China’s Google Hack Raises Issues In World Wide Web Security Enforcement
With evidence that Chinese hackers where behind Google attack and China denying involvement in the attack and important question is raised about security enforcement on the world-wide-web when computers are connected through an open standard, but that countries do not adhere to political standards!
Law enforcement for international cyber-crimes
Lets say some guy attacks Yahoo website from a MIT computer lab and that cybersecurity professionals trace the origin of the attack and find the perpetrator. What happens is that since the crime was committed in the US, law enforcement officers simply proceed with prescribed measures. This is a simple case where computers in a geographical region are connected and that the region is governed by the same legislation.
However, when cybercrimes are committed in geographical regions that are governed by different laws, then there needs to be protocol between those two countries to exchange proper information so that cyber-criminals get proper reprimand for their actions. This protocol is very much implicitly accepted between countries who’s computers are connected through open protocols. That’s because the protocol is designed to guarantee security, or at least guarantees that the origin of an attack can be traced. So when two people connect their computers together, they are saying: “We’ll do the necessary when someone uses one of our computers to attack the other computer”.
Now, if a cyber-crime happens and that the country from which it happened refuses to cooperate with the other country, then it is somehow saying that it does not want to have its computers connected with the other country anymore! So if we take the case of China here, it is saying that it cannot guarantee that proper measure will be taken to punish those who attacked Google. The funny thing is that by acting this way, China is somehow confessing that it has orchestrated the attack!
So why does China want to unplug from the World Wide Web?
If we take a look at the historical events that led to Google’s attack, it all started with China asking Google to filter-out improper content to which Google has complied. But it seems that Google’s compliance policies had its limits which was followed by a hack that was targeted at obtaining information about Chinese dissidents. Of course, Google has so much information that it is the target for those who want to terrorize populations.
Political reasons
Now, the situation has gone to the point where these computers connected through the HTTP protocols can be the bearers of ideological battles. People exchanging freely on the Internet could lead to people asking each others questions which could lead to people asking questions about themselves. And everybody knows what happens when a population becomes self-aware: revolution.
So the natural thing to do for China is to cut itself out from the Internet. Well, not the whole Internet, just the outside-of-China Internet. So the plan is to have a Nation Wide Web or Chinese Wide Web, which amazingly has the potential of having more surfers that the other World Wide Web!
Economic reasons
The other aim of the Chinese government in cutting itself from the Internet is in an attempt to slow down the growth of American web firms. American firms have a lead in Internet products and services. So as Chinese consumers get access to Internet connections, they will be better using American services like Facebook and Twitter because those are the platforms on which most people are connecting to.
But if China cuts itself off, then it can have a nation-wide program of services similar to Facebook and Twitter and wait that they get as big. So the idea is to not give business to the US and keep that business to itself. This makes a lot of sense for a country that has known tremendous growth from exports and that is struck with a global crisis that is leading to protectionist policies from its once major clients. China has to learn to have growth from within and it is taking draconian measure to achieve that.
At first sight, it seems that social media in China might have an adverse effect on Chinese people’s opinion about socialism, but the truth is that Chinese government is going to hire tons of ’social media gurus’ who in reality are going to push for socialist ideals. Instead of having bloggers praise Apple iPads and Google Android, they are going to have bloggers praise China’s greatness. After all, marketing is not only a matter of capitalism.
StartUp Visa Act: The Only Good Foreign Entrepreneur Is A Dead Foreign Entrepreneur
Those who have read my recent post about the state of US innovation capabilities, won’t find difficult to imagine my confusion with the StartUp Visa Act where the US is willing to grant visas and permanent residency to foreign entrepreneurs who are able to – read carefully – raise American dollars! Yes, foreign entrepreneurs who raise money from American VCs. I would like you to take a minute to enjoy the significance of this situation.
In the StartUp Visa Act, permanent residency is offered to those who will be able to create jobs (at least five) and attract/make $1 million in the first two years of the company. Of course, nobody is asked to invest their own money in the US. They are asked to create jobs with money that American VCs are going to invest.
So the message that the senate is sending out there is that this means that there is more money than what the economy is capable of doing with. Of course the madness with which money printing has taken place in central bank could be the cause for this situation. But then again, why bringing people from the outside when unemployment is at 10%? Even worst, unemployment is between 7% and 10% in San Fransisco bay area, one the most innovative places on the planet. I am sure that plenty of people willing to start up a business can be find in that area. Some of them will have everything that it takes to run a business with success. So why this need to hiring entrepreneurs from aboard?
Well, the answer is very simple and it has something to do with the fact that foreigners are taking over American technology markets and that they are moving at a faster pace than the US in international markets. So it’s not that the US doesn’t know how to innovate, it’s more that the US forgot how to innovate better than others. Or we could say that others have learned to innovate better than the US. What ever the angle from which we look at it, the US is losing ground in the international innovation scene.
