Andrew's space

Long a favourite of management and marketing consultants, and with good reason, the 2x2 matrix is an elegant and insightful way to display information across two dimensions.  Perhaps the most famous use of this is the Boston Consulting Group's Growth-Share matrix.  It is a simple but powerful tool for assessing a portfolio of products or companies. However, I have always loved the following insight from Kurt von Hammerstein-Equord, an old-school General who served on the German Army's General Staff in the early part of the twentieth century.  As Chief of the Army High Command, Hammerstein-Equord oversaw the composition of the German manual on military unit command (Truppenführung), dated 17 October 1933. He originated a special classification scheme for his officers:

"I divide my officers into four classes; the clever, the lazy, the industrious, and the stupid. Each officer possesses at least two of these qualities. Those who are clever and industrious are fitted for the highest staff appointments. Use can be made of those who are stupid and lazy. The man who is clever and lazy however is for the very highest command; he has the temperament and nerves to deal with all situations. But whoever is stupid and industrious is a menace and must be removed immediately!^"

Like all great analysis, it is beautifully simple and has applicability to a broad range of situations.  In modern management-speak the, it renders thus:

Beware the Stupid and Industrious.

At least there's a win for brand recognition.  How quickly have "Terminal Five" and "T5" become widely recognised brands!?!  BAA's marketing guys must be delighted.

I avoided writing about this for a few days but, sadly, the debacle rolls on.  I was in London, and offline, the day that T5 opened and I spent the day mentally defending British Airways (BA) for being the victim of a surely inept BAA (British Airports Authority, who run all the major London airports).  After all, most of the pain and inconvenience you suffer before getting onto your plane is down to the airport operator rather than the airline.  Having spent more than a fair share of my life in queues at Heathrow, I have little love for BAA and its indefensible monopoly.  However, as the story unfolded, it became clear just how badly BA had managed the launch of "their" new terminal.  At first, we heard about problems with staff parking and baggage handling - maybe that was BAA's fault?  Then we heard about frontline BA staff who were clearly clueless about using the new technology.  At that point, I was reflecting on the old adage of spoiling the (air) ship for a ha'penny's worth of tar.  How could you possibly allow the launch of your flagship new home - with all the eyes of the world (and your customer base) watching - to descend into angry farce for the want of decent staff training?  Who pinched the pennies that destined BA to a PR nightmare?

But worse still - and for this BA deserve all they get - the company is now facing fines from the EU for misleading passengers as to their rights under EU legislation.  The refusal of the"world's favourite airline" to assist the passenger's they had stranded smacks of the worst kind of corporate arrogance.  Their offer of £100 (limit now rescinded) to cover a night's accommodation nearby (at Heathrow!)demonstrates just how desperately out of touch the world's favourite airline has become.

I remember doing a marketing course with Professor Colin Gilligan who suggested that all successful companies are doomed to becoming FLCA: fat, lazy, complacent and arrogant.  You can make your own mind up about which of these applies in this case.

I first saw this ad as a double page spread in this week's Economist. My first thought was, "how sad".  It's not as if he needs the money and it felt like a sell out by one of the few who have never sold out.  However, it's a fantastic photograph - by Annie Leibovitz - with great depth and detail.  A great portrait.  And, as it did with me, it will stop readers in their tracks and make them read, so I guess it serves its purpose.  I get the "emotional journey" tag, I understand the connection they're trying to make but does it work?  Well, despite myself, at the very edges of my mind I can here a small voice saying, "well, if it works for him..."

And he is donating his fee to charity.  And it is the first ad he has ever done, so he must have seen the value (not pecuniary) himself.

When all is said and done (and there is plenty being said), it is a great portrait.

I thought this had died quietly years ago ... but apparently not.  The EU has just approved €99m to aid France in the development of Quaero.

Originally a Franco-German project to build a European (i.e. non-American) Google-killer, this was a pet project of President Mitterand.  The Germans quickly saw sense and bailed out but, it seems, the EU has ridden to the rescue (the same EU, incidentally, which earlier this week approved Google's takeover of DoubleClick). 

It's not, I guess, a large sum in the European scheme of things (a mere £1 for every man, women and child in the UK) and Europe definitely needs to build its IT skills and industry.  However, I cannot see how pouring public money into pet projects ever works, particularly when there already exist extremely successful, free-market alternatives.  Google is successful because people use it, because it delivers results.  Microsoft and Yahoo! with deep pockets are in a battle royal with Google to beat them at their game.  Other, lesser offerings have fallen by the wayside: Alta Vista, ask.com and many, many others.  What is the sense of throwing public money at an already well-functioning marketplace?  Better to ask why such solutions are not already percolating up out of European industry and go solve that problem: lower taxes, lower bureaucracy, higher skills etc etc.

What a beautiful concept from Kevin Kelly.  A consequence of all that Chris Anderson talked about in The Long Tail is that it is easier for creators (photographers, musicians, writers, whatever) to reach directly to their audience, their market, their fans.  Cutting out the middle-man, and the middle-man's filters, has never been easier.  What Kelly offers in this insightful post is something of a bridge or staging post between impoverished artist and mega-star.  Simplistically put, all an artist needs in order to provide a living is "1,000 true fans".  Kelly defines these as follows:

"someone who will purchase anything and everything you produce. They will drive 200 miles to see you sing. They will buy the super deluxe re-issued hi-res box set of your stuff even though they have the low-res version. They have a Google Alert set for your name. They bookmark the eBay page where your out-of-print editions show up. They come to your openings. They have you sign their copies. They buy the t-shirt, and the mug, and the hat. They can't wait till you issue your next work. They are true fans."

Crucially, Kelly suggests that the true fan will spend one day's wage per year on your product, nominally pitched at $100.  Thus, 1,000 x $100 = $100,000 = a reasonable living.  Of course, the real figures will vary by geography, by muse and by the size of the artistic unit: a six-piece rock band will require a higher income (= a bigger number of true fans) than, say, a poet.  However, it's a great concept.  Simple, elegant and worth pondering.

Kevin Kelly -- The Technium

A great post from Seth Godin. 

It mirrors one of my earliest business insights.  Back in the early 80s, when I was growing up, in a small town in the north of Scotland, we had one record shop (real, 12" black vinyl records, this was in the days before CDs).  Their slogan was "For Tomorrow's Sounds Today", which of course I later learned they had borrowed from Phil Spector.  However, the sad reality was that they could just about deliver a a tiny sliver of yesterday's sounds in about two weeks time if the delivery comes in.  We had a Woolworth's in town and they pretty well cornered the market in profitable Top 20 stuff so Deletion Records was left trying to compete by servicing niche demands - an impossible task in a small shop, in a small town.  These were also the days before the web.  I have fond memories of the shop and I discovered so much in their tiny stock: JJ Cale (Shades and Grasshopper), John Martyn (One World), Nils Lofgren (Code Of The Road) and many others.  However, my pocket-money wouldn't stretch to supporting the whole store.  The first warning sign was T-shirts - and my warning to you all is, "Beware the T-shirts" - an ever growing floor-space of funky, sloganned T-shirts.  And of course, as they moved from hopeless specialist to mediocre generalist, they went out of business.

Beware the T-Shirts!

(but always embrace the music :-))

Seth's Blog: The long slide to gone

Don't you love it when two of your favourite things come together?  In this case, it's cool technology and rock and roll.

When I was still at Microsoft, I saw a couple of very, very cool demos of a technology called SeaDragon which enables magical things to happen with images.  Some of this has now gone live, under the name Deep Zoom (not Deep Thought) as part of Silverlight 2.0, on the web-site of the Hard Rock organisation.  Hard Rock's famous memorabilia collection is now available to be viewed in astounding detail.  From a screen of 258 tiny, quarter-thumbnails, you can zoom in on any picture in sufficient detail to see the rust on the screws on guitars or the stitching on Jimi Hendrix's jacket. 

What practical use?  Well aside from enabling unparalleled access to museum collections around the world, imagine a web-based advertisement for, say, Jaguar or BMW where the user could zoom into any detail they wanted?  Not just the layout of the dashboard, not even the font used for the instrument panel but right down to the grains of dust on the glass.  That is powerful technology.  Imagine an image of screen shot of little black dashes like DNA samples where every black smudges was the entire contents of a book.

Hard Rock Memorabilia

Tip of the hat to Steve Clayton's blog for publicising this.

I attended an interesting meeting yesterday hosted by Business Link in Hampshire.  The event was part of their Peer Group Learning program and the presenter was Harold Russell of Strengths Based Business.  The attendees were all "micro-businesses", firms with 1-5 employees, from all walks of business.

The session made me reflect on a number of things:

• With freedom comes responsibility.  The freedom of running your own business also means that you are, obviously, responsible for your own development.  Obvious, but easy to overlook in the day-to-day turmoil of pleasing your customers. 
• Remember that you need to delight your customers now and in the future.  Customers' expectations will rise; will you rise to meet them?  How do you prepare now to delight customers next year?
• The Strengths approach - as originally described by Marcus Buckingham - is a lot like the the approach taken by leading sportsmen and women.  If Tiger Woods swings a dozen shots, and two of them are exceptional (amongst another ten which are merely excellent), he will take analyse the exceptional ones to learn what made the difference; what he can incorporate into his game in the future.

The Strengths approach is about really understanding what you do well, where your natural talents lie and then steering your business or career in ways which will enable you to capitalise on that; to delight customers and to get paid for doing what you love doing which will be the area where your natural strengths lead you to excel. 

I loved Buckingham's book, "Now, Discover Your Strengths" which is very focused on recognising and enabling your Strengths and those  of the people around you.  His other books, before and after ("First, Break All The Rules" and "Go, Put Your Strengths To Work") are perhaps more organisation oriented but also, maybe more practical.

At heart, it is a simple but powerful concept.  Why waste time trying to shore up your perceived weaknesses when you could be many times more powerful if you invested that effort in developing your strengths.

There is something deeply rotten here.  Bad enough that the RIAA, in its desperate death throes, is suing its customers (see earlier post) but it would appear that they cannot even pass the monies collected to the artists on whose behalf they purport to act.

It is long past time that everyone realised that the "Music Industry" is not the sum of publicly listed companies who comprise the RIAA and similar bodies.  They are simply the outmoded logistics arm.  The real Music Industry is the sum of a myriad artists who actually create the music; much less visible from a financial/economic perspective.  The music will win through as long as there is an audience to connect with it.  All we are seeing is the inelegant death of a delivery arm.

Two business lessons here:

1. You cannot fight change;
2. Never forget who you are and what your part is in the larger scheme of things.

In all honesty, there is not much of a business angle to this post (other than maybe the marketing angle of providing something of value, free) but I wrote this up for my personal blog and wanted to share it here too.  It is a great novel...

Neil Gaiman, currently famous for having written the novel (now a film), Stardust, has just announced that his famous novel, American Gods, is now available free and online, here.

Coincidentally, I finished reading the book last week (in original, bought and paid for, paperback form) and I enjoyed it immensely.  It is a magnificent, big, complex, multi-layered novel tackling some enormous themes, not least of which is the fate of the gods which immigrant Americans took with them to the new country.    It's also a road story about small-town America.  More deeply, for those of a Jungian inclination, it's a novel about life and rebirth.  That the main character's name is Shadow should give you a clue.

Immediately after finishing the book, I started a book by Jungian analyst Robert Johnson called Living Your Unlived Life which brought back to mind his earlier work called Owning Your Own Shadow.  I now having a burning urge to re-read all 635 pages of American Gods  (the "Authored Preferred Text" version which I have) and it has gone onto that short list of books and cds which I give as birthday gifts to all my friends and relatives (you have been warned).

It's a great book, well worth an exploration.

I enjoyed this piece, the essence of which is that:

"You’re going to be on people’s radar a lot longer than you think, longer than you’re going to be at your current job and longer than you might want."

This isn't just a Web thing, it's Organisational Humanity.  From both a career and a geographical perspective, we are more mobile than our parents. Layer on top of that, all that the e-enabled, Flat world has brought and we are now in contact with / work with / exposed to many, many more people than previous generations would have thought imaginable.  Not only that, but we have many more methods of communication: face to face, phone, conference call, email and the web.  We make connections we may never have conceived of, may not be aware of, and we leave our fingerprints in the minds of many.

Two challenges:

• to be aware of how far (in space and time) our communications may reach:  the embarrassing email trail, or Seth's "The web doesn't forget."
• to stay in contact with those people who are important to us.

Seth's Blog: Thinking about Dustin Hoffman

I have no love of politicians as a breed.  I tend to believe in the adage that those most likely to do well in office are those least likely to seek it.  The opposite all too often seems also to be true; that those most likely to seek office are those least likely to deserve it.

However, I have been reading increasingly shrill "Shock! Horror!  Outrage!!!!" articles about the current "scandal" in UK politics and I am beginning to dread that the outcome may be worse than the crime.  If there are cases of corruption, of misuse of public funds then, of course, they should be investigated and wrong-doers dealt with heavily.  If a Member of Parliament has his snout sufficiently in the trough to pay his children for work they have never done, then isn't that a simple case of embezzlement and fraud?  Clean up the house, deal heavily with the grasping few.  But also, let's be grown up about the business of being an MP.  If I worked for a large organisation which required me to divide my time between "home" and London, they would pay my accommodation at one location or other.  At a notional £200 per night (for bed, breakfast, dinner etc) for, say, three nights a week that buys me about 28 weeks of London attendance.  You can tweak the figures but in that context, MPs' London allowance does not seem outrageous.  Similarly, most other expenses if you consider them in a business or professional context. 

I am sure there is a good case for tightening procedures (the £250 threshold for producing receipts may be too high (but what is the cost of additional checking?)) but let's be realistic, sensible and grown up before a small-minded and envious obsession delivers an elected house of petty bureaucrats with immaculate expense claims but even less vision and leadership than we have today.

As ever, the answer lies in balance.  What is required is the rigid application of an adequately light process rather than the more eye-catching, all-embracing heavy process which ends up in loose or poor application.

Can business people (still) learn from soldiers?  I think we can learn from anyone and, while we fret about the changing world, there are lessons to learn from seeing how others tackle similar challenges. 

I read "The Utility Of Force: The Art of War in the Modern World" by General Sir Rupert Smith when it was first published, attracted by a review in the Sunday Times. Whilst I learned a lot more than I had anticipated, what originally attracted me, and what strikes as having a huge relevance to modern business and marketing, is Smith's central thesis that “industrial war”, the all-out sort of struggle that disfigured the 20th century, is dead. Instead, we fight “amongst the people”.  Instead of massed forces squaring up to do battle on a lonely plain, war has become a matter of working within and alongside populations seeking to change perceptions, to influence and persuade. 

Consider modern marketing in the digital age.  Gone are the days of massed marketing budgets squaring up to do battle on a lonely magazine page or TV slot.  Instead, we need to find new ways to get in amongst the population.  The clumsy rush into social networking sites is an example of this.  We should hope that it doesn't turn into an "old war" Retreat from Moscow.

Perhaps the key lesson here is this: it is no longer sufficient to talk at your audience; it is necessary - and not before time - to talk with your audience, to engage in a debate.

I enjoyed this short post from Seth Godin's blog.  It is a reminder to us all that, as the environment around us changes, we need to respond by changing the stories we tell.

"Of course, the two different extremes can lead you to buy the very same thing. It's not the thing so much as it's the story.

Starbucks was the indulgence of a confident person happy to blow $4 on a cup of coffee. Starbucks can become the small indulgence for the person who just traded down to a small rented apartment."

We may be selling the same product or service but the reasons that people will buy it can be different; i.e. the solution which the product or service is providing to the customer becomes different.

Seth's Blog: Marketing in a recession

I have just finished a new article for the web-site which explores this idea a bit further but I wanted to post the gist of the idea up here.  The heart of it is that to be truly fulfilled (or happy or realised or self-actualised; pick your adjective), we need to look at career success on two dimensions.  Firstly, the more obvious measure is that of meeting our material needs; earning a bucket-load of money and feeding our hungry wallets.  The second dimension though is harder to target and is too frequently subordinated to the pursuit of plenty.  That dimension is the need to feed our souls.  I arrived at the following matrix as a result of some of the coaching work I've done and it has proved useful for people trying to re-balance their working lives.

We are all searching for Nirvana, aspiring to reach the top-right of this chart: to get paid lots for doing what we love.

In the bottom-right quadrant, at worst, we tend towards martyrdom; no money but oh, what joy!

Top left, is a surprisingly easy place to land. You’re good at what you do, you get promoted, you earn, and become tied to, increasing amounts of money but... you realise the joy has gone, it has become soul-destroying.

And, at worst, we find ourselves in the realm of the Zombie: a dark kingdom with no money and no pleasure.

That is the essence of the model.  The full article goes into more depth on the concepts and begins to explore how to begin your journey in search of Nirvana.

I'm indebted to The Register's article on SUN's acquisition of mySQL for reminding me of this gem.  South Park is a show which divides people into "Love It!" or "Hate It With A Passion!!".  I'm in the former camp because, beneath the puerile vulgarity which turns so many people off, there is often clever and insightful satire.

As regards the clip, sadly, this kind of business thinking is all too common.  "Phase Two" is where the rigour is required.  "Phase Two" is what differentiates successful organisations from the rest.

Maybe I should change my business name to Phase Two Consulting.

Over on his blog, Geek In Disguise, Steve Clayton has been running a series on Great Ads and I really liked this one.  However, I also found myself feeling a bit "cheated" when I realised what it was for.  I'm not sure why, the brand is a well known and respectable luxury brand, but somehow the train of Big Thoughts which were set running by the ad seemed to overpower the brand, the punch-line.  And I'm not sure why.  The only parallel I can immediately think of is Microsoft's "Your Potential, Our Passion" ads.  Those ads also featured big themes but for me, those ads resonated strongly and I do not feel the same dissonance which I did with this brand.  It made me realise how important it is that the audience buys into your aspirational message...and sees your product as being an enabling part of that aspiration.  If not, you risk appearing overblown and hubristic.

Steve Clayton: Geek In Disguise : Great Ads #8

According to various quotes from those "close to" Yahoo!, Microsoft is trying to steal the company.  From who, exactly?  Reading the response of the Yahoo! board to Microsoft's proposed takeover is like reading a textbook case-study of the "agency" problem with public companies. 

Cosily ensconced directors forget that they do not actually own the company which provides for them.  In fact, they are employees of the owners and are charged with protecting and maximising the owners' investment in the company.  Certainly, the board will have some shared ownership but actual ownership sits with the body of all shareholders.  When Microsoft made its takeover offer, it valued Yahoo! at a price not seen on the market in over two years.  Certainly, the stock price may be higher now but that is driven by the anticipation of speculative investors.  The only "theft" going on here would be if the board were to fail to act in the best interest of all shareholders and thus deny them the right to realise the value offered.  Directors, as officers of a public company need to remember their duty to all shareholders.  It is at tough times like these that they need to be called to account if they fail to be objective.

The hubris of the incumbent board deserves a proxy fight to have them removed.  That said though, I remain to be convinced that this is a good move for Microsoft and I would hate to see them rise to the bait and increase their offer only to win a reluctant and hostile prize.  The challenges of integrating Yahoo! looked enormous at the outset; they would be even more so following a poisonous takeover.

Yahoo! set to revive merger talks with AOL after rejecting hostile takeover - Times Online

The CBI's latest report on the outlook for SME manufacturers contains mixed results.  Unfortunately, the good news looks mainly in the past.  UK firms saw a strong quarter driven by high overseas orders.  However, the outlook for the present quarter is much more subdued with many small firms feeling that finally, increased input costs will drive them to increase prices leading to a consequent drop in demand.

Technology

One piece of encouraging news I spied though, was that capital expenditure expectations remained at their highest for ten years.  Not only that, but the reasons for expenditure were "planned investment in product and process innovation".  That has to be the right thing to do.  Carefully planned and implemented investment in technology can lead to that step change which is the difference between merely tweaking efficiency and actively improving effectiveness, ensuring that firms are best able to achieve their goals.  This is applicable at all scales from small businesses taking their first steps on the web up to major re-engineering of enterprise production.

Tenacity

Continuing capital expenditure plans may be the right thing to do but it can look like a brave step in the face of an uncertain future.  That's where the tenacity comes in.  You need to revisit those plans and your overall business plan to ensure that you still have confidence in the future of the business and in the anticipated return on the investment.  More fundamentally though, take a good look in the mirror and ask are you truly committed to your path?  There is never an easy time to do this but sometimes the prospect of challenging times ahead is enough to get you thinking.  If the answer is "yes, bring it on" then you know you can put your shoulder behind the wheel and steer the business forward. If "no", then you need to ask what you can change to ensure that you are fully energised.  Nothing is as draining, as soul-destroying, as half-heartedly facing a seemingly endless stream of difficulties. 

CBI Press Release

I am interested to see any follow-up coverage after Mandelson's speech tonight.  In the excerpt's here on the Economist.com's blog, he makes a powerful case for the need to avoid any temptation to slip into (even more?) protectionism as the western world shivers on the edge of recession.  He is, of course, absolutely right (or should that be "correct"?  No, I think it's "right"; in every sense.)  Mandelson uses some powerful statistics to show how much emerging markets have emerged over the last number of years.  He also shows how this has not been to the detriment of Europe.

I need to review my opinion of Peter Mandelson, which hitherto has been less than favourable.  I clearly haven't been paying sufficient attention to his work in Europe.

We all live in the global marketplace now | Certain ideas of Europe | Economist.com

Mitra comes close to making sense of the mythical $15bn valuation, ie that multiplying up Microsoft's investment to a full 100% and calling that the price-tag is nonsense.  Microsoft paid what they had to ($240m) to get the stake they wanted (1.6%).  That doesn't mean that they, or anyone else would pay (100/1.6=) 62.5x that to acquire the whole company.

The challenge remains for Facebook to "show me the money".

I came across a couple of interesting articles about Facebook this week.  Firstly, a piece in the Register suggesting the beginning of "Facebook Fatigue".  That piece, in turn, draws from the Creative Capital blog wherein you can see the underlying data.  The concern is that the average time spent by users on social networking sites is falling.  Is this an indication of flagging interest?  At the same time, The Sunday Times magazine printed a fascinating exploration of Facebook, its attractions and its impact: Who's pressing your buttons on Facebook? - Times Online.

I do not think death is imminent, but there is certainly a need for a deeper analysis and for some healthy concern.  If the novelty is wearing off - and this is not the result of a changing demographic (has heightened awareness led to an increase in exploratory users outside of the core segment who quickly lose interest and drag down the average stats?) - then that should be a worry.  Much of the excitement and money surrounding social-networking sites is being driven by the idea that the powerful community of users and the stickiness of the site can be used to market or sell.  The challenge is that, as yet, no-one has developed a viable method for this.  Facebook's own clumsy attempt at peer-marketing met with a user backlash which led to the project being hastily reversed.

The challenge is this: to ensure that the user base remains engaged whilst introducing those users to offerings which will make money in ways which are acceptable to those users.  No-one likes to be "used" which was what riled people about facebook's Beacon blunder.  As The Times points out, people are fickle and Facebook has the feel of a very faddy site.  A key metric for me would be engagement time split by average tenure.  Do those who "grew up" with facebook remain loyal?  Those are the key segment to understand.  One of the earliest players in the social-networking space was friendsreunited.co.uk which followed a similar path of exponetial growth followed - shortly after purchase by ITV - by a steep decline.  There are clear lessons there.

Another statistic caught my eye in the Creative Capital table was the performance of LinkedIn.com.  LinkedIn is a very different site in that it is targeted towards business networking.  Users don't get spammed to join in cat-poo fights or to support Obama; they simply use it to make connections and do business.  To be sure, the figures are a whole order smaller but ove the two quarters shown, users grew by 163% and average engagement time grew by 30%.  A different demographic, a different purpose but I wonder if LinkedIn offers something of perceived value over that offered by my general "social" sites.

No real surprises in this article by Sramana Mitra.  It appears that the cost advantages which India and other countries have previously enjoyed are being eroded through wage inflation and the lack of key skills.  The cost advantage has dropped from 1:10 to 1:3.  This was always going to be the case.  The real question is whether smart strategists had build in cost recovery over a suitably short timescale to enable firms to re-relocate to another  cheaper location and still show a profit overall.  As Mitra states, Eastern Europe is establishing itself as a strong contender for offshoring software development and many major firms have invested heavily in Russia, Armenia and other locations.  This is aided by a strong legacy of science and engineering education.  However, those hot-beds of development like St Petersburg are also facing huge wage inflation and a consequent erosion of their advantage. 

For local firms, the only sensible strategy for the long term is to use their current cost advantages to establish a reputation for quality and to specialise. There is no long-term future in a low-cost strategy.  For multi-nationals, they can never consider off-shoring to be a one-off strategy and cost projections need to take a suitably short-term approach to ensure that there remains a net-benefit to the exercise once the favoured location has lost the advantages it originally held.  Chasing lowest cost is hard but there remain a number of locations around the globe where development or other activities can be re-re-relocated.  And in time, the education investment plus the flight of jobs from the first wave of off-shore locations may make those competitive again.

This - and all the earlier posts on this blog - was originally posted on my personal blog.  As I'm updating my business web-site, I have separated these business-related posts and re-posted them on this site for my business audience.  However, when I posted this originally, it attracted an insightful comment from Michael Sullivan - an Irishman in Istanbul who is responsible for Microsoft's Platform Strategy in the Middle-East and Africa.  Michael usually has interesting things to say. Well, to be clear, Michael always has things to say and they are usually interesting and insightful.  Anyhow, I have taken the liberty of adding his comments below and promise him beer or fine wines next time we meet up...

I enjoyed this column by Bill Thompson on the BBC News web-site because it questions, and begins to through a bit of light on something with which I've been puzzling for some time.  If increasingly clever on-line advertising is going to fund so much of the web and software in general in the future (and of course, it's a model which is serving Google exceedingly well at the moment), why do my friends and I so seldom actually click on an ad?  On most sites, I am pretty well blind to, or at best irritated by, banner ads; my pop-up blocker does a pretty good job of eliminating unwanted interruptions and I never click the Sponsored Links when I do a Windows Live or Google search.

I'm not sure what the answer is.  Web metrics and measurement are far from perfect but they are still many, many times more telling than comparative measures available for broadcast or print media.  Advertisers are not daft - although I'm sure they suffer as badly as others from the herd instinct - so they must be able to demonstrate some form of return.  Perhaps it's just that the marginally more demonstrable returns from online are sucking dollars out of the scatter-gun approach of press advertising.  As they say, in the Kingdom of the Blind, the One-Eyed Man is King.

Michael's Comments...

The Gmen simply did that 'market making' thing all great (lucky?) companies do at their birth: they made the pie 100x larger and enact a modest transaction tax. And yes, there were precursors to the Larry,Sergei and Eric, but not really. Prior to online/digital advertising, and in particular 'search based advertising', the whole concept of ADVERTISING was for the well-endowed, large-enterprise, agency-using, brand-toting, purchaser. Think FMCG company or Automotive manufacturer. Their sales were, and remain, significantly dependent on marketing-generated (where marketing = ad.campaign) leads.

As you are reading Anderson's 'Long Tail', think about this: search based advertising is exactly the tool, or can opener, that made a market out of this whole long tail of global search detritus.  If a 100 producers of coloured-beads-on-a-string can now 'advertise' and sell their wares to anyone, anywhere, where UPS or Fedex can reach, and that 'advertising' only costs me $25.00.  Game on. And if a 1,000,000 small businesses (consumers and producers) can do it...game really on.

Perverse Corollary:  Is this market-making breakthrough of search-based advertising (plus the networks of sellers, re-sellers, after-sellers, aggregators, hangers-on and digital leech-crafters) is in its essence something that is ANTI-BRAND?  Are we watching now a micro-SMB business model par excellence swimming back upstream to try it's hand in the world of the One-Eyed global BRAND. Maybe. Not sure. Just maybe. You are right to say that the jury is still out on that point.  In the meantime, I would venture that neither you nor I will in fact hang around for that Dodge 4x4 trailer to play before we consume the video clip of our favourite band, from that no-name digital video juke box in the cloud.

** HAPPY CHRISTMAS, NEW YEAR AND HOGMANAY TO YOU AND YOURS **

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