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CNN: The IPO that Swallowed Facebook

2012-05-15T15:48:31Z

(CNN) -- Facebook advocates are touting the company's initial public offering this week -- the biggest ever for an Internet company-- as if it will save the net, the economy and the American way. Its detractors see the final chapter in the rise and fall of a smart but solipsistic Harvard dropout, and predict the inevitable decline of Facebook's stock will spell the end to innovation in social media. Internet Bubble 2.0.

Of course, none of this is true. Such hyperbole is more about our traditional media's need for simple stories than anything happening at Facebook or on Wall Street. These are the judgments of financial analysts who don't even know what API stands for (application program interface), and technology analysts who never heard of the Greenshoe option (the provision for an underwriter to oversell).

This factless speculation, combined with the risk-off jitters of the greater markets, has led to the conflation of stock value with business, and one social media company with the future of the net. If the dot.com bubble and more recent stock market crash should have taught us anything, it's that stock prices have been uncoupled from business profitability, which has in turn been uncoupled from value creation.

Facebook can still be one of the most successful and significant companies of the past 100 years without being nearly worth an IPO valuation of $100 billion. Meanwhile, traders buying stock at that valuation can still make billions more over the next hours or days, even if the stock then plummets or slowly peters out. Likewise, Facebook can shoot to a sustained stock market success even without showing a reasonable profit for many years. Finally, Facebook can become the biggest stock market and business loser since Lucent (who?) without taking the Internet or social media down with it.

So to start, let's look at the IPO in isolation. Is Facebook worth the $96 billion reportedly implied by IPO valuation? Not at the moment. Facebook's profits are down since last year, its membership growth is stagnating and the online advertising market is softening. This IPO comes at a later than ideal time, as the potential trajectory for the company no longer seems infinite.

Does that mean you shouldn't buy the stock on opening day? Of course not. The price of Facebook shares will have nothing to do with the reality on the ground (or online). Everyone wants in, demand is outstripping supply, and the hunger for shares could push the price very high in the short term. None of this has anything to do with social media, it's just gambling.

It's also possible that even the craziest speculators are still undervaluing Facebook's ultimate worth. That's where a media theorist like me can venture an opinion -- and I'd have to say no, they're not. Facebook is certainly the best of the social media apps to come along, just as Google was the best search engine. Similarly, however, the social media playpen constituted by Facebook is temporary. Just as we are moving away from Web search into a world of applications running on smartphones, we will move away from our single Web-based social media platform toward more ad-hoc social apps on our handheld devices.

It's hard for us to imagine right now, but we won't be logging into Facebook to find out what's going on; we'll work and play in an ecology of apps that tell us where people are and what they are doing.

Yes, Facebook may have a role in that next-generation social media universe, but it will need what tech industry people like to call "a second act." Apple's second act is the iPhone. Google is hoping for "augmented reality" eyeglasses and network-controlled automobiles.

Facebook's second act is far from clear. It wants to become the platform on which everybody else builds social media apps. But if all this activity is happening on smartphones, then Facebook is dangerously dependent on Android and iPhone for everything, a layer on top of Apple and Google's systems. Facebook's inability to generate income on the smartphone has led to some desperate moves, such as its billion-dollar acquisition of photo-sharing app Instagram and off-putting products like "sponsored stories."

So far, love him or hate him, Facebook creator Mark Zuckerberg has been consistent with his vision of building a more social Web: a peer-to-peer communications infrastructure that changes the way people connect, share ideas and sell things. The more comingled his mission becomes with the priorities of Wall Street, the less freedom he will have to challenge the status quo.

The Facebook IPO itself, for instance, is being conducted in the most traditional fashion possible, with underwriters establishing a price and offering shares through brokerage houses. Compare this to Google, who let the public establish the share price through open bidding, mirroring the company's revolutionary, bottom-up search algorithm, and challenging underwriters with net democracy.

The most radical thing Zuckerberg has done so far is attend investor meetings in a hoodie -- as if to say, "in your face." Cute, but it hardly asserts innovation in the face of profiteering, or social networking in the face of the corporate capitalism.

This is a week when the stock markets are particularly vulnerable to a new message. The CEO of Yahoo is resigning after a controversy over resume padding, while executives at JP Morgan Chase are falling on their swords for losing so much money, so quickly, that they may change the regulatory landscape for their entire industry. People are ready to embrace a new way of playing this tired game.

By jumping headfirst into the stock market, Facebook may be joining a zero-sum shell game at just the wrong "risk off" moment. If Facebook does succeed in the stock market this week, then it will do so at the expense of Groupon, Apple and Google, whose net-fetishizing investors will likely be selling those shares in order to buy the new ones from Facebook. Worse, by joining in the speculative economy on Wall Street's terms, a company that might have changed business instead subjects itself to forces far beyond its control.

