Silicon Valley

Opportunity clicks

Why President Clinton's plan to wire the poor is a good start.

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A week ago, technology writer Todd Oppenheimer outlined the holes in a new Clinton administration plan to subsidize computers and Internet access for low-income families. ClickStart, Oppenheimer argued, would do more to benefit the Silicon Valley’s bottom line than to help underprivileged families. In an interview, B. Keith Fulton, director of the National Urban League’s technology programs and policy, argues an opposing view.

Between the government subsidies and family contributions at the core of ClickStart, it could easily be argued that the program’s participating technology companies are getting the equivalent of corporate welfare. Is there a risk that ClickStart will benefit Silicon Valley’s bottom line more than low-income families?

I don’t know that you should pit them against them each other. The point is, How do you get quality machines to a population that hasn’t benefited from dropping prices? You figure out some way to subsidize it so it’s affordable, and $5 a month sounds like a fair rate to pay for a device and Internet connectivity. It’s not a substantial burden. This stuff isn’t cheap, and you can’t just give it away, that would be too much of a burden on the private sector. Will industry benefit? Sure. But that’s secondary to having more citizens being able to plug into this economy. It means they will become workers and consumers, and the trade-off for what the corporation gets versus what the worker gets is a reasonable one.

By Silicon Valley measurements, $50 million is a paltry sum. How far will this go toward wiring the poor?

It’s a start. It’s important to bring attention to this problem in a significant way — the government’s already been able to leverage its [subsidies] with a tremendous amount of private sector investment. Some private sector investments have even begun to outstrip any of the government’s. It’s important to figure out ways to bring industry resources and talent to bear for the other domains — communities and homes. If we leverage it with corporate monies, we may be able to turn it into $100 million or more, and I think then you’re talking about a substantial number of communities being able to bring their community technology centers online. The untold story is how many people actually get jobs and then go back to work, pay taxes and get off the welfare rolls. ClickStart really gets us going in a substantial way; but it’s still hardly enough to do the job that’s required if we’re going to leave no Americans behind.

Is technology the best tool for improving the standard of living and education for low-income families? Oppenheimer argues that a good deal of the information on the Internet is geared for white and upper-middle-class families and indulgent consumption, whereas the poor’s needs are a little bit more basic — they need food, shelter and good job training.

Folks who are trying to make their way into the economic mainstream have a compelling reason for using these devices — training, skill enhancement and career opportunities of the job pools. But you’re not perpetually in that state. A lot of our programs take people from food stamps to 401Ks. When she’s at the 401K end of the spectrum, she’s not looking solely at programs to help her gain more skills so she can gain a better job, she’s now looking at ways to train online, and being able to get the New York Times for free becomes more important. But it’s natural that people would organize their life on priorities, and I think if you are trying to acquire the skills set to earn a living wage for you and your family, then what’s happening on E-Trade is not relevant for where you are right now. It’s not forward-looking enough to say that poor folks will only want a certain kind of content.

Oppenheimer points to content geared for white males. But BET.com has just launched, you’ve got Urban Magic, Black Planet, various Latino Web sites, UP and others. Those content challenges and opportunities will definitely be a part of what brings more minorities to the Net. The Web is a great resource for low-income folks because of its educational applications, job and career portals, online training, distance learning opportunities, etc.

Technical support and training for low-income households is a complex issue because no computer is truly plug-and-play. Who will provide support for home users who may not possess technical savvy?

You’re going to see community call centers created, where it’s maybe the local tech center and the local community college working together to provide the necessary support for the beneficiaries of these programs. These community call centers will evolve to provide the support that nonprofits, community members and new owners need, without the kind of price that has traditionally been associated with support. What will evolve is that they’ll rely on institutions, community colleges and community technology centers. Churches, too, will begin to get smarter as they realize they can use labs and technology to have a new kind of access to their congregation.

Free Internet access and discounted computers are often offered with onslaughts of advertising selling products and services. Do you think this presents any danger for low-income households?

