[iDC] MySpace staff cuts

BURAK ARIKAN arikan at burak-arikan.com
Thu Jun 25 16:50:26 UTC 2009 

Dear Danah,

I agree that there are big costs for running a large system such as a  
social web service or a city with a couple of million users. In fact,  
when you ask founders of such social web services, they say "you use  
free services, so you pay with your data", which is being used for  
marketing, targeted advertisement etc. But the problem is the binary  
comparison, the black and white simplification itself. There is a  
critical difference between the value a user generates for the  
service, and the value that the service generates for him or her. For  
example, by calling my friends to use the service, I may generate more  
value than what the service gives to me. So free use is not enough, I  
should also get paid for what I've done for the service. Of course,  
this is a composite difference, complex, and quite invisible for our  
everyday attention space. It may not be reduced to its material values.

As a solution, web services / governments can use participation / user  
labor standards to keep track of the contribution and to continuously  
calculate the participation value. Then we can compare our  
participation value with the service value, and debate the difference.  
How much is my participation tax?

This is quite a literal way of dealing with this issue I think. As a  
top down solution, I think all private companies should always open  
their data, so that we can have a "real free market economy", if you  
will.

Best,
burak

On Jun 25, 2009, at 10:02 AM, danah boyd wrote:

> When it comes to social media sites (and particularly those that
> involve photo-sharing), you might want to also account for 1) the
> people who are forced to spend all day every day with politicians,
> attorneys general, and policy makers in every state and every country;
> 2) the hundreds of people who sit and sift through photographs/video
> looking for illegal content; 3) the round-the-clock staff who field
> calls from FBI and police; 4) the large teams who battle spam,
> phishing and hacking; 5) the legal team who has to deal with everyone
> and then some suing them over issues of safety, porn, etc.
>
> Having spent 2008 running the Internet Safety Technical Task Force, I
> am in awe of the scale of operations dedicated to safety, privacy, and
> security on each and every one of these sites. We're not talking 10
> people. We're talking 100s.  If you think that you can get away
> without doing this, wait till the attorneys general come after you.
>
> And this is just one aspect of what costs money inside large social
> media operations.  There are a lot more parallels to cities than one
> might think.  And just like it takes money to run the police force and
> maintain the sewer system, it takes money to keep social media sites
> functioning.  Someone's gotta foot the bill.
>
> danah
>
>
> On Jun 25, 2009, at 12:21 AM, Andreas Schiffler wrote:
>
>>
>> <unlurk>
>>
>> If the Internet should or shouldn't be about making money is really
>> besides the point. To "run the net" costs money - boatloads of  
>> money -
>> hence one cannot disjoin the internet from "things that have to do
>> with
>> money" including making some from nothing but electrons flying
>> around in
>> wires and semiconductors.
>>
>> I think it is helpful to provide some context to where these costs  
>> are
>> coming from ... just calling out bandwidth isn't doing this justice.
>> Let
>> me try to develop a chain that needs to be put into place for
>> something
>> to happen. Assuming we want to engineer the average June 2009 page
>> view
>> after time-traveling from the stone age, we'd need to build and
>> operate
>> this:
>>
>> Client Device/Connection - Last Mile Provider - Cloud Providers/
>> Telecoms
>> - Hosting Facility - Server Device - Operating System/Software -
>> Programmer/Designer - Content
>>
>> Next let me try to estimate some cost numbers for each item, say for
>> the
>> US, for one year, for fancy commercial stuff.
>> [Disclaimer: These are just crude order of magnitude estimates  
>> without
>> much research backing them up. Maybe we can crowd-source better
>> numbers!]
>>
>> Client Device/Connection: 150M online devices at $100/year for power,
>> maybe 30M new devices/year at $500 a device = 30B
>> Last Mile Provider: 10M new hookups/year at $1K a pop (pays for
>> provider
>> infrastructure and personnel) = 1B
>> Cloud Providers/Telecoms: 10 providers, 10B each/year in revenue,
>> 25% is
>> internet (pays for provider infrastructure and personnel) = 25B
>> Hosting Facilities: 10 big/100 small facilities, 10M setup+10/100M in
>> power/cooling costs = 2B
>> Server Device: 1M servers at $1000 each = 1B
>> OS/Software: 1M servers at $2K each = 2B
>> Programmer/Designer: 300K people at 100K/year each = 30B
>> Content: priceless ... not really, 10B stock images/sounds/blogs at  
>> $1
>> each, 100M books/videos at $20 each = 12B
>>
>> Now let's split this into two groups (a) what crowd sourcing/open
>> source
>> can affect in terms of price and (b) what needs to be payed to "the
>> system" anyways:
>> (a) open/crowd-sourceable: Last Mile Provider, OS/Software
>> (Linux/apache), Programmer/Designer (phpBB/mozilla), Content
>> (wikipedia/flickr) = 50B
>> (b) corporate system: Client Device/Connection (PC/Power Utility),
>> Cloud
>> Provider/Telecoms (ATT/Akamai), Server Device (HP/IBM) = 56B
>>
>> So even if open/crowd-sourcing is 100% effective, the corporations  
>> who
>> run "the net", make "the gadget" and provide "the juice" still need  
>> to
>> come up with the other half of the bill. Thus I conclude it will  
>> never
>> be a profitless enterprise. The current preoccupation with  
>> advertising
>> and user generated content is in my view partially a fad (yes, many
>> people don't care about many of the services) and partially an
>> economic
>> reality (it pays, as Google demonstrates so well).
>>
>> To cut something out of (b) many, many people would need invest into
>> devices that use less power and last much longer, build community  
>> mesh
>> networks and mini-clouds, and consume less server-based streams.
>>
>> And another note on the original discussion about mySpace layoffs -
>> one
>> of the biggest chunks of the cost in the chain is the personnel as  
>> one
>> can easily see in the above estimate. So if a company wants to loose
>> less money (YouTube) or make more profit (mySpace), they just fire
>> most
>> of the people who made the software but keep the servers running.  
>> This
>> will go without anybody noticing anything (this works for at least a
>> year - been there, done that).
>>
>> --Andreas
>>
>> </unlurk>
>>
>> Michael H Goldhaber wrote:
>>> Jean, all,
>>>
>>> Why weird? The idea that the Internet exists to make money is the
>>> prime mistake, as I have been arguing for years. It is about exactly
>>> what YouTube so directly provides: a means for individuals to  
>>> compete
>>> for attention. Some relatively few companies such as Google have
>>> found
>>> ways at least temporarily to profit but most of the Internet is not
>>> about money at all. Far more "transactions" are pure attention
>>> transactions. Twitter and Facebook are two examples of  platforms
>>> that
>>> allow attention transactions that their founders and other hope will
>>> make money somewhere down the road. Maybe that will be the way
>>> YouTube
>>> did, by being bought by Google. Now Google is stuck with an
>>> albatross,
>>> but if it cuts it off all YouTube users will be angered, and that's
>>> just about everyone.
>>>
>>> People on this list seem mostly to have adopted the perverse  
>>> attitude
>>> of Wall Street: the Internet should be about making money for
>>> corporations. The only difference is that most here see that as bad.
>>> Both Wall Street and you fail to consider that something else is
>>> really going on, that most corporate hopes will not pan out, the
>>> would-be profiteers are mostly just patsies for the attention  
>>> seekers
>>> and payers. Even Google is probably much more useful for the new
>>> economy than not. Its making money is beside the point.
>>>
>>> Let me add: this new economy is not primarily about advertising or
>>> about collecting info on audience members, except in Norman Mailer's
>>> sense of "Advertisement for Myself."
>>>
>>>
>>> Best,
>>>
>>> Michael
>>>
>>>
>>> On Jun 24, 2009, at 8:33 AM, Jean Burgess wrote:
>>>
>>>> Sean, thanks for this concrete example. It points us to something I
>>>> find very interesting.
>>>>
>>>> On the one hand, you have the massive unpaid workforce of people  
>>>> who
>>>> through their various activities co-create the value (however
>>>> defined) of platforms for user-created content. On the other, you
>>>> have the profound inability of most of these platform providers to
>>>> make any real money out of that activity - once you factor in
>>>> bandwidth costs, and at least thus far.
>>>>
>>>> YouTube is a particularly sharp example of this -where UGC is both
>>>> the driver of YouTube's growth and a ruinous waste of bandwidth
>>>> because nobody wants to run their ads alongside it: it's
>>>> unpredictable in content and not clearly enough located in any
>>>> particular national (that is, US) market.
>>>>
>>>> For platform providers like YouTube Inc, the "users" who provide
>>>> content (and who have to a very significant extent built the thing
>>>> we
>>>> call YouTube) are, I suspect, seen as mere placeholders (one day,
>>>> the
>>>> "real", monetisable content will replace all those pointless
>>>> skateboarding cat videos). The trouble is, YouTube now has a  
>>>> culture
>>>> of its own: and its "attention economy" is in practical terms
>>>> incompatible with commercial media logics.
>>>>
>>>> I really do think this is a weird situation.
>>>>
>>>> Cheers
>>>> Jean
>>>>
>>>> On 24/06/2009, at 2:17 PM, Sean Cubitt <scubitt at unimelb.edu.au
>>>> <mailto:scubitt at unimelb.edu.au>> wrote:
>>>>
>>>>> What’s so fascinating is just how small the workforce behind a
>>>>> global player can be; pointing toards the economic scale of  
>>>>> content
>>>>> production by users
>>>>>
>>>>> Extracted from a longer piece at
>>>>> http://www.theage.com.au/technology/biz-tech/myspace-cuts-twothirds-of-global-workforce-20090624-cvw1.html
>>>>>
>>>>> June 24, 2009 - 10:15AM
>>>>> Social networking site MySpace plans to cut 300 jobs, or two- 
>>>>> thirds
>>>>> of its overseas work force, in an effort to rein in costs and  
>>>>> focus
>>>>> on countries where it has many users and better business
>>>>> opportunities.
>>>>>
>>>>> The move comes a week after the News Corp. unit said it would cut
>>>>> 420 jobs in the U.S., or nearly 30 per cent of its domestic work
>>>>> force. Combined, the cuts will reduce MySpace's employee base by
>>>>> nearly 40 per cent to about 1,150.
>>>>>
>>>>> "Our goal to tap into as many international markets as possible
>>>>> drove us to create too many offices around the globe, and with  
>>>>> them
>>>>> came inefficiencies," chief executive Owen Van Natta, a former
>>>>> executive at rival Facebook, said in a memo sent to employees.
>>>>>
>>>>> Regards
>>>>>
>>>>> sean
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> ------
>
> "taken out of context, i must seem so strange" -- ani
> http://www.zephoria.org/thoughts/
> http://www.danah.org/
> @zephoria
>
>
>
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