Chapter 08: Social Network Sites / Virtual Communities

Social Networking for the Equipment Leasing & Finance Industry

11/3/2010 by David Teten

I just learned that the Equipment Leasing & Finance Foundation has finished their study on “Social Networking for the Equipment Finance Industry 2010“. The executive summary is available at http://www.leasefoundation.org/IndRsrcs/MO/SocMed10/ ; the full study is $300. The author is Suzanne E. Henry.

The study shows that B2B social media marketing in the equipment finance industry is still in the nascent stage, with participants waiting for clearer directions and guidance for return on investment and development strategies. For context, in its report, "B2B Goes Social," marketing agency White Horse reveals that 86 percent of B2B firms are using social media, compared to 82 percent of business-to-consumer (B2C) organizations. However, B2B firms aren’t as active in their social media activity with only 32 percent engaging on a daily basis compared with 52 percent of B2C firms.

The study is a good overview of social media for a B2B executive with little background. The best part of the study are the case studies of:

– GE Capital, undoubtedly the largest equipment leasing and finance industry player, which has been exploring and using social media for more than a year. The organization encompasses corporate lending, vendor/dealer financing, core equipment financing, and specialty finance, including GE Commercial Distribution Finance Corporation, which offers inventory financing;

– Duncan Aviation, the largest family-owned aircraft support facility in North America, which offers comprehensive service for nearly every make and model of business jets and turbo-props; and

– American Express OPEN Forum. American Express OPEN is the leading payment card issuer for small businesses in the United States

For more on the use of social media in the investing industry (at no cost!), see our research.

(Image by billjacobus1 via Flickr)

Filed Under: Chapter 08: Social Network Sites / Virtual Communities, Chapter 26: Marketing, Chapter 27: Sales, Social Network Research, Social Networking, Success Stories

Liveblogging The Smart Money of Crowds: Collaborative Investing Startups

4/7/2009 by David Teten

I’m liveblogging notes from tonight’s MIT Enterprise Forum event on The Smart Money of Crowds: Collaborative Investing Startups. This was not hard to organize, and I’m very happy with how the event turned out.

Panel Biographies

Roger Ehrenberg, Moderator, Managing Partner of IA Capital Partners, LLC

Roger Ehrenberg is Managing Partner of IA Capital Partners, LLC, his personal venture investing vehicle. IA has made 27 investments since 2004, principally in the areas of digital media and financial technology. IA`s portfolio companies include TheLadders.com, Mimeo.com, Clickable, Covestor, BlogTalkRadio, Buddy Media, Silicon Alley Insider and Stocktwits. Roger was also an original investor in Wallstrip (sold to CBS Interactive) and MyTrade (sold to Investools), sits on five Boards of Directors and advises the gaming company Genesis Interactive and the location-based messaging platform Socialight.

Prior to founding IA, Roger spent 18 years on Wall Street in Mergers & Acquisitions, Derivatives and Trading. Most recently, Roger was President and CEO of DB Advisors, the $6 billion multi-strategy hedge fund trading platform of Deutsche Bank. As head of derivatives businesses at both Citibank and Deutsche Bank, Roger`s teams twice won awards, securing Global Finance magazine`s `Interest Rate Deal of the Year` in 1998 and Institutional Investor magazine`s `Equity Derivative Deal of the Year` in 2000.

Roger has penned the popular business and technology blog Information Arbitrage since July 2006, and has had over 1 million readers since inception. He has also been interviewed broadly on topics ranging from hedge fund regulation and algorithmic trading to deep-web search and building vertical communities by The Financial Times, The Wall Street Journal, the BBC, NPR, Reuters, CNBC and many others.

Roger received his Bachelors in Business Administration from the University of Michigan/Ann Arbor, and his Masters of Business Administration from Columbia Business School. Roger is Trustee of the Little Red School House/Elisabeth Irwin High School and a Board Member of the Integrative Pediatrics Council. He lives in New York City with his wife Carin and two boys.

Divya Narendra, Founder and CEO, SumZero

Before founding SumZero, Divya was an Associate at Sowood Capital Management, a $3.5B multi-strategy hedge fund located in Boston, MA. At Sowood, Divya analyzed investment opportunities across the capital structure, spanning credit and equity. Prior to this, he was an analyst in the Mergers & Acquisitions Group at Credit Suisse Securities in NYC. In 2004, during his senior year at Harvard College, Divya co-founded ConnectU.com, an online social network dedicated to the university community, and predecessor of Facebook.

