Dana Blankenhorn

Bubbles Don’t Really Pop

History will record that the Trump Bubble burst on January 6, with a coup attempt organized by Donald Trump. (The picture is from Doc Searls' blog.)

I have seen many bubbles pop in my experience as a business reporter. The best-known was the dot-com bubble. It popped on January 10, 2000 when Time Warner announced it would “acquire” AOL.

The precise date of the popping is only remembered in retrospect. At the time, business went on. That spring I attended a trade show called ad:tech, on my employer’s dime. Even a year later I was able to take my wife on a trip to Hawaii because of an Internet commerce conference on the Big Island.

My most vivid memory of that ad:tech conference was on a bus, heading back to our hotel after a day spent on the water, sponsored by an Internet ad agency that eventually sank with the rest. A young entrepreneur was complaining that each new round of funding was requiring more equity from him and generating less cash. “It’s unfair,” he whined.

I’m a cruel man. I laughed until I cried. Later, at the event’s award show, a block “CNN” ad won awards for creativity. I laughed until I cried again. The people around me thought I’d gone crazy. It was just that I saw the handwriting on the wall.

The point is that even after a bubble pops, many people will remain unaware of it. They will continue to take the bubble as a real thing. They’ll go in even-deeper. They’ll consider falling prices an opportunity, telling folks to “buy the dip.”

Pay Per Day

There are days when I’m disgusted by my fellow journalists, and the whole journalism business.

This is one of those days.

While elite journalists bemoan the right-wing propaganda machine, seeing it as an existential threat to democracy and liberty, they’re defending an industry rapidly going behind paywalls. Nearly all daily newspapers are already there. Now the news services are doing. The latest is Reuters, which erected theirs this weekend.

The criticism is apt. The refusal to do anything about it is criminal.

There are things that can be done. I have been flogging the idea of “day passes” for some time.

Instead of demanding the commitment of a subscription, newspapers can offer day passes that let people behind the paywall for 24 hours or even less. When I tweeted this idea, however, a reporter for the Columbia Journalism Review specializing in digital journalism instantly dismissed it, calling it unworkable. (I felt like throttling the bastard.)

Amazon can make this work. Google can make this work. So could Microsoft or Apple. Heck, Facebook could make this work.

The True Cost of Bitcoin

If America’s enemies wanted to bury this country under energy costs, it could do worse than to have invented Bitcoin.

Greed has made Bitcoin the world’s energy sink. Bitcoin uses as much energy as the country of Argentina. Most of this new Bitcoin is being produced in China, leaving most of the country dependent on coal. It’s not just China being hurt. A Bitcoin miner in Montana, a former patent troll, is keeping a local coal-fired power plant operating. 

The waste doesn’t stop there. It costs about $25 million of electricity per day to run the Bitcoin network.  The current estimate for Bitcoin energy consumption this year is over 100 Terawatts.  And it’s not just Bitcoin. Every cryptocurrency is an energy hog. 

Some cryptocoin advocates, like Ethereum inventor Vitalik Buterin, admit the truth. He wants to change Ethereum’s algorithm so it uses less electricity.

But Buterin is in the minority. Most Bitcoin advocates claim what I just wrote is a myth. It’s supposed to use a lot of energy, at first, they claim. The existing transaction networks also use energy. Bitcoin’s use will drop once it replaces every other currency. Oh, and if you’re using hydropower or “excess” power from otherwise unused sources, what’s the harm? 

This is bullshit. Bitcoin isn’t a currency. Currency values remain relatively stable during a trade, otherwise they’re useless. Bitcoin is an asset, a global index of fear and greed.

Redistribution of Technology Wealth

The redistribution of technology’s wealth is indeed trickier than I thought. 

When I first began covering open source in 2005, Amazon.Com was worth $19.6 billion, Google had just passed $100 billion  and Facebook was a start-up.

The “incumbent” software companies of that time were IBM, which was worth $140 billion, Oracle at $63 billion, and Microsoft at $273 billion.

Open source was an underdog technology. Closed source or “proprietary” software was where the money was. You licensed software. The company that developed it accepted all the costs of growing and maintaining it. The cloud was barely a gleam in Larry Page’s eye, a headache made necessary by Google’s roaring success in search.

Google vs. Oracle: No Takesie Backsies

The world of open source software is based on one truth above all.

No takesie-backsies.

Once code goes open source it doesn’t go back. You can create a new version, create a new license around it, and sell that. But the old code remains free to see, free to fix, and free to change.

Oracle hates open source with a passion. Nothing else represents such an existential threat. Oracle’s business model is based on charging high and rising prices for its database software. If someone could create an alternative that was free, Oracle couldn’t exist.