Rushkoff Keynote at Rhizome's 7 on 7 Festival

2012-05-07T14:15:19Z

Here's a very brief - 15-minute - keynote about the changing relationship of artist and technologist, delivered at the NewMusuem on April 14 for Rhizome's 7 on 7 festival.

Seven on Seven 2012: Keynote by Douglas Rushkoff from Rhizome on Vimeo.

My Preface to Boorstin's The Image

2012-04-27T19:36:53Z

The new edition of Boorstin's classic book on media and culture, The Image, has just been released from Vintage. I had the honor of writing a new afterword to the text.

The first edition of The Image was published in 1961, the same year I was born. Kennedy was yet to be assassinated, LSD was yet to reach Harvard University, and the French post-modernists were yet to begin their deconstruction of America’s television-driven culture.

Ironically perhaps, like most readers coming to the book today, my main access to the sensibility of this era comes from television shows such as MadMen which, for all their slick characters, cigarette smoking, and cynical dialogue, actually depict a kind of innocence: the last moment in our history before the images created on Madison Avenue overtook reality. From our current perspective within the chaos of the Twittersphere, the discussions between admen about what slogans might best sell pantyhose seem almost quaint. Though rather devious in its intent, there was an art to the manufacturing of images that could touch the untapped recesses of human psychology. This was a craft that could be mastered by one set of human beings to influence the behaviors of another.

Our widespread fascination with this era - with its styles, appliances, and values - points to our own sense that something was lost back there. Yes, the seamless American narrative was to be irreparably interrupted by a series of brutal assassinations, the Vietnam War, and Kent State. But reaching back just a bit further than this, to the landscape of PanAm, the Worlds Fair, and the Dick Van Dyke Show, we find an America already in transition from one culture into another. We went from what Boorstin would consider the world of language and text to the world of the image.

A conservative at heart, Boorstin saw this as a shift away from thought and consideration to one of instantaneous assumption. While words take time to utter and hear, the image is frozen in time - its impact immediate, and its influence decadent. Before the primacy of the image, a salesman would have to describe the attributes of a product in a rational appeal to the intellect. Afterwards, it was the mythology of the brand, usually concocted by psychologists, that would sway a consumer’s heart. Likewise, the policy platform of a presidential candidate would come to matter less than the ability of his image to convey ineffable or irrelevant values.

Of course, the rise of the image ultimately served the left and liberal no better than it did the right and conservative. Reagan would come to depend even more intentionally on the symbolic language of visual imagery as Kennedy, and modern conservatives would exploit the thought-quelling immediacy of television as well as any liberal democrat.

Where Boorstin proved the most prophetic and relevant to our age, however, is the extent to which created imagery would be able to supplant reality itself. In a process he saw just beginning in his own time, the imagery we created and the media we used to disseminate them were taking on a life of their own. That’s why the era of the MadMen is so intriguing, even nostalgic for us today. There were still human beings utilizing their creativity. The MadMen were actively concocting the logos of banks, the brand myths of soaps, and the characters on cereal boxes. However manipulative the intentions of such image factories, there was a creative innocence fueling all this cultural production and reproduction. The magic of color TV was as spectacular as the race into space.

But as Boorstin had begun to observe, the novelty of television was soon superseded by its ubiquity. The hypnotic lure of these simulated realities became the seamless wash of Muzak and strip malls. Innocence and awe gave way to sensory overload and unconsciousness. As Baudrillard would later explain, we lost touch with any of the creative origins of these media as the simulations they rendered became the new reality.

The first symptoms of this culture-wide disconnect appeared to Boorstin as the precursors to a much greater disease. Unlike Marshall McLuhan, who would later codify these changes in less judgmental terms such “hot and cool,” or “obsolescence and retrieval,” Boorstin made no secret of his concern and disdain for the direction in which the American experience and its discourse were going.

Most famously, he coined the term “pseudo-event” as a way to describe the public relations driven, over-dramatized media moment. He saw events and ideas enjoying dissemination and attention based on little more than their appropriateness to a sensationalist media. These synthetic events distracted us from the issues that mattered, and recast everything in the language of image. He feared presidential debates becoming too much like quiz shows, and coverage drifting from issues that matter to discussions of the candidates’ television performances. The pseudo-event highlights only pseudo-qualifications.

He worried about the tendency of Hollywood to recycle the stories of novels, creating the illusion that the forms were interchangeable and that people could truly get the gist of a book simply by seeing the movie. (We can only wonder what might Boorstin say of today’s college students who get the “gist” of Hamlet by reading a two-paragraph summary on SparkNotes.com?) And while movies are capable of representing panoramic sweeps and many kinds of spectacle, they are generally limited to speaking out on issues. Novels, on the other hand, by engaging with individual readers’ minds over longer periods of time, have the ability to “speak in” and address a more interior drama. In a world dominated by the image instead of the word, interior life gives way to exterior show. Substance gives way to simulation.

