Facebook Meets Wall Street

The recent FacebookIPO has dominated not only the financial media, but people who have never in their life purchased a share of stock or actually know what an IPO is were discussing around the water cooler the pros and cons of investing in this iconic social media company.  For sure, a company that was launched in a college dorm room about 8 years ago being valued in the billions of dollars is news.  For many, a vision of making a lot of money on this investment is irresistible.  After all, didn’t Apple stock once sell for about $4 per share?  Last look showed it trading in the $500+ range. 

 

It seems to me that while Facebook has quickly become a staple of daily life for millions of people around the world, its value to advertisers, the real driving force behind its recent stock valuation, could quickly wane.

 

In my experience there are three types of Facebook users. People in the first group have a Facebook account and most likely used it a few times when they first signed up.  After the first few days they forgot about it and perhaps now visit infrequently… if they can remember their password.  These accounts are in the minority but still inflate the reported extraordinary number of subscribers. And since they seldom sign on, members of this group seldom see the advertisements.

 

On the other side of the spectrum are the Facebook fanatics.  These are the folks that feel the need to let all their digital family know that they just enjoyed eating a Big Mac or that they are at the super market buying some grapes.  In many ways they live on and through Facebook.  These are also the people that you really want to “unfriend” but you don’t want to hurt their feelings. Since they live on Facebook one would presume that they see some of the ads.

 

The third group, and in my opinion the largest, is made up of people who look at the site once or twice a day to catch up with friends and family.  They review a picture of the grandkids or a vacation spot, read a rant or two about a politician or see an invitation to support a cause.  Facebook  is just one, albeit convenient, way of staying in touch.

 

I consider myself a member of the latter segment of users and therein is the issue.  I don’t pay attention to the ads.  I know they are there but I am certain they have not influenced me to buy or think or call or do anything.  I don’t think I am alone.

 

So if Facebook is to live up to its multi billion dollar value based on effective advertising, we may have a problem.  I would hate to see Facebook adopt the “in your face pop up” strategy that the Enquirer uses on line.  Unfortunately that may be the only option.

Wired Phones On The Wane

A brief article caught my attention recently. It seems that some phone companies are petitioning the government for permission to get out of the phone business. Perhaps that is a bit of an overstatement; in reality the companies want the government to release them from providing wired phone service at a reasonable price to most anyone who would like to have it.


It is called Universal Service and the roots of this mandate can be traced as far back as 1913 when the Federal Government gave AT&T a virtual monopoly for providing phone service in the United States. It was restated in 1934 with the Federal Communications Act which called for “rapid, efficient, nation-wide wire and radio communication service with adequate facilities at reasonable charges to all the people of the United States.” The Universal Service mandate assured that all citizens of the country would have phone service and that the phone company would not provide such a service only to the wealthy or only to those in large densely populated cities. That mandate has been modified several times, but to this day requires the phone company to provide a wired service to all but those in the most remote locations.

So why would the phone company want to stop stringing wires? The answer to that question can found by taking a look at your family and friends. Most of us know people who have dropped the traditional wired phone and use only a mobile phone. The younger the person the more likely it is that he or she will use only a cell phone. So with fewer people paying the monthly charge for a wired phone, the less money the phone company makes. Unfortunately, a reduced number of paying customers does not translate into a significant reduction in the cost to maintain the wired network. So there is less profit. And the profits are only going to get smaller.

In the US we have a very robust and reliable phone network. It has been around for a hundred years and at one time was the model for the world. Today a look at developing countries will show that instead of modeling phone systems after ours, these emerging countries are jumping ahead to a cellular network. They will never have wired phones in private homes, only cellular service. Building a few towers serving thousands of customers is much less expensive than stringing wires to remote villages and towns.

For sure the wired phone network in this country is not going to disappear soon. It is that very network that connects many of our cellular carriers and allows for transparent communication between wired and non-wired phones. What may change quickly is having that network continue to include private homes. Having a wired phone hanging on the wall in the kitchen may soon seem as quaint as a milk bottle in the ice box.

Lightning Can Fry Your Computer

Over the last few weeks some strong storms have pummeled our area. Not only have we had several inches of rainfall, we have experienced Mother Nature’s light show with some spectacular lightning. One bolt visited our neighborhood and left some serous damage to some of our computer equipment.

The lightning bolt hit very close to our house. While it did not damage the house and the lights only blinked, it fried my wifi router and my wife’s computer. The latter was not even plugged in. When storms approach, my wife is very careful to unplug her computer from the AC power.

Though I am not sure, I think the surge came into our house not on the AC power line but through my hard wired computer network cable. Our house has both wifi and a hard wired network. While my wife had unplugged her computer’s power cable, she did not unplug the network cable. Actually it was my fault because she didn’t even know she had a network cable as I had recently installed it because the wifi signal in her office was weak.

All of our computers do have surge protectors for the AC power, but I did not have surge protection on the network cables. This is something that I will add now that I have a brand new wifi router to replace the one fried by the storm.

Here are some hints to limit your exposure to lightning damage. First, make sure that you have a surge protector on all computers that are plugged into an AC outlet. This includes a lap top if you are using it on household current rather than on battery power. If you are using the battery, unless the lighting strikes very close, you are protected. If it strikes close enough to harm your lap top, the computer will be the least of your worries.

If you have wifi in your house the lightning can’t travel over the wifi network but, as happened to me, it can travel on the network cable line from your modem to your router and on to any computer connected to the wired network. So, either install an inline surge protector on the network line or unplug the network line from the router and modem during severe weather.

During a storm, if you absolutely don’t have to use your computer, unplug it from the AC outlet and any other outside connection, i.e., network cable, telephone line, etc. Lightning is unpredictable. It can travel in strange paths. A strike a mile away can travel through power lines, cable TV connections and telephone circuits. If it finds its way into your digital device it can turn it into high tech toast in a millisecond.

Surge protectors can be found at most all electronics stores. It is a good idea to use one, not only on computer equipment, but with TVs, game systems and audio systems. The protection is not expensive and can save hundreds of dollars in repair or replacement.

Appointment Viewing Going Away

                                                                                              

The growth of on-demand and personal video recording technologies such as the DVR is providing viewers many more options for watching their favorite programs when and where they want to. With cable and satellite providers bundling DVRs as part of the monthly subscription fee, recording programs has become effortless.  Not only can you record entire series with one command, you can store hundreds of titles within the machine without tapes or DVDs.

With the proliferation of these technologies one might think that the number of non-linear viewers, i.e., people watching a program at a time other than when it is broadcast, would be very high.  In reality, looking at the UStelevision audience as a whole, the number is not great.  In fact, current estimates by television trade organizations estimate that only 15% of TV viewing in 2015 will be non-linear.

For some in the broadcasting industry this trend is comforting since most broadcasting revenue is still based on the number of eyes watching a program at a specific time.  We see stations rolling out special programs during the Nielsen Sweeps periods hoping to attract more viewers than the competition.  The more viewers watching, the more money the station can charge for advertising.  This has been the model for more than 70 years in TV business.

There is a new set of technologies that might well accelerate the adoption of significant non-linear viewing much faster than the current predictions.  Tablet computers like the Apple iPad and Kindle Fire have already been game changers in the book and newspaper publishing business and could well have an even more pronounced impact on TV viewing.

Up until now, the personal TV recorders were connected to TV sets and, as such, most viewing was confined to the traditional places one finds a TV set. With tablet computers TV programs and movies are available anywhere.  And because they can access programming from a variety of sources, it makes no difference if you remembered to record the program in advance.

With millions of tablets being sold there is a user base developing that is used to having information and entertainment on demand no matter the time or the place.  Very little programming is enhanced by “appointment viewing” watching live.  A major sporting event like the Super Bowl is really the exception among thousands of hours of TV programming.  Just as the music industry changed radically with music being distributed on the Internet rather in CD form, look for TV programs to migrate away from traditional networks and broadcast channels to an on demand mobile device based industry.  It will happen sooner than we think.