SumZero is the largest online community of professional investors worldwide, currently consisting of more than 1,200 analysts/PMs from nearly every well-known buyside fund. The site is free to use, but membership is by invitation-only. Each member lists 3 or more tickers for companies he/she has extensively researched. As such, an analyst can search for a company he is interested in and find the buyside analyst at another leading firm who has already spent months researching that name and initiate a dialogue. As a by-product, an analyst grows his network. SumZero also contains a fully searchable database of concise investment write-ups focussed on valuation. Though not required, only those members who contribute an idea can access the database. Please emaildivya@sumzero.com for more information and an invitation to join.

Stacy-Marie Ishmael, Writer, Financial Times Alphaville/Long Room

Stacy-Marie Ishmael is a New York-based writer and blogger for FT Alphaville, the Financial Times’ award-winning blog. Her responsibilities also include FT Alphaville`s Long Room, which is a “digital restaurant” where finance professionals are encouraged to share research and comment on the work of others. Stacy-Marie is actively involved in the development of the FT Alphaville platform and brand.

FT Alphaville is a Webby-award winning blog focused on global financial markets, with a team spanning London, Tokyo and New York. The Long Room, which was launched in October 2008, is a members-only extension of the main site, focusing on comment and analysis. Both FT Alphaville and the Long Room are free to readers (an FT subscription is not required to access content) and are supported primarily by display advertising opportunities on the site and in FT Alphaville`s email briefings. In the case of the Long Room, revenue is generated from the sponsorship of “digital tables”.

Phil Pearlman, Director, StockTwits

Phil Pearlman was a co-founder of Lumina Fund Management, a long/short equity hedge fund which focuses on behavioral and sentiment analysis to exploit under and overreactions in options markets. He is an expert in the area of market participant behavior and emotion and consults with professional investors employing strategies adapted from empirically validated psychological treatments to improve trading performance. Phil has developed a proprietary prescriptive model of investor experience which integrates empirically validated clinical models and behavioral finance. He is a contributor to Real Money, a paid service owned by TheStreet.com. He currently trades a private account in New York.

Phil is an investor in and director at StockTwits. He also makes angel investments in other social media based start ups and focuses on the relational and community aspects of online social networks. Phil earned a doctorate in clinical psychology from Argosy University in Washington DC.

Rikki Tahta, Co-Founder Covestor

Rikki Tahta has held a number of senior roles in Finance and Information Services. Previous start-ups include ARK Information (acquired by Thomson Financial), WebTrack (acquired by Jupiter Communications – later public on NASDAQ), Steelhead Systems (acquired by Merrill Lynch) and Bookpages (acquired by Amazon.com). Other positions include Chase Capital Partners (private equity) and Thomson Financial (Securities Data Corporation). Rikki lives in New York and loves fishing. Username: RikkiTahta

Covestor is a portfolio sharing service for proven self-investors and for those wishing to track them. Tens of thousands of self directed investors share their real trades and you can follow them live for free. Covestor is funded by New York based Union Square Ventures, Boston based Spark Capital and London based Amadeus Capital Partners. We also have a strategic investment from Independent News and Media Group.

My notes

Roger:

I just spoke with a major ebroker. They’re not worried about trading volume, which is fine. They’re worried about durability, because they feel that their community is not loyal.

You remember stock message boards in the first dot-com wave. Problems of anonymity. Whole Foods CEO going online and bad-mouthing other peoples’ companies.

I spent 18 years on Wall Street at Citi/Deutsche. Left in 04 after running a hedge fund business for Deutsche

Stacy-Marie Ishmael.

Officially, she’s a credits market reporter for FT. Unofficially she’s a web geek there.

Alphaville was viewed as the ‘badly behaved little brother’ of FT: their first blog. It was a response to perceived need for real-time interaction/dialogue.

Performed two functions: a) trendy (in 2006, everyone had to have a blog), and b) increased engagement.

Alphaville has 9 person team, based mainly in London. We do combination of reporting and commenting. We’re encouraged to have an opinion on financial stories.

When we launched, traditional FT readers were slow to respond. We got 2 comments/week. FT’s historic market were C-suite.

