dragged into being global companies," says Chuck McGonagle, North American vice president of marketing for SDL International, a provider of translation and globalization services targeting mainly Global 2000 companies. In his view, U.S. companies realize they need to pay attention to their international brand in one of two ways: The company has a product it needs to sell to people in other countries, and it needs to put it and its marketing in the local language and culture, which is the traditional way; or it has English-language Web sites that get visits from around the world, drawing purchase requests and e-mail inquiries in other languages.

McGonagle believes there's a lot of work to be done in the area of globalization of e-businesses, whether that involves a company's intranet that services offices in many countries or the translation of material on B2B and B2C Web sites. And while the globalization of a site involves a fair amount of work to determine how a company's brand and message are presented in each market (presumably, you want the reader/customer/partner to get the same image of you regardless of where they are based), it won't go anywhere without first tackling the language problem.

Translation can be done by machines or by humans. You probably don't want your company's full site done by machines, because they simply aren't as good as humans. Anyone who's used Babelfish knows that; machine translation is good for when you need to get across the basics of a message, because the reader can still get the point even though some verbs are wrong or a couple of nouns have been translated incorrectly and placed in the wrong spot in a sentence. It may also be appropriate if you have regularly changing information on a site, in which case human translation might be unrealistic.

Naturally, human translation costs more. And if you need to do many languages on your Web site that markets to customers and partners in a dozen countries, the price goes much higher.

"You really have to decide where you're going to get a return on investment," says McGonagle. He suggests that machine translation can be tailored to a specific company and in the process become more accurate than the public automated translators we all know and laugh at. For example, one of SDL's customers, Corning Cable Systems, uses an SDL translation server of its own. SDL has built glossaries of terms that are specific to Corning, so someone using Corning's Lotus Notes system to access documents about fiber optics would be using specialized dictionaries. But anything you expect to have "made nice" for others to see probably still needs a human translator to proof the machine translator's work.

For a Web site, you'd probably need an even nicer translation of most text, and we've only begun to get into the issues involved. As McGonagle points out, there are also technical issues, such as what types of language characters you can include, how you present the dates, and the amount of space left for text (translating an English page into German will give you significantly longer text, which still needs to fit into the design of the page). It's all adding up to something that probably can't be directed from a low level in your company, but needs direction, financing, and support all the way up the leadership ladder.

(06/01/01) When I was a student newspaper editor in college, I would have died and gone to heaven if anyone had been interested in getting my endorsement for political office. Unfortunately, our editorial page’s track record was so pathetic we dubbed it our “kiss-of-death endorsement,” because the candidates we endorsed invariably lost. Parties should have paid us money to keep us from endorsing them.

Compare that to the short period in the mid-to-late 1990s when Silicon Valley was the hot place to get endorsements and, more important, money. Once the political parties understood that the high-tech business community was a force to be reckoned with (and shaken down), they made a point of catering to the technology business.

The story of those early years is told by Sara Miles in her new book, How to Hack a Party Line (Farrar, Straus and Giroux). Miles has a tale to tell largely thanks to her access to maverick fundraiser Wade Randlett and Internet financier John Doerr, who were intent on remaking the Democratic party in the guise of a pro-business, New Economy party.

“I was at an amazing moment where the Internet boom was taking off and politics was really changing, and the two were going to intersect,” says Miles today about why she wrote the book. “This wasn’t the kind of politics where everything was rote. They were making it up.”

Unlike my college publication, it’s not this magazine’s role to tell people which candidate or parties to support, and we know from reading your letters and meeting with you in person that you’re not confined to one party or political outlook. But Miles’ book is a worthy addition to your reading list, because in the 1990s, Internet business became a political power. Like an adolescent flexing newly developed muscles, it looked to apply its newfound strength, and did so in some ways that were helpful, others that were clumsy, and some that were detrimental to itself and the wider democracy.

Miles’s book tells of politically inactive Internet executives enticed into weighing in on laws concerning taxes, shareholder relations, education, immigration, and encryption. These executives believed the government and business’s relationship to politics were slow, corrupt, or irrelevant.

In one case, for example, we read of Silicon Valley execs meeting with a group of senators to discuss federal policies affecting the Internet business community. A total disconnect occurs between the Net leaders, with their “get it done, and fast” attitude, and senators hemmed in by notions of compromise and the legislative challenge of making competing interests work together.

This particular instance was solved fairly quickly—but in political, not Internet time. By the 2000 elections, Silicon Valley was more bipartisan, and companies were beginning to understand that success in Washington could be achieved by maintaining a steady corporate presence instead of approaching it as if it were a buggy software product in need of a few programmers pulling an all-nighter to fix it. That’s because, beyond the hot ideological issues, “there really is a level in Washington in which you can get your business done,” says Miles. “On that level, Silicon Valley is becoming more like other businesses who understand politics is a business. This is how you get into it and have your impact—put your lobbyist to work.”

That doesn’t mean Silicon Valley doesn’t still have a lot to learn. In particular, Miles points to the tens of millions of dollars spent by two tech leaders in recent California referenda campaigns. The corruption of the democratic process may just be getting furthered by the infusion of large sums of new money, and it’s being applied in ways—such as referenda—that seek to avoid the built-in inertia of elected legislators, an inertia intended to give the country time to mull over laws and consider how they could adversely affect other citizens.

Referring to the separate branches of government and the occasional frustration of compromises and consultations, Miles says, “There’s a real value to slowing down the political process. It wasn’t supposed to work at maximum efficiency, it was supposed to work fairly.” That’s the framework in which e-business is learning to work.

