user is always right, but…really?

On a fairly regular basis, feedback at futureme dot org gets silly requests that make me chuckle. Or cry. Or both. Here are some of the recent more memorable ones:

Mar. 3, 2010: Send my letters explaining S&P 500 movement to an earlier date

These two emails are by far the most important and valuable emails I have ever sent in my life to anyone including myself. the public email starts: “Please reveal to me the S&P500′s sequential order of movement and activity for the week of 2010/1/18. I thank you. I love you. I am eternally grateful. Amen.”

Oct. 6, 2009: We hate people with cancer, apparently (FM requires 30 day sending date minimum…) Jay says: “you’ll never beat cancer with an attitude like that”

Saw this on the Today Show this morning and decided to write myself a letter to see how I was doing next week and got a response that said you’re not a reminder service jaand it must be a month away. Well, you know what, when you have cancer, a month may not come for you. What a crappy service. You should be ashamed.

Sep. 18, 2009: He’s afraid about getting fired b/c he forgot his meds:

I was not taking my anti-depressants and think I sent a future me e-mail to my boss by mistake.

Please help me.

If he receives it I will lose my job.
Please help.

Aug. 28, 2009: Sent her Facebook password to the future (and huh?)

well i contacted you because i’m an avid futureme.org fan. recently i was just about to go on a “facebook” fasting and made random passwords and sent it to myself in the future. problem was, i wasn’t even logged in at that time. now as far as i can remember it should have been sent to me a week ago. help please you know how IMPORTANT of a caprice facebook is. i really have to get my password. my user name in my futureme.org account is [******] and i wasn’t logged on to it. i actually sent my random password to **********@yahoo.com, my official email. it’s just that i used my other email, [*********]@yahoo.com and i cant even remember the random info i entered while making this 2nd email. PLEASE DO HELP ME OUT HEEEEEEREEEEEEEEEEEEE

Apr. 4, 2009: He girlfriend’s FutureMe letters wants:

You are my last hope. We have lived with my girlfriend about one year in peace, but serious problems have more recently begun. It is very guilty to me and tries to disappear from my life not to hurt. We are very love each other, but I do not understand as myself to conduct.

More recently she has written 2 letters on your site. (her e-mail **********@mail.ru). the Second should be delivered on June, 30th.

If is though any possibility – send me please text of this letters on *********@gmail.com. Becouse of i wanted to know what i should do to keep peace beetween us and wish to know not to lose she. Help to rescue love.

Yours faithfully, *****

Appologise my English – i am russian speaker.

my daughter is hilarious

back in college, I had a mini-moment of fame (nytimes & NPR mentions…) when I wrote a little shockwave MP3 player to accompany the dancing baby (before you could get smacked-down by RIAA for doing that kind of thing.) Here’s a press release that is so old school I had to scan it as a PDF.

I guess this is the proverbial life imitating art… (make sure you catch the end where she starts singing…)

kindle book prices are plenty high…despite what publishers say…

I’m too cheap to buy a real deal Kindle, but I did grab the (free!) iPhone app as soon as it came out, and have to say – I’m impressed. I’ve read Dan Ariely’s “Predictably Irrational” (a fantastic read worth a post in and of itself…) and am currently reading “Dreams of My Father” by some dude with a funny name.

I gotta say – it’s a perfectly serviceable reading experience: fonts are crisp, bookmarking is easy, and as someone w/ a short-attention span, I appreciate being able to “turn the page” every few seconds.

But I think the $9.99 price point is too high, despite the whining from Publishers. Here’s why.

Obviously, there are savings in the marginal costs of producing each book, since there is no need for paper, printing, binding, shipping, etc. So I’d expect these cost savings to be reflected in the price.

But I’m also bothered by the lack of lendability in the current Kindle model, and think this restriction should be reflected in a deeper discount. I very much enjoy sharing books with friends and then discussing them. Always have. I am also a big believer in the concept of a public library. Both of these “scenarios” are challenged by the current Kindle model in which an ebook is tied to a single device. I can’t even lend a book to my wife. Lame. When we can’t read books that we get on loan (i.e. for free), we pay an implicit premium over a physical (lendable) book, as we need to buy everything we want to read on the Kindle.

The following is a very, very, back of the envelope look at relative per unit costs & revenues of physical and (unlendable) digital books, that I think supports the case that Kindle content should be cheaper. Or lendable.

