Media Futures

The blog world is starting to produce some really interesting thought pieces.

A case in point is Seth Goldstein's five part treatise on Media Futures.

We are waiting for the finale, to be titled Arbitrage.  I suspect it will be a fitting conclusion.

But the leadup is really quite brilliant and alliterative too.

Starting with Automata, Seth lays the foundation for his vision of a world of participatory media.

Then with Algorithm, Seth starts hitting his stride, laying out the essential ingredients for his vision.

In API, we get to the glue that stitches the vision together.

And in the truly "must read" Alchemy, we understand that this new world is fundamentally differnet and building companies in it requires a new apprpoach.  I must share with you this Pierre Omidyar quote from Alchemy because it says it so well.

So people often say to me - "when you built the system, you must have known that making it self-sustainable was the only way eBay could grow to serve 40 million users a day." Well… nope. I made the system self-sustaining for one reason: Back when I launched eBay on Labor Day 1995, eBay wasn't my business - it was my hobby. I had to build a system that was self-sustaining… …Because I had a real job to go to every morning.

I was working as a software engineer from 10 to 7, and I wanted to have a life on the weekends. So I built a system that could keep working - catching complaints and capturing feedback -- even when Pam and I were out mountain-biking, and the only one home was our cat.

If I had had a blank check from a big VC, and a big staff running around - things might have gone much worse. I would have probably put together a very complex, elaborate system - something that justified all the investment. But because I had to operate on a tight budget - tight in terms of money and tight in terms of time - necessity focused me on simplicity: So I built a system simple enough to sustain itself.

Seth leaves us in the hands of market speculators at the end of Alchemy and looking forward to how his vision reveals itself in a world of Arbitrage.  I can't wait to read it.

Comments

[Peter Flaschner]

Thanks for the great tip!

[Frank Ruscica]

Adbitrage is what he is getting on about. From the April 4, 2005 issue of Fortune:

"As a vice-president at hedge fund D.E. Shaw in the mid-1990s, Anil Kamath helped bring sophisticated computer-driven investing strategies to Wall Street. Now he and other quant jocks are taking aim at Madison Avenue. Their goal: to bring financial-markets-style trading systems to the $ 9.5 billion *online* ad industry. And the quants are finding believers. Venture funding to the sector jumped from $ 25 million in 2003 to $ 175 million in 2004, according to VentureOne, a research firm.

...The trend towards quant-driven ad buying is not limited to the world of search engines. Ad networks run by companies such as Advertising.com (which was bought by AOL, a division of Time Warner, FORTUNE's parent) purchase banner-ad inventory from publishers and use software algorithms to optimize their advertisers' campaigns. Startups like Right Media in New York aim to go one step further by creating a single auction market for all online ad transactions. And everyone is looking to a not-too-distant future when the same systems will be used to buy and sell ads on digital TV and radio. Industry wags already have a catchy slogan: "Welcome to the ADZDAQ."

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Of course, the above is just an elaboration on historic developments. Consider:

"In search engine marketing (SEM), arbitrage is rampant. Instead of securities, it revolves around differences between the cost of search traffic and the payout a client is willing to make, either on a CPC basis or a return on investment (ROI) metric (e.g., cost per lead, cost per sale, or commission per sale)."

ClickZ.com
November 21, 2003

[ellen]

Mr. Goldstein's blog is amazing. He is a true a visionary in the world of marketing and media and economics. I, too am looking forward to part 5. It is unusual to find someone in the techno field who is such an eloquent writer.

[ray]

Thank you for introducing me to this blog. I've bookmarked your blog as well. Keep sharing.