Pseudo-events, in turn, give rise to a new kind of celebrity: people who are famous for being famous. Boorstin was thinking of the Hollywood star system, how it manufactured “types” whose very casting in a part communicated pretty much everything one needed to know about the character. But he was also getting at least a vague premonition of today’s “reality” television, where any sort of talent is not only superfluous, but actually a hindrance. The kids on MTV’s Real World, for example, excel most for their ability to behave like “real world” castmembers. The Real World season, like that of any other reality show, is itself a pseudo-event, absolutely manufactured and all the more successful for its refusal to do anything other than be itself.

On such a pseudo-stage, celebrity becomes not just what Boorstin called a “self-fulfilling prophecy,” but a self-referential vacuum. The purity of celebrities is measured and confirmed through their ability to prove their incompetence in all real things. Paris Hilton, for example, is famous precisely because she is not qualified to do anything other than be famous. Her hit reality TV series followed her and her friend through America as they failed at doing basic tasks, either through laziness or incompetence. Likewise, Charlie Sheen reaches the highpoint of his own celebrity not by performing well on his television sit-com, but by sharing his manic delirium with the world through social media. Even his fictional television role was more of a tongue-in-cheek comment on his pseudo-event real-life debauchery than an acting performance.

Although Boorstin predated the net, he did foresee the direction in which we were going, and longed to alert us to both the humanity and intellect we would be destined to leave behind and as we leaped headlong in a world of image. What he may not have realized, however, is the extent to which the emergence of peer-to-peer networking technologies might eventually challenge the preeminence of the image factory from which he recoiled. By making images for one another instead of just consuming those of corporate America, we could begin to reverse the process through which we are, in Boorstin’s words, being “programmed” by advertisers.

He also seemed somewhat oblivious to the role of the market economy in fueling all this image-making and meaning-taking. As we understand now, media does not act independently of other social institutions, but as part of a greater ecology of forces and technologies. Television did not cause the pseudo-event any more than Facebook caused Arab Spring - even though the biases of these media types were certainly contributive to kinds of outcomes they yielded.

In the case of America in 1962, corporate capitalism was understood as a given. The only question at the time was what might be the best method for promoting its values and products to America. The MadMen of Madison Avenue believed they could create a mythical landscape in which brands and consumption would feed both our corporate coffers and our unconscious desires. Boorstin saw such efforts as not only dangerous, but also an admission of defeat. Why do we need the lies of an advertising industry unless we are covering something up? By surrendering to the disingenuous image-maker, we were acting as if we had something to hide. In hindsight, perhaps we did.

Whether or not a truer American dream may have been realized without the manipulations of the advertising industry, there is little doubt that we descended into a dream nonetheless. It was a dream we built ourselves in a spirit of optimism and infinite possibility, from Detroit to Levittown, in offices and bedrooms furnished by Eames and Heywood-Wakefield, and televised by NBC and Philco.

If we are inclined look back at that era with fascination and longing, it may be less for the mid-century furniture and fashions than to comprehend the consciousness with which they were created and used. Those last wonderful moments before we drifted off to sleep.

This book is one of the clearest missives we have from the other side of that dream. It was a dream into which Boorstin saw us drifting, and a dream from which he was imploring us to wake up. By reckoning with this analysis of how we were lulled to sleep, we may finally stand a chance of rousing ourselves into consciousness again.

Douglas Rushkoff

Hastings on Hudson, 2011

Motherboard TV: Douglas Rushkoff in Real Life

2012-04-27T14:50:52Z

Via Motherboard.TV

For someone who likes to talk about the virtues of disconnecting, the media critic Douglas Rushkoff seems surprisingly always on. When I visited him at his storefront office near his home in Hastings on Hudson, New York, he was preparing to teach a new class, getting ready for a BBC interview, writing an essay, staring down a pile of articles to read, trying to figure out his new iPhone, and hurrying to finish his third book in three years – a graphic novel called ADD, which revolves around gaming culture, celebrity and the pharmaceutical industry. “It also asks the question,” he says, “what if attention deficit disorder weren’t a bug, but a feature?”

The hyper-speed hyperlinked life is familiar ground for Rushkoff, whose first book Cyberia, made him a popular tour guide to the Internet in the early 1990s, and an early prognosticator of its radical potential. But much has changed between the awkward days of “the ’Net” – then a non-commercial collection of public networks, accessed by local ISPs – and the overloaded era of Facebook, YouTube and iPhones. If Rushkoff is well versed in the language underneath the “digital revolution,” he’s also become one of its most outspoken critics.