ClickStart doesn’t say that it’s going to be subsidized by advertiser revenues, so it shouldn’t be construed as something to be assumed about the Clinton program. Low-income consumers will have to learn how to use the Internet in a way that meets their own tastes and interests. We live in a world where you’ve got television commercials that are going to come on. I don’t think that the latest Coca-Cola or McDonald’s commercial is so dangerous to the person who happens to be watching whatever channel the commercial is on, and I don’t think that it’s going to be dangerous for someone who is surfing on the Internet. Where it might be a challenge — and where we were on record as saying that it will be a challenge — is if children are doing homework and in the middle of a math problem an intrusive advertisement pops up on the screen, I think that’s too much.

Oppenheimer also argues that the government spent billions of dollars on KickStart, an earlier program to put computers and the Internet access into the nation’s schools, but there’s still no solid evidence that the use of computers in classrooms boosts learning. Could that same problem apply to households?

In 1999, we had the first longitudinal study on whether or not technology infusion in a school district made a difference — it was in West Virginia. Thirty percent of the students’ gains were attributable to investments in technology. Oppenheimer developed his idea during the embryonic stages of the deployment of these technologies. At some point, you have to be forward-looking, and I think the Clinton administration is trying to do that here.

If you make a commitment to leaving no one behind, then make the darned commitment, make substantial investments, and let’s evaluate this thing closely to make sure that we maximize the return on our investments. It’s easy for pundits to come in and say, “Show me the proof.” Oppenheimer doesn’t have any proof that it doesn’t work. If he was being honest, he’d have to look back and say, wait a minute, here’s what the Department of Education found, here’s what they found in West Virginia with this longitudinal study, here are some other studies. At the Urban League they trained 1,400 low-income workers, who are now earning $32 million in salaries and pay $2.1 million in taxes. That’s not a bad return on an investment.

There’s more than $87 billion of pent-up demand in the black, Latino and urban underserved markets. I believe in scrutiny, but we have to understand that we’re right now in the beginning of this and we’re trying to make sure that we get it right.

With new programs aimed specifically at bringing low-income families and minorities online, are we at a turning point?

The Clinton program has yet to be approved by Congress. Some say that because this is an election year, there are political reasons for promoting ClickStart. But the E-Rate program had a tough road to go down. I hope that this new program gets similar treatment and Congress sees the wisdom of it, because it helps all constituencies. But I tend to think that while we’re figuring things out, the statistics are coming out that things are getting worse — the number of working poor is growing, the distance between the heads of companies and the workers is expanding, we have a lot of wealth being created, but that wealth is being concentrated in certain communities and kids in record numbers are failing in standardized tests. We have to figure out a way to help them, so we do risk taking our inequities from the 20th century well into the 21st, but I think these kinds of measures, these kinds of programs, will begin to mitigate some of the problems.

Daryl Lindsey is associate editor of Salon News and an Arthur Burns fellow. He currently lives in Berlin and writes for Salon and Die Welt.

IBM’s Watson wins practice round of “Jeopardy!”

Computer, which tech giant calls "profound advance" in artificial intelligence, beats two former game show champs

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IBM's Watson wins practice round of "Jeopardy!" champions Ken Jennings, left, and Brad Rutter, right, look on as an IBM computer called "Watson" beats them to the buzzer to answer a question during a practice round of the "Jeopardy!" quiz show in Yorktown Heights, N.Y., Thursday, Jan. 13, 2011. It's the size of 10 refrigerators, and it swallows encyclopedias whole, but an IBM computer was lacking one thing it needed to battle the greatest champions from the "Jeopardy!" quiz TV show - it couldn't hit a buzzer. But that's been fixed, and on Thursday the hardware and software system named Watson played a competitive practice round against two champions. A "Jeopardy!" show featuring the computer will air in mid-February, 2011. (AP Photo/Seth Wenig)(Credit: AP)

The clue: It’s the size of 10 refrigerators, has access to the equivalent of 200 million pages of information and knows how to answer in the form of a question.

The correct response: “What is the computer IBM developed to become a ‘Jeopardy!’ whiz?”

Watson, which IBM claims as a profound advance in artificial intelligence, edged out game-show champions Ken Jennings and Brad Rutter on Thursday in its first public test, a short practice round ahead of a million-dollar tournament that will be televised next month.