Panasonic Looks to the Net to Curb Health-Care Costs
By John Zipperer

(06/01/01) In a climate of steadily rising health-care costs, Panasonic is pitching its new home-based health-monitoring product as an important part of the solution. One company that has been testing the system for years claims it "will change the marketplace in home health care" and greatly expand the ability of health-care providers to reach patients.

Focused Health Solutions (FHS), a Northbrook, Illinois-based provider of health care to people in their homes, partnered with Panasonic to test the product. Representatives of Panasonic and FHS both used the mantra "we move data, not people," by which they mean they let the patient send health data directly to the medical provider via an Internet connection, reducing the need for in-home visits by medical staff or in-person visits to the hospital by the patient.

"In a perfect day, a nurse in a home health-care setting can see five or six patients," said FHS president Judith Hicks. She says that using the Panasonic system, one nurse can work with more than 100 patients a day because they wouldn't have to travel. In addition, the real-time flow of the data directly into a database that turns it into charts and graphs helps the nurse prioritize the patients' needs.

Panasonic's tele-home-care system has three components. First, there's the Patient Terminal, a box the size of a fax machine that sits in the patient's home. The patient uses it and a number of accessories to measure weight, body temperature, blood pressure and pulse, blood sugar level, oxygen saturation, and heart health. The terminal is an all-in-one center for the patient, who gets e-mail messages from the doctor, uses it to collect health data, engage in videoconferencing with the doctor (a Web camera is positioned at the top of the terminal), and keep track of a medical schedule. The terminal will automatically transmit the data over a dial-up connection to the health-care facility after the patient is finished with the tests.

The second component is the Network Server software, which personalizes the entire experience for the patient. The final component is the Doctor Terminal, a Web-based interface used to track patient data and communicate with the patient.

"A significant cost saving is realized through the reduction or even the elimination of travel," Arthur Matsumoto, a vice president of Panasonic, told attendees of a Manhattan press conference on Thursday. One diabetic patient reported reducing his in-person visits to the hospital from about 30 a month to a total of 90 in a year. "It allows patients to be more comfortable and relaxed in the comfort of their own home," said Matsumoto, a claim echoed by Hicks.

The system is leased at a cost of $15,000 for three years, which breaks down to about $400 a month -- far less than a single hospital visit. Currently available only in English, Panasonic is planning other editions, most likely beginning with a Spanish-language edition.

Internet Whirl
Why Reputation Matters Even to the Anonymous
By John Zipperer

(05/31/01) In the mind of the typical business person, Internet message boards may be nothing more than amateur chatter, not worth any attention beyond an occasional browsing during the lunch hour. But one businessman, citing research showing that many of these messages are posted by informed professionals, and noting his own experience showing that message traffic can have a very real effect on corporate share prices and marketing strategy, is offering a way for companies to know when the Internet "buzz" is significant to their bottom line and when it's worth ignoring.

David Holtzman is CEO and cofounder of Opion, which tracks what's said about companies and products -- and who's saying it -- on public message boards. Holtzman has the kind of resume that encourages envy. It includes analyzing and building Internet systems integrations for enterprises and government, serving as chief technology officer of Network Solutions, being a top scientist at IBM, advising members of Congress and the president, and even a stint as a military cartographer. So why is he now focusing on such an odd aspect of Internet business culture?

He says it was witnessing the IPO and secondary offering of Network Solutions that gave him the inspiration for his current efforts. "One of the things I noticed was how the message boards appeared to be affecting the stock price. Everyone said I was crazy, but you see how the message boards say things, and the stock falls, and it got me thinking," he recalls. "I started to question the whole way demographic segmentation and advertising were linked. What's the difference between some pseudonym on Raging Bull and Mary Meeker? I've met her, but a lot of people haven't. There's this concept of influence that's very interesting. I started noticing that banner ads didn't work, and some of them were based on some fundamental demographic issues; I wondered if there wasn't some other way of doing this."

His "other way" is based on those basic thoughts. Opion's customers use its service to follow the online buzz about them and their products. His first launches have been with customers in two fairly obvious markets: financial services and Hollywood. Soon, he'll be going after Global 500 companies and the consumer products market, where he believes companies need to get better data on consumer feelings about their companies. There are other ways to get some of this info, but he says customer relationship management (CRM) and enterprise resource planning (ERP) systems aren't as fast as what he offers, which he says can increase the effectiveness of marketing -- which he calls a black art that uses billions of dollars. If you track the point at which influential voices are promoting your product/service/film through viral marketing, you can reduce or reallocate your marketing dollars. Or if you discover that negative rumors are being spread around about you, you can target your marketing response. That's Holtzman's pitch.

The financial services industry is one he thinks is a natural fit for his database of 500,000 identities. Early on, his company went to brokerage firms to see how they used message boards. "We asked the managers, and they said no one in the firm looks at the message boards," Holtzman says. But when he did research on the brokers themselves, he says brokers at 26 of the 27 firms reported looking at the message boards every day.

Being the devious-minded one, I've been trying to figure out how someone who wanted to circumvent Holtzman's system could do so. If someone wanted to puff up a company so she could run up the stock value, could she fool Opion's system? The answer, I think, is that it would take someone very determined, very patient, and able to produce quality analysis; because they would have to build up a good reputation over time before they could even hope to make an appearance on Opion's radar. The patience alone would cancel out most troublemakers; and the need for quality -- the fact that they'd actually have to establish a reputation through perceptive message postings -- would wash out most others. If you could be that perceptive over a long period of time, why would you need to trick other folks in order to make money -- you'd have already made your money for yourself.

Holtzman says his system is hard to skew because he tracks that person's activity over a number of years; his system's algorithms "reward longevity in a big way," he says.