So, Oracle took direct action. It bought Sun Microsystems, at the time a primary supporter of open source, in 2010 and closed its projects’ source code. The Sun Solaris operating system didn’t survive. The Open Office code base was eventually forked but isn’t a big factor in the market. The big get was Java, originally created as a “write once, run anywhere” environment but, by 2010, a primary language for servers.

Oracle closed the code by declaring the Application Program Interfaces (APIs), the instructions showing how the code worked, could be copyrighted. To Oracle, this now meant that any code whose creation relied on those APIs belonged to Oracle.

This is bullshit.

Redesign My City

The pandemic is both a tragedy and an opportunity.

A decade of business evolution was compressed into a single year, of necessity. Companies learned to deal with a remote workforce and found it good. So did the workers. Electronic commerce went from being a luxury to a necessity. New jobs were created in warehousing and delivery, while those in retailing and wholesaling disappeared.

Now that the pandemic is easing, we’re not going back. Companies that force people back into offices are going to find themselves at a disadvantage. The acceleration of cloud means many jobs are gone for good.

There are some who think this means we’ll all be living separate lives after this. I don’t think so. That’s not how things went after 1918. On the contrary, people became desperate for other people, for life, and for meaning. They didn’t call it the Roaring 20s for nothing.

Be Your Own Brand, Become your own business

This is the first piece of advice I give young journalists. It’s one I was taught in the 1970s was anathema.

Be your own brand.

When I was at Northwestern’s Medill School, in the late 1970s, I was told a journalist “is someone who works for someone who buys ink by the barrel.” This has since been changed to “bits by the gigabyte” but it remains true. Journalists are defined by who they work for. You are your job.

(This is a publicity picture taken at my first post-Medill job, with the Houston Business Journal.)

But it’s a one-way street. You can give your publisher all your loyalty and, should the needs of business demand it, you’ll still be on the street. (I've been there.) The only way to protect yourself is to define your beat, to specialize, and become “the leading expert” on it. Then (and this is the hard part) monetize it.

This is the part of the new job journalists hate. I feel for you. I hate it, too. But if you want to make a living at this, you must do it.

This starts with social media but doesn’t end there. If you’ve gained expertise advertise it and become a source. Start a side gig, a blog or e-mail newsletter. Incorporate, and treat yourself as a business. This means that you can consider stepping over lines your j-school taught you never to cross, but which your publisher-employers crossed as easily as you walk across the street.

It used to be that the only alternative to a newspaper or magazine job was to go into PR or ghost write. That’s not true anymore. You can solicit advertisers or take money from politicians if you like. You can go on TV and spout off if you’re asked. You can do podcasts, send out your own press releases. You can mine your market, in any way you can, if you’re willing to take the risks that every other businessperson takes.

Who Writes, Who Reads, Who Buys Your Story

If you don’t take responsibility for the medium you create someone else will. And they won’t have your interests at heart. 

This has been my “pinned tweet” at Twitter for a year and a half. But there’s a corollary, which I thought was obvious.

Taking responsibility is gonna cost ‘ya.

Print publishers have understood this for centuries. Credibility is the coin of their realm. But print publishers are paying for what they publish. The checks control the content. Publishers are also subject to business’ morality, not that of the journalists they hire. If ethical compromises must be made, they are empowered to make them, and take responsibility for the result.

There’s wiggle room here for everyone but the writers.

This Will Get Me in Trouble

Asked what his members wanted the answer of union legend Samuel Gompers was simple. “More.” 

Despite being encouraged by liberal interests, unions are the most conservative institutions society has. They advanced most during the 1930s, when manufacturers sought to control input costs and keep production going. Remember, too, that the Great Depression was caused by deflation. Labor assured limited inflation.

While Cloud Czars like Google and Amazon create deflation, they also fight unions because unions limit the flexibility they see as essential to their mission, fostering rapid change.

Some act surprised that Amazon is fighting this battle in Alabama. Bessemer is next to Birmingham, the state’s industrial heart. Birmingham was first called the “Magic City” because the steel mills there seemed to spring up by magic. It’s not an antebellum town. It was, for many years, a union town.

Google News Briar Patch

The newspaper industry is as excited as can be over news that Australia has passed a law “requiring” Google to pay for news links. Europe is on deck. They want in on the action.

I’ve written about this scam before.  It’s coming from Rupert Murdoch, who controls the Australian media. Most of the money that Google (and Facebook) will pay for news links in Australia will go to Murdoch and his global propaganda machine, not to keeping reporters fed.

So why was Google willing to be tossed into this briar patch? Because it lets them finally monetize Google News, and more thoroughly monetize a related service, Google Now. If Murdoch is going to charge Google for links to his stuff, Google is going to get its money back.

News has been ad-free for over a decade now. It’s great. Tells you, in broad strokes, what’s going on. It lets you try to go deeper. Increasingly, not much deeper. Paywalls have become commonplace on every beat. You click a link and what you want is covered up with a demand to subscribe.