Vogel Internet, Information Technology, and e-Discovery Blog : Texas Internet, Information Technology, eCommerce, & E-Discovery Lawyer & Attorney Peter S. Vogel : Gardere Wynne Sewell Law Firm : Dallas TX

Hitwise recently reported that 1 in every 4 pageviews in the US is on Facebook, and also incredible is Facebook’s claim that people spend over 700 billion minutes per month on Facebook. Astonishing growth made even more amazing by realizing that the second place, and far behind Facebook, is YouTube with 6.39% of US pageviews and third place Google at 5.32% of US pageviews! To make Facebook’s 25% of US pageviews even more significant is that comScore reported that Facebook’s growth in the past year was 55% over the preceeding year. Pretty heady stuff, but the biggest questiona of all are- where are we headed with Social Media and will the growth continue at this kind of pace?

Get Ready for Interesting Litigation

It’s not hard to conclude that the more Social Media activity, the more likely that communications between individuals will be evidence in lawsuits. Just one more reason that individuals who participate in Social Media should be thoughtful about what they post of Social Media sites, since items posted on the Internet have a way of surviving forever as Google CEO Eric Schmidt and some people may decide they need to change their identifies because of what they’ve said and on Social Media sites. Otherwise I recommend this advice – Don’t say anything on a Social Media site that you wouldn’t want a jury to see. If jury hears something once they may believe, if a jury hears something said twice they start believing it’s true, but if a jury sees a posting on a Facebook they will believe it’s true!

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A new report shows that customers are not that happy with Facebook and MySpace also showed that social media was ranked lower than property & casualty insurance. Also not a surprise that airlines were lower in customer satisfaction than social media. The 2010 American Customer Satisfaction Index (ACSI) was produced in partnership with ForeSee Results is described in the Annual E-Business Report. ACSI scores for Wikipedia topped the Social Media score with a 77, followed by YouTube (Google) 73, Facebook 64, and MySpace 63. IRS scored a 65. Not a surprise that the primary reasons for low rankings for Facebook were: “privacy and security concerns, the technology that controls the news feeds, advertising, the constant and unpredictable interface changes, spam, navigation troubles, annoying applications with constant notifications, and functionality, to name a few.” Interesting customer results at a time with Facebook announced that it had 500 million users and Mark Zuckerberg is sued over an ownership claim!

Facebook a Utility?

In a recent interview on National Public Radio (NPR) Facebook CEO and founder Mark Zuckerberg described his company as a utility for its subscribers “….When I say utility, I mean we are trying to provide people with utility,...Our goal was never to build something cool. It was to build something useful." As part of this interview it was pointed out that Facebook has the largest private database of personal information in the world. When pressed about why Facebook wouldn’t disclose the contents of the database, Zuckberg responded that people would no longer trust Facebook if the database was disclosed. So if Facebook is a utility used by 500 million people, why is it not regulated?
 

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Viacom lost its $1 billion lawsuit against Google and YouTube for alleged copyright infringement when a judge granted summary judgment. YouTube’s defense was that it used the “safe harbor” protection of the Digital Millennium Copyright Act (DMCA) where YouTube would remove allegedly infringing videos after being notified, and after three offenses a poster would be banned from YouTube. On June 23, 2010 US District Judge Louis Stanton granted YouTube and Google’s motions in defense of claims brought by Via and other plaintiffs. In the 30 page Opinion Judge Stanton pointed out that “over 24 hours of new video-viewing time is uploaded to the YouTube website every minute.”  I know that YouTube is responsive to the DCMA takedown requests because YouTube has removed videos which have infringed copyrights of my clients.  The DCMA takedown procedures rules are part of YouTube's Terms of Service.

Viacom to Appeal

Viacom plans an appeal, but at this moment this appears to be a monumental ruling for Google and YouTube which helps define Copyright law on the Internet. As a trial lawyer my experience is that Judges rarely grant summary judgment (there are no facts in dispute, and the moving party wins on the law without a trial).  It is more likely than not that Google and YouTube will prevail on the appeal since the trial Judge granted summary judgment.  This case is important given size of YouTube and its role in changing Social Media.

