timone NetMarketing
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Marketing in the Internet - as seen from Italy

by Giancarlo Livraghi

No. 25 - August 31, 1998

  1. Editorial: "Globality" and the individual
  2. Why Finland?
  3. Another way of "counting users"
  4. The secret code
  5. "New" isn't always "better"
  6. The value of hypertext

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1. Editorial: "Globality" and the individual
Here is, once again, a quotation from one of my favorite online writers: Gerry McGovern (two of his articles are in issues 13 and 14 of this newsletter).

On August 24 he published a brilliant article on The Myth of the Individual. For decades we’ve been reading and discussing about the end of mass production, mass markets and mass culture, the growth of diversity and individual values. But we are still living in a desperately repetitive and uniform culture (or so pictured and driven by "mass media" on a global scale).

This is what Gerry McGovern says:

A few months ago I was at a very high-powered meeting with some very high-powered people. People who ran some of the most powerful companies in the world. People who you would regard as being very individual.

And I'm sure most of the people at the meeting were individual. Strange then, as I gazed around the room at these very powerful men – they were nearly all men – at how uniform and bland they looked. They were nearly all dressed in gray-blue suits. They all looked somehow the same; the expressions they had on their faces, the same type of posture. They looked like a bunch of sheep.

One man, with the last minute ticking away, will come and save the world. Riding over the horizon he will shoot down the baddies. He will grab the damsel in despair and whisk her off to safety. Hollywood tells us again and again that the world is safe for individuals, that individuals are what we all love, that an individual is what we all want to be. Big and muscly, with no fear, saving the world for the 978th time.

It's all a real laugh. There are precious few individuals around. And they're not wanted, really. They're okay up on that big screen, but we don't want too many of them down in the office smoking cigarettes under the "No Smoking" sign.

The Internet and the Digital Age in general is the bastion of the small player, the individual. It's the ultimate level playing field. Right? Then how come there's so much consolidation, industry convergence and mergers and acquisitions going on? How come if this is the age of the small player that the so-called dinosaurs are getting fatter and fatter as they gobble up more and more?

America is the land of the individual. America was built by individuals. Right? Check out Editorial Media & Marketing International, who have written an excellent article entitled Death of the Company Town? In it they state that, "While Americans might like to believe that this country was built on the pioneering spirit and the resolute independence of rugged individualists blazing their own trails, the reality is that the sweat that greased the wheels for the development of the greatest industrial power in the world dripped from the brows of working men who, as Tennessee Ernie Ford pointed out, owed their souls to the company store."

Before a bunch of patriotic Americans jump down my throat, let me state for the record that I am not anti-American. I could talk for ages about the things about America I love. So spare me; I'm just trying to look behind the myths to see some reality.

How come if America so cherishes the individual that it has some of the most restrictive laws in the world on the rights of the individual. Yes, you can carry arms but no you can't smoke a cigarette in most places. What do you think John Wayne would have said if he was asked to put out his cigar in a restaurant in San Francisco?

Like Jerry McGovern, I am not anti-American. There are many things in America that I admire, like and enjoy. But there are also things that I wish we wouldn’t imitate so clumsily. And I am uncomfortable with the pseudo-Americans in this part of the world, including those "anti-Americans" that, with a can of coke in one hand and a big mac in the other, criticize America without knowing what they are talking about and badly copying, or poorly translating, something that Americans have been saying about their own country.

But let’s get back to the subject: individuality. There are two playing fields. In one, people and companies in this part of the world are likely to be the losers. Our comparatively lightweight, and somewhat clumsy, dinos have a slim chance of prevailing in the fields dominated by the multinational Tyrannosaurs (of which not many are based in Europe, and very few in a country like mine).

Just like the Americans, we’re busy merging and concentrating. Only "big", we think, can survive. But how big is big? We pay lip-service to the notion that our economy is based on millions of small companies or individual enterprises. The attention is concentrated on the big companies and the big deals. We model our society on imitation and flattening standards. We discourage individuality and imagination. That stands in the way of our ability to compete in the global economy.

It the internet an opportunity for small payers? I think so. But the big conglomerates (government bodies as well as private corporations) want to be in control.

I think diversity and individuality are good for everyone around the world. For countries like mine, that don’t have strong enough dinosaurs, they are a necessity.

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2. Why Finland?
I’ve been wandering why the highest use of the internet is in Finland. I’ve heard several explanations; the most obvious is that in a cold climate it’s less easy to meet people outside. Maybe... but that’s not a good enough reason, as there are cold places, such as Russia, with low internet penetration.

