Futuríveis

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THE internet age was supposed to herald hard times for the middleman. Customers, so it was said, would flock to the web to buy products and services faster, cheaper and more transparently than in shops or through intermediaries. Disintermediation has indeed come about, as any out-of-work travel agent or bookseller will tell you. Yet retail bankers—the middlemen between savers and borrowers—have been surprisingly untouched.

Enter Prosper Marketplace, a Californian company that matches people who need small loans with others who have extra cash to lend. Prosper launched its website on February 6th. This week, the number of active bids for loans was running at around 200. Lenders have put up some $750,000.

Such “person-to-person” lending is not entirely new. Zopa, a British venture that also matches borrowers with willing lenders, opened for business last March. It now boasts 50,000 members, of whom 15% are actively trying to borrow or lend money at any given time. The company does not publish the volume of loans.

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Zopa and Prosper say that lenders can earn a higher rate than they would from a savings account and borrowers pay less than on a credit card. According to Richard Duvall, Zopa's chief executive, interest rates on Zopa have averaged 7% before bad debts (of which there have so far been none). That compares with the 4.5% paid on a good British savings account and the 15% typically charged on credit-card debts.

There is a psychic pay-off, too. Users on Zopa have said that they like lending and borrowing within a community of “real” people, rather than through a faceless bank. Mr Duvall notes that affinity credit cards (ie, those linked to an activity or membership) tend to have lower default rates than traditional credit cards. “The sense of community matters,” he says.

Prosper takes this idea a step further, by allowing customers to form groups of borrowers with similar interests or backgrounds—similar to social networking sites such as MySpace.com or Friendster. Groups include one made up of Harvard Business School alumni, and others for atheists and agnostics. Groups with reputations for repaying loans on time can expect to get cheaper interest rates.

Chris Larsen, Prosper's founder, believes that these groups will help his company cut the two biggest costs encountered by credit-card companies: customer acquisition (often requiring pricey direct-mail or advertising campaigns) and defaults. Because group leaders earn money as their members repay loans, they have an incentive to recruit new members—in theory, doing Prosper's marketing for it. And the hope is that group members will be less prone to default because doing so would lower the credit rating of their group as a whole. Moreover, while borrowers can remain anonymous to the larger community, group leaders will know who has defaulted, so there is a “shame” factor. “It only takes lowering default rates by a fraction of a percentage point to make a difference,” says Mr Larsen.

Catherine Graeber of Forrester Research, a consultancy, is intrigued by the idea, particularly because it might attract 18- to 28-year-olds who need credit and spend hours logged on to social networking sites. These people, says Forrester, are much less likely than their parents to care about brands when choosing a bank. They are also routinely ignored by banks.

Still, potential pitfalls remain. One is that Prospect's group concept suffers from an inherent conflict: bigger groups mean more borrowers, but less cohesion, weakening the shame factor. But perhaps person-to-person finance's biggest difficulty will be to attract enough lenders—particularly once customers start to default, as they surely will. Ms Graeber points out that there is a reason why banks and credit-card companies charge the rates they do. “Unsecured lending has a high default rate,” she says. “What do these companies know that banks don't?”

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Economist.com | Articles by Subject | Person-to-person finance

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The old story of technology in business was a trickle-down affair. From telephones to computers, big companies came first. They could afford the latest innovations, and they reaped the benefits of greater efficiency, increased sales and expansion into distant markets. As a technology spread and costs fell, small businesses joined the parade, though from the rear.

Now that pattern is being challenged by a bottom-up revolution, one fueled by a second wave of Internet technologies like the search services from Google, Yahoo and Microsoft and software delivered as a utilitylike service over the Web.

The second-generation Internet technologies — combined with earlier tools like the Web itself and e-mail — are drastically reducing the cost of communicating, finding things and distributing and receiving services online. That means a cost leveling that puts small companies on equal footing with big ones, making it easier for upstarts to innovate, disrupt industries and even get big fast.

The phenomenon is a big step in the democratization of information technology. Its imprint is evident well beyond business, in the social and cultural impact of everything from blogs to online role-playing games. Still, it seems that small businesses, and the marketplace they represent, will be affected the most in the overall economy. Long-held assumptions are suddenly under assault.

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Web Services Upend Old Ideas About the Little Guy's Role - New York Times

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The era of cheap, lightweight digital cameras — in cellphones, in computers, in hip pockets, even on key chains — has meant that people who did not consider themselves photography buffs as recently as five years ago are filling ever-larger hard drives with thousands of images from their lives.

And one particular kind of image has especially soared in popularity, particularly among the young: the self-portrait, which has become a kind of folk art for the digital age.

Framing themselves at arm's length, teenagers snap their own pictures and pass the cameras to friends at school or e-mail the images or upload them to the Internet. For a generation raised on a mantra of self-esteem, striking a heroic, sultry or brooding pose and sharing it with the world comes naturally.

"It's a huge phenomenon," said Matt Polazzo, the coordinator of student affairs at Stuyvesant High School in Manhattan, referring to the compulsive habit of teenagers to snap everything in their lives, especially self-portraits. "Just yesterday I had a girl sitting on the couch in my office," he said. "She took out her cellphone and said, 'Here, I'm going to show you a picture of my best friend,' snapped a picture of herself and showed it to me, all in one fluid motion."

Art historians say that the popularity of the self-portrait is unprecedented in the century-long history of the snapshot. "I think it is probably a new genre of photography," said Guy Stricherz, the author of "Americans in Kodachrome, 1945-65" (Twin Palms, 2002), which includes snapshots culled from 500 American families. Mr. Stricherz said he reviewed more than 100,000 pictures over 17 years in compiling the book but found fewer than 100 self-portraits. These days you can find as many by clicking through a few home pages on MySpace, Friendster or similar social networking sites.

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To a certain extent new technology is driving the new self-portraiture. Cellphone cameras and other digital cameras are sold with wide-angle lenses that allow a picture taken at arm's length to remain in focus. Computers are essentially $1,000 darkrooms that permit sophisticated manipulation of images.

But technology alone can't explain the trend. Even in previous generations when cameras were cheap, they were generally reserved for special occasions. "In 1960 a person just wouldn't take a Kodak Brownie picture of themselves," Mr. Stricherz said. "It would have been considered too self-aggrandizing."

Psychologists and others who study teenagers say the digital self-portraiture is an extension of behavior typical of the young, like trying on different identities, which earlier generations might have expressed through clothing and hairstyles. "Most of what I've been seeing is taking place in the bedroom," said Kathryn C. Montgomery, a professor of communication at American University, referring to teenage self-portraits. Dr. Montgomery studies the relation of teenagers to the digital media. "It's a locus of teen life where they are forming their identities, and now it's also a private studio where they can develop who they are.

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Since endless experimentation with digital photography costs little or nothing (you just delete the duds), many young camera owners like Ms. Davidson have practiced their art to the point where they have stumbled across sophisticated portraiture techniques of lighting, composition and camera angle that were once the province of professionals.

Take that shot with the camera held high above the head, so common on MySpace that some members refer to it as "the helicopter shot." It is a fairly sophisticated technique.

"Shooting from higher up stretches the neck muscles, and there is no double chin," said Ken White, the chairman of the fine-art photography department at the Rochester Institute of Technology, adding that it also accentuates the jaw line. "It is a glamorizing view."

In the era of the blog, when many deem the most trivial and personal information fit for public consumption, the self-reference of the new portraiture feels natural. "In a funny way I don't see this as photography anymore," said Fred Ritchin, an associate professor in the photography and imaging department at the Tisch School of the Arts at New York University. "It's communication. It's all an extension of cellphones, texting and e-mailing."

Many users consider digital self-portraits whimsical and ultimately disposable.

"People want pictures of a new hairstyle, outfit or makeup, and they want to show it to their friends," Tom Anderson, the president of MySpace, said in an e-mail message. But, he added, "I suppose all folk art comes from necessity of some sort."

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Here I Am Taking My Own Picture - New York Times

Outsourcing Is Climbing Skills Ladder - New York Times:
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In a survey of more than 200 multinational corporations on their research center decisions, 38 percent said they planned to "change substantially" the worldwide distribution of their research and development work over the next three years — with the booming markets of China and India, and their world-class scientists, attracting the greatest increase in projects.

Whether placing research centers in their home countries or overseas, the study said, companies often use similar criteria. The quality of scientists and engineers and their proximity to research centers are crucial.

The study contended that lower labor costs in emerging markets are not the major reason for hiring researchers overseas, though they are a consideration. Tax incentives do not matter much, it said.

Instead, the report found that multinational corporations were global shoppers for talent. The companies want to nurture close links with leading universities in emerging markets to work with professors and to hire promising graduates.

"The story comes through loud and clear in the data," said Marie Thursby, an author of the study and a professor at Georgia Tech's college of management. "You have to have an environment that fosters the development of a high-quality work force and productive collaboration between corporations and universities if America wants to maintain a competitive advantage in research and development."

The multinationals, representing 15 industries, were from the United States and Western Europe. The authors said there was no statistically significant difference between the American and European companies.

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FT.com / Comment & analysis / Comment - Wake up to old-fashioned power of new oligopolies: "The increasing power of a few leading trade-oriented companies over entire production and supply systems results in a variety of economic and political ills. One is the degradation of many production systems themselves. That is what happens when the actual producers of goods or components are unable to capture a sufficient share of revenue to support innovation, or sometimes even to maintain existing machinery and workforces. Another is the heightening of competition within society as opposed to between leading companies. In a production system marked by extreme outsourcing, oligopoly does not result in the end of competition so much as the redirection of competition downwards, as lead companies capture more power to set supplier against supplier, community against community and worker against worker.

It is here we find at least a partial explanation for one of the more confusing paradoxes of today’s global system – the simultaneous rise in consolidation and competition. So far, especially in America, the tendency has been to blame extreme competition on “globalisation”, not least because faulting foreigners for domestic ills can be a good way to sell books and win votes. The real explanation, however, is not only globalisation, or even mainly globalisation, as much as radical changesin the structure of industry. In other words, it is not the Chinese who destroy US and European jobs, but roll up by the world’s largest traders and retailers of the power to pit producer against producer, and to capture most or all of the gain from the arbitrage.

Outright monopoly is absolutely defensible – when granted temporarily to reward companies for bringing truly new ideas to market. But most of today’s powerful companies are not the result of new ideas, only the strategic reordering of markets. If anything, their goal is the oldest one in commerce – to fence in the place where deals are done, and to tax producers and consumers for the right to meet there. It will not be long until we realise that to save our free market system will require, among other actions, far more aggressive enforcement of antitrust. Simply stopping any further roll out of power will not be enough. True believers in the free market will admit there is no other choice than to roll the power back.

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FT.com / Comment & analysis / Comment - Islam offers role model of most modern kind: "Muslim protesters do not represent some religious tradition that must be schooled in the lessons of modern citizenship. Rather, their protests bring into being a hyper-modern global community whose connections occur by way of mass media alone. From the Philippines to Niger, these men and women communicate with each other only indirectly, neither by plan nor organisation but through the media. And just as in their protests over Salman Rushdie’s Satanic Verses in 1989, most Muslims today are hurt not by the offending book or image but by its global circulation as a media report.

Yet it is this very circulation of the offending item as news that also allows Muslims to represent themselves as a global community in, through and as the news. Moreover, they can only do so by way of English as a global language. It is no accident that the cartoon controversy outraged the Muslim world only when it was reported on the BBC and CNN television networks, as noted by Thomas Blom Hansen of Yale University. English, not Arabic, is the source language of global Islam. In this hyper-modern community, traditional distinctions of belief and practice have ceased to be relevant, as indeed has religion itself in an old-fashioned sense. The generic Muslim being displayed on television screens across the world canncannot be marked by any specifically theological concern. In the Rushdie affair, the explicitly religious issue of the “satanic verses” was never taken up as a cause for offence – even in the Ayatollah Khomeini’s fatwa – and today’s protesting Muslims similarly object not to Islam’s supposed proscription of the Prophet’s image but instead to the manner of portrayal.

These theological concerns are in fact interesting only to the defenders of liberal democracy, who think of challenges to its freedoms in outdated terms. As in the Rushdie affair, the Prophet insulted today is not a religious figure of any traditional sort. In 1989 it was Mohammed as husband and family man who stood impugned in the eyes of protesters. Today’s protesters express their hurt by comparing the Prophet to a family member, hardly a religious role. This is language that belongs more in the Christian than the Muslim tradition.

In fact, Mohammed as family man has become a role model of the most modern kind, one representing the ideal Muslim not as a citizen or even leader of a state but as a properly global figure. This is not surprising for Muslims who themselves have become global subjects through displacement by war as much as economic migration, by the massive growth of cities and technological transformation.

These Muslims are inventing a new global politics. Such are the peaceful and individual boycotts of Danish goods, which operate through trans­national capitalism to create a global politics outside the cognisance of states. Muslim protests over cartoon caricatures in a Danish newspaper do not threaten freedom of expression in liberal democracies. They challenge liberal democracy itself as a political form that is becoming parochial within a new global arena.

Liberal democracies are increasingly shot through with new global vectors, from immigrants to multinational corporations. While Islam is certainly not the only global movement around, its geopolitical situation has made this religion the most volatile global phenomenon of our times.

It is because global Islam comes to us from the future that it exposes so clearly the limits of liberal democracy. Instead of defending their freedoms dressed in the wigs and breeches of liberalism’s past, the critics of Islamic fanaticism must think about the limits of liberal democracy in new ways.

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InformationWeek | E-Commerce | Internet Expected To Influence Nearly Half Of Total Retail Sales | February 6, 2006: "The amount of money consumers spend online is expected to increase 75 percent by 2010, with the Internet influencing nearly half of all U.S. retail sales, a market research firm said Monday.

U.S. consumers are expected to spend $144 billion in 2010 from $81 billion last year, JupiterResearch said. Spending this year is expected to reach $95 billion.

By 2010, 71 percent of online people will use the Internet to shop, compared with 65 percent last year. The small increase indicates that retailers will mostly be dealing with an experienced population of online shoppers who are savvy about finding free shipping and deeper discounts, the research firm said."

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If introducing a volunteer-based global network of Wi-Fi hotspots sounds like a crazy idea, you might as well have some fun with the process.

That was the strategy behind Wednesday's "formal" launch of the idea known as "FON" here at the O'Reilly Emerging Telephony conference, an intro that was as formal as sneakers at a black-tie dinner.

FON, which was started last year by Argentine telecom entrepreneur Martin Varsavsky, has already started signing up people in Europe who are agreeing to share their Internet access by allowing other FON users to freely access their wireless routers. Other users may simply pay to use the FON network of hotspots, much like you would pay for any other Internet-access service.

While the idea has a huge list of unanswered questions standing between it and success -- not the smallest of which are legal terms of service that can prohibit "sharing" of broadband access -- on Wednesday the company was in full crusade mode in front of a largely appreciative audience of telephony geeks, who answered affiratively almost in unison when asked if they had a Wi-Fi router at home.

FON's leader for North America, the charismatic Ejovi Nuwere, drew more than a few laughs with FON's over-the-top promotions, which included postcards left in the show hotel's men's bathrooms that showed a shadow outline of a person sitting on a toilet using a laptop computer under the company's "Wi-Fi Everywhere" logo.

InformationWeek | 'FON' Has Fun With U.S. Launch | 'FON' Has Fun With U.S. Launch | January 26, 2006

FT.com / Arts & Weekend - Goodbye, cruel world: "“The greatest danger to our civilisation is not selfishness nor self-interest. It is the combination of intense loyalty and selfless behaviour towards one’s own group with the utmost neglect and cruelty to those outside,” FT commentator Sir Samuel Brittan once remarked in a book review I cut out and kept."