YouTube Turns 5

When YouTube celebrated its fifth birthday in May, 2010 it announced that it passed “two billion video views a day.” YouTube has perennially lost money so there were many analysts who criticized Google’s $1.65 billion purchase of YouTube in 2006, which was made worse when Viacom brought its Copyright infringement lawsuit in 2007. YouTube has been developing partnerships with music labels to compete with "Hulu.com, the joint venture of Fox, NBC and ABC." So Judge Stanton’s Order should help clear Google and YouTube’s path for success and bring clarify about the DMCA.

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I was honored to be asked by the Texas Senate to testify how Social Media impacts Open Government at a hearing on May 11, 2010 and you are welcome to read my Statement concerning Charge #13 for the Senate Affairs Committee:

Study the Public Information (Open Records) Act and the Open Meetings Act to ensure that government continues to operate in a way that is open and transparent. The study should consider how advances in technology and the emergence of various forms of social media (e.g. Facebook, MySpace, Twitter) have affected communications by and within governmental bodies.

The questions from the Texas Senators were very interesting since the first question was whether governments should do anything to regulate Social Media at all or just let things happen. You can listen to the hearing on the Texas Senate website and the testimony and questions begin about Charge #13 at about 2 hours and 3 minutes into the hearing.

Social Media Activity by Texas Senate Affairs Committee

It seemed like a good exercise to see what the Committee members were doing with Social Media so I prepared this chart as part of my Statement:

Ironically enough the Committee Chair Senator Robert Duncan was unaware that he was on Twitter until his staff advised him during the hearing. This only proves that elected officials have to be active with Social Media because it’s part of deal today and also why 430 Members of Congress have YouTube pages. Social Media is the way the world communicates and elected officials are participants.

Should Blogs and Social Media be Public Meetings?

The Texas Senate hearing was very timely since it was on the heels of the April 7, 2010 White House Memo declaring that posting blogs and Social Media are public meetings. This Memo is interesting and perplexing in that few people who post on Facebook, MySpace, Twitter, etc really think that everything about the public consequences. However when government employees post items on Social Media using government computers or during the workday they are not private citizens and there are consequences to what they say. Legislators in the US Congress and in the States need to be mindful about Social Media, however Social Media changes is not static nor can any laws to attempt to regulate Social Media.

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My good friend Kevin Campbell (CIO at Hunt Oil) told me recently that about 5 years ago he removed the TVs from his home with great protest from his kids, but they did keep 2 computers hooked up to the Internet. One evening last fall Kevin’s wife asked him to check on the pending storm on the western horizon Kevin checked on weather.com. Kevin reported back a few minutes later about the latest radar report. In the meantime Kevin’s 20 year daughter reported about strong winds, lightening, and heavy rain which was not part of the weather.com’s website report. When asked where his daughter got her information, of course she just pinged friends on Facebook who lived to the Campbell’s west where the storm was brewing. I guess Kevin’s reliance on going to a website rather than use a Web 2.0 social network source shows a different perspective on getting current information!

2010 Election Year

Adding to the reality of 2010 Web 2.0 politics that 430 Members of Congress are now on YouTube, the Washington Post reported that a Facebook lobbyist is now tutoring Members of Congress:

Inside the headquarters of the National Republican Congressional Committee, 25-year-old Adam Conner -- registered Facebook lobbyist, poster of multiple Obama attaboys and a guy whose Facebook photo is a grizzly bear wielding two chainsaws -- sits down to teach a course. The subject: How to use Facebook better. His student: Rep. Peter Roskam (R-Ill.).

Not much of a surprise given President Obama’s successful campaign and the reality of the down economy means fewer political contributions. So if candidates want to get re-elected (or just elected) they have to use Web 2.0!

Texting is for Real

A former partner recently told me that his daughter sent a text to his wife – “OMG!!!” So his wife called their daughter, and when there was no answer she sent the daughter a text “What’s this about?” The daughter sent a text reply “I’m marrying Jim next summer!” All text, all the time. Web 2.0 will mean be a different year for politics since so many people now rely on texting, Facebook, MySpace, et al. It will be interesting to see how 2010 elections turn out.
 

