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| March 7, 2011
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Tech Titans Talk Tax Cuts with POTUS

Tech Titans Talk Tax Cuts with POTUSFortune is reporting that a group of tech, pharmaceutical, and energy giants are lobbying for a tax cut that would allow them to bring home the estimated $1 trillion they’ve got parked overseas at a steeply discounted rate. Fortune’s sources say that Apple (AAPL), Cisco (CSCO), and Oracle (ORCL)  are among the major players looking to win a one-year tax amnesty on their foreign earnings, allowing them to repatriate that money at a tax rate of about 5%, instead of the 35% they face now.

Multinationals prevailed on Congress to approve a one-year tax holiday once before, as part of a jobs package in 2004. Back then, the companies argued the relief would help them boost economic growth because they’d plow their repatriated money into research, investment, and hiring. And while plenty of outfits benefited from the break – 843 corporations made use of the holiday, bringing back a total of $362 billion, according to the IRS — the broader economic benefits were dubious.

The Treasury Department wrote rules trying to make sure that the recovered cash was in fact invested back into the companies. But money is fungible. Although the rules expressly prohibited using the funds for dividend payments or stock buybacks, later analysis has shown participants sent most of it to shareholders anyway. One study cited by Fortune from the National Bureau of Economic Research found that for every dollar of repatriated cash, companies bumped up shareholder payouts between 60 and 92 cents.

“A tax holiday would bring a substantial amount of cashback to the United States and paying that out to shareholders is good for the economy,” said study co-author Kristin Forbes, an economics professor at MIT’s Sloan School of Management and a member of then-President George W. Bush‘s council of economic advisers told Fortune. “But if you’re a politician claiming this will create a lot of jobs or new investment, it isn’t supported by the data.”

In order to sell the deal, Cisco CEO John Chambers and Oracle president Safra Catz argued in an October editorial in the Wall Street Journal that a second holiday would help put Americans back to work. But they don’t promise that companies would drive all of their repatriated money directly into job-creating investments. They acknowledge that companies might pass the money along to shareholders again. But Mr. Chambers and Ms. Catz argue on top of direct investments, the tax cut holiday would spur a new stimulus by boosting markets, thereby increasing consumer confidence. And they say the tax revenue itself could fund $50 billion worth of credits to encourage new hiring — a sum only possible in the unlikely event companies decide to bring home the entirety of their overseas reserves.

President Obama’s recent dinner with Silicon Valley’s tech titans was a star-studded event according to TechCrunch.

Obama tech- dinner toast

Invitee included Facebook CEO Mark Zuckerberg, Apple CEO Steve Jobs, Yahoo (YHOO) CEO Carol Bartz, Cisco’s CEO John Chambers, Twitter CEO Dick Costolo, Oracle CEO Larry Ellison, Netflix (NFLX) CEO Reed Hastings, Genentech Chairman Art Levinson; Google (GOOG) CEO Eric Schmidt; former state controller and venture capitalist Steve Westly Doerr, and Stanford University President John Hennessy. The event was held at Kleiner Perkins partner John Doerr’s home.

After the dinner, White House press secretary Jay Carney said the group talked about ways to invest in innovation and how to increase jobs in the private sector. He said Mr. Obama also discussed proposals to invest in research and development and his goal of doubling exports in five years.

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I don’t think it’s unreasonable to assume that what POTUS calls, “increase jobs in the private sector” would mean a “tax cut holiday” for the tech titans.

It should be no surprise that the Tech Titans who supped with POTUS were big political contributors and supporters of the tax cut holiday. What happened to “Yes We Can”?

 

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.

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| February 28, 2011
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Riskiest Social Media Apps

Riskiest Social Media ApplicationsDarkReading has a report from Seattle-based network security vendor WatchGuard which says that the fastest growing threat to corporate networks is web-based social media applications. The WatchGuard security researchers claim that social media applications can seriously compromise network security, expose sensitive data, and create productivity drains on employees.