Basically, the idea with the StartUp Visa Act is to stop creative people from creating somewhere else than in the US. This is the USA’s strategy to stay competitive in global technology markets. The idea is to deprive other countries from the people that could make use of other people. This also appears to be a long term strategy if we consider the recent policies regarding state university endowments.
In a previous post, I talked about the tragedy of foreign inventors being granted more patents that American residents for the first time in history. While those who claim that it is only natural that emerging economies gain ground in the US, things seem to be more troublesome. In another study, numbers show that in 2009 the US owns a lower percentage of international patents than what it did in 2005. However, this trend wasn’t observed for other advanced countries such as Japan, Germany, France and Britain. All these other countries have advanced their share of international patents. Therefore, saying that emerging countries are advancing as they should and that it is the main reason for foreigners being granted more patents doesn’t hold anymore.
Even more frightening, if it is true that other economies are emerging, then it is more important for American firms to go out there and get international patents, so they can own global markets who are now more attractive because of the said emerging economies. But what we observe here is the complete opposite and we see that America’s international position is weakening.
Now, like if all this wasn’t enough, American state universities will see their budgets shrink for around $3 billion. This is added to another $3 billion that was removed from budget last year. In other words, US administration is expecting a miracle since it is hoping that cutting costs will actually lead to more productivity from scientists. Now, taking into account that knowledge is created and transferred to firms from universities, investing less in universities will most likely lead to worse results in terms of innovation. Therefore, the only logical explanation to US administration’s cut in university endowment could come from it’s intention to offshore eve more of it’s innovative capabilities. Maybe the idea is to fight it’s own lack of innovation by bringing-in innovators from outside the country.
Dude, where is your American dream?
My heart broke when I read about American public opinion shifting towards pessimism when i comes to getting rich. Seven Americans out of ten believe it is harder to get rich. Compared to 1999, there are eight times more people that have lost faith in the American dream.
One thing is sure: American aren’t trying their best to have better financial situation. If you doubt this, take a quick look at the best selling books on Amazon.com. Most of them are going to be either about self help, personal finance, investment, entrepreneurship and career or business management. In other words, if there is anything on American mind, it is money for sure.
So how come, despite all their effort, Americans just came to the conclusion that the American dream is no attainable? My opinion is that plain economic reality has hit most Americans in the face. By economic reality, I’m not talking about the current recession. What I mean by economic reality is the fact that there just seems to be less money in the hands of average Americans and that they start being aware of it.
Low income plus high debt is killing everybody
When asked about the biggest obstacle to getting rich, more than half believe it due to low income. Of course, the cost of living never diminishes. Again, we can’t really blame Americans for their misfortune by saying that they don’t work hard enough. If you are skeptical about this, take a look at productivity growth vs wage growth for the last 15 years. It is obvious that wages haven’t grown as much as productivity does. In fact, Americans have been penalized for their good productivity by seeing their jobs being shifted aboard for less competitive salaries.
Basically, the only thing we can blame Americans for is to not work for the same wage Chinese or Indians work for. But then, if Americans decided to work for the same low wages as in Asian countries, how many of them would be able to buy new plasma TVs, iPhones, laptops, iPad, etc? The answer is they won’t be able in the long run. Of course, they can always do their spending on credit. But sooner or later, when incomes decrease and that expenses stay steady or increase, something bad is going to happen. And this is exactly what happened with the current economic crisis that started with a credit (mortgage) crisis. With decreasing income, Americans will have to learn frugality which means that they will have to find a way to explain to their kids that they won’t be able to have the next iPad.
My opinion is that American dream is attainable if there is balance between productivity and wage growth. If this issue gets fixed, then people will see an increase in their income, people will rely less on credit and might believe that they will, one day, get rich.
Corporations aren't evil on their own.
People often wonder why corporations turn into anti-social entities that end-up doing more harm than good to the customers. My view is that all corporation end up acting in accordance to shareholder interests which can be in conflict with public interest. This is the tyranny of shareholders on a social level.
The concept of tyranny of shareholders initially expressed the contradiction between what is good for a corporation and what is good for the shareholders. For example, laying off talented employees could be bad for the corporation but good for the shareholders who will increase profits.
In this post, I call the tyranny of shareholders the contradiction between shareholder interests and society’s interests. Indeed sometimes, something can be good for shareholders but bad for society as a whole. For example, offshoring research and development activities could be good for shareholder who will again increase profits but bad for a society because it loses innovative capabilities.
My view is that society must protect itself from powerful agents who could have conflicting interests with the public. In other words, governments should prevent big players from performing things that will end up harming society under the justification that it’s in the shareholders right to make a profit.
Google can't be trusted with our personal data.
Google claims that Google Dashboard gives complete privacy choice and control. I guess this is good news for those who advocate for privacy on the Internet. The truth is that it is very much no news at all. The reason is simple: who says that what we see on Google Dashboard is all that data Google has on us?
It is only Google’s own claim that the dashboard is a direct access to its analytics infrastructure. Knowing how information is vital to Google who mainly lives out of information retrieval, I just have the feeling that it cannot be trusted with such claims.