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Web 2.0 must be for real, how else can anyone explain Members of Congress find YouTube, Twitter, Blogs, and Facebook the most effective way to communicate in 2009? Today NPR (National Public Radio) interviewed Republican strategist Mindy Finn (a partner and blogger at the political consulting firm Engage who helped Virginia Gov.-elect Bob McDonnell) said that "Members who don't have a lot of say or don't have much of a voice in Congress can use social media to talk directly to their constituents, to voters and to activists." Finn went on to say “"In the past, they might put out a press release and nobody picks it up. But now if they build up a network of blogger support, if they have a presence on Facebook or on Twitter, and they put out that same information, it can go virally across the Internet."

YouTube Offering Text Captioning

Google recently announced that it is making YouTube accessible to deaf and hearing impaired Internet users. Since the captions are English-language speech only the power of Google’s 51 languages will allow for automatic translation to millions of people around the world who do not speak English. This technology is not new and Google currently uses it to transcribe voice mail messages into .wav files with Google Voice. Of course this technology is not perfect but offers a dramatic impact on world-wide communications.

Federal Trade Commission Examining Google Acquisition of AdMob

What will happen if AdMob, one of the top sellers of iPhone banner ad apps and web pages, becomes part of Google’s empire? This acquisition would position Google to be a major player in the mobile advertising ecosystem and expand Google’s market power. It does not take rocket science to see that Members of Congress are taking advantage of YouTube and Web 2.0, so surely they will capitalize on mobile ad which Google can see. Without question President Obama’s use of Web 2.0 vaulted him into the White House, and clearly Members of Congress depend on Web 2.0 to be relevant and communicate with their constituents. Wonder what will happen with Web 3.0 in the future and its impact on politics?

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Social networking remains headline news as Facebook got a $200 million infusion from a Russian based company while at the same time Iran changed its blocking policy and unblocked Facebook in the midst of a heated June 12th election. Both of these reports demonstrate important messages about social networking in spite of the fact that Facebook, Myspace, and YouTube are not generating the revenue expected given their size and evolution. But at the same time reports of phishers harvesting Facebook passwords for profit should be a sobering reminder that social network users are very vulnerable since they trust their friends, who may be taking personal identities and passwords.

$200 Million = 1.96% Equity

When you do the math and see that Digital Sky Technologies (DST) paid $200 million for 1.96% of equity of Facebook that translates to a $10 billion valuation, which is a third less than Microsoft’s October 2007 $240 million invest for 1.6%. These numbers can make anyone dizzy, notwithstanding that Facebook doubled in size between August 2008 and April 2009 to 200 million friends. Since Facebook reports that more than 70% of its users are outside the US it makes lots of sense for DST as it invests mostly in Internet companies in Russia and Eastern Europe.

A World Message

DST’s Eastern Europe reach reinforces social networking’s power, but Iran’s concern about Facebook influencing an election is an even bigger message. Since the Facebook ban in Iran lasted only a few days the social pressure forced the change. Surely Iran will not be the only country to limit access to social networks which was worried that anti-government groups could band together on Facebook to impact the June 12th election.

You would have to live on Mars to not be aware that President Obama maximized the use of social networks to raise funds, support, and ultimately election. No wonder the White House has a YouTube page. We should all keep an eye on political uses of social networks as we watch the evolution of the Internet.
 

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When DARPA started in 1962 as part of the US’s reaction to Russia launch of Sputnik in 1957 no one could have foreseen its evolution to 2009 with FaceBook, YouTube, and Google. A recent article questions whether we need a new Internet since the current hodgepodge is not designed for the future. Clearly there are people working on re-tooling the Internet, but how it will continue to evolve is interesting but unclear. The UK and US are busy trying to provide high speed Internet access to the every home, but the Spectrum changes for TV for HD broadcast will free up the old Spectrum and will provide new cell and Internet services unknown before.