Watchguard logoThere are many reasons why social media applications can pose risk to any size business. WatchGuard noted that productivity and data loss are major risks for organizations of all sizes. Social media sites also serve as malware and attack vectors. Social networks will become the leading malware vector over the next few years for three reasons:

  • Social media sites breed a culture of trust. The whole point of social media is to interact with others. Typically interactions are with people considered to be “friends”, which implies trust. Meanwhile, social media sites do not have any technical means to confirm that the people you are interacting with really are who they say they are. This environment of trust creates an ideal scenario for social engineers to use.
  • Many social media sites suffer from technical vulnerabilities. While Web 2.0 technologies offer many benefits, they also harbor many security vulnerabilities. The complexity of Web 2.0 applications can lead to imperfect code, which introduces some social network sites to Web application vulnerabilities, such as SQL injection and cross-site scripting (XSS) attacks. Furthermore, the concept of allowing untrusted users to push content onto social media sites conflicts with traditional security paradigms. Simply put, this means social media sites are more likely to suffer from web vulnerabilities than less complex and less interactive websites.
  • Hugely popular. According to online analytics firm, Compete, Facebook is now the 2nd most popular Web destination after Google. Many other social networks, such as Twitter and YouTube, follow closely behind. The popularity of social networks attracts attackers because they know it means that they can get a “return on investment” for their attacks.

For these reasons, WatchGuard researchers deemed the following applications the riskiest:

Facebook logo1. Facebook is the most dangerous social media site, largely based upon its popularity according to WatchGuard. With a 500+ million user following, Facebook offers a fertile attack surface for hackers. Add in the potential technical concerns, such as a questionable, open App API and now you have a recipe for disaster.

Twitter logo2. Twitter, many incorrectly assume that very little damage could be done in 140 characters. Twitter’s short-form posts lead to new vulnerabilities such as URL shorteners. While URL shorteners can help hackers hide malicious links. Twitter also suffers from Web 2.0 and API-related vulnerabilities that allow various attacks and Twitter worms to propagate among its users.

3. YouTube attracts attackers because it is one of the most popular online video sites. Hackers often create malicious web pages that masquerade as YouTube video pages. Additionally, attackers like to spam the comment section of YouTube videos with malicious links.

4. LinkedIn bears more burden than other social media sites; it is business-oriented. Thus, it makes a more attractive target to attackers, as LinkedIn is highly trusted. Because most users leverage LinkedIn to form business relationships or find jobs, they tend to post more valuable and potentially sensitive information to this social network.

4Chan logo5. 4chan is a popular imageboard, a social media site where users post images and comments. 4chan has been involved in many Internet attacks attributed to “anonymous,” which is the only username that all 4chan users can get. Some of 4chans image boards contain the worst depravities found on the Internet. Many hackers spam their malware to the 4chan forums.

Chatroulette logo6. Chatroulette allows webcam owners to connect and chat with random people. The nature of this anonymous webcam system makes it a likely target for Internet predators.

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I have written about social media risks since 2009, yet many organizations still do not have a social media policy.  Why take the chances?

Does your organization have a social media policy?

Does anybody actually allow 4Chan or Chatroulette?

 

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.

Category: Social Networking | Tags: , , , , , , , , , ,
| February 20, 2011
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The Demise of Twitter

The Demise of TwitterThe troubles with Twitter starter long ago.  UK-based researcher Conquest released a report on social media habits of 16-24-year-olds. The online research conducted during January 2011, documents Facebook’s domination of social media and YouTube’s close second place. The Conquest research says that Facebook is the principal means of social and commercial engagement for 16-24-year-old market. FB out-ranks telephone, email and even going out.

Facebook“Project Chatter” also found that regular Facebook users (91% of the sample) check their accounts over six times a day. 30% are on the site for over an hour a time. Meanwhile, YouTube is the major conduit for music browsing, consumption, and sharing in this age group. In contrast, 56% of Tweeters claim their activity is dwindling with an average site visit lasting five minutes.

Social media activities

Conquest says that social media for this age group has become the central means of staying up to date and engaging with peers, showcasing oneself, ‘chatting’, ‘liking’, consuming music, videos, and TV, following celebrities, and brands, etc. This group tends to rely on social media to message contacts, increasingly shunning email and telephone. Conquest also spotted a disturbing trend with a significant 20% preferring to meet online than in person.

YouTubeThe dominant site for browsing videos and discovering and sharing music and videos is YouTube. Conquest sees Twitter usage declining among  16-24-year-olds in the future – 20% anticipate using the micro-network less in the next year. 20% of Twitter users told the pollsters that they expected to use the micro-blogging site less in the next 12 months. Facebook users reported a lower expected drop-off rate of 13% after  12 months.

In addition, out of the 42% of the 16-24 years olds interviewed who had used Twitter. More than half (56%) said they used it a little, or a lot less often, or never made active use of the site after visiting it. In an interview with Contagious David Penn, Conquest’s marketing director said:

‘Facebook is used for writing on walls, sharing photos, checking what friends are doing and keeping in contact. It is the most social site of the lot, whereas Twitter is often used for following celebrities and is not really social in that sense. It is almost more of a broadcast medium than an interactive and social one.’