“A society that looked at the Internet as a path toward highly articulated connections and new methods of creating meaning is instead finding itself disconnected, denied deep thinking, and drained of enduring values,” Rushkoff writes in 2010’s Program or Be Programmed. His remedy is simple, if ambitious: once people begin to understand how software works, “they start to recognize the programs at play everywhere else – from the economy and education to politics and government…All systems have embedded purposes. The less we recognize them, the more we mistake them for given circumstances."

Understanding how things work In order to make them work better is the basic hacker ethos, but Rushkoff has applied it to his broader discussion of the way the culture and politics of the many are driven by the interests of the few. Between his landmark Frontline documentary The Merchants of Cool to his recent book Life Inc., Rushkoff has indexed the risks that capitalism and corporate influence pose to democratic society. Or, to extend the metaphor, he’s sought to show how we the users routinely get screwed by an “operating system” that’s over 500 years old.

“We’re leveraged in so many ways, it’s like, our economy is leveraged to produce more than it can in order for it to survive,” he says. “It’s leveraged to grow. Human beings are financially leveraged now. So how do you roll that back and say, well, you know, ‘this is it’?” Or, rather, “How do you get the good of a zombie apocalypse without the zombies? That’s sort of what I’m trying to help people with.”

Enter Occupy. Rushkoff has watched the movement with cautious optimism, penning editorials on CNN and organizing November’s Contact Con, a powwow of net roots activists and open source hackers working to foster new civic-minded apps and hardware. To include prizes, Rushkoff enlisted the help of Pepsi, which ultimately granted $10,000 to the Free Network Foundation, which was profiled in our recent documentary.

Rather than shun corporate sponsors, Rushkoff revels in what they bring to the table, and in the contradictions of the movement. Occupy’s power, ultimately, is its meme — the idea that a citizenry can not only protest the system but demonstrate a new way of responding to it and reworking it. Like his call to program, Occupy’s nebulous mission may be hard to swallow or carry out. But that also lends it its own kind of power, he says. Its radical promise isn’t unlike the earlier Internet’s: a distributed and open system that could change civic discourse and remake culture.

But as on the strange battlefield of the Internet, Occupy could also crash against its own giant ambitions, which will be heavily tested in the next few months, starting with next week’s “general strike”. Progress will have to be made gradually, says Rushkoff. “There are ways to slowly move towards a sustainable life path, and it’s just a matter of doing that, and I’m hoping that more people in Occupy start seeing it that way – in that more subtle way, rather than exclusively in the kind of activist, let’s-get-pepper-sprayed by cops way.”

Much has changed in the decades since Rushkoff started critiquing the system. But his philosophy is still animated by a big question, one that applies not only to the digital spaces of the Internet, built by the Facebooks and the Googles, but to other kinds of “public” spaces too, in town squares, Congress, and culture: who programmed these spaces, and to what ends, and how can they be hacked into something better?

Technology, Art, and Why the Future of Branding is Nonfiction

2012-04-27T12:38:00Z

Via Fast Company.

Ahead of his appearance at the art/tech event, Rhizome Seven on Seven, Douglas Rushkoff talks to us about the changing role of artists and technologists and how brands can no longer be abstract.

By Jim Hanas

Author and futurist Douglas Rushkoff--in his books or, in this case, via Skype--is frequently the voice of unconventional wisdom. He has argued, for example, that employment is an obsolete economic indicator and, though he has long been a tech enthusiast, his latest book--Program or Be Programmed--is a technological cautionary tale. There he argues, via “Ten Commands for a Digital Age,” that the technology that takes up more and more of our lives comes with built-in biases--toward simplification of complex issues, for example, and toward anonymity--and that in order to counteract these biases, we should learn how our programs work. We should all become programmers, in other words, a process Rushkoff now admits could be “harder than I might have made it sound, especially for an adult. It’s certainly as hard as learning Portuguese.”

Next Saturday, April 14, at New York’s New Museum, he will deliver the keynote at the Rhizome Seven on Seven Conference, which pairs noted artists and technologists together and challenges them to develop a project in just 24 hours.

We asked Rushkoff some questions about Rhizome, branding, and the future of marketing. As you might expect, some of his answers are unconventional.

CO.CREATE: What is your keynote going to be about?

DOUGLAS RUSHKOFF: I think what I’m going to talk about is the history of the relationship of artsy to techy people, and how I feel like it’s reversed over the last 20 years. The artsiest people went into technology and it feels now like--especially when I go someplace like Rhizome and see these partnerships between technology people and arts people--that the arts people are the nerds. The technology people are the people coming up with wild ideas and going forward and building them and the arts people are the ones who say, “This is a sort of Schopenhauer-influenced post-modern blah, blah, blah.” They’re the ones creating the documentation and the historical framework around projects that are pure imagination. So it looks to me like the nature of the partnerships between artists and technology people are the opposite of what they might have been back in the day, where the art boys were the crazy, wild people, pairing up with nerds to sort of envision this technological future. And now it’s wild-eyed technologists pairing up with educated, almost PhD-like artists, in order to contextualize what they’re doing more responsibly.