4G is Coming

AT&T announced its plan to roll out 4G by 2011 which would replace the spotty 3G network now in use. AT&T, Verizon, and the other providers will use the Long-Term Evolution (LTE) wireless broadband which is supposed to handle downloads at 100 Mbps and uploads of 50 Mbps for every 20 MHz of spectrum…which will clearly change the way we operate today.

Do We Need a New Internet?

With the new high speed access in cell phones and at our desktops this should be a clue that it’s time to rethink the entire Internet structure. Maybe the UK and US plan for broadband access to every home will be revised based on 4G, and surely there will be an evolution in desktop computing. Not just that Microsoft and Open Source developers will offer new operating systems or browsers, but rather a major transformation about how technology is used. When in graduate school in 1972 I took a course on the computer as a public utility which was an interesting idea at the time…however it does not look like that ever happened. However the juxtaposition of 4G with the Internet may require a whole new approach to what how we operate. This should be an interesting evolution for the Internet…not Web 2.0 or Web 3.0, rather maybe Internet 2.0.

I welcome comments on this Blog.
 

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The UK’s plan to bring broadband Internet service to every home by 2012 is a very bold plan since based on recent reports only about 68% of the UK population are currently Internet users. In the meantime about 72% of the population of the US are Internet users. However these are not exactly apples to apples comparisons since these statistics do not tell what percentages of homes have broadband, rather these statistics shed light on the number of users. In the US cable television is a major provider of Internet access, and there are still dial-up users who are primarily outside of the heavily populated regions in rural America.

What about Rural America?

The FCC (Federal Communications Commission) and USDA (US Department of Agriculture) are working on a joint initiative to bring high speed Internet access to the rural US over broadband over power lines (BPL), satellite, wireless, and other means. However for the most part this effort not speeding along. Specifically this Blog is being written on a computer in the rural Texas (Milam County, Texas) which has dial-up only, not WIFI, or any other broadband Internet option available. This is reality for rural America where citizens still have white and yellow pages, which is something my home in Dallas has not had for many years.

Internet in More Homes

As we look to the future of the Internet more high speed Internet access is a necessity given the proliferation of eCommerce, and expansion of Web 2.0 into Web 3.0. Of course there’s also the age divide which is changing the use of eCommerce, now that FaceBook has more than 150 Million users, the demographics have changed so that a larger and larger percentage of users are 35 or older. It seems pretty clear that as our younger generations rely on the social networking and texting, everyone has to get with it, even in rural America. Not a surprise that on January 21, 2009 (day after the Inauguration) President Obama launched his YouTube site, but equally as interesting was the following week that the Pope launched his YouTube site. Clearly both the President and Pope know that the primary way to communicate is through the Internet. The UK is on the right path, and hopefully the US will not be far behind in having high speed Internet in every home by 2012.

What priorities should America have to bring high speed Internet access to rural citizens? To every home?
 

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When Google purchased YouTube for $1.65B a few years ago there was in expectation that the site would be a money maker, not just a magnetic for video traffickers. Of course Google did not expect the troubled economy that we live in today nor that Viacom to file a $1B lawsuit for copyright infringement. Google’s new offering will allow YouTube users to purchase digital goods from Apple’s iTunes or Amazon.

AdSense for Games

Google also announced beta software called AdSense for Games which allows video, image or text ads to be placed at the start, end, or change of level for online games.

It’s About Advertising

Notwithstanding these complex economic times, recent estimates of global online advertising revenue are an astonishing $81.1B by 2011, and Google is obviously one of the greatest movers. Since the estimates of revenue from YouTube are a measly $200M for 2009, Google’s new sale of digital goods should significantly increase Google hope to generate $27B which they estimate. It’s also hard to image that Google’s 10th birthday will be in November and it is one of the richest companies in the world. In the meantime the US government doesn’t know what to do about Google proposed advertising partnership Yahoo! so that deal is now on hold. We all need to stay tuned, but be assured Google will generate more data about visitors to their kingdom which clearly translates into ad revenue.
 

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