Complex systems theorists at the Swiss Federal Institute of Technology have completed a study on relationships (PDF) between 43,060 transnational corporations (TNCs), using data from the Orbis 2007 company database. The study, about to be published in PLoS One, has revealed there are
a core of 1318 companies with interlocking ownerships (see image). Each of the 1318 had ties to two or more other companies, and on average they were connected to 20. What’s more, although they represented 20 per cent of global operating revenues, the 1318 appeared to collectively own through their shares the majority of the world’s large blue chip and manufacturing firms – the “real” economy – representing a further 60 per cent of global revenues.
Other theorists quoted in the article are more interested in broad takeaways and policy implications. The TNC relationship structure, similar to other naturally-occurring structures, indicates owners of the superconnected TNCs are unlikely to be part of a global conspiracy to consolidate wealth and power. In fact, the lack of collusion may be more worrying than a conspiracy would have been: if the superconnectedness of the core economy occurred naturally and spontaneously, then, without new regulation, the stability of the global economy may continue to depend on the performance of the hyperconnected TNCs. (In 2007, the 34th most connected TNC was Lehman Brothers.)
The world’s most superconnected company in 2007, according to the researchers? Barclays plc. As I mention all the time, I live in northern Ghana. There isn’t a whole lot going on around here, but there are TWO air-conditioned Barclays banks here. On Bank Road.
The MIT Press have just announced that they’re adding The Baffler to their journals program, and will fund 15 issues over the next five years. This means the publication will (finally) be published regularly, that contributors will be paid and that you writers should update your bucket lists.
The first year of the returning Baffler will consist of an election-year trilogy. The first issue that will appear in March 2012 is nearly complete, Summers said. Its contents will include essays by Rick Perlstein, Thomas Frank, and Barbara Ehrenreich, and a short story by Lyudmila Petrushevskaya. Three sections new to The Baffler will appear, too: “Lives of the Pundits,” a series of mock profiles; “Ancestors,” reprints with commentaries of authors such as Henry David Thoreau, Oscar Wilde, and Paul Lafargue; and the self-explanatory “Robber Barons.”
David Attenborough isn’t always enthralled almost to the point of ecstasy, but when he is, he is watching nature from a billabong in northern Australia. From a recent interview with The Guardian, ostensibly about his new series, Frozen Planet:
In Life on Earth, his first series that told the story of evolution in 12 hours of groundbreaking television, [David Attenborough] referred to Darwin as being “enthralled almost to the point of ecstasy” by his discoveries. Does he recognise that feeling?
“Again, it’s a bit highfalutin but there are occasions, yes. The process of making natural history films is to try to prevent the animal knowing you are there, so you get glimpses of a non-human world, and that is a transporting thing. A displaying blue bird of paradise is one of the most mind-blowing things you can imagine, but I suppose if I had to pick one I would say I remember getting up before dawn and going to a hide we had built by a billabong in northern Australia.
“Going there in the pitch dark and just watching dawn, watching the animals coming to this billabong in front of you, seeing the birds arrive and the kangaroos coming out and then seeing the crocs gliding across the top, and pythons snaking through the water and then these wonderful ibis and magpie geese and the sun coming up and the whole thing, I mean you suddenly saw a kind of prelapsarian, paradisical, Rousseauesque, Breughel-like world of the garden of Eden. Hmm … “
Hmm, time to shut my laptop and reconnect with nature, starting with the big bugs I’ll have squished by shutting my laptop.
We the Facebook users know that Facebook is overvalued: we never click ads, we know our status updates aren’t real commodities and most of us have considered deleting our accounts, whether due to Facebook selling our data or stealing our time.
A pair of econophysicists at the Swiss Federal Institute of Technology in Zurich, Peter Cauwels and Didier Sornette, now argue that if we model Facebook user growth based on existing data, Facebook will need to pull off a dramatic increase in per-user profit in order to live up to investor expectations. The chart below presents three scenarios for user growth:
Technology Review sums up Cauwels and Sornette’s findings neatly:
Cauwels and Sornette offer three scenarios in which Facebook eventually plateaus at a base case of 840 million, a high growth case of 1.1 billion or a case of extreme growth reaching 1.8 billion users within a few years. (The graph above shows that Facebook’s growth will probably fall somewhere between the base and high growth scenarios.)