Brits much slower to take up social media. We had a lot of readers but minimal interaction.

Shortly after, we launched MarketsLive: a real-time chat every day at 11am ET between two senior market reporters. When this launched , we were the first. It made people realize that there were real people behind the concept of Alphaville. We got to a point of 420 comments per MarketsLive event, and quality of comments went up.

In late 80s, there was a well-known restaurant known as the Long Room, which attracted all the significant traders in the City. That’s the origin of the name.

Today we feel that our main job is to moderate and edit, not write, because there’s so much quality content.

Divya, Sumzero

Our vision was to create a Wikipedia for investing, but focused on professional investors.

We wanted to be as universal as possible.

Most writing to date is on single-name credits

We launched a year ago.

1700 analysts are members

Even if you haven’t submitted a note, you can still see who has extensively researched a given company.

You can send a message to other analysts and start a dialogue.

This is the first way that analysts can communicate with one another about trades.

We have an earnings template which is searchable so you can run a screen based on buy-side consensus. We believe that’s much more valuable than sell-side consensus.

(Teten note: this reminds me of Novus, as well as some of the other competitors I blogged about earlier.)

Phil Pearlman, Stocktwits

A community built atop Twitter

We’re getting a lot of people, including amateur investors, professional investors

There’s a high correlation between people we see subjectively as being experienced, and the number of followers they have

We have 2 semantic tags: 1) Put $ in front of a ticker, or:

2) general market comment: $$ at beginning or end of tweet.

Certain stocks are very popular on certain days.

Finance websites usually have huge dropoff on weekends. So in response, we’ve set up programming on weekends, where professionals do Q&A.

We also have a discussion, Macrotwits, Sunday night. Our speaker will advance a global macro thesis and debate it.

Rikki Tahta, Covestor

Our goal is to democratize fund management. We don’t care about what you do ; we care about what you invest in.

(Teten note: I like his model, but I would never be a customer. It’s like Marketocracy; there’s so much noise in the data that I’m very uncomfortable delegating my investing decisions to someone else’s etrade account. Investing is not a democracy; it’s a game rigged in favor of the professionals.)

Most of the tools for investing are available free on the web.

BofA has even launched a free market trading platform.

In 2000, a big change in UK investment research : Marshall Wace led a movement towards ‘Alpha Networks’: a focus on actionable ideas instead of just opinions. They then quantified who gave the best advice and allocated trading flows instead. This concept never took off in the US.

This was a complete disassociation between brand name of the institution. We said investment talent does not logically have to be inside a financial institution.

Our principals:

– Treat anyone as a fund manager. But, they have to be investing real money, which we verify. We also require full transparency, so you can’t selectively share your trades. We create a Morningstar tear sheet for individuals.

– Find best and invest alongside. Covestor replicates in your own account what other people are doing. Madoff is something of an inspiration: We think you should keep your money in your own account, and just take advice from others. This is like a distributed UMA. Our investors can treat their own account like a fund of funds.

– Benefits for investors. More choice, more control, more transparency. This is what big banks give people with $30m in assets. This is a better way to get active management

Roger

Does community matter?

Rikki

It matters less to us. Our focus is building an ability for an individual to invest with better resources than he would otherwise.

Divya

Credibility matters. We help people vet out their ideas.

Stacy

Community definitely matters.

Phil

We have people who make a lot of bold calls. 50% of the time they’re right. We find out what they’re really like when they admit (or don’t admit) their mistakes).

Divya

If you hold a position, you have strong incentive to publicize why you hold that position. The guys who run their own funds are happy to discuss. The junior guys are nervous about ticking off their bosses. The people at very large hedges (e.g., och-ziff) and large investment banks are more hesitant to talk about their positions.

Phil

Ego

Rikki

People who are great performers but don’t communicate, don’t attract as many investors as those who can do both. The former is a much bigger driver than the latter. (Teten note: Jim Cramer is a far better performer than investor.)

Roger

Who gets into the community?

Stacy

We have very strict criteria for joining. We independently verify that a person is who he says he is. The person must be an active participant in the financial markets. This ticks off a lot of Alphaville readers who did not qualify for entry into the Long Room. There was a lot of angst over this among some readers. We don’t allow people to discuss specific trades. Most of the discussion is about sectors/macro issues. So pumping and dumping don’t happen.

