When the gods dance...

Saturday, June 30, 2012

Twin Peaks - In Dreams

A candy-colored clown they call the Sandman
Tiptoes to my room every night
Just to sprinkle stardust and to whisper
"Go to sleep, everything is all right"

I close my eyes, then I drift away
Into the magic night, I softly say
A silent prayer like dreamers do
Then I fall asleep to dream my dreams of you

In dreams I walk with you
In dreams I talk to you
In dreams you're mine all of the time
We're together in dreams, in dreams

But just before the dawn
I awake and find you gone
I can't help it, I can't help it, if I cry
I remember that you said goodbye

It's too bad that all these things
Can only happen in my dreams
Only in dreams
In beautiful dreams

Tech sounds that won’t ever come back

What used to be state of the art devices a few decades ago are now totally outdated and are no longer produced. Here are the characteristic tech sounds which you are unlikely to hear today.

Dial-up Modem Handshake

The Mac OS “Uh-Oh” Sound

VHS Rewind

The Whir of a Floppy Disk Drive

Dial Tone

Busy Signal

Rotary Phone Winding

“You’ve Got Mail!”

Windows 95 Shutdown Sound

Dot Matrix Printout

CRT TV On and Off Sound

Clicky Keyboard

Source: link


12 Extremely Helpful Photo Editing App Cheat Sheets

When working in any photo manipulation package, and especially when first starting out, it is very important to develop good habits. One habit you need to develop early is the use of shortcut keys instead of menu buttons. This will dramatically increase speed once you practice and get use to it.

To help in your quest for increased productivity here is a list of some of the best cheat sheets you can find for Photoshop, PS Lightroom, PS Elements, Apeture, and Gimp.

Adobe Photoshop CS4 Keyboard Shortcuts

Adobe Photoshop CS4 Keyboard Shortcuts

Adobe Photoshop CS3 Keyboard Shortcuts

Adobe Photoshop CS3 Keyboard Shortcuts

Photoshop Lasso Tool Cheatsheet

Photoshop Lasso Tool Cheatsheet

Adobe Brush Tool Cheat Sheet

Adobe Brush Tool Cheat Sheet

Adobe Pen Tool Cheat Sheet

Adobe Pen Tool Cheat Sheet

Photoshop Elements 7 For Dummies Cheet Sheet

Photoshop Elements 7 For Dummies Cheet Sheet

Photoshop Toolbox Reference

Photoshop Toolbox Reference

Adobe Photoshop Lightroom Cheat Sheets

Adobe Photoshop Lightroom Cheat Sheets

Photoshop Black and White Cheat Sheet

Photoshop Black and White Cheat Sheet

Apple Aperture Cheat Sheets

Apple Aperture Cheat Sheets

Gimp Quick Reference Card

Gimp Quick Reference Card

Photoshop Secret Shortcuts from Web Designer Wall

Photoshop Secret Shortcuts from Web Designer Wall

The Weariness of the Self

The Weariness of the Self

Depression is the guardrail of the person with no road map.

Versace Ad/NYT Style Magazine/Winter 2010

In the 16th century, melancholia was the elective illness of the exceptional man, of he who had nothing above him. During the Romantic period, it stood at the crossroads of creative genius and madness. Today, it is the situation of every individual in Western society.

Depression is a pathology of time (the depressed person has no future) and a pathology of motivation (the depressed person has no energy, his movement is slowed, his words slurred). The depressed person has trouble forming projects; he or she lacks energy and the minimum motivation to carry them out. Inhibited, impulsive or compulsive, she has trouble communicating with herself and others. With no project, motivation or communication, the depressed person stands in exact opposition to our social norms.

Depression and addiction are names given to the uncontrollable, which we encounter when we stop talking about winning our freedom and start working on becoming ourselves and taking the initiative for action. They remind us that the unknown is part of every person – and that it always has been. It can change but never disappear: that is why we never leave the human realm. That is depression’s lesson.

Alain Ehrenberg, from The Weariness of the Self: Diagnosing the History of Depression in the Contemporary Age, McGill-Queen’s University Press.

THIS IS A TRAGEDY: States Divert Foreclosure Deal Funds

Billion Dollar Bait & Switch: States Divert Foreclosure Deal Funds

A foreclosed home stands boarded up on February 9, 2012 in Islip, New York. (Getty Images)

May 24, 2012: This post has been updated to clarify Virginia’s use of its settlement funds.

States have diverted $974 million from this year’s landmark mortgage settlement to pay down budget deficits or fund programs unrelated to the foreclosure crisis, according to a ProPublica analysis. That’s nearly forty percent of the $2.5 billion in penalties paid to the states under the agreement.

The settlement, between five of the country’s biggest banks and an alliance of almost all states and the federal government, resolved allegations that the banks deceived homeowners and broke laws when pursuing foreclosure. One part of the settlement is the cash coming to states; the deal urged states to use that money on programs related to the crisis, but it didn’t require them to.

