The Twitterization of the Blogosphere

It wasn't until recently, with the overnight sensation known as Twitter, that the cell phone showed its potential to move to the fore of blogging. If a growing number of bloggers are shying away from the citizen journalism and mass consumption that originally defined the medium, Twitter's popularity shows how eager people are to share quotidian tidbits of life in real time.

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Business Week Online | 06/10/07


There are dozens of Weblogs that seemingly anyone who is anybody in the technology industry reads regularly. Lisa Hsu's blog isn't one of them. A doctoral student in computer science and engineering at the University of Michigan, Hsu occasionally pens a post about topics like "secure shell protocols," a software standard for protecting data on a computer network. More often than not, however, she's just musing about mundane things that only her friends would care about: details of a trip to the dentist, random Web discoveries or maybe a new movie.

Hsu guesses that only five people tune in regularly, while occasional readers may number 25. However, she's far from disappointed about not having the mass following of the blog TechCrunch. "I don't hope that I meet new people. In fact, a lot of times, if I have a random person comment, I get scared," says Hsu. "All I really want is for my friends to see it."

Hsu's not alone in blogging for her buds. On average, there are only seven readers for each of the 12.5 million blogs on LiveJournal, one of the most popular services for hosting Reliable hosting solutions with 24x7x365 support – Visit HostMySite.com these online journals.

Most bloggers wouldn't have it any other way. "Blogs that tend to get a lot of press are the ones that draw a lot of traffic and get people fired up, but that is a very small, narrow, niche-use case," says Eric Case, product manager for Google's (Nasdaq: GOOG) Latest News about Google Blogger hosting service. Meanwhile, he says, the concept of blogging is already evolving. "This thing we understood as blogging is vanishing and it is reframing as people develop new ways of posting and sharing things."

Cell Blogging: Less Is More

As part of this shift away from lengthy blog reflections that entail time behind a keyboard, cell phones are gaining traction as a key blogging tool. Popular services such as Microsoft's Windows Live, Blogger, and Yahoo 360 began introducing mobile blogging features two years ago. These services allow users to post short notes and photos to their "moblogs" on the go, albeit from the discomfort of a cell phone keypad.

However, it wasn't until more recently, with the overnight sensation known as Twitter, that the cell phone showed its potential to move to the fore of blogging. With Twitter, people share quick updates on their most mundane doings, often from a cell phone. If a growing number of bloggers are shying away from the citizen journalism and mass consumption that originally defined the medium, Twitter's popularity shows how eager people are to share quotidian tidbits of life in real time.

One company hoping to further facilitate this demand is Six Apart, which operates the blogging services LiveJournal, Vox, TypePad and MovableType. On May 23, Six Apart announced a deal with SpinVox, enabling LiveJournal users to speak their blog entries by phone. SpinVox, which transcribes the words with voice recognition Latest News about voice recognition technology, says the system is 97 percent accurate, learning from individual accents over time. "Blogging is a really good product, but it becomes great when you can do it from any phone," says SpinVox Cofounder Daniel Doulton.

Say It With Video

Microsoft sees the potential to offer a similar service. In March, the company acquired Tellme Networks, a provider of voice recognition systems for phone directory listings and automated customer service Free Download - Sage Software's 17 Rules of the Road for CRM.. In the future, Microsoft could leverage the technology for call-in blog posts. "They have some great voice search services, and obviously voice is a great premise for the mobile phone," says Phil Holden, the director of Microsoft's mobile Web services group and himself the author of a mobile blog read by a tiny audience. "I don't care about having a billion friends," he says.

With the connections between cell phones and wireless Get the facts on wireless solutions suited to your industry. networks getting speedier, blogging companies also see potential for mobile video blogging. Already, sites such as kyte.tv, owned by decentral.tv, allow users to post videos taken with mobile phones to their blogs. In the future, the company plans to allow live video posts to blogs via mobile phone.

Video and photos will become integral to blogging, says Andrew Anker, general manager of Six Apart's consumer products division. After all, most of the time, bloggers may not have the time to write 1,000 words. However, they can upload the visual equivalent via a camera-phone photo. "The writing-lots-of-words blogging will be a small amount of blogging," says Anker. "When I'm in some place interesting and I have a quick thought or I see a funny sign and want to share it -- when you think about blogging in the next five years, that will be blogging."

Playing the Money Game

Even in the real world the financial services industry already has a substantial virtual component. It is also one of the most technologically advanced industries on the planet, and there are some who believe the financial services industry will benefit most from the online revolution these new 3-D worlds are spearheading.

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Global Finance | 06/10/07


With millions of users now involved in them, virtual communities are beginning to attract the attention of global banks and corporations, which are looking at how best to tap into this growing phenomenon. Many industry insiders believe that the future of online commerce is a combination of 3-D and 2-D commerce -- bringing together the 2-D online shopping experience that so many consumers now access regularly for their shopping needs and the 3-D virtual communities that are increasingly being embraced by the wired world.

Many banks and companies are getting in on the ground level, building up a presence in one or more of the largest virtual communities in much the same way that they tiptoed onto the Internet in its early days. However, what business model will eventually be successful in making a real-world profit from virtual ventures remains to be seen. Estimates have put revenues from the virtual gaming and virtual community industry at almost US$10 billion by 2009, and this reflects only revenue by the hosting Reliable hosting solutions with 24x7x365 support – Visit HostMySite.com companies, not those entrepreneurs and corporations that are setting up shop and looking to eventually make a profit. All evidence suggests that figure will be just the tip of a very large iceberg.

First National Bank of Second Life?

However, while most of the focus so far has been on the potential for real-world companies to promote and possibly sell real goods to members of virtual communities, another area is quietly developing that holds possibly even greater promise: virtual financial services. Even in the real world the financial services industry already has a substantial virtual component to it. It is also one of the most technologically advanced industries on the planet, and there are some who believe that the financial services industry will benefit most from the online revolution that these new 3-D worlds are spearheading.

To an extent, the virtual communities are already evolving rudimentary financial services industries. Each of the biggest communities and game sites has its own virtual currency-or an online token that represents money within that world. Currency can be earned either through game play or by selling goods and services, or it can be bought at exchanges for real-world currency. For example, there are PEDs (Project Entropia Dollars) in Entropia Universe, Isk in "Eve," Gold in "World of Warcraft," Acorns in South Korea's Cyworld, or Linden dollars in Second Life. Hong Kong messaging firm Tencent offers the Q coin, which is not an official currency for any one site but is generally accepted in China and Hong Kong for use in various online game sites and for various online services-including, significantly, the purchase of some real-world items.

There are countless exchanges, both official and unofficial, for trading between real-world and virtual currencies. MindArk, the Swedish firm behind Entropia Universe, offers an ATM card to add PEDs to an inhabitant's account and has various mechanisms for users to convert back to real-world currencies.

Particularly in the realm of currency exchange, the similarities to the real world are striking. Second Life has an official exchange, LindeX, and a number of unofficial exchanges have sprung up. The Linden dollar is a floating currency, while some others, such as the PED, offer a fixed exchange rate to the US dollar. Some sites offer currency exchange themselves while others, such as Eve, are adamantly opposed to it. These last two points -- fixed- versus floating-rate currencies and whether currency exchange is state-sponsored, as it were -- are fundamental differences between sites and are driving how those economies are developing.

Crossing Over

In order to bring some transparency to virtual economics, a New York University economics student has developed a model bank in Second Life to provide real-world-like banking services and to look at how virtual economies are developing. SL Bank offers in-world accounts for residents and has a Web-based administrative panel. The bank provides transparent information on interest rate fluctuations, project goals and fund investments.

In many ways it is no different from the Web-based interface Manage remotely with one interface -- the HP ProLiant DL360 G5 server. that many people use to manage their money in real life. It is this apparent crossover -- and the sheer volume of money changing hands -- that is catching the attention of real-world financial services companies.

As yet, little crossover between virtual currencies has occurred, although this would seem to be a logical next step. A few sites, such as Iron Prairie, are beginning to spring up that claim to offer trading between different virtual currencies, but those few that do plan to offer inter-site trading are fledgling at best. One Web site, GamesUSD, was dedicated to providing exchange rate information between virtual currencies and real-world currencies, but it appears to be defunct.

Economic Development

The growth of virtual economies is also exemplified by the tremendous amount of infrastructure Barracuda Spam Firewall Free Eval Unit - Click Here and support springing up that is geared at helping companies reach target audiences and successfully integrate real-world business models with virtual settings. For example, advertising Email Marketing Software - Free Demo and marketing companies are now beginning to target the virtual arena. Electric Sheep is one such company building out an ad network for virtual worlds. Many consumer research firms are beginning to look at virtual consumer behavior. "What is clear is that the fusion between real and virtual worlds is occurring," says Ed Kountz, a senior analyst at JupiterResearch.

Many virtual communities are now of a size to have an independently functioning economy, with all the advantages and difficulties that implies. As this develops, so too is regulatory awareness of virtual economics. Kountz says that there have been some discussions in the United States about taxing virtual profits. "But how you do that is a very interesting question. There are no easy answers for that," he says.

David Johnson, visiting professor at the New York Law School, says that virtual economies are real economies and virtual commerce is real commerce. "Some form of regulation is always necessary to create healthy markets and enable the formation of companies and organizations of all kinds," he says. However, that regulation can be made by groups that come together online in particular places or by the hosting companies that establish rules and the people who decide to visit such hosts.

These views are reflected by Jeanette Hofhiann, program leader for Internet governance at the Social Science Research Center in Berlin and a member of the Internet Governance Forum. "Markets need regulation to make them work-more precisely to enable and to protect competition. Regulation should ensure a level playing field-particularly that market power does not prevent choice and the freedom of innovation," she says.

Regional Regulations

Hilmar Peterson, CEO of CCP Games, the company behind the sci-fi universe Eve, says all legislation will have to be regionally based and ensure that it allows a competitive market landscape for companies in that country. Some regulators are indeed attempting to put in place laws to govern virtual-to-real-world currency trading and purchases. In South Korea, media reports have said that legislators plan to ban commercial trading in virtual currencies. China's Internet regulators and the central bank stated that the Q coin from Tencent could become a threat to the stability of the renminbi and have disallowed the use of virtual currencies to buy real goods and services.

According to Dan Speed, senior graphics programmer for Eve, such actions are misguided. "It will be a painful learning process, and many mistakes will be made in doing this. It is very easy to misunderstand the issues that are truly going on under the surface," he says.

One big concern about a virtual currency is how to ensure the solvency of the organizations that issue it: If an organization were to become insolvent, that currency could become completely devalued overnight. However, as Johnson notes: "The world is full of exchangeable things that could change in value depending on the activities of others. The way to protect oneself against this is to be careful about the kinds of value/things you accumulate, and to diversify. The Internet provides opportunities to create rating systems and distribute information that can help people correctly assess risks." This kind of decentralized, reputation-based control will be far more effective than regulatory intervention, he adds. "Of course governments should intervene to attempt to prevent and punish fraud. But the global economy is far too complex to allow governments to attempt to prevent economic failures or fluctuations in the value of various goods and transferable tokens," he says.

Getting Into It Now

For those banks and companies looking to take a piece of the virtual action, the question may be whether getting in on the ground level will be the best investment-building up a strong brand and growing with the community-or waiting to see how such communities will evolve and how regulators will address them. Kountz says that no one yet understands how these virtual communities can best be accessed by real-world entities. "But there will be an opportunity here. Beyond that, it is a matter of ensuring that the brand is where the potential consumer is," he says.

Entropia Universe is selling banking licenses to financial institutions looking to set up shop in the virtual world. David Simmonds, business development director at MindArk, says that, with the license, financial institutions will have the opportunity to offer any of the services they do in real life (IRL)."There is no difference in what they will offer simply because it is virtual. If they have a license to offer loans, saving, or insurance IRL, then it is possible that they can do this virtually as well," he says.

"Banks in particular are aware of the changes that are going on," notes Kountz, "and it is clear that the rise of virtual communities and, associated with that, the rise of virtual currencies provides an opportunity to blur the line between virtual currency and real-world currency."

Both ABN AMRO and ING have communities within second Life. Wichert van Engelen, director of ING Venturing, says: "We believe that now in virtual realities there is something developing that is like a real economy. Any economy is serviced by one or more financial institutions, so that is why we think we can play a good role in this developing phenomenon."

The virtual banks are almost certainly not making money yet, but as Kountz says, "Anywhere there is a chance to be involved in a transaction-virtual or not-there is opportunity to take a piece of that." Van Engelen goes further in his plans for virtual banking: "In the long run I believe that the normal way we use payments on the Internet will be replaced partly or in total by virtual worlds. It is not a matter of 'if you will move real-life banking services to virtual banking services. It will happen; it is a matter of how and when."