Google is a big data center. Nothing more, nothing less. What makes the difference between Google and any other search engine that decides one day to imitate and compete with it is the big inimitable data center. If it flushes user’s personal data, it is gradually loosing competitive edge over other players (like Bing) who decide to keep information and can provide more personalized services.
Unless governments step in and impose regulations and audits concerning privacy, claims such as the one with Google Dashboard are going to be nothing more than marketing campaigns aiming at giving a more humane face to an increasingly feared corporation.
Why not consult a real economist...
I came across an article stating a view that the financial crisis is nothing but the result of aggressive foreign investment in the American economy. What I find absurd in this article is in claiming that the economy failed because it was too good! According to this view the economy was so good that it attracted the wrong kind of investors who wanted a piece of the action. Then, what happened was that the economy wasn’t able to live up the expectation.
Well, how about admitting that the whole market hype was a bubble like the current rise of the stock market is a bubble? Why try to put the blame on the whole world instead of admitting that it doesn’t make sense to take risks without backup? Oh I forgot, there was backup: the money-printer!
It appears that Apple and Microsoft are discussing about the possibility of offering Bing as the iPhone’s default search engine. For those who are familiar with Microsoft’s bribing strategy and the recent News Corp. saga, it isn’t really big news. It is only natural for a company that pretty much paid the whole PC manufacturing industry to ship Windows to try the same thing with other products.
The cloud
With today’s industry focus on the cloud and web-based applications, it is important for big players to have a product-line that offers a whole set of tools for everyday Internet users. In other words, the search engine as a single product will not be enough to give a competitive edge to anybody, let it be Google. For example, Google search engine users have access to Maps, Gmail, Reader, Docs, Calendar and a whole bunch of applications that will answer day-to-day needs. Microsoft is trying something similar with Bing Maps as a competition to Google’s.
Mobile computing platform
Today, a third of Internet users come from mobile phones. This trend will only keep on growing in the future as better products will be released for the mobile market. It is only a matter of time before the mainstream Internet completely switches to the mobile platform. With forecasts showing Android as potentially surpassing iPhone sales by 2012, both Apple and Microsoft have no other choice than to put their efforts together in a fight for their life.
What it means to the iPhone users
Well, this is good news and bad news for the iPhone consumer. On one hand they will be exposed to a potentially worse and less mature product. On the other hand, it will bring more balance to the search engine market, forcing Google to work on it’s competitive edge by releasing better products. Of course, things could balance towards a bipolar market where both Bing and Google will be better of with what they have rather than trying to take away market share from the other player.
Kodak has decided to take legal action against Apple and RIM for infringing patents that covers technology related to a method for previewing images. According to Kodak’s Chief Intellectual Property Officer, their primary interest is in receiving compensation for it’s intellectual property. This is going to be much different that what happened to Microsoft when it had to remove Office 2003 & 2007 from the shelf. The good news is that Apple and RIM will keep on selling iPhone and Blackberry mobile phones; but the bad news is that their prices will go up if Kodak wins its case in court. Since patent licensing is not the most expensive thing in a product, my guess is that it will not be such a bi rise in price.
The number of blog posts that praise the possibility of making money by blogging and using AdSense is just outstanding. It looks like all you need is to do ten things to make a lot of money on the Internet. Well, here is something to think of when considering to buy that big lie: Google says AdWords click-through rate is around 2%.
What is the CTR?
Click-through rate is defined as the percentage of clicks per impression of an ad. This means that, in average, people will click twice on AdSense ads for every 100 impressions. My opinion is that Google’s announcement is not really accurate and that average CTR is somewhere around 1%. But for the purpose of this post, I will stick to the official Google answer to CTR.
How much traffic is needed to make a living?
Now that we know how many clicks to expect from users, lets suppose that every ad click will bring in 25 cents. Let’s also suppose that the website owner needs $3K per month for a living. This means that the website needs 12k ad clicks per month for the owner to pay his bills. Since data shows that CPM is lower on social media, it isn’t wrong to say that new visitors will have higher CTR than returning visitors as the chance for the former to accidentally click on ads is higher. Let’s take the 20-80 rule and suppose that new visitors will represent 80% of ad clicks. In other words, new visitors will generate 9600 clicks that represents 480k ad impressions at 2% CTR. Finally, if we suppose that new visitors view 1.5 pages per visit, 320k new visitors are needed for the website every month.
How to get 320k visitors per month?
New visitors will most likely come from the search engine. Again, we can use the 20-80 rule to expect 256k organic visits. Let’s say the blog is targeting long tail keyword. Every blog post targets one keyword that will bring 10 visits per day. This means that the blog post needs to have around 853 blog posts to generate 256k organic visits per month.
To generate a blog post that can reach 10 visitors per day, the blog owner needs to perform 4 hours of reading, keyword search and writing. To reach the 853 number of posts, it will take more than 20 months of full time searching, reading and writing!