ProPublica contacted every state that participated in the agreement (and the District of Columbia) to obtain the most comprehensive breakdown yet of how they’ll be spending the funds. You can see the detailed state-by-state results here, along with an interactive map. Many states told us they’ll be finalizing their plans in the coming weeks. We’ll be updating our breakdown as the results come in.

What stands out is that even states slammed by the foreclosure crisis are diverting much or all of their money to the general fund. In California, among the hardest hit states, the governor has proposed using all the money to plug his state’s huge budget gap. And Arizona, also among the worst hit, has diverted about half of its funds to general use. Four other states where a high rate of homeowners faced foreclosure during the crisis are spending little if any of their settlement funds on homeowner services: Georgia, South Carolina, Wisconsin, and Maine.

Overall, only about $527 million has been earmarked for new homeowner-focused programs, but that number will go up. A number of large states — in particular New York, Nevada, Illinois, and Florida — have indicated they’ll be dedicating substantial amounts of the funds to consumer programs, but haven’t yet produced a final breakdown.

Iowa Attorney General Tom Miller, who led the coalition of attorneys general who negotiated the deal, argued that only a very small portion of the settlement was being diverted and it will “overwhelmingly” benefit homeowners. The centerpiece of the settlement is a requirement that the banks earn $20 billion in “credits” by helping homeowners in various ways — from reducing principal on underwater homes to bulldozing empty ones. Because the system awards only partial credit for certain actions, Miller said the settlement would bring more than $20 billion in benefits to consumers — he estimated $35 billion. Critics contend those sorts of numbers far overstate the benefits to consumers, because the banks can claim credit for some activities that were already routine.

The banks will only pay $5 billion in actual cash penalties under the agreement. The largest chunk, $2.5 billion, goes to the states’ attorneys general, while about $1 billion goes to the federal government. $1.5 billion will be sent to borrowers who lost their homes to foreclosure during the crisis in the form of $2,000 payments.

Compared with the billions going to consumers, Miller contended, $1 billion going to states’ general funds was minimal. It was always expected that the states would divert some of the money to their general expenditures, he said.

But when announcing the deal, state and federal officials said the states’ $2.5 billion would mainly fund housing counselors and legal aid organizations. Studies have shown homeowners stand a better chance of avoiding foreclosure if they get the help of a counselor, and homeowners lack legal representation in the overwhelming majority of foreclosure cases. The money was divvied up among the states according to a formula that took into account how large the states were and how hard they were hit by the crisis.

As you can see from our breakdown, 15 states have so far allocated over half their amounts to consumer-focused efforts. But the uses range widely. In Ohio, $75 million has been set aside to destroy some 100,000 abandoned homes. In Minnesota, the state is setting up a fund to compensate victims of the banks’ foreclosure abuses.

In two of the states most affected by the foreclosure crisis, California and Arizona, the attorneys general had intended to use most of their funds on homeowner-related efforts before the governors intervened.

After California Attorney General Kamala Harris prepared a proposal to spend the money on counselors, lawyers, and other consumer-related efforts, Gov. Jerry Brown released a proposed revised budget last week that used the state’s $411 million for existing housing programs. In other words, the money would just be used to help fill the state’s $16 billion budget deficit. Harris opposes the move, which still must make its way through the state legislature for it to become law.

The $25 billion settlement: Breaking it down

    $20 billion in credits:
  • $10 billion for cutting debt for struggling, underwater homeowners
  • $7 billion for various other forms of homeowner relief
  • $3 billion for refinancings for underwater homeowners
    • $5 billion in cash payments:
  • $2.5 billion to the states’ attorneys general
  • $1.5 billion to borrowers who lost homes to foreclosure
  • $912 million to the federal government
  • $90 million to various state organizations
  • In Arizona, the attorney general had similar plans. Then state lawmakers and the governor took $50 million of the $98 million coming the state’s way. Although the budget legislation stated that the money should be used to fund departments related to housing and law enforcement, there will be no new spending. Housing advocates are readying a lawsuit to stop the transfer and expect to file in the coming month, said Valerie Iverson, Executive Director of Arizona Housing Alliance.

    Several other large states have diverted most or all of the money:

    • Georgia directed all of its $99 million to programs designed to attract new businesses. A spokesman for the governor said, “He believes that the best way to prevent foreclosures amongst honest homeowners who have experienced hard times is to create jobs here in our state.”

    • In Missouri, the state legislature used almost all of its $39 million to fund higher education, which had been slated for cuts. The attorney general’s office kept $1 million for hotlines and outreach related to the settlement.