Because people are anonymous, talent will out. People decided whether to trust the source or not based on commentary.

Rikki

The only hurdle is a $10,000 account. We run rankings on 78 different criteria. I learned this from Thomson: the more rankings the better.

Divya

Screening process is viewed positively. They have to work at a reputable fund, or submit a quality writeup showing they fit in.

Phil

We earlier built a vote up/vote down feature, but we found we didn’t need it. The crowds made the picks for us. We subjectively made picks of who we thought was most value-added. The better people were building large followings.

Divya

if we hit our targets, we’re very monetizable. Our content has tremendous value. We could charge our members for access. Set up section on website for outsiders to access our content for a fee. We could license our content to SeekingAlpha for a fee.

Phil

We view ourselves as a farm system. We’re launching next week 2 premium products with two guys who are pros, and have built significant findings: Brian Shannon (technician) and Joe Donahue (hedge fund manager) . Next product will be options product.

In finance vertical, people will pay for information.

Stacy

I work for a news organization..that itself is a problem. We’re one of the few parts of the FT which is completely free. You dont have to be a FT subscriber to get into Long Room. This is a constant source of friction between editorial team and ad team. We think being free is critical to our success in getting the community where it is. We’re a loss leader. We do sell advertising.

Alphaville readers are much more sticky than FT.com readers. Our uniques and repeat visits are very high. We have people who are constantly updating RSS feeds.

Rikki

We haven’t launched revenue model yet. We’ll charge investors a management fee.

Gary Mueller

Which B2B communities are making money now, besides your own?

Roger

Gerson Lehrman Group. Revenues around $300m, valued at $1b by Silver Lake. 280,000 experts.

Stacy

Bloomberg. They own the major messaging system used on trading floors. They were a community before people talked about communities.

Rikki

Phil

Look at ResearchEdge in New Haven.

Teten

How can users manipulate each of these sites; how are your users doing so now; and how are you defending?

Phil

We eliminated microcaps.

We also monitor the stream very closely and remove anything that smells funny.

Divya

We think reputation is the solution. Other users can rate content.

Stacy

We allow people to use pseudonyms. A certain analyst at a bank kept posting “CIT looks great today.” We emailed him at his work address, and that put a stop to him doing that.

We’re very strict on copyright and libel issues; as a news organization our awareness of those issues is high.

Wachtler:

What sites do you recommend for discussion of macro issues?

Roger

Use disqus to track individual comment streams, which creates a community around a comment thread.

Phil

9pm Sundays: Gregor Macdonald discussion. We squeeze a lot of meaning into 140 characters.

Stacy

Zerohedge came out of nowhere and has really taken off. We’re sensitive to paranoid about whom we link to, since they can be thought of as sources. Look on our website for links to blogs we think are most worth reading.

Filed Under: Chapter 08: Social Network Sites / Virtual Communities, Events, Social Media Industry, Social Media Sites

Notes on BRITE Workshop on Online Communities, at Columbia Business School

10/17/2008 by David Teten

Following are my notes on the BRITE Workshop on Online Communities, at Columbia Business School

Community as Part of Your Site Offering: Strategy from 50,000 Feet and Tactics from the Trenches
Sylvia Marino, Executive Director, Community Operations, Edmunds.com

3 person staff running this. I’m the Executive Director of Community Operations. I have my own P&L. We get profitable quite early in the year. I have a community manager, who deals with moderators and members. Senior Product Manager who makes sure community is integrated throughout the site.

We sit in the media group, separate from editorial, but equal to them

Our membership agreement is one of the most copied on the Web

We’ve banned a user and sued him to do that

Consumers engage with others, editors, industry experts, manufacturers, experts

General rule: no soliciting

A: Why do you have both Forums and Social Q&A?

A: Q&A is for quick response.

Forums is for longer-term dialogue

Our customers engage in Edmunds, Carspace, and also elsewhere: YouTube, Twitter, Facebook, widgets, mashups, RSS

Our community tools (e.g., Twitter) have empowered editors.

We have lots of moderators, most of whom are part-time

Consideration Marketing strategic placement based on what the contest is.

Advertisers used to worry about seeing their ad next to negative conversation but that’s now rarely true. Most advertisers are doing packages.