Later, the human contestants made jokes about the “Terminator” movies and robots from the future. Indeed, four questions into the round you had to wonder if the rise of the machines was already upon us — in a trivial sense at least.

Watson tore through a category about female archaeologists, repeatedly activating a mechanical button before either Ken Jennings or Brad Rutter could buzz in, then nailing the questions: “What is Jericho?” “What is Crete?”

Its gentle male voice even scored a laugh when it said, “Let’s finish ‘Chicks Dig Me.’”

Jennings, who won a record 74 consecutive “Jeopardy!” games in 2004-05, then salvaged the category, winning $1,000 by identifying the prehistoric human skeleton Dorothy Garrod found in Israel: “What is Neanderthal?”

He and Rutter, who won a record of nearly $3.3 million in prize money, had more success on questions about children’s books and the initials “M.C.,” though Watson knew about “Harold and the Purple Crayon” and that it was Maurice Chevalier who sang “Thank Heaven for Little Girls” in the film “Gigi.” The computer pulled in $4,400 in the practice round, compared with $3,400 for Jennings and $1,200 for Rutter.

Watson is powered by 10 racks of IBM servers running the Linux operating system. It’s not connected to the Internet but has digested encyclopedias, dictionaries, books, news, movie scripts and more.

The system is the result of four years of work by IBM researchers around the globe, and although it was designed to compete on “Jeopardy!” the technology has applications well beyond the game, said John Kelly III, IBM director of research. He said the technology could help doctors sift through massive amounts of information to draw conclusions for patient care, and could aid professionals in a wide array of other fields.

“What Watson does and has demonstrated is the ability to advance the field of artificial intelligence by miles,” he said.

Watson, named for IBM founder Thomas J. Watson, is reminiscent of IBM’s famous Deep Blue computer, which defeated chess champion Garry Kasparov in 1997. But while chess is well-defined and mathematical, “Jeopardy!” presents a more open-ended challenge involving troves of information and complexities of human language that would confound a normal computer.

“Language is ambiguous; it’s contextual; it’s implicit,” said IBM scientist David Ferrucci, a leader of the Watson team. Sorting out the context — especially in a game show filled with hints and jokes — is an enormous job for the computer, which also must analyze how certain it is of an answer and whether it should risk a guess, he said.

The massive computer was not behind its podium between Jennings and Rutter; instead it was represented by an IBM Smart Planet icon on an LCD screen.

The practice round was played on a stage at an IBM research center in Yorktown Heights, 38 miles north of Manhattan and across the country from the game show’s home in Culver City, Calif. A real contest among the three, to be televised Feb. 14-16, will be played at IBM on Friday.

The winner of the televised match will be awarded $1 million. Second place gets $300,000, third place $200,000. IBM, which has headquarters in Armonk, said it would give its winnings to charity while Jennings and Rutter said they would give away half theirs.

In a question-and-answer session with reporters after the practice round, Rutter and Jennings made joking reference to the jump in technology Watson represents.

“When Watson’s progeny comes back to kill me from the future,” Rutter said, “I have my escape route planned just in case.”

Jennings said someone suggested his challenge was like the legend of John Henry, the 19th-century laborer who beat a steam drill in a contest but died in the effort. Jennings prefers a comparison to “Terminator,” where the hero was a little more resilient.

“I had a friend tell me, ‘Remember John Henry, the steel-drivin’ man.’ And I was like … ‘Remember John Connor!’” Jennings said. “We’re gonna take this guy out!”

——

Associated Press writer Leon Drouin-Keith in New York City contributed to this report.

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Goldman Sachs’ Facebook ploy

The investment bank buys, big, into the social network -- and expands a shadow stock market

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The “great vampire squid” of finance, Goldman Sachs, has invested $450 million in the emerging great vampire squid of cyberspace, Facebook. As the New York Times’ DealBook reported, the deal is gives Goldman a leg up on the huge fees investment banks will get when the social-networking company eventually sells shares to the public. And as the Times and Wall Street Journal also report, Goldman will also haul in huge fees from those clients who want to invest themselves.

