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Surf the users In the days and weeks after November 8th, there was much hand-wringing concerning the influence of Facebook on the election. As with many things at the intersection of popular culture and technology, this was partly the result of a category error. Because many Americans (and, I suppose, Canadians) get their news from Facebook, both the mainstream news media and many consumers insisted that Facebook is a media company with the same responsibility to edit and moderate as any other media company. However, Facebook is more like Google search in how it chooses which content to serve to its users – meaning, that it does not “choose” at all. Facebook and Google are governed by algorithms. The purpose of these algorithms is to provide the most interesting, more relevant content to their users. Google delivers different search results to different users depending on their region, past behavior and other demographic factors. Facebook provides articles in a user’s news feed based on their comments, interests and past behavior on Facebook. Meaning that users did not receive fake news stories about Hillary Clinton and a pedophile pizza ring because Facebook thought it was legitimate news. Users received these highly dubious “articles” because they had shown a willingness to read and engage with highly dubious articles in the past. The Facebook algorithm digests and reflects the user’s likely interests. In the memorable phrase of VC Benedict Evans, Facebook is “surfing their users.” Why does this matter? It is too easy to throw up your hands and say “caveat emptor, Facebook user.” After all, if someone wants to believe obviously fake news, that is their God-given right as Americans. America gave us both the moon landing and the belief that the moon landing was faked. Freedom! But then consider the unfortunate case of Mr. Edgar M. Welch. Mr. Welch had just gotten internet access for the first time and promptly signed up for Facebook. There, he was shocked to discover that multiple news organizations were reporting that there was a secret pedophile ring run by Hillary Clinton out of pizza parlors. Mr. Welch was new to the internet. He believed what he read. And promptly visited one of the aforementioned pizza parlors with an automatic rifle, in hopes of liberating those poor children. However, tempting it is to dismiss Mr. Welch as a rube, many people are too credulous when it comes to reading internet articles that confirm their prejudices. The algorithm that kept feeding Mr. Welch nonsense and lies, feeds a different set of readers information about gluten intolerance or the dangers of vaccines. Surfing the users can create self-contained bubbles of established “fact.” While I may abhor his politics, I consider Mr. Welch a tragic figure. He is the victim of a cultural cynicism about the importance of separating truth from fiction. In a nutshell: Facebook is not a news organization. But they do have a duty to inform their users that information they find on the site is often false. Read More Amazon rising Digital advertising dollars are largely controlled by two companies, Alphabet (Google) and Facebook. Each company is a problematic partner for advertising agencies. Google is considered problematic because its share of the market is so vast that it could easily disintermediate most advertising agencies and work directly with clients. This forces many agencies into the arms of Facebook as a counterweight against Google. However, Facebook is problematic because it has misrepresented the effectiveness of its digital advertising on numerous occasions. Advertising agencies are squeezed between a potential monopolist and a known prevaricator. The good news is that a powerful competitor is rising to challenge this duopoly in Amazon. Amazon has been quietly building an advertising suite to compete with Alphabet’s Doubleclick while they have also been buying up companies to improve the SAAS layer on AWS. Amazon has unique knowledge of many consumers’ buying habits and can allow marketers to advertise in a more targeted way than Google and Amazon. Unfortunately, Amazon eats middlemen for breakfast. The dirty little secret of advertising is that advertising holding companies make their money by acting as the middlemen between advertisers and media companies. Creativity is a value-add. Why does this matter? In the short term, this is good news for Google. Just as Facebook was losing credibility as a competitor, Amazon swoops in as an answer to European regulators concerned with the monopoly power of Google. In the short term, this is good news for Facebook. Both Google and Amazon are considered untrustworthy by the ad agencies. This forces agencies to continue to work with Facebook, even as they doubt the accuracy of its metrics. In the short term, this is good news for advertising agencies. They gain a competitor to Google and Facebook, allowing them to demand better terms for their client’s media dollars. In the long term, Facebook, Google, and the advertising industry just woke up next to an apex predator. This won’t end well for everyone. In a nutshell: Amazon is becoming a viable alternative to Facebook and Google in digital advertising. Read More AI - le mot juste? Jerry Kaplan writes in MIT Technology Review that artificial intelligence suffers from a PR problem. Over the last ten years, we have been subjected to a steady drumbeat of low level hysteria about the rapid development of something that is called “artificial intelligence.” The machines are becoming smarter than we are – already they have bested us at chess and Go. Soon they will throw off their puny-brained human masters and use planetary-scale neural networks to evolve into digital gods! As best as my puny human-sized brain can understand it, the argument is that no intelligent creature has allowed itself to be ruled by a less intelligent one. (Insert obvious Trump joke here.) Kaplan seems to think that AI would not be generating this level of scrutiny if it had been given a less provocative name. He suggests “anthropic computing.” Why does this matter? Machine learning, anthropic computing, artificial intelligence, deep learning – each of these names has a unique set of associated meanings. Each is inaccurate in its own subtle way. The danger is that the misinterpretations which naturally result from using one of these phrases can change the public debate about technology and warp the course of research. I am sympathetic to the idea that people working with AI must be mindful of the unintended consequences of their systems. But that is true of all technology. There are intelligent reasons for being concerned about the growing role of technology in our economy and personal lives, but the rise of Skynet just isn’t one of them. While we focus our discomfort on “what if” scenarios, we may be losing sight of the need to create a society where everyone has the ability to earn a living. In a nutshell: The phrase “artificial intelligence” causes people to freak out. Read More Applied Blockchain Bloomberg columnist and deadpan-humor virtuoso Matt Levine dedicated part of a column this week to a company that is actually using the blockchain in a thoughtful and practical manner. Danish shipping company Maersk was confronting a chronic problem with shipping containers. While their existing systems were capable of keeping track of millions of shipping containers all over the world, each individual shipping container required stamps and approvals from as many as 30 people before leaving port. If one of these approvals was missing or misplaced, it was possible for a shipping container to languish in port. As Levine points out, most blockchain initiatives are glorified database projects. In fact, most of the time a vanilla database would be better at accomplishing the goals of the initiative than a blockchain. However, this particular challenge plays to the blockchain’s strengths. The blockchain is an effective messaging platform in an environment where trust is lacking. Maersk is partnering with IBM to build a blockchain system to track these shipping container approvals in a way that enhances communication and avoids fraud. Why does this matter? I don’t blame a CIO or CTO for launching a blockchain initiative when they would be better off with a database. Like everyone else, these individuals are just trying to secure funding for much-needed corporate initiatives. It is much easier to convince the CEO and the board to underwrite something sexy like the blockchain, than it is to convince them you need to set up a database. And I don’t blame software consultants for selling blockchain initiatives when their clients would be better off with a database. Everyone has to eat. But I do blame those CEOs and boards for not taking the time to understand what the blockchain does well and what it does badly. Remember, a blockchain is like a snowmobile. It’s fun and useful in the right environment and embarrassingly useless in the wrong one. (Bonus simile: Blockchains are like lederhosen.) In a nutshell: Blockchains are like snowmobiles. Read More

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