Mr. Penn told Brand Republic that Twitter has peaked among the younger demographic and warned it “may undergo a gradual decline echoing the fate of Myspace and Bebo in internet Siberia”.

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Declining usage by 16-24-year-olds and 60% of users dropping off after the first month doesn’t seem like a good way to support a Wall Street $10 Billion dollar valuation on Twitter. I agree with the Conquest study that Twitter is the least social of the social media’s. I am on Twitter because others are on it, not because there is anything exciting for me.

Twitter has not done its IPO yet, maybe they know there is a problem with their business model. If their IPO flops will that be the start of dot.Bomb 2.0?

What do you think?

Is Twitter destined for “Internet Siberia”?

Will a failed social media IPO cause another Dot.Bomb?

 

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.

Category: Social Networking | Tags: , , , ,
| January 29, 2011
Comments Off on Facebook Tried to Buy Twitter

Facebook Tried to Buy Twitter

Facebook Tried to Buy Twitter

-Updated 02-12-2011- The Wall Street Journal is reporting that in recent weeks executives from both Facebook Inc. and Google Inc., (GOOG) have been talking about the acquisition of Twitter.  According to the WSJ, the potential suitors have placed an estimated valuation on Twitter of $8 billion to $10 billion.  In case you weren’t paying attention, that is a 3x increase in three months since December 2010 when it was Twitter was valued at $3.7 billion.

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Imagine the Bizarro World where social networkers Facebook and Twitter hooked up. In a recent Financial Times interview with Twitter co-founder Biz Stone, he revealed that in 2008, Facebook tried to buy Twitter for $500 million in Facebook stock.

Facebook saw the potential in Twitter but the Twitter big-wigs declined. Mr. Stone told the FT that Twitter wanted to become not just a popular site but a viable business, and not be taken over by another company. “We’ve created something that people are finding value in,” he told the FT. “But we haven’t yet created a business out of this, and we really wanted to do that.”

It is possible that if Facebook had bought Twitter it would have died. As a part of Facebook, Twitter would have been restricted to only one set of users and is unlikely to have gone through its huge period of rapid growth. Its main financial power has been in business and less in social networking according to the FT.

Twitter had 175 million registered users as of November 1, 2010, who sent about 95 million messages a day or 25 billion “tweets” last year. Twitter has pursued rapid growth over profits, but since last spring, it has brought in advertising revenues through paid for “promoted tweets.” In mid-December, Twitter said it had received a major infusion of funds from a group of investors, which reportedly put a $3.7 billion value on the site.

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Well, a valuation of  $3.7 billion or $500 million in Facebook vapor stock seems the Twitter boys did OK for themselves.

Is Twitter worth $3.7 billion? Does it have a business model to support $3.7 billion?

Is Facebook worth $50 billion?

 

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Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.

Category: Social Networking | Tags: , , , , , ,
| December 21, 2010
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Social Media Bubble

Social Media BubbleThere is growing speculation that a backlash against social networking is brewing. At CustomerThink.com there was a recent article When the social media bubble burst which points out that “We rarely see people as enthused as they are over social media. Among those recent rare times are: when the high-tech balloon popped; at the height of the housing bubble; just before the market crashed; and when Sarah Palin was nominated for VP. Hey, exuberance can be headiest just before the fall.”

Socail media

The author, Axel Schultze, CEO of the social business application development firm Xeesm says YES. Schultze believes that the social media bubble is about to burst. Schultze, the founder of the Social Media Academy, said in the article that people are starting the usefulness of social media, “People are recognizing already that the endless hours of watching the incoming streams from Twitter and Facebook or all the status updates on LinkedIn are hours wasted. All the paid tweets and people or agencies, who have been hired to tweet are not going to contribute to the bottom line. And the fan pages people build to get “fans, followers, connections” just hope that it will do something for the business – but it won’t.”

Schultze concludes that the social networking bubble will burst because, “Socializing is work, it takes time and focus, discipline and a clear understanding what to do and what not to do. And as 80% of humans continue to look for getting the job done automatically and get rich instantly, they will leave the social web because they just learned again and again – there is no free lunch.”

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In the article, Schultze reiterates the fundamental change factor of the Internet, “from anywhere at any time”, when he says that the biggest benefit of social media is to do “more business with more people in a grander geography and in less time than ever before.” Schultze continues that the benefits of social media come at a price, “…the price you pay is to be more open, more social, more connected, more interactive, more helpful and more conversational than ever before.” Making organizations more open, more social, more connected, interactive, and helpful is hard work which means that many organizations will fail and the social networking bubble will burst.

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Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.

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