Low population density is a good reason. We see high net activity in Canada, Australia, Scandinavia, etc. But there are densely populated countries with heavy use of the internet – such as the Netherlands.

I think there are other reasons. Here are some observations by a friend of mine, David Casacuberta, who has just returned to Spain from one of his many visits to Finland.

Finland has a strongly "socialist" system. Finns pay almost half their income to the state. Some rich people complain a bit, but generally they feel the money is well spent. The government does many useful things with taxpayer’s money; one of these is providing an impeccable system of electronic communication. Their FTP services are so good that often I prefer to download software from a site in Finland than from one in Spain.

I’ve been traveling around Finland for three years and I am surprised by their warmth and shyness. Finns are uncomfortable in a big party with lots of people. While the others chat and play around, they hang on to their glass, look at the floor and rarely say a word. But in a small group, say three or four people, they are very human and open, willing to discuss "intimate" matters, feelings, personal life, instead of the empty party bla-bla we hear almost everywhere.

So are the Finns: they enjoy dialogue with few people, private and close. They are timid, quiet people. The internet is an excellent tool for this type of conversation: chats and e-mail work well with small groups. The fact that other people cant’ be seen or heard makes shy people comfortable. The net (as long as the government leaves it alone) is ideal for discussing private and intimate subjects.

Unfortunately I don’t know Finland. I was there only once, for a few days – and only in Helsinki. The (not many) Finns I know fit David’s description; and that’s why I like them.

Other observations on the same subject come from Ireland. This is what Sorcha Ni hEilidhe says in an article published by NUA on August 12:

A friend of mine from Finland recently told me of a popular and oft repeated joke in Finland. It goes like this: A man enters a bar and orders a drink. He is joined shortly by another man who proceeds to sit down beside him and order a drink without saying a word. They drink all evening and into the night. Three days later they are still at the bar drinking and one man turns to the other and says, "It's terrible weather we're having". The other man turns to him crankily and says, "Are you here to talk or drink?"

There is a double meaning in Finland, my friend explained, as the people of Finland take pride in the fact that they do not engage in small talk or daily niceties. "In fact," she wrote in her letter, "nobody talks to anybody here. If people have to communicate, they'd rather do so non-verbally or by letter than in person."

In the face of this (and perhaps because of this), Finland is the most wired country in the world with the highest per population use of the Internet worldwide and at least one telephone to every household. In addition, recent studies of Finnish Internet experience suggest that the strongest growth in use of the Net is from home users and the most frequent use of the Net is email.

Finland has 5.1 million people and recently Gallup Media announced that 41 percent of all Finns, some 1.79 million people, aged 12 and over, had gone online in the last year. This is up from 28 percent the previous year. The survey was conducted by telephone in April/May of this year and used a sample of 9,000 people.

Another survey, conducted by Taloustutkimus, polled 3,500 people and found that 37 percent of Finns over the age of 15 had gone online. The study found that 162,000 Finns use the Net for email only.

The Gallup survey found that frequent users of the Net, people who had been online in the seven days leading up to the survey, comprised just over 1 million, a quarter of the population, while 0.54 million, or 12 percent of the population, had gone online the day before the survey.

As in most other countries, males outnumber females in Internet usage. Of those who said they were frequent users, 60 percent were male and of those who said they had been online the day previous to the telephone poll, 65 percent were male.

An increasing amount of Finns are logging on from home and spending higher than average amounts of time online. 49 percent of those who had been online the day before the survey had logged on from home, 40 percent logged on from work, 18 percent logged on from school and 2 percent from public libraries. .......

Risto Sinkko, Director of Media Audits from the Finnish Bureau of Media Audits, reckons mobile phones will outnumber traditional phones by the end of the year. "In Finland mobile telephone is no longer a tool of an important businessman, but the first telephone of a young and less affluent person starting an independent life."

Coming back to Mira's joke, perhaps Finnish people are just shy and don't like talking to one another face to face. Or in bars, which it has to be agreed, are for drinking in. Maybe nobody talks to anybody anywhere anymore.

So – the reasons why the internet is so widely used in Finland is the way people there think, feel and behave. Their technical superiority is a consequence of their human needs (not vice versa).

There’s a moral, I think, to this example. When we want to understand something about the net (or the use of any technology) we invariably find that human behavior is the key factor. With a bit of "political" support, such as a government that tries to cater for people’s needs and refrains from gagging, censoring or otherwise controlling communication.


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3. Another way of "counting users"
I’ve been repeating ad nauseam why I don’t think "counting net users" is very important; why most "headcount" calculations aren’t very reliable; and why data for different countries (or from different sources) aren’t comparable. However... here’s another way of trying to figure out "how many online".

I’ve always thought that there could not be a direct relation between hostcount and number of people online. Maybe I’m wrong. Several people think that there is a fairly constant factor of four or five "users" per host. That’s a bit strange, because there would be 95 to 120 million users in the United States, while the people that tried to count them came up with figures between 30 and 70 million. But it seems to work better in the rest of the world.

Of course not all .com or .net or .org domains are in the US. But if we analyze that we find that the pseudo-American hosts can’t be more than 2 or 3 percent, so that doesn’t change the picture in any relevant way.

With all these disclaimers... let’s take a look at what happens with such a calculation. Here are figures for the 29 countries that in the latest worldwide survey  had more than 50,000 internet hosts (except the US) and for broad areas (not including thr US and Canada). There are two figures for European countries; the fist is based on the worldwide hostcount, the second on the data for the Europe-Mediterranean area (that are a bit different – and more up-to-date).

Number of internet "users"

% of inhabitants

Japan 6,100,000 4.8
United Kingdom 5,400,000 5,900,000 10.1
Germany 5,200,000 5,900,000 7.2
Canada 4,600,000 15.6
Australia 3,400,000 18.8
Netherlands 2,300,000 2,400,000 15.5
Finland 2,300,000 2,000,000 39.1
France * 1,900,000 2,000,000 3.5
Sweden 1,700,000 1,650,000 18.8
Italy 1,450,000 1,600,000 2.8
Norway 1,400,000 1,350,000 31.1
Spain 1,100,000 1,150,000 2.9
Switzerland 900,000 1,000,000 13.9
Denmark 850,000 900,000 17.4
New Zealand 800,000 22.4
Korea 800,000 1.8
Brazil 750,000 0.5
Belgium 700,000 800,000 7.4
Russia 700,000 800,000 0.5
South Africa 600,000 1.5
Austria 600,000 700,000 8.8
Taiwan 500,000 2.3
Poland 450,000 500,000 1.3
Israel 400,000 450,000 7.6
Mexico 400,000 0.4
Hungary 350,000 400,000 3.8
Czech Republic 300,000 300,000 3.1
Singapore 300,000 9.7
Argentina 250,000 0.8

* if we considered minitel, users in France would be over 10 percent of the population.

Europe 29,000,000 31,000,000 4.4
Asia 8,000,000 0.2
Pacific 4,200,000 14.0
Latin America 1,500,000 0.3
Africa 700.000 0.1

This may be a bit whimsical – but the results are surprisingly close to figures worked out in other ways. And in this case the figures are comparable, because hostcount criteria are basically the same worldwide.

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4. The secret code
The legal fight between Microsoft and US authorities is going on and on... and I don’t find the details very interesting, except when they point to problems that go far beyond the case of any individual company.

Nathan Newman if NetAction, in an article  published on August 20, explains that Microsoft was ordered by U.S. District Court Judge Thomas Penfield Jackson to turn over the source code for its Windows operating system to government lawyers so they could determine whether the company has been using internal structures of the code to illegally expand its monopoly. Of course Microsoft complained quite loudly.

This, points out the article, highlights why a secret operating system is so incompatible with both legal and innovation needs in the new economy.

I leave it to legal experts to get into the legal issues. But I think this is an opportunity to focus on a very relevant problem.

The general trends of the New Economy were well defined in an article by Kevin Kelly that I quoted  last year; and it’s quite clear that open solutions are very important for the improvement of technology – and especially for the internet.

Nathan Newman says:

It is an anomaly in intellectual property law that the nuts and bolts of a piece of software's design is not publicly available. Traditional works protected by copyright, like books and music, wear their design literally in their text and in their musical notes, available to any fellow artist to study and improve upon. Similarly, creators of traditional technology protected by patents are required to file the details of how an innovative technology functions in order to obtain patent protection.

All of this is in line with the goal of patent and copyright protection, detailed in the U.S. Constitution, to "promote the progress of science and the useful arts." This goal was traditionally met by protecting intellectual property in two ways: innovators were compensated for their work and thus had an incentive to produce it, while, just as importantly, they were required to register their work publicly so other innovators would have full access and could attempt to create an improved version.

Software has never fit comfortably within this scheme, since most software innovations are too incremental to meet the standards of fundamental innovation protected by patents. Yet those innovations are not really of the same character as artistic creations.

Still, as long as most software was generally made up of discrete programs running independently, copyright protection was generally both economically and technologically useful.

However, as software is increasingly designed to work in conjunction with other software, especially as networked computing explodes due to the Internet, the secrecy of source code allowed under copyright increasingly obstructs innovation in fundamental ways.

In the case of Microsoft, we increasingly see that innovation is endangered as a result of this source code secrecy. That's because Microsoft controls the operating system needed to make other desktop software work, and the company is seeking to control the browser software

that all Internet software needs to function. ....... Not only did this give an anticompetitive advantage to Microsoft, the fact that all programmers do not have full access to knowledge of the operating system and cannot innovate as fully has meant a general loss for consumers. Because the functions of the operating system are integrated behind source code secrecy, it becomes very hard for anyone else to improve some aspect of its functioning without replacing the whole Windows operating system in toto.

At one level, the opposition to Microsoft bundling Internet Explorer into Windows is not just the fear that Microsoft will add to its desktop monopoly but that a whole new set of functions, namely access to the Internet, will disappear into source code secrecy. As long as the browser was a separate piece of software from the operating system, all competitors had a somewhat level playing field, at least in regards to programming options, for integrating Internet functions into desktop computing.

By definition, since no one else can access the operating system source code directly, Microsoft has no competition in integrating Internet functions into the core of the operating system. The bundling of browser functions into the operating system is therefore the death of competitive innovation in fundamental aspects of Internet functionality.

The alternative would be a world where source code was public and programmers were free to create innovative additions to the core operating system. ...... There is a whole array of open source software, including the Linux operating system, where this is the reality. The result is software that is generally considered more innovative and robust than commercial software where only a limited number of programmers have access to secret source code.

Now, Linux is not going to supplant Windows anytime soon, although it is making impressive gains. But its continuing innovation by a broad range of programmers demonstrates what is lost by source code secrecy in Windows.

By revealing the source code of its Internet browser and encouraging others to innovate improvements, Netscape has made an encouraging step in the direction of open source computing, and Microsoft should be encouraged to follow suit. .......

If competitors could freely create innovative substitutes for different functions of the Windows operating system, many of the concerns about Microsoft would be lessened. Competition and innovation would be enhanced – a net plus for consumers in every way.

Copyright's protection is intended to enhance innovation. Where secrecy serves instead to reinforce monopoly interests, it should give way to open source code where all competitors can compete with a level playing field of knowledge.

The general issue of shared knowledge versus intellectual property goes far beyond any specific technology. But it’s especially relevant in information technology, and even more so in open networks. This isn’t just a matter of innovation, but of the basic efficiency end compatibility that we need – and we aren’t getting with proprietary operating systems.

It’s hard to understand if, how and when this problem can be solved. There could be a combination of factors. Intelligent initiatives by competitors. Choices made by large institutions. Maybe the law. So far we see only tiny glimpses of light in what looks like a huge legal war of giants but is only a detail in the general development of the tools we need to communicate freely and effectively. We can only hope that some of the tiny cracks will get large enough to break through the wall that prevents us from getting the solutions we need.

Here are some resources for more information on this subject, published in a special issue of Web Review  and quoted by Nathan Newman in his article:

Measuring the Impact of Free Software

What's New in Free and Open Source Software

The Origins of Free and Open Source Software

There are also two articles that I had quoted   last year: The Cathedral and the Bazaar  by Eric Raymond and a report at the O’Reilly Perl Conference Information Wants to be Valuable. More on this subject on the NetAction. site.

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5. "New" isn't always "better"
Readers of this newsletter know that I am quite uncomfortable with a glut of so-called technological "innovation" that is not serving ant practical purpose and often makes things unnecessarily difficult.

More from Ireland... an article published on August 24 by Antóin O Lachtáin In Praise of Lo-Tech   explains the situation very clearly.

There is always a new technology coming on the Internet. There's always new hardware, new server software, new programming languages, new delivery mechanisms, new everything really.

But when you look at it, there actually hasn't been all that much core technological progress on the web since Tim Berners-Lee invented it in 1990. HTTP is still the method by which web pages are delivered. HTML is still the almost exclusive format for delivering documents over the web. HTTP has been changed a little with HTTP 1.1 to address some of the performance problems with the original spec.

HTML continues to be enhanced in a fairly disorganised and haphazard way. It has become a lot more complicated, and has moved away from its original principles to facilitate more controlled page layout. Ironically, XML, which is designed to replace HTML, is a return to those first principles.

Equally at a lower level, the TCP/IP protocols that underlie the Internet have not substantially changed. There have been some changes to allow for more efficient allocation of the limited IP address pool. The technology has been scaled up to allow for greater and greater traffic without requiring any changes for the vast majority of computers connected to networks.

The original cooperative concept of the Internet has also changed relatively little. Proprietary standards like Shockwave and ActiveX have failed to gain a foothold. The audience for free operating systems like Linux and FreeBSD is still limited, but the Internet has definitely helped them expand. Apache, the main open-source webserver is holding its own. Netscape, a major public company has embraced an open development, open source strategy. Technological decisions about the Internet are still reached through 'rough consensus and running code'. .......

In a strange way, a big part of the reason for the commercial progress of the Internet has been its wariness about technological progress. If it had kept on changing, and kept requiring new software and new equipment, it would not provide the stable platform you need for developing communities and commerce.

This is not to say that change is all a bad thing or that technological progress isn't critical. The Internet obviously needs to change as it moves from being an academic and research network to being a network that a large proportion of the world's population will use regularly. But that won't be a problem providing that changes don't happen too often, and aren't too disruptive for ordinary users.

But the important things happening on the Internet today are not scientific breakthroughs. The important things are the changes in the way people are doing business, and how they are interacting with their customers, suppliers and employees using the technology. The people who succeed ... are the people who have isolated new opportunities to interact with customers in new ways.

Two basic facts are confirmed here. Innovation works when it serves a relevant and useful purpose – technology for it’s own sake does more harm than good. Simple, open, compatible solutions work much better than any over-complex, or in any case "closed", systems.

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6. The value of hypertext
I am becoming more and more impatient with a lot of the words that have become fashionable when discussing new technology and electronic communication. Especially those with a confused and often misleading meaning, such as "virtual" or "multimedia" (or anything starting with "cyber").

But there is a word that, though it sounds a bit funny, has a precise and important meaning: hypertext.

Many people seem to think that it means mixing pictures (maybe also sounds and animations) with written text. Of course it can do that as well. But its most important quality is the way it allows us to organize information.

Expert readers please forgive me if I say things that, for them, are obvious; or if I am nor very precise on the technical side. I am not trying to explain the technology. I am simply trying to define a few basic concepts that, I think, are important for people who are not involved in the technical execution of a website or any other hypertext-based solution.

The notion of hypertext is over twenty years older than the technique most widely used today (HTML, HyperText Markup Language, the backbone of the World Wide Web) and can survive any change of technology. There is already a new and more flexible system: XML (Extensible Markup Language) that users can adapt to their specific needs, as some scientific communities are doing. Math Markup Language makes it easy to display equations without converting them to images; Chemical Markup Language enables browsers to display the chemical structure of a molecule from a text describing the compound. MusicML allows compositions to be stored as text but displays them as sheet music.

One simple fact may be interesting for non-technical people. What we read as text is lots of gibberish for a computer; while software sees as "language" instructions that are spelled out in "alphanumeric" characters (like text) but we don’t see when we read something with a browser – or with any word processor.

What’s really important, for anyone reading or offering material to be read, is the structure of information; often called (quite rightly) the architecture of a site (or a cd-rom, or a file system, or whatever).

Technically, this isn’t quite as simple as it seems. But the really difficult, and most important, task is the organization of content. A "hypertext" structure allows a "potentially infinite" depth of information, that can be placed in a complex "hierarchy" on n levels. In addition to that, links can work across the system to reach related subjects; and in the case of a website "outgoing" links can connect to anything anywhere on the net.

The problem is: how can we provide the greatest possible amount of information with the easiest possible access? The value of a website (or anything else with a hypertext structure) increases with its complexity (i.e. lots of information and links) but its usefulness is based on how simple and easy it appears to readers.

Putting the two together (depth of content and ease of access) is quite difficult; also because it needs to be done from the point of view of the reader, not of the content provider. But it’s crucial: this is where hypertext is superior to any other possible form of communication. The quality of service offered to readers is one of the key success factors for an online site.


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