We’re #3 automotive info site, after General Motors (whole network) and eBay motors . So we’re the only neutral information site.

We use NetworkedInsights, which measures your ROI on your community activity.

Every page and every product is a community opportunity

Read customers.com by Patricia Seybold. First figure out the customers’ needs, and then see if you really need Twitter, blogs, podcasts, Facebook, etc.

We’re a private family-owned company (Steinlauf family)

Dealers tried to co-opt our service to promote themselves. Customers didn’t like having them in forums, but wanted to know about good dealers. So we added dealer ratings/reviews, and now local auto repair service ratings /reviews.

We decided that thinking that our users could spell was a really radical assumption.

—————————————–
Interactive: Creating Experiences For Online Communities
Bernd H. Schmitt, Professor, Columbia Business School, best-selling author, “Big Think Strategy”, with Aliza Freud (CEO Shespeaks), Sylvia Marino, and Olivier Toubia

Q: Who participates in these communities?

Marino: it’s people with needs. Although I often wonder if these people have jobs. For support , to give & receive information, and entertainment. I have a federal court judge, to a woman with 9 kids. I have people who are in every day, and people who come in once every 3 years when their lease is up.

Freud: People of all ages are online, but their purposes vary widely. Moms often go online to monitor what kids over age 13 are doing.

Q: Comment on manufacturer-owned sites.

Marino: User will always have suspicion that negative comments are edited out. When we get complaints from car manufacturers about what is written on our site, our response is always, ‘make better cars. Treat your customers better.’

Marino: some years ago L’Eggs launched an online community for pantyhose members. Real women said, ‘women don’t want to talk about pantyhose’. But it turns out, there were people who wanted to talk about pantyhose: duck-hunters and cross-dressers.

—————————————–

Integrating Online Communities: From service and product forums to a holistic approach to customer communities
Richard Binhammer, Conversations, Communities and Communications, Dell, Inc.

“Dell has been a leader in using social media to engage its customer community in tech support, product development, and public relations. Initiatives have included corporate blogs, customer-to-customer support (C2C) forums, IdeaStorm for idea generation, online videos, and ratings & reviews. Richard Binhammer will discuss Dell’s current community initiatives and future plans to integrate these diverse programs into a holistic approach throughout the company.”

Launched online communities since 1996.

There are 4000+ conversations about us every day.
We decided to listen, learn & participate.
We estimate we have 2b interactions with clients evey day. IdeaStorm has 9800 customer ideas so far.

Main channels now:
– resolve dissatisfiaction
– Join conversation
– Share content & collect ideas: StudioDell, IdeaStorm, Blog roundtables, Second Life, Digital Nomads (powered by Dell but not officially a Dell site), Regeneration.org (powered by Dell but not officially a Dell site)
– Tell our story: Direct2Dell blog

We’ve done $0.5m in revenues on twitter (from DellOutlet.com)

Our premise: we are a listening company.

When there’s a dispute, we try to take it offline, because of our privacy policies. To solve your problem, I need your Dell ID and other information. We then cross our fingers that the customer will acknowledge that we solved the problem. 90% of the time they will do so.

We are evolving to a model where we don’t treat online as a special type of media. Core group of 40 people in conversations with community team.

Social media is a phenomenal early warning system.
I can name 3 issues (e.g., laptop batteries) where social media warned us 3.5 weeks before anything else of a major issue.

I’ve probably covered half my salary in computer sales.

—————————————–

From BarackObama.com to AT&T: Using online communities to engage, energize and mobilize constituents
Thomas Gensemer, Managing Partner, Blue State Digital

“With nearly a million members, the My.BarackObama.com social network has helped to win a presidential primary, raise enormous funds online, and reshape the role of the Internet in political organizing. The company behind the social network, Blue State Digital, has worked with more than 100 clients in politics and business, to develop new media strategies to grow relationships with customers and advocates. Managing partner Thomas Gensemer will discuss how they have worked with the Obama campaign and clients such as Stonyfield Farms and AT&T to energize and mobilize constituents on their behalf.”

Our tools & programs: the basics. Easy signup. Email broadcast. Fundraising. Event management. Surveys, quizzes, polls. Petitions, tell a friend.

1.6m active profiles.
Over 50K groups & circles
Over 250K user-organized events

List power:
Active users (about 5% of active signups)
One-time users
Profile owners
Low-level actions
Basic signup (deadbeats >35%)

93% of Americans expect companies to have a presence in social media.

Why network?

– self expression & ego
– utility
– Exhibitionism/voyeurism
– Reputation (Linkedin)
– Altruism (actblue, my.barackobama.com, angie’s list)

If you had 10 of your most loyal customers in a room, what would you have them do?

I don’t believe that everyone should have a social network.

1/10 of Best Buy employees have created a profile on BlueShirtNation.com

BMW’s site on Facebook makes sense. It doesn’t require people to join a new network.

Al Gore’s “We” social network hasn’t taken off, because it’s not tied to face-to-face local events. What can people organize around?

Analysis: why doesn’t Whole Foods have a real social network? There’s real affinity, real physical presence.

Key Lessons

Not all networks utilitarian; in fact, most won’t offer utility.
Need shared affinity
Need low barrier ‘ask’
Need ongoing engagement tactic (e.g., local meetings)

If you’re a ‘deadbeat’, you get a ‘thank and spank’ message saying, ‘0.5m people have signed the petition; why not you?’. We work with an organization called Wal-mart Watch.

If we had done what Kerrey did, focusing on MySpace / Facebook, we would be very limited in our ability to message people. We wouldn’t own the data.

110 people now work in new media for MyBO, including people in all 50 states.

Filed Under: Chapter 04: Social Software Industry, Chapter 08: Social Network Sites / Virtual Communities, Events, NextNY

Dr. Eric Clemons, Wharton Professor, on FirstWivesWorld.com/Online Networks

10/6/2008 by David Teten

I recently attended a private talk by Dr. Eric Clemons, Professor of Information Management at The Wharton School, at the offices of www.firstwivesworld.com, the first social network and community dedicated to women transitioning through divorce. He is currently creating a case study on the site. I definitely love their name!

My notes:

He avoids being an investor in companies he profiles/analyzes.

Quoting a panelist from a panel he moderated: “We may not do the deep analysis of traditional journalists, but we’re so wired. We’re a collective mind.”
“We don’t need fact-checkers. We don’t need editors”.

Is the internet a breakthrough in human communication?

Social networks still have norms, which constrain what you can do.

Superficial monetization of a social network with advertising is a failure, because it doesn’t fit the social norms.

In beginning of radio: there was no programming because there was no one listening. RCA owned a radio station and made radios. They solved the chicken & egg program by giving away thousands of radios in NY which were tuned to only 1 station, theirs. Then they could go to media guys, and tell them 100% of NY radio market is listening to RCA. Now we can go to Colgate and sell advertising.

Have you ever noticed that all the ads on the different channels run all at the same time? Because you agreed to be captive in exchange for free content.

BUT the net is entirely voluntary. It’s like showing up at a medieval faire.

Most attempts to monetize the net are ill-conceived at best to offensive.

British Airways used to have a promotion: if you buy a 1st class seat, you could bring your wife. Problem: people would bring their mistresses.

Facebook Beacon is making the same mistake. If I buy black lacy lingerie, 3 possibilities:
1) bought it for myself
2) bought it for wife
3) bought it for another woman

In all of these scenarios, I don’t want my wife / network to know about this.

My first wife left (rightly). She said, “During the day, I’m first in my class at Cornell Law. I come home and I do your cooking. Do your own cooking!”

Ultimate terror: 2:45am. If I need to whine, the only person who will listen to me whine is the reason I’m whining.

When I was 25 and my wife left, I was disoriented. It had been my life, my car. When she left, my network fell apart. We have a group that is in need but too embarrassed to ask.

I had grad students whom I paid to play Second Life, and another whom I paid to play World of Warcraft. One was a jock, who created a character called Sweetie. He would send her to bars, salsa with other characters, and then watch her be violated.

No one on a dating site wants ONLY a virtual relationship.

3 P’s of a successful online network
1) Personally relevant. If it’s not relevant, it’s just bad TV.
2) Participatory
3) Physical transition

The hard part of a social network is monetizing it.

How would you feel if a woman you met on First Wives World said, “I’m a therapist, and I want to be paid for providing you some counsel.” You have to be careful about violating norms.