In your book, you argue that brands were necessary fictions that no longer make sense. What does that mean for the brand discourse that is so prevalent today?

It means people shifting their understanding of brand. Brand always had two functions. One of its functions was to mask the long-distance industrial-age reality behind a product because people’s personal relationships with producers were being replaced by the plain, brown-box relationship to mass-produced goods. That was one function: to humanize factory products.

The other function of the brand, though, was to create accountability. The difference between a branded product and an unbranded one, was a branded one, you knew who you could go to. They’re there. It’s their way of owning the product, both in the bad kind of way and the good way. We’re standing behind this. So the we’re-standing-behind-this aspect of branding I think still holds.

Every company has a social media strategy whether they know it or not

[But] it’s not about creating a mythology around the way a product was created, so it’s no longer “these were cookies made by elves in a hollow tree.” That’s not the value of the brand. The value of the brand is where did this actually come from? What’s in this cookie? Who made it? Are Malaysian children losing their fingers in the cookie press or is this being made by happy cookie culture people? At that point, all these companies come to people like me saying, “We want to become transparent. We want a transparent communication strategy.” And I’m like “Well, are you proud of what’s going on inside your company? Are you proud enough to pull up the shades and let people see inside?” It’s that easy.

Every company has a social media strategy whether they know it or not. You can have your dedicated social media person chasing down consumer complaints, but your real social media strategy is how are the people who work at your company and the people who buy from your company and people who supply to your company, how are they talking about you in social media? The way to make them talk about you [favorably] is by walking the walk of the thing that you do. And that’s so hard for so many of these companies because they’ve become so abstracted. They’ve become so distanced from the core competence of their industry. The job of a communicator--or someone like me--is to go in and say, well, just do something. Don’t outsource one thing and then make your company about that.”

What will marketing organizations look like in the future?

It will be companies that figure out how to communicate the non-fiction story of a company, so it’s going to look a lot more like a communications company than a creative branding agency. It’s going to look a little bit more like PR, in some sense. It’s going to be people who go and figure out what does your company do and how do we let the world know about that? There’s going to be a lot of psychology involved, except instead of it being psychologists turned against the consumer, it’s going to be psychologists going in and trying to convince companies that what they’re doing is worthy. It’s breaking down this false need in companies to hide from the public what they’re doing--except for the ones that do (need to hide).

The thesis of your book is that digital technology has built-in biases that limit choices and discard information. Do you think exercises like Seven on Seven can serve to overcome, or at least reveal some, of these limitations?

I think the artist, even more than government, has become the one who is doing long-term thinking about what’s happening, what are the implications, what are we doing to ourselves? And they’re some of the only ones, really. An artist’s job is to sit outside what’s happening and reflect back to us where the human is in this. I think it’s a very valuable exercise. It’s just the opposite exercise of what most people probably think it is. It’s not for technologists to realize the visions of artists. It feels much more like it’s for artists to contextualize the visions of technologists.

CNN: The New Whistleblowers

2012-03-24T17:21:26Z

(CNN) -- Back when I was a kid, they were called "whistle-blowers": employees of corrupt companies or government agencies, who went to the press with shocking stories of criminality or abuse.

Daniel Ellsberg risked his life to leak the Pentagon Papers, which destroyed public support for the Vietnam War. Plutonium pellet maker Karen Silkwood was exposing malfeasance at the Kerr-McGee plutonium plant when she was killed in an auto wreck. Jeffrey Wigand exposed Brown & Williamson's practice of intentionally manipulating the effect of nicotine in cigarettes, forcing Big Tobacco finally to admit the addictiveness of their product.

Since the 1960s, dozens of brave, disillusioned Americans such as them have turned against employers who were breaking the law or otherwise harming humanity in some real way. They did so at the expense of their careers and sometimes even their lives.

Somehow, the recent spate of similarly public defections of employees from the corporations they work for just doesn't feel like quite the same thing. Sure, it's pretty easy for most of us to agree with Greg Smith, the Goldman Sachs derivatives dealer who quit publicly via a New York Times OpEd because "the environment now is as toxic and destructive as I have ever seen it."

Still, he's not complaining that Goldman Sachs is destroying the environment -- as in the air or the water -- through pollution. He's complaining about the corporate environment, the conversation in the corridors and the way the firm is choosing to make money. Instead of helping its clients make money, Smith says, the firm is now -- legally but unscrupulously -- putting its own needs first and fleecing its clients for whatever it can get. He is upset about the collapse of the corporate culture, its ability to create value for clients and the sustainability of the enterprise.

Likewise, computer engineer James Whittaker, who left Microsoft in 2009 to work at Google, returned to Microsoft last month and fired off an angry public blog post about how Google is losing itself in a "whirlwind of desperation." He says that when he first went to Google, it was "a technology company that empowered its employees to innovate." Now, he complains, thanks to its obsession with promoting its Facebook-like Google+ service, "The Google I left was an advertising company with a single corporate-mandated focus."