Cauwels and Sornette then calculate a value for the company based on the prospect of each user generating $1 profit per year, the approximate average over the last five years.
This gives a value in the base case of $15 billion, in the high growth case of $20 billion and in the extreme growth case of $33 billion. All these numbers are significantly less than those that are bandied around in the press.
It’s worth pointing out some of the assumptions behind this calculation. It generously assumes that real interest rates are essentially 0% for the next 50 years, that Facebook’s profit margins remain as high in future as they are now and that its revenue per user remains constant in future.
This last one is particularly generous. Cauwels and Sornette have worked out the average revenue per user over the last five years. But the truth is that Facebook’s revenue per user appears to be halving every 3.5 years, a fall that is entirely masked by taking an average.
So these valuations are at the top end of what could be called reasonable calculations.
They imply that if the current valuations are to be achieved, Facebook will somehow have to improve its profit per user by between 1.5 and 6 times.
Good luck, Facebook! Ref: arxiv.org/abs/1110.1319: Quis Pendit Ipsa Pretia: Facebook Valuation And Diagnostic Of A Bubble Based On Nonlinear Demographic Dynamics
At the risk of posting the straw that broke the meta’s back, I can’t wait to watch a documentary where Richard Branson talks about all the people he’s met who deserve their own documentary, and why. Branson on Gorbachev and his translator:
It is interesting having a conversation with President Gorbachev. He doesn’t speak a word of English, but he has had the same delightful man with him for 30 years who acts as his translator. The translator … does it so beautifully you forget you are not actually listening to President Gorbachev. He speaks at exactly the same time as the President. I can imagine the day someone makes a film called The Translator based on his life and all the fascinating things he has seen. From the break up of the Soviet Union to the end of the Cold War and the fall of the Berlin Wall.
Scientists asked, “Can apparent superluminal neutrino speeds be explained as a quantum weak measurement?” What they found… may surprise you.
The full paper can be downloaded here.
For the past three years, my internet sessions have begun with logging into Gmail and proceeding directly to Reader, Google’s RSS aggregator and semi-social network. I use Facebook and Twitter, probably more often than the average user, but out of a sense of obligation. But Reader! Sweet Reader! Compared to the pace of development of its other products, Google neglected Reader—allowing Readers the freedom to make the user experience their own, their wonderful own.
And now Google is killing Reader’s social features in an effort to force Readers onto Google+. We knew this was coming as soon as YouTube embeds by note were disabled. I do have a small hope that G+ will roll out features similar to Reader’s this week, but no Googler seems willing to confirm efforts at a seamless transition. Won’t just one of you quell our fears and night sweats?
Happily, Reader became for me a place where I could maintain relationships with a small group of exceptionally bright and interesting “IRL” friends, as well as develop new relationships with strangers and minor celebrities whose thoughts and opinions I very much valued. We weren’t forced to sift through pictures of babies or parties to find content that had passed through trusted friends’ filters, and we weren’t limited to a certain number of characters. On Reader, we couldn’t easily quantify, rank and broadcast our prowess as information sponges and sharers—we couldn’t even see how many people were following the people we followed! Our only soft metric was the number of funny and/or thoughtful comments left on recent shared stories, and comment baiting never became a competitive sport.
Reader created communities of people who were interested in content, engagement and dialogue, and there is no social network today that can replicate that user experience for the diaspora.
Google is wrong to make this decision, without assuring us of new G+ features, for several reasons:
User discontent: While I don’t know how many users regularly use Reader, it is safe to say that power users and their followers are livid at this betrayal, and at only a week’s notice. We’ve turned a blind eye to your Evil before, but no longer trust that you’re looking out for us. Bad move to alienate so many loyal users! If only Gmail weren’t so great…
Feature black hole: G+ has none of the features that make Reader a safe space for users interested in content. G+ has most of the trappings of social networks, cluttering my sidebars and congesting my white-space-y G+ feed with rubbish in which I have no interest +1-ing. (Yes, even when I only stream Sharebro feeds. We’ll have to create a social contract moving forward.) G+ doesn’t provide an in-house RSS reader, meaning any “solution” will involve lots of clicks navigating between social feature-less Reader and G+. I just tried a G+ search and cringed. G+ doesn’t provide a collapsable view, doesn’t allow for marking items as read or unread, and I can’t continue this list because it’s too sad.
International connection speeds: I live and work in northern Ghana. Even when the Vodafone link is up and the neighbors haven’t cut the copper wires, the connection is still slow and high-priced. Reader works on a slow connection like mine, while trying to load G+ is a funny joke.
Censorship dodging: Based on the Iranian response to Googler Alan Green’s post about the Reader update, Reader might be a more important global platform than I had realized. In some sense, its under-the-radar status may have allowed it to flourish in places with Internet censors, e.g. Iran or the office that pays you to be doing actual work.
Data loss: Reader curators have spent years building up archives, and you’re only offering us limited export features. Plus, come on, Google. Don’t you want to keep gathering our data? Reader knows more about me than I know about myself. Put me in a room with any of the corporations to whom you’re selling our data, and they will be super mad at you for doing this to Reader. I wish I could have access to your data on power user activity so I could spend a few weeks performing (unqualified) psychoanalysis on them.
Ironic twists, but nevertheless testament to Readers’ commitment to content sharing and engagement, are the Google Group Google Reader Diaspora and the Google Doc Petition to Save Reader. It also appears some Sharebros are creating their own RSS aggregator with features similar to Reader’s.
I love you, Reader. Wouldn’t take back these years for anything. But Google, we’re begging you to set up G+ features enabling a recreation of the Reader experience, stat.
Joel Waldfogel, a professor of economics at UMN and the author of Scroogeonomics, recently submitted a working paper to NBER, “Copyright Protection, Technological Change, and the Quality of New Products: Evidence from Recorded Music since Napster”. The abstract, emphasis mine:
Recent technological changes may have altered the balance between technology and copyright law for digital products. While file-sharing has reduced revenue, other technological changes have reduced the costs of bringing creative works to market. As a result, we don’t know whether the effective copyright protection currently available provides adequate incentives to bring forth a steady stream of valuable new products. This paper assesses the quality of new recorded music since Napster, using three independent approaches. The first is an index of the quantity of high-quality music based on critics’ retrospective lists. The second and third approaches rely directly on music sales and airplay data, respectively, using of the idea that if one vintage’s music is better than another’s, its superior quality should generate higher sales or greater airplay through time, after accounting for depreciation. The three resulting indices of vintage quality for the past half-century are both consistent with each other and with other historical accounts of recorded music quality. There is no evidence of a reduction in the quality of music released since Napster, and the two usage-based indices suggest an increase since 1999. Hence, researchers and policymakers thinking about the strength of copyright protection should supplement their attention to producer surplus with concern for consumer surplus as well.
My first reaction to the abstract was that the usefulness of the results would be limited, thanks to the lack of counterfactuals, namely a Napster-free Earth and an Earth where the financial and temporal costs of making and discovering music had remained about the same, adjusted for inflation, over the time period studied. In the full paper (PDF), Waldfogel does admit “it is entirely possible that absent the weakening of effective copyright protection, the other changes in technology might have ushered in an era of even greater creative output” and that we will never know a world without file-sharing. A fine effort nonetheless.
If you are thinking of becoming a thoughtful mainstream music critic, you should note the following. When the author overlapped professional music critics’ best-of-the-2000s lists–56 for albums, 22 for songs–he found “a great deal of concordance”:
Two albums – Funeral by Arcade Fire and Kid A by Radiohead appear on 47 of the 56 lists covering the 2000s. Is this It? by the Strokes and Stankonia by Outkast appear on 45 and 37 lists, respectively. One hundred albums account for 40 percent of the entries on decade-best lists, 250 albums account for over 60 percent, and 500 albums account for over three quarters of the 4202 entries on 56 publications’ best-of-the-2000s lists. At least 300,000 albums were released during the decade. Yet, 500 albums – less than 0.2% of the decade’s new releases – account for three quarters of the entries on 56 critical best-of-the-2000s lists.
Can someone at Facebook create a graph of the number of users listing Arcade Fire as a favorite band over time? I would do it myself, but I have to go steal Stankonia.
A journey of a thousand reblogs begins with a single original content post. I took this photograph last year in the floating village of Ganvie in Benin; it’s not a particularly special shot, but no one really knows this blog exists yet. #filler #moretocome