I have a freshman, who has a company. You send him a text message, and he’ll forward them to everyone you know. E.g., when Heath Ledger died, I got 70 messages. Some other faculty said, they had to cancel classes, because everyone was either texting or crying. The students say they get 10 messages/hour, except Friday/Saturday night when they get 40 messages/hour.

The people we’re trying to capture are ‘digital virgins’. I want them to become digital residents.

A lot of people freeze halfway through the registration process on First Wives World. As soon as my activity online is linked to my real identity, I’m nervous.

We’ve done studies of the depth/loyalty of the average 19-year-old employee. They’re both cocky & ignorant.

The alternative to advertising is letting users design it.

Here’s what FirstWivesWorld should do. Tell ETrade: we won’t take your ads. But give us $0.5m to do research on needs of divorced women with money. Because we did the research together, you have an exclusive on this relationship. You cant get this knowledge from anyone else. This is not giving an exclusive on banner ads.

Bud spends $.75b on promotion. Kraft hasn’t gotten past the model of: we’ll sell a product the buyer doesn’t really like, but he’ll buy it if the price is low enough . We call this promotion, even though neither the buyer nor the seller is happy with the transaction.

Companies have both a promotion and an advertising budget. There’s not as big a pressure to justify ROI on the promotion budget.

The flush toilet and the elevator made cities possible.

The iphone may be as big as the automatic transmission.

If YouTube collapses the public broadcasting system, the culture goes away.

We are teaching people to use itunes as a coping mechanism. That is emerging spontaneously from the community.

Filed Under: Chapter 08: Social Network Sites / Virtual Communities, Events, NextNY, Social Media Sites

Free Speech and Censorship in Online Communities

1/2/2007 by Scott Allen

Every so often in the business-oriented online communities in which I participate, the issue of free speech and censorship comes up, usually from someone (or several someones) who is testing or pushing the envelope of the acceptable boundaries within the community — profanity, flame wars, etc.

Is free speech an absolute right within online communities? Can an online community, regardless of its size and membership requirements, establish and enforce a more restrictive code of conduct?

There is a long, well-established precedent for moderation/governance in online communities — even ones that are open to the public. Whether it has been tested for constitutional validity in court or not (and I haven’t found any court cases, but would greatly appreciate any references anyone may have), online communities have for years been in the practice of having codes of conduct that were far more restrictive than constitutional protections. Even large, open membership communities have moderators who are able to edit or delete posts and suspend or eject members who violate those codes of conduct. To say that the boundaries of constitutionally protected free speech is applicable to any privately-owned online community is to go contrary to decades of business practices.

Do blogs change this? What about sites like Gather, Ecademy or AlwaysOn, in which individual blogs are aggregated or displayed in the front page and other pages? One could make the argument that blogs are somehow different because of the fact that they are an individual voice rather than a community space. However, the aggregation of them on the front page and the nature of the threaded comments would, I think, negate any such argument. The site may call them blogs, but if they’re aggregated and allow comments, they’re still really just one big threaded discussion forum. I doubt a court would see a substantial difference simply based on the slight technical difference.

Even so, most hosting companies, including blog hosting companies, also have terms of service that are more restrictive than free speech limits, typically restricting hate speech and pornography, among other things. For example, WordPress.com prohibits the use of PayPerPost. Is that a violation of a blogger’s right to free speech?

Under the Uniform Commercial Code, we all have the right to voluntary restrict our free speech by contract, and when we join an online community we are doing just that — subject to whatever the terms of service are. In fact, the contract doesn’t even have to be explicitily signed in order to be in effect. Consider that when you walk into a theater or restaurant, you give up some of your free speech rights. Do anything that is significantly unpleasant to other patrons — talk too loudly, let your kids run wild, etc. — and you’ll be warned and eventually ejected.

Why would anyone expect an online community to be any different?

You do have the right of free speech, but the owners of a community also have the right to establish and enforce codes of conduct within the community, and be joining that community, your right of contract supercedes your right of free speech.

So when you find yourself bumping up against the boundaries of behavior in an online community, you might want to consider whether that community is really the right community for you. If so, then you can either adapt your behavior to the code of conduct or you can use persuasive means to try to change the code of conduct. But don’t make cries of “Censorship!” — you gave up that right when you joined.

Filed Under: Chapter 08: Social Network Sites / Virtual Communities, Chapter 13: Netiquette, Tips

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