These gentlemen are garnering the same sorts of astonished headlines and outcry from their former employers and colleagues as did earlier generations of whistle-blowers. And while it may seem like they are turning against their companies, the real difference here is that they see themselves as speaking for their companies. These are not conflicts over corporate malfeasance, but over business plans!

Smith believes it is not just more ethical, but better business for Goldman to think about serving its clients. He thinks it is a better long-term strategy for Goldman to help its clients make smart investments, rather than convincing them to make bad investments -- and then bet against those very same clients.

Whittaker believes Google, the corporation, is turning its back on its greatest assets by focusing on advertising revenues instead of technological innovation. "The trappings of entrepreneurship were dismantled," he explained, "trappings" being a good thing in this context. In short, this is not the way he thinks the corporation can succeed.

Unlike whistle-blowers of the 20th century, this new breed of turncoats reveals just how far from questioning the corporate reality we have come. They become dissidents not by challenging corporate power, but by challenging their own corporation's methodology -- as if they would have been better CEOs themselves. In both cases, they accept the underlying corporate structures and the greater economic operating system in which they function as given circumstances.

What they cannot see from their vantage point is that these companies are behaving in a manner totally consonant with their corporate agendas. The minute Google went public, its only priority was to serve its shareholders. Google is an advertising company. That's how it makes its revenue. Any technological innovations that don't serve this purpose -- and do so quickly -- will be questioned by shareholders and board members looking for big short-term gains.

Likewise, Goldman is in the moneymaking business. They always have been. They are operating on a fiscal landscape where innovation is no longer valued, and where it's easier to make money the old-fashioned way (exploiting people dumber than you are). Occupy Wall Street kids figured this out months ago, and a few million mortgage-holders and retirees figured it out a few years ago: When you have to keep growing at the rate of interest to stay alive, you are going to start making stupid short-term decisions.

In short, the kinds of sustainable, value-creating businesses these corporate escapees are calling for just can't happen within a corporate model based on borrowing, leverage and expansion. It's too little and too late for a few corporate whistle-blowers to tell us how the companies they work for are technically incompetent, distracted by revenues or losing the values that once made them great.

It's time to blow the whistle on the whole thing.

CNN: A New Role for the One Percent

2012-03-09T14:24:25Z

(CNN) -- A whole lot of us are stuck with credit-card debt that goes up each month, mortgages worth more than our homes and student loans that extend into infinity. So it's only natural that we look at the debt crisis from the bottom up: from the perspective of the 99% who are getting screwed.

But what if we instead looked at this whole mess from the top down, from the point of view of the 1%: the billionaires and venture capitalists in Mitt Romney's world? Maybe, just maybe, their problem is our problem.

In fact, as I have come to see it, short of civilization-ending revolution, solving the debt crisis might actually mean saving the 1%.

They have the power and the money, they own our government, and they won't go down without taking everyone and everything else with them. Instead of backing them even further into the corner of fear and defensiveness, we need to help them find a way out. And that means helping them understand how they got there.

The debt crisis is not entirely President Bush's or President Obama's fault. It's not even Congress' fault. It actually resulted from a short-term "fix" to the economy made about 700 years ago.

See, for pretty much the entire first millennium -- what we call the Middle Ages -- the 00.01%, the feudal lords, enjoyed total control over the land and its people. The 99.99% worked the land and served the lords, who created no value at all. But by around 1100, the Crusades moved a whole lot of people and stuff around Europe. Peasants were exposed to sugar, cotton and all sorts of new weaving and milling technologies for the first time. Former peasant farmers started to get smarter and more productive. They established market days and traded what they grew and made with one another. They invented local currencies to store and exchange value instead of bartering.

Local currency then worked very differently from the money we use today. Someone would simply bring grain they harvested to the grain store, and come out with a foil receipt. The receipt could be broken into smaller pieces, which served as money. Since some grain was lost to spoilage, the currency's value went down over time. This meant it had to be spent instead of saved. So the money circulated very rapidly.

People got wealthy, invested in upkeep on their windmills, paid one another good wages, and got taller. Little towns got so rich that they built cathedrals. That's how a peer-to-peer economy works.

But the aristocrats weren't participating in any of this wealth. Without a dependent peasant class, they had no way to survive. They didn't know how to do anything themselves. They needed a way to make money simply by having money. So they came up with some ways to force new kinds of dependence.

Their first trick was to outlaw local currency. If people wanted to trade among themselves, they would have to borrow money from the central treasury, with interest. Wars were fought, blood was spilled, but they got their way. We have all but forgotten that the money we use today is a monopoly currency that costs us more than it's worth.