    • Virginia put the entirety of its $66.5 million into the state’s general fund without restrictions. In March, Democrats proposed a budget amendment that would funnel all of the money to foreclosure prevention and homeownership programs, but it was voted down. $7 million was ultimately allocated to a state fund for housing programs. While the appropriation was not explicitly tied to the settlement in the final budget, lawmakers involved in the negotiation said that the funding was as a result of the settlement.

    • Wisconsin Governor Scott Walker announced soon after the settlement was finalized that the bulk of it—roughly $26 million—would go into the state general fund. Two million went to an economic development fund, including funds for demolition in blighted neighborhoods. Many state Democrats and housing advocates opposed the plan, but failed to block it.

    • Texas directed its $135 million to the state’s general fund, of which $10 million has been allocated for basic services to low-income Texans. The legislature won’t formally decide what to do with the rest until next January because it meets only once every two years. John Henneberger, co-director of Texas Housers, an affordable housing group, said that in speaking to legislators, advocates had “received no assurances that this money will be used according to the purposes of the settlement.”

    ProPublica will continue to track how the funds are being used in the coming months. Check out our breakdown and interactive map for updates.

    One year after the riots of June 15, 28 & 29 2011 - Split normality


    Russia's nuclear sledgehammers

    Russia's nuclear sledgehammers

    Russia's nuclear missile bunkers reportedly come standard-issue with a sledgehammer whose designated purpose is smashing open the safe containing the launch-codes, should the combination not work:

    The sledgehammer's existence first came to light in 1980, when a group of inspecting officers from the General Staff visiting Strategic Missile Forces headquarters asked General Georgy Novikov what he would do if he received a missile launch order but the safe containing the launch codes failed to open.

    Novikov said he would “knock off the safe’s lock with the sledgehammer” he kept nearby, the spokesman said. 


    China Caught the U.S. in Manufacturing, High-Tech Weapons Might Be Next

    It’s no secret that China (and many other nations) are catching up with the U.S. in education and manufacturing. A quick Google search can reveal the massive gains China’s manufacturing and education sectors have made over the last three decades. Experts have long warned that the U.S.fast slipping far behind it’s industrialized peers in terms of critical education sectors;  science, technology, engineering and math.

    The worst part they say; as the U.S. is slipping, China is rising. First, it mastered — some would argue, it still is mastering — basic manufacturing and it has begun investing heavily in higher-end engineering and scientific education, paving the way for it’s rapid gains in high-tech manufacturing. Now, China is starting to turn this investment in engineering and scientific knowledge toward producing high-end military gear.

    Just look here, here and here to see how fast the Chinese military is growing. This great technological leap forward owes much of its success to China’s large investment in an education system that produces far more engineers each year than the American university system — something you’ll hear any American defense executive lament. These engineers — with plenty of help from information acquired from America and Europe via espionage, reverse engineering Western gear and partnerships with Western companies — have helped design China’s new crop of fighter jets, anti-satellite missiles, space planes and more.

    Chinese engineers have also designed the sophisticated cyber weapons that have stolen reams of information from American defense contractors and the Pentagon to fill in gaps in Chinese weapons designers knowledge. Meanwhile, American companies like GE are partnering more and more with Chinese firms such as COMAC to produce everything from jet engines to cutting edge avionics, as we’ve said above, these partnerships provide China with information on how to catch up with the the U.S.

    So while China’s manufacturing and engineering knowledge base might not yet be at the same level as America’s, it’s getting better every day as its engineers take on more challenging projects and learn from their partners at world-class companies like GE.

    To learn a bit more about this issue and what can be done to keep the U.S. on top of its game in the face of rising competition from China, DT asked Naval War College Professor, Kathleen Walsh for her take on all this. Here’s her bio, needless to say, she’s got the ear of plenty of decision makers and influencers when it comes to China policy. Click through the jump to read her answers to our questions.

    When will China catch the U.S. in terms of high-end engineers capable of designing and building quality, high-tech goods and military equipment?

    In terms of sheer numbers, it won’t take long.  Of course, quality is what matters here, and that will
    take longer, probably a decade and perhaps much more.  I’m told by industry experts that Chinese engineers coming out of Chinese schools are quite proficient in basic engineering skills, but that they
    typically tend to lack the independent initiative and innovative approaches that at least Western multinationals are seeking and tend to be important in advanced science and engineering.  So, I think it will
    be some time (10+ yrs) before they’re able to produce similarly advanced, independent engineering as US, with some exceptions possible. But though they might not “catch us,” that is not to say that they won’t
    be marginally innovative or adaptive in important ways in the meantime – something we need to be cognizant of.  Of course, our own labor force in this sector is ageing, retiring, and largely comprised of foreign
    students.  So I’m not sure this is the right question — us v. them. Perhaps it is what we can continue to do to attract high-quality engineers wherever they come from and however advanced China might
    become.  That is the nature of the current competition — growing and attracting the world’s best STEM talent.  We’ve been very good at this since the World War II era; many studies suggest policy reforms are needed to ensure we remain so, on which, in general, I concur.

    How soon will China make the leap from partnering/licensing/stealing western designs and tech to innovating its own game-changing technology?

     They are already in the process of doing so, at least in some select areas (info tech sector, especially).  The way I see it, China will continue to engage in all of these activities along the full spectrum of
    activities (from stealing/copying through independent innovation) for some time. The earlier stages, of course, help develop the latter, more advanced indigenous innovation capabilities China seeks. Multinational corporations know this, too, and seek to find ways to maintain their edge and advantage. It’s a two-way game.

    What are some of the potential roadblocks to China’s rise in these areas?

    Education, I think, is a big road block as it is something that is hard to “grow” fast (you can build a university but that is not the same as establishing a high-quality educational institution and faculty). China has some elite schools and faculty, but these are largely (not entirely) found in the eastern cities (Beijing, Shanghai,
    Guangzhou and some others). China’s military, defense industry, and researchers are still located in many cases in the Central-Western provinces. So, we’ve seen the military trying to employ (according to State plans) these elite universities for training, recruiting, and partnering as well as in assistance in building more universities in
    other parts of the country, as well as greater focus on attracting foreign experts, faculty, and foreign university programs. But this is, by its nature, a long-term solution to a current gap.

    How can the U.S. remain competitive?

    As indicated in my testimony and comments made in that hearing Q&A, I think there has been a tipping
    point that affects how the US must answer this question today. That tipping point is tied to the nature and evolution of globalization – which has seen the outsourcing and offshoring of manufacturing, followed
    by the same for R&D, and now, I think, of science itself — much of it to China. If science (basic and applied sciences) becomes a truly global endeavor in which China is a major player (as is becoming the case as China invests billions in it and attracts some of the world’s leading scientists, engineers, and innovators to its shores as well, at least for temporary stints in China), then this suggests to me that the US must find better ways to leverage this global trend –and China’s increasingly important role in it— rather than shy away from it or
    simply seek to control or contain it (which I think will yield diminishing returns at best and harm our own S&T efforts if we’re not privy what’s going on in China S&T by being involved strategically at least in part). The United States, European Union, and increasingly China (some might include Russia too) are among the few that, in a world of more global science, I think, are likely to continue to invest in a full spectrum of basic science, including frontier science; in a more globalized system where science and its results are more readily
    accessible (as it becomes more globally cooperative, outsourced, commoditized, and offshored), smaller countries will likely not feel the need to invest in such themselves — if they can access/buy from others,
    except in those areas in which they might have a scientific competitive advantage.  Every country wants to be more innovative and scientifically advanced in order to grow and advance their economy today. I think only
    some big countries like the US and China will have the ability to do so, which suggests to me opportunity and a need to be more engaged rather than operating in wholly separate spheres as in the Cold War era. This
    approach has its inherent dangers, but the tipping point to me is that the risks of NOT doing so as China becomes more scientifically advanced have begun to outweigh the risks inherent in doing so — and will grow.
    As such, I advised that we should be flooding the place (China) with students, scientists, and others to learn more about and be more involved in China’s science and technology efforts as a way to leverage this (their) investment (as they do ours and others’) and, most importantly, serve US national security interests

    I must, as you know, add a disclaimer that these are my own personal views and in no way represent
    US government, DoD, US Navy, nor Naval War College, which should be made clear in anything made public.

    Now, the rise of China and other nations isn’t necessarily a bad thing for the world. Still, if the U.S. wants to remain competitive to a rising China, it must invest more in its education system — part of that also means reforming the immigration system  and ensuring we have a level economic playing field to attract and keep the world’s best minds in our country. We’ve got the size, natural resources, a decent sized population, and for now, brainpower to compete with China, but unless we take a look at the numbers in terms of education, we may not always be competitive in the private sector or the defense arena.

    If you want more arguments of how China — and others — are rapidly moving forward while the U.S. risks being surpassed, read this depressing article called Why America Is Slouching Towards Third World Status by Harvard University’s Steven Strauss.

    Clashes between students and police in Santiago, Chile


    United Technologies sold China software for attack copter

    By Michael Winter, USA TODAY
    Updated 1d 2h ago

    Via DefenseTech

    United Technologies, one of the nation's biggest defense contractors, and two subsidiaries have admitted selling restricted military software that China used to build its first helicopter gunship, the Department of Justice announced today.

    Connecticut-based United Technologies, Hamilton Sundstrand Corp. and Pratt & Whitney Canada covered up the illegal sales by delaying their disclosures and lying to the government, the Justice Department said in its news release.

    The motive? Profit.

    In 2002 and 2003, Pratt & Whitney Canada sold China engine-control software that was made by Hamilton Sundstrand. Federal prosecutors say PWC "anticipated that its work on the Z-10 military attack helicopter would open the door to a far more lucrative civilian helicopter market in China, which according to PWC estimates, was potentially worth as much as $2 billion to PWC."

    The Justice Department says United Technologies did not disclose the illegal exports until investors questioned whether PWC's involvement with the Z-10 might violate U.S. law. Military sales to China were restricted after the 1989 Tiananmen Square massacre of pro-democracy demonstrators.

    For pleading guilty to violating the Arms Export Control Act and making false statements, United Technologies and its subsidiaries were fined $75 million. Of that, $20.7 million will to be paid to the Justice Department and $55 million to the State Department.

    But, as the company says in its news release, $20 million of the $55 million will be suspended "subject to certification and approval of qualifying compliance expenditures." And the $35 million will be paid over four years.

    As The Washington Post points out, United Technologies reported net sales of $58 billion for 2011.

    "Export controls are an integral part of safeguarding U.S. national security and foreign policy interests. As a supplier of controlled products and technologies to the Department of Defense and other domestic and international customers, we are committed to conducting business in full compliance with all export laws and regulations," said Louis ChĂȘnevert , United Technologies' chairman and CEO. "We accept responsibility for these past violations and we deeply regret they occurred."

    "These violations revealed important opportunities to strengthen our export compliance program. We have taken considerable steps to improve our export controls and to enhance our compliance infrastructure," he added.

    Here are the particulars of the scheme, according to the Justice Department:

    During the development phases of China's Z-10 program, each Z-10 helicopter was powered by engines supplied by PWC. PWC delivered 10 of these development engines to China in 2001 and 2002. Despite the military nature of the Z-10 helicopter, PWC determined on its own that these development engines for the Z-10 did not constitute "defense articles," requiring a U.S. export license, because they were identical to those engines PWC was already supplying China for a commercial helicopter.

    Because the Electronic Engine Control software, made by HSC in the United States to test and operate the PWC engines, was modified for a military helicopter application, it was a defense article and required a U.S. export license. Still, PWC knowingly and willfully caused this software to be exported to China for the Z-10 without any U.S. export license. In 2002 and 2003, PWC caused six versions of the military software to be illegally exported from HSC in the United States to PWC in Canada, and then to China, where it was used in the PWC engines for the Z-10.

    According to court documents, PWC knew from the start of the Z-10 project in 2000 that the Chinese were developing an attack helicopter and that supplying it with U.S.-origin components would be illegal. When the Chinese claimed that a civil version of the helicopter would be developed in parallel, PWC marketing personnel expressed skepticism internally about the "sudden appearance" of the civil program, the timing of which they questioned as "real or imagined." PWC nevertheless saw an opening for PWC "to insist on exclusivity in [the] civil version of this helicopter," and stated that the Chinese would "no longer make reference to the military program." PWC failed to notify UTC or HSC about the attack helicopter until years later and purposely turned a blind eye to the helicopter's military application.

    HSC in the United States had believed it was providing its software to PWC for a civilian helicopter in China, based on claims from PWC. By early 2004, HSC learned there might an export problem and stopped working on the Z-10 project. UTC also began to ask PWC about the exports to China for the Z-10. Regardless, PWC on its own modified the software and continued to export it to China through June 2005.

    In its report, the Post notes that "U.S. officials have long accused China of actively spying on the American defense contractors to steal intellectual property."

    Officials suspect, for instance, that stolen U.S. technology helped the Chinese build a stealth fighter jet, the J-20, and modify its cruise missiles to make them harder to detect.

    "By obtaining these materials illegally from the United States, China can save itself considerable time and expense needed to develop advanced military technology on its own," a federal law enforcement official, speaking on condition of anonymity, told the Post.

    DefenseTech posted a photo of the Z-10 back in February. It says the gunship is "based on the Eurocopter Dauphin light cargo chopper. You know, the same helo the U.S. Coast Guard uses for search and rescue and even combat air patrols over Washington, DC."

    Update Friday at 4:48 p.m. ET: The Project on Government Oversight has gotten ahold of documents filed by the government, including a statement of the charges, the guilty plea, and the deferred prosecution agreement.

    It also says that United Technologies "was the fifth largest federal contractor in fiscal year 2011 with $7.9 billion in contracts" and that the conglomerate "has 17 resolved misconduct instances and $465.9 million in misconduct penalties since 1995."

    COMMENT:  An Army private, the boy Bradley Manning, is being held for treason on suspicion of having passed classified material to the whistleblower website WikiLeaks.  These corporations are clearly, in my opinion, guilty of treason yet they get off with a $55 million fine (United Technologies reported net sales of $58 billion for 2011).

    Friday, June 29, 2012

    Morning Eclipse Tafreshi


    State Farm Secretly Gave $2.4 Million to Ill. Judge in $1B Case

    By Cynthia Hsu, Esq. 

    The following story serves as a lesson in common sense for corporations everywhere: don't cover up how much money you donate to judicial candidates.

    This is especially true if the judicial candidate you donated money to ends up voting in your favor in a billion-dollar case.

    State Farm Insurance is learning this lesson the hard way.

    State Farm allegedly gave campaign donations to Judge Lloyd Karmeier during one of the nation's most expensive judicial races in 2004.

    Judge Karmeier won that race, and became a member of the Illinois Supreme Court.

    He also voted to overturn a billion-dollar verdict against State Farm in 2005.

    At the time, it was known that Judge Karmeier received donations from State Farm during his judicial race. Karmeier declined to recuse himself.

    The State Supreme Court analyzed the potential bias at the time, and found none. They thought State Farm had only raised $350,000 of Karmeier's donations.

    Why would they think State Farm only raised $350,000? That's because $350,000 is the amount that State Farm told the court they donated when they were asked.

    An FBI investigation discovered that State Farm actually donated between $2.4 and $4 million in donations for Karmeier's judicial campaign.

    The startling amount of donations contributed by State Farm certainly paints Karmeier's ruling in a different light. It also creates a much bigger chance that the Judge Karmeier wasn't impartial.

    Several attorneys, including former U.S. senator Fred Thompson, have filed a class action suit against State Farm. They claim that the insurance company defrauded the court. They're asking that the court reconsider its decision to overturn the $1 billion verdict, according to the Chicago Tribune.

    So, State Farm, are you regretting your judicial campaign donations now?

    Related Resources:


    Yesterday, in Chile, 150,000 demonstrated for more affordable education.  A spokesman for The Confederation of Chilean Students (Confech) stated: “The government is right to be worried because we are dealing with a minister who bows to business. We want to say that while this happens, we will not be quiet. We went from a military dictatorship to a market dictatorship.”


    Thursday, June 28, 2012

    What Happened to Silicon Values?

    What Happened to Silicon Values?

    By Bill Davidow   Jun 25 2012, 11:51 AM ET 36

    Compare Mark Zuckerberg and Larry Page to the founders of Hewlett Packard and Intel, and you'll find a paradigm shift as to how the tech industry treats its customers.

    PRNewsFoto/Silicon Maps, Inc.

    The Facebook IPO brought with it a flood of questions about how Silicon Valley has changed over the decades. I must be getting old because many people assume that I watched Silicon Valley evolve, and ask me to comment on the changes I've seen.

    They assume correctly. I arrived in the San Francisco Bay Area as a young engineer in 1959, before there even was a Silicon Valley. Four years earlier, the physicist William Shockley had brought silicon businesses to the Santa Clara Valley when he founded Shockley Semiconductor Laboratory, and the transformation began. Out came the apricot orchards and in went Silicon Valley.

    At the risk of sounding like someone who remembers only the bright spots of a golden age, I think it's worth exploring some of the values of the leaders who first shaped Silicon Valley, because they provide a sharp contrast to those of recent Internet entrepreneurs. The values of Mark Zuckerberg of Facebook, Larry Page of Google, and Mark Pincus of Zynga are currently influencing not only the business decisions their companies make but also the values of many other new Internet businesses.

    When I arrived at Hewlett-Packard in 1965, the company was already a $300 million giant. Bill Hewlett's and Dave Packard's ideas and principles were in evidence everywhere. I learned a great deal listening to them in meetings and watching them manage. Dave's memorable quote, "More companies die of indigestion than starvation" -- roughly translated, "Focus, stupid" -- became one of my own guiding principles. I learned that sharp focus ensured great execution and created loyal customers. Dave's values became the company's values and the employees' values. His concern for the customer became the company's concern.

    The company was focused on delivering advanced technology of great value, then servicing and supporting the customer to make sure he derived value from what he bought. Customers trusted Hewlett-Packard. I remember one customer who so trusted the salesman who took care of his account that he let the sales rep purchase what he needed. That period of trust went on for a long time. The salesman told me his secret: He never bought anything for the customer that the customer did not really need.

    At both Hewlett-Packard and Intel, where I next worked, money was important -- but it wasn't the top priority. The goal was to do the right thing and do it well. If you did that, over time, rewards followed and shareholders supported your efforts. Intel and HP both eschewed the notion of two classes of stock, which gives disproportionate voting power to the founders -- something that is common in the valley now.

    Many other things have changed in the valley over the past five decades. I've become increasingly concerned about one thing that is seldom discussed: the valley is no longer as concerned about serving the customer, and even sees great opportunity in exploitation. We are beginning to act like the bankers who sold subprime mortgages to naïve consumers. In such an environment, we are less likely to create the role models of the past who guided the valley to its future.

    The unapologetic pursuit of wealth is perhaps the most obvious explanation. Less obvious is the loss of customer power.

    In the past, serving a powerful and demanding customer kept us honest. At the dawn of Silicon Valley, most companies sold products to industrial companies and the government. More often than not, suppliers were managed by purchasing agents who possessed power and a long memory. If you violated customer trust, you were severely punished. Sometimes you were cut off as a supplier.

    Many Silicon Valley customers are no longer industrial companies. They are consumers, not companies represented by purchasing agents, and those consumers have less power in dealing with their suppliers. (Nothing better gets a corporation's attention than a purchasing agent threatening to take away a $50 million order.) Instead of such people to keep us in line, we now have government regulators who are slow to react, subject to lobbying influence, and, in many cases, ineffective.

    Internet consumers get locked in to one company and find it difficult to escape. In the process, they lose their power.

    Facebook is a perfect example. You can spend a lot of time and energy learning the ins and outs of the site, and building your image on the site by posting pictures, videos, and messages. You spend a lot of time getting friends to pay attention to you, and you in turn spend a lot of time keeping track of them. If you leave Facebook, you leave both your virtual friends and your investment in the site behind.

    There is an ever-increasing list of companies that can leverage lock-in in the pursuit of big profits and high stock prices -- Microsoft, Apple, Google, Facebook, Twitter, Zynga, Comcast, and Amazon. The emerging market for Internet cloud services creates still more opportunities to lock in customers. Massive databases put a great deal of information about our personal lives in the hands of government and businesses that can leverage it to make profits.

    Lock-in creates dominant players -- witness Google, Facebook, Microsoft. And in this monopoly-driven environment, customers get exploited. Microsoft forces them to upgrade to expensive, overly complex, and bug-ridden software.

    Apple controls our virtual landscape, bounded by iTunes to the north, the iPhone to the south, the iPad to the east, and the iPod to the west, giving it increasing power to deprive customers of choice. It exercises that power aggressively. Google appears to have a culture that condones shamelessly violating consumer privacy. How else can you explain a company that bypasses Apple's iPhone privacy settings in a reported attempt to strengthen advertising revenues?

    It is hard to believe that Dave Packard or Andy Grove would ever tell a group of entrepreneurs that he did "every horrible thing in the book to just get revenues right away," or brag to trade publications that his company used behavioral psychologists to design "compulsion loops" into products to keep customers engaged. But Mark Pincus, the founder of Internet gaming giant Zynga, has done just that.

    When corporate leaders pursue wealth in the winner-take-all Internet environment, companies dance on the edge of acceptable behavior. If they don't take it to the limit, a competitor will. That competitor will become the dominant supplier -- one monopoly will replace another. And when you engage in these activities you get a different set of Valley values: the values of customer exploitation.


    Judge Says Universal Music Tried To "Dupe" Him In FBT-Eminem Case


    Yesterday (June 27) the California judge presiding over the damages portion of a lawsuit brought by FBT Productions against Universal Music Group ruled that FBT may amend its complaint against the major record label. In a decision that the Hollywood Reporter termed a "smack-down," Judge Philip Gutierrez suggested that Universal has been "bamboozling" and attempting to "dupe" him into overlooking an issue that could amount to substantially more money for the plaintiffs - and possibly other musicians who have filed similar lawsuits. Specifically, FBT asked to amend its "damages claim" because after the trial phase of the case it subsequently learned that not all money generated by foreign sales of Eminem songs returns to Aftermath, the Universal division that releases albums by Eminem. In fact, FBT found that Aftermath only receives 29% of revenue generated by Eminem recordings, while UMG receives 71%. Universal had argued that it was too late for FBT to include UMG's portion of revenues in the damages debate, even though UMG did not reveal that it retains the lion's share of net revenues. "Defendants [UMG] contend FBT was being 'coy,' and actually knew precisely the issue Defendants were raising," Judge Gutierrez wrote. "The Court finds it hard to swallow the assertion that in this hotly contested case FBT would have played possum on Defendants' summary judgment motion, just so FBT could attempt to raise this issue later in a supplemental complaint." [Full story: Hollywood Reporter]

    iHeartRadio Will Be Yahoo!'s Premier Digital Radio Service


    Yahoo and Clear Channel Media and Entertainment this week jointly announced a multi-faceted relationship that makes iHeartRadio Yahoo's premier digital radio service. According to a prepared statement, the deal involves the distribution and cross-promotion of premium content in addition to streaming a live concert series to the combined audience of the Yahoo! Media Network, which reaches more than 167 million monthly online users in the U.S., and CCME's 237 million monthly U.S. listeners. "Clear Channel has accelerated their digital strategy overnight," said Yahoo Interim CEO Ross Levinsohn. "Yahoo! is excited to be the exclusive digital streaming partner for the biggest music events of the year, including the iHeartRadio Music Festival and additional concerts. This partnership will expand our ability to provide consumers and advertisers with the best premium content available and provide Clear Channel with unmatched digital reach." Clear Channel CEO Bob Pittman added, "We were thrilled when Ross approached us about this partnership. We like the direction Yahoo! is going and by working together we can accelerate growth for the both of us." In a separate announcement earlier this week, Clear Channel revealed that both Cox Radio and Emmis Communications would be distributed as part of the iHeartRadio platform. [Full story: company statement]

    Sirius XM Internet Radio App Will Launch on Google TV


    Sirius XM Radio this week said it will launch its Internet Radio App on Google TV devices later this year, offering subscribers a way to access the satellite radio service's content in the home. A new SiriusXM Internet Radio App for Google TV will be made available as a free download from Google Play "soon," and marks the first time the company's programming will be available on a connected TV. "Working closely with Google, we developed the SiriusXM Internet Radio App for the new Google TV, giving subscribers another platform to listen to their favorite SiriusXM programming at home," said Sirius XM VP Sean Gibbons. "With SiriusXM on Google TV, we are giving even more consumers the ability to get the premium audio entertainment they enjoy from SiriusXM on their televisions." In a company statement, Sirius XM said subscribers now will have the ability to "fast forward" and "rewind" on many (but not all) channels; pause live programming; automatically start the current song playing from the very beginning; and go back in time up to five hours and hear previously aired programming on many channels. [Full story: Satellite Radio Playground]

    Future Of Music Coalition Argues Against UMG-EMI Merger

    The Future of Music Coalition - a nonprofit organization that supports musical artists - last week said it has serious issues with the proposed merger between Universal Music Group and EMI Music. In written testimony submitted to the Senate subcommittee on Antitrust, Competition Policy and Consumer Rights, FMC Deputy Director Casey Rae said that, "to achieve a robust and legitimate digital music marketplace, there must be active participation by a diverse array of players, as well as a high level of competition rather than market concentration. Even today, the major labels are able to dictate compensation structures on emerging platforms and tilt the balance in their favor through a range of demands on digital music services." Noting that independent and unaffiliated artists simply do not have the leverage to compete, Rae asserted that "more market power in the hands of fewer companies means that any influence we have - however slight - would be further diminished. Growing the legitimate digital music marketplace is in the best interests of the entire music community. This goal is not advanced, however, by further concentration in the recorded music industry." [Full story:mi2n]


    Yahoo And Spotify Announce Global Content Distribution, Promotion Deal


    It's been a big week for Yahoo! In addition to the pact it struck with Clear Channel's iHeartRadio (see above story) the company also announced a global content distribution and promotion agreement with digital music service Spotify. The deal enables Yahoo to integrate and promote Spotify's on-demand music service on Yahoo's Media Network, which reaches nearly 700 million unique users monthly. "We are really excited about the new Yahoo leadership team and are thrilled to partner with them to build great experiences around high quality content," observed Spotify founder/CEO Daniel Ek. "We want to light up the web with music and as Yahoo's global music partner we're able to reach their massive audience." In turn, Yahoo interim CEO Ross Levinsohn, added, "Delivering compelling premium experiences across screens is core to our mission. Spotify is the leader in the digital music field and together we can provide the 'soundtrack' for users around the world. What Daniel and his team are doing is changing an industry, and we're thrilled to be partnering with them." [Full story: News Release]

    Group Could Place Restrictions On .music Websites


    You know that .music domain name you've been thinking about registering after ICANN selects the organization that will govern that new extension? Well, at least one of them - a group calling itself Far Further - is planning on placing restrictions on anyone who wants a .music website, including membership in an industry trade group or royalty organization. So who is Far Further? According to documents received by Digital Music News (no relation to this newsletter), it is a group composed of the Recording Industry Association of America, the Recording Academy, ASCAP, SoundExchange, and 38 other organizations. In its filing the group states, "Domain registrations may be accepted, but will not resolve until the registrant has been identified and validated as a member of the music community via their membership in at least one existing association related to the creation and support of music. Should the registrant fail to meet the eligibility criteria, they risk the suspension and ultimately deletion or loss of their domain name. Verification of continued membership is required for renewal, to ensure ongoing eligibility." Of course, these stipulations raise a number of issues, such as what happens if a company gets booted out of a group based on a legal disagreement. In that scenario, the company risks losing its domain name, which could ultimately result in losing its entire business overnight. [Full story: Digital Music News]
    Al Bell Presents American Soul Music ... And American Soul TV

    If you're into classic and contemporary Soul, R&B, Blues, Gospel, Jazz, Hip-Hop Soul, Rap Soul, and Neo-Soul, we invite you to listen to Al Bell Presents American Soul Music. Former Stax Records owner and Motown Records Group President Al Bell personally has programmed this awesome radio station online, presenting your favorites from the 1960s and '70s [and some '80s], a lot of the best new music that's being released today, and some real gems you haven't heard in a long, long time. Come to www.AlBellPresents.Com
     and hear it for yourself!