Meanwhile, Facebook gets the capital to keep buying talent and startups, and to fuel its expansion in all kinds of other ways — and it gets to sell stock in what amounts to a shadow stock market that’s growing faster than regulators seem willing or able to understand, much less deal with.

This looks like a better deal for Facebook than its investor, putting Facebook’s value at $50 billion, which makes sense in today’s increasingly bubble-like market. Silicon Valley is going a bit wild again– not as crazy as the late 1990s, mind you, but there’s a froth element to the local economy.

An interesting question now is whether Facebook will do a a real public offering anytime soon. Federal rules require significant data disclosures when a company has 500 or more shareholders, and surely Facebook is at that point or nearing it. The Goldman deal may be an end-run around the rule, with Goldman not selling Facebook shares to its clients, but rather selling shares in something it (Goldman) owns. If this is the game, and if the SEC lets it happen, the 500-shareholder rule has become meaningless — and markets are all the more opaque at a time when transparency is more needed than ever.

Opacity is a growing issue. A thriving shadow marketplace has emerged for big startups that haven’t done IPOs, so big that the Securities and Exchange Commission is, at least in that space, looking into the wheeling and dealing. For good reason: Many if not most of the investors in these markets have no idea what the true financial picture may be of the shares they’re buying.

Facebook seems like a no-brainer right now. It reportedly has passed Google as the most visited website, and it’s growing in power and people. And Goldman, for all its sleazy ways, has smart people making investment decisions.

But Goldman was also a big investor in the financial bubble that nearly toppled the global economy. It escaped ruin only because we, the taxpayers (actually our children and grandchildren) rescued it and the rest of the banking industry. That was and remains Goldman’s real genius: making giant bets with other people’s money.

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A longtime participant in the tech and media worlds, Dan Gillmor is director of the Knight Center for Digital Media Entrepreneurship at Arizona State University's Walter Cronkite School of Journalism & Mass Communication. Follow Dan on Twitter: @dangillmor. More about Dan here.

Another big Web company erodes user trust

Yahoo says it'll sell bookmarking service, a reminder that we exist online at other people's whims

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Another big Web company erodes user trust

UPDATED

(Please see the note at the bottom of this piece.)

Yahoo says it will try to sell its Web bookmarking service, Delicious. This news, posted on the Delicious blog, comes a day after widespread reports — unchallenged until now by Yahoo — that the company was shuttering the service.

One result of the earlier reports was a frenzied search for a new social bookmarking service to replace what many people, including me, have used over the years to stockpile and organize links to online material we’ve found interesting. A second result was a further hit to Yahoo’s declining reputation.

But the most important result may ultimately be what this move, among others. does for public understanding of the role of Internet service providers of all kinds. As Amazon.com’s recent takedown of the Wikileaks site it was hosting demonstrates, we are at the whims of the companies that provide the services, and they are increasingly demonstrating that we should be highly skeptical about their commitment to our data’s longevity.

We put our data — our websites, photos, bookmarks, email and more — on their sites. But they can, and do, change their terms of service at will, doing what they please with what we’ve put on their servers. And sometimes they just shut down the services they’ve been providing. They may do it for good reasons, or absurd ones. It doesn’t matter. The point is, they can.

As noted here some months ago, we all need a Plan B for just about everything we do online these days. If we give others a choke point over our communications, we are inviting them to throttle us.

Note: The original version of this piece said Yahoo was closing Delicious. That was based on a variety of credible — and, as noted, unrefuted — news stories that started appearing more than 24 hours ago. They were based, initially, on a Twitter posting that linked to a screenshot taken at an internal Yahoo meeting. The screenshot, which has now been taken down, had Delicious among a group of Yahoo services that were being “sunsetted,” which is corporatese for end of life.

Whatever Yahoo’s intentions with Delicious, my points here stand. Even if the service is sold, a new owner might radically change the terms of service (as Yahoo itself could do at any time). The users’ insecurity remains, whatever the ownership may be.

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A longtime participant in the tech and media worlds, Dan Gillmor is director of the Knight Center for Digital Media Entrepreneurship at Arizona State University's Walter Cronkite School of Journalism & Mass Communication. Follow Dan on Twitter: @dangillmor. More about Dan here.

Netflix’s streaming push: Charging more for less

The DVD-rental company moves hard onto the Net, and raises prices for early customers despite slimmer inventory

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Netflix's streaming push: Charging more for less

I just downgraded my Netflix account, and will be sending the company $7 less each month than I’ve been sending for several years now. Why? Because Netflix is moving fast to live up to its name — to become an online video-streaming operation instead of the DVD-rental outfit it’s been — but in the process it’s raising prices while making its service worse, in key ways, for longtime customers.

These changes appear to make plenty of sense for Netflix, because the company will avoid the cost of buying and then mailing the millions of DVDs customers like me have been receiving. And, indeed, on Monday Netflix announced it was going to offer customers an all-online streaming plan for $8 a month.

I suspect there’s been a misstep, however, if I’m any example of the Netflix customer base. I’d been paying $17 per month for a plan that allowed us to have three DVDs out at a time, plus being able to view streaming content anytime. But Neflix has raised our rate by $3 a month, or about 18 percent.

There are way too many problems with the streaming-only plan to even consider it at this point. At the top of the list is the fact that the Netflix catalog of DVDs is vastly, vastly greater than what you can watch online. If the company really wants to be a streaming-only outfit, it needs to persuade the robber barons of Hollywood to digitize everything sooner rather than later.

And while the quality of the streaming is generally OK if you have a fast enough broadband connection — though it doesn’t look as good on my computer as a DVD — network congestion (in my experience) can cause the video to degrade in quality or, in some circumstances, pause altogether. I tried it on a hotel Wi-Fi recently, and finally gave up as the film kept stopping while the stream caught up.

So when the e-mail arrived announcing the price hike, my reaction was: Sorry, no sale. We’ve moved to a lower-cost plan that allows one DVD out at a time, for $10 (also more expensive than that plan used to be), plus streaming. The various plans Netflix offers now range up to $56 a month, and slightly more if you’re renting Blu-ray discs.

Netflix has leveraged the broadband Internet structure like no other company. It now accounts for a significant amount of evening data traffic, by all accounts. I’m guessing that heavy Netflix users are going to pay for the money they save in other ways when they start running into data caps that some carriers have put on their basic Internet service.

Wall Street was thrilled with the latest Netflix maneuver, pushing the stock price way up on Monday (though it eased off slightly this morning). The share price has roughly quadrupled in the past year — evidence of investors’ love for the company, an infatuation I believe has been mostly justified.

But I’m convinced that this move by Netflix is too little, too soon. And I’m betting I’m not the only one who feels that way.

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A longtime participant in the tech and media worlds, Dan Gillmor is director of the Knight Center for Digital Media Entrepreneurship at Arizona State University's Walter Cronkite School of Journalism & Mass Communication. Follow Dan on Twitter: @dangillmor. More about Dan here.

Google gives Gmail users more control over inboxes

Now users can choose chronological stacking over threaded messages

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Google Inc. is addressing one of the biggest complaints about its free e-mail service by giving people more control over how their inboxes are organized.

The new option announced Wednesday will allow Gmail users to choose whether they prefer their incoming messages stacked in chronological order, instead of having them threaded together as part of the same electronic conversation.

Gmail has been automatically grouping messages by topic or senders since Google rolled out the service six years ago.

But this so-called “conversation view” confused or frustrated many Gmail users who had grown accustomed to seeing all their newest messages at the top of the inbox followed by the older correspondence. After all, that’s how most other e-mail programs work.

The complaints grew loud enough to persuade Google to revise the Gmail settings so users can turn off conversation view and unravel their messages.

“We really hoped everyone would learn to love conversation view, but we came to realize that it’s just not right for some people,” Google software engineer Doug Chen wrote in a Wednesday blog post.

The aversion to conversation view doesn’t seem to be widespread. Gmail ended July with nearly 186 million worldwide users, a 22 percent increase from the same time a year ago, according to the research firm comScore Inc. Both Microsoft’s Windows Live Hotmail (nearly 346 million users) and Yahoo’s e-mail (303 million users) are larger, but aren’t growing nearly as rapidly as Gmail.

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