The second great idea was the chartered monopoly: the corporation. It gave just one firm -- one friend of the king -- the authority to do business in a certain industry. The British East India Trading Company, for example, had all rights to cotton in America. A farmer wasn't permitted to sell his cotton to neighbors, or to make it into anything. He had to sell it at fixed prices to the company, which shipped it to England and let some other chartered corporation make mittens and hats, which were then shipped back to America for sale.

That's why we fought the Revolution.

The problem with this scheme is that it works by stifling innovation and competition. The wealthy stay wealthy by extracting value instead of creating it. The more value they extract, the more laws they write protecting the rights and privileges of the extractors. As companies like General Electric realized, it was better to sell off productive assets and become more like a bank. The system was created for people who have money to make money. The value creators are the chumps.

The most surprising victims in this whole saga, however, are the corporations themselves. You think you're scared? Talk to the heads of America's corporations. They have sucked all the money out of the system, and don't know how to create any more. According to Deloitte, asset profitability for American firms has steadily fallen 75% over the last 40 years. In other words, corporations have managed to absorb all the money, but they don't know how to do anything with it. They have no skills, no competencies and no vision.

It's not the 99% who need to retrain themselves in order to get jobs. It's the 1% who need to face the fact that their 600-year workaround of the value creation has reached the very endpoint of diminishing returns. They need to consider whether they might actually make more money at this stage of the game by helping people create value instead of actively preventing it.

What would that look like? Right now, companies like Google, eBay, Square, Kickstarter and even PayPal and Apple are at least pointed in the right direction. They create and sell tools and services that give people and small businesses the ability to create and exchange value with one another again. They understand that real value creation comes by fostering the peer-to-peer transactions of a bottom-up marketplace rather than simply repressing such activity.

But we, the 99%, are the only ones who can show them the way. We need to begin by abandoning the fruitless quest for gainful corporate employment, and instead start working for ourselves and one another. We must stop outsourcing our savings and investments to bankrupt corporations, and instead invest in the people and businesses in our own communities -- however we define those.

In doing so, we will very quickly create demand for the kinds of networks, supply chains and services that only larger companies can provide. We will give the 1% an opportunity to re-educate themselves, to find a path to success, and -- for the first time in centuries -- to experience the guilt-free satisfaction of working for a living.

CBR - Shaun Manning's Interview and Review of A.D.D.

2012-02-02T14:46:37Z

By Shaun Manning - In a near-future world, a select group of teenagers are chosen to beta-test revolutionary video games full time, living in a lavish dormitory that provides everything they could ask for and enjoying celebrity exceeding that of today's most famous athletes. But what makes this group so special, and what does the corporation behind it all truly have to gain from the teens' skills? In "A.D.D.: Adolescent Demo Division," noted media theorist Douglas Rushkoff turns his attention to the world of video games and the potential for good and ill contained within something as simple as play. Rushkoff, whose previous comic book work includes the "open-source Bible" series "Testament," is joined by artist Goran Sudžuka. The book is in stores now from DC/Vertigo.

Comic Book Resources and Rushkoff had a candid discussion of "A.D.D." and the ideas behind the book.

"Most simply, 'A.D.D.' asks, 'what if Attention Deficit Disorder were not a bug but a feature?' What if the things that we're seeing emerge from our very media-connected kids, what if these weren't illnesses or pathologies but rather adaptations? What if the abilities gained by the Newtype children of manga and anime, what if some of the things we're considering disorders are actually adaptations or reactions to the media environment in which kids are living?" Rushkoff told CBR. "We sort of asked the question, and then the story grew out of that. Ok, if ADD is a feature and not a bug, it means that someone made it happen, someone put it there. Who would do that, and why? I built a world around that 'what if' and wanted to get to the place of asking, 'what would constitute resistance in a world where corporations are trying to program us into submission?"

Rushkoff, who has published several books on media culture including the recent "Program or Be Programmed: Ten Commandments for a Digital Age," told CBR that in "A.D.D.," he wanted to examine such ideas in "a very human way," expressing his views in comic book form rather than a non-fiction treatise. The choice of artist, then, also became important, and Goran Sudžuka provided what both Rushkoff and the Vertigo editors were looking for. "Jonathan [Vankin], who was the original editor on this book, decided -- and I agreed -- that we wanted a simple, accessible style, focused on the acting rather than the environmental style," Rushkoff said. "At this point, it seemed less important to depict another version of the external media circus panoply of marketing imagery and all that -- which would be the obvious place to go -- and instead look at these kids in their starkest, most human reality you could, so you identify with the kids and their struggle. Goran's really good at the acting, at making their faces and body language exude what they're actually going through. We wanted to make these kids as human as possible so they're not just little game pieces."