This embedded spreadsheet contains a quick collection of sample data comparing “real” books to Kindle versions on Amazon:

Let’s first talk about the paperbacks:

a) Average price is $10.25 for “real”, $9.57 for Kindle…

b) BUT, marginal costs of physical production are 12.5% less for Kindle books, based on NYTimes article referenced above)and this is self-reported in that article…I frankly imagine it to be more.

c) AND, assume that 25% of the books that I read I get as loaners from friends, wives, enemies, co-workers, libraries, etc. With the Kindle, I need to buy every book that I want to read. So I buy more books. (this 25% number comes from 1 data point here = me…did I mention back of the envelope?)

Based on these assumptions, spreadsheeted out below, we see there is ~50% more profit per Kindle sale than from “real” sales, at least with paperbacks.

And all this, not to mention that the same NY Times article states that Amazon is actually paying more than $9.99 back to the publishers – as much as $13 per book to ease their concerns about the business model.  (I do not know how this compares to Amazon’s physical book subsidy, or not. Amazon’s payments to publishers is an interesting topic, but a bit beyond the scope of this little post…)

(Disclaimer #1: Yes, I know there are additional costs, royalties, marketing, etc, that go into a bottom line profit calc, but these are essentially equal between two forms, hence “relative baseline” qualifier)

(Disclaimer #2: I’m not really addressing the relative merits (“willingness to pay”) for Kindle vs. non-Kindle content. It’s all very debatable. My feeling is that there are pros and cons for each form, but ultimately, I am paying for the content more than the form…and that if anything, the physical form would command more of a premium than the Kindle form. Think: bookshelf-show-off-effect). But the goal here is to show that Kindle model is plenty profitable and prices could/should be lower. So this question, while interesting, is a bit tangential.

(Disclaimer #3: Would I really buy all the books that I am getting via loan from friends, etc?  Perhaps not…And of course I can still get physical loaners…for now…but even if I would only otherwise buy 2 out 3 books that I get on loan, the numbers work out in the Kindle’s favor)

Hard covers are a murkier picture, as the prices vary more widely, in both Kindle and “real” forms. I’m not totally clear why (though it does seem clear that Dean Koontz is a greedy bastard). But following the same approach, Kindle dollars still come out on top.

So: I say let’s lower the prices…or figure out a reasonable way to lend content…part 2 of this post will include a proposal for the later…

bike commute from Jamaica Plain to Kendall Square

It’s been two weeks since I stopped doing the daily cross-state commute and we moved to Jamaica Plain. I’ve been exploring the best bike route from our new home in Jamaica Plain to work in Kendall Square.

The ride is very bimodal in its enjoyment level. Green = pleasant morning spin – 75%. Red = sucky roads with drivers trying to squish innocent bikers – 25%.

If some wiser veteran biker out there has suggestions, I’ve made the map editable…I’m refining this as I figure out the best ways to get between the two bike paths, and then to get from the end of the riverway bike path to the river.(Making the map editable was apparently a misplace of trust in the “crowd”, as the original route was deleted and I had to remake it. So much for collaboration with the unwashed masses.)

Note the difference in the way back to get around the Kenmore Square death trap. And a slight difference in getting back across Rt. 9 after getting off the riverway as well.

This route is taking me 25 minutes door to desk…45 minutes less than my old commute. 90 minutes a day back. Y to the E to the S. Also – on the few days where I’ve driven, it’s about 23 minutes door to desk. Ride your bikes, people. Good for the climate, good for the city, good for you. And a lot easier than you think.

Update #1:I’ve tweaked the way there to get to the river rather than dealing w/ Kenmore – go up Park Rd to Commonwealth, right on Commonwealth, and left (careful!) across Silber, straight to the ramp across Storrow.

Update #2:According the REI “Bike Your Drive” iPhone app, I save 11.4 lbs of CO2/day by not driving, which is worth $.10 according to (low) EU carbon prices. Willing to sell credits to qualified offset buyers.

View Jamaica Plain to Kendall Square Bike Commute in a larger map

…will make a different route for getting home cuz there are some differences.

how the search business reminds me of wall street

Is there a conflict of interest between quality organic search results and pay-per-click sponsored links?

This starts with a simple story. My brother runs a small translation company in Berkeley called ION Translations. Like many small business owners, he has explored using Google’s uber-popular AdWords service to help promote his business.

“Berkeley Translation” is one the search phrases for which he currently bids, and indeed, if you search on Google, as of 2/14/09, you will see his ad listed on the right-hand side sponsored links list. You do not, however, see a listing for “Ion Translations” in the “organic” search results. So perhaps my brother needs to do some work on optimizing his site for search engines?

But…here’s where it starts to get a little fishy…if you search for “Berkeley Translation Service“, a phrase that my brother is not bidding for – lo’ and behold, there is Ion Translations, listed in the “organic” search results local link section. Note as well that otherwise the organic list result is very similar.

Curious. Is it indeed a quirk in the Google algorithm that by including the term “service” in the query that all of a sudden my brother’s company shows up in the organic search listings? Really? Or…(cue the organ music…) is there a more nefarious story about how Google is (not) rendering “organic” links based what sponsored links are associated with the query …?

Indulge me the conspiracy for a few, if you will, and let’s try and put aside the quirky lovable do-no-evil brand that Google has admirably built over the past 8 years. Let’s think plain and simple about incentives.

First, recall how the AdWords model works: advertisers bid for keywords, Google lists them based on expected revenue, and only when a user clicks on an ad does Google get paid. (see appendix for more info on how the model works…)

If Google aims to maximize the revenue of this single instance query, then of course they would not want links to the same page (iontranslations.com in this instance) in the “paid” ads section to also appear in the “organic” list. After all, if the same link appears in both lists, Google would risk losing revenue if the searcher clicked on the “organic” link. And from Joe Searcher’s point of view, he just wants to find what he’s looking for, and probably doesn’t really know or care how Google’s business model works and will just click away on the most relevant seeming link. The only person who would prefer the organic click to the paid link click is the advertiser who would pay in that case (in the longer term the customer would also prefer that the advertiser not be unnecessarily charged, as higher costs would be passed along…)

…But of course, life ain’t so simple…and in Google’s (and all other search engines’) defense, let’s kick a little lay-man’s game theory. Searching is not a “one shot game.” Google has been able to build and maintain its formidable lead as the top search engine because users trust its results.. Trust is built over time, by delivering stellar service time and again. Any kind of public disclosure of the type of tinkering to drive revenue would really be damaging (I think, right?) But it would also be exceptionally difficult to prove, as Google’s algorithm for ranking results is a proprietary black box.

Given that Google’s search mechanics are, unlike many of the other offerings from the company, not “open”, I can’t help but be suspicious with the structure of the paid search listings business model. For these more fringey searches, like “Berkeley Translation”, for which we know there is a very long tail, might a search engine be able to get away with it?

In fact, I think there is a darn uncanny parallel here to the conflict of interests in investment banking that have ebbed and flowed throughout the years.

In the banking world, there are analysts and traders. Analysts are supposed to be objective and report on the fundamental strength or weakness of securities. Traders buy and sell and make money off of commissions. But as we saw in the dot-com boom, analysts have the power to manipulate information flow, in such a way that unsuspecting sheep (the rest of us) buy or sell stocks and allow the traders (and analysts – see Blodget, Henry) to make money because of market swings that they can anticipate. Sarbanes-Oxley, in fact, was largely a response to this condition. And banks also had the same reputation interests to protect, as banking is not a one-shot game either.

So – let’s transpose: in the search world, “organic” results are the analysts (an objective, scientific, heuristically driven list of links sorted by relevance), and paid listings are the “traders” (commissions are made based on trades/clicks.). And there they are – sitting on that sparse page together, with the tenuous white column serving as the firewall. If the analysts happen to have a moral slip-up and manipulate the objective information…they can drive business to the traders…

OK OK OK, I’ll stop channeling Michael Moore. To be clear – I am not accusing Google of any wrong-doing. I do actually think this is a strange quirk of circumstance. But – and this is really my point: how can I be sure?

The bottom line is that this model deserves more scrutiny than it’s received. And not just Google, but Yahoo, Microsoft, etc…who all have essentially the same approach. There is something quite troubling about these incentive structures, especially given search has become the way in which we gather and consume information. All we can do is trust that companies are doing the ethical thing…which we know all-too-well doesn’t always work out…

Appendix:
The paid keywords business model, used by Google and others, is that advertisers pay if and only if a searcher clicks on the advertisement. The advertisers have stated a willingness to pay for a click, and the search engine calculates a likelihood of a click, and then ranks the list based on the product of those two numbers: (Probability of a Click) x (Willingness to Pay). The special sauce is really in the first number – the probability of a click, which is based on lotsa data from previous queries, which is why Google has such a strong advantage in this space.

(Yahoo used to charge for listing, not for click, which had its own issues…but I’ll leave a comparison on the sidelines for now…).

Full disclosure: I work for Microsoft, not on anything related to search. I am writing this on a Mac. I use a bunch of Google products, which are for the most part very very very good. But I try not to click on their ads. When I can actually tell that they are ads.