Video games provide a useful context to explore Rushkoff's vision of modern society due both to the elements of play and because games are a constructed world -- much like our own, in Rushkoff's view. "A lot of these ideas occurred to me while I was in South Korea doing a television documentary that was largely about the pro gamers of South Korea. Spending time with them and seeing their world, it was so bizarre. It was such a bizarre existence that they had. On one hand, it was the idealized existence for any 14-year-old gamer, but on the other it was sort of this self-contained nightmare," the writer said, describing what is clearly a real-world analogue for the live-in game testing facility of "A.D.D." "Also, I've always been interested in gaming from the perspective of the playability of the world we're living in. Most people don't seem to recognize that we're living in a constructed world, that a whole lot of the things we take for granted as the given circumstances of nature are actually very specific creations of people, of man. And they're playable. The economy can be played with, the media can be played with. These are not laws of nature written in stone. These are very virtual worlds. We're living on top of operating systems, however much they try to hide that from us. You know, central currency is an operating system. It was developed in the 1200-1300s by specific people with specific goals. Now, we go around thinking this economy is some natural thing, this economy is the way all economies work, and it's not. Even this idea of free market -- we don't live in a free market. The extent to which this market is free is the extent to which we agree to play by the rules that were set in place by the people who invented the market that we're living in right now. Gamers, it seemed to me, especially good gamers, are people who have the ability to see beneath the rules to the actual 'who wrote this game' and 'what do they want this game to actually do.' How is this game rigged, and who rigged it, and why?"

Pages from "A.D.D.: Adolescent Demo Division"

While the gamers of "A.D.D." are all teenagers, there are, of course, no no small number of adults playing video games. We asked Rushkoff how these older players fit into his view of games in society (or gamesas society), to which he responded, "I do think that there's a developmental period. There's something going on between 12 and 21, that isn't when they're older. What's happening when you're young is, you're kind of a native of that environment. Your neuroplasticity is at its height, the degree to which you are shaped and formed by the world that you're in is really heightened," Rushkoff said. "Whatever TV you're listening to between 12 and 20, whatever music you're listening to, whatever clothes you're wearing, whatever technology is around, those kind of come naturalized.

"I think it was Alan Kay who said, 'technology is whatever was invented after you were born.' But there's that sense that, to a kid 12-20, the newest thing that might be in a game is just the way things are. Whereas to us, it's sort of this newish thing," Rushkoff continued. "You and I might look at 'Farmville' or 'Mafia Wars' as, 'oh, those are the little social games that were built on top of Facebook,' always from outside in. But to a nine-year-old who plays 'Farmville,' it's part of their formative experience of this space. I think they think of that as a classic! They think of that the way we think of 'Asteroids' and 'Space Invaders,' as these sort of archetypal experiences. People who were in their 30s and 40s when 'Space Invaders' and 'Asteroids' came out probably looked at it as some weird, new-fangled thing."

Of all the teen gamers of "A.D.D.," there is only one female at the testing site -- and there is a very specific story reason for this, as readers learn. With the ongoing discussion of women in comics and video games -- particularly, the scarcity thereof -- CBR asked Rushkoff for his thoughts on the causes and effects of women being sidelined in some popular media. "I think to some extent it's harder for the forces that be to hypnotize women the same way they hypnotize men," Rushkoff said. "Women were just as susceptible to the marketing of objects. In the 1950s, when they started marketing to women in America after World War II and trying to increase consumption, that's when kleptomania was first diagnosed -- and it was a women's disease, because they were so marketed to that they would go in and steal stuff from the department store. I'm not saying women are not programmable and susceptible, they are. But it tended to be more for 'the real.' I'm finding, at least, that boys and men are more susceptible to the attraction and hypnosis of 'the virtual,' whether it's pornography or video games or ideas. They seem to be more susceptible to these abstract forms of manipulation. Maybe men are more visual and less tactile; there's probably some old evolutionary biology reasoning for it. Men were hunting, so they had to stay at a distance; women were gathering, so they had to feel the berries in their hands. Who knows what it is, but it doesn't seem, for the most part, that these worlds are quite as compelling in the same way to women as they are for men. They are compelling -- now, the numbers are changing, and I think the number of women involved in social media is greater than the number of men. As the applications change, certainly the gender biases change as well. But this ADD video phenomenon thing does seem to be more boy than girl."

As technology has expanded what is possible in the real world -- events like the Arab Spring and Occupy movement would likely be impossible without the democratization of media made possible by smart phones, social media, and the like -- Rushkoff cautions in "A.D.D." that the very tools we perceive as liberating can also be dangerously limiting. "I wrote this 'Program or Be Programmed' book to give people commands through which they can orchestrate their media and digital experience, rather than just having them orchestrated for them. But the big one that I've been thinking about lately is not to mistake choice for liberty, or choice for freedom," he said. "A choice is not a choice if you're obligated to choose. If you're obligated to choose, it might as well be 'Sophie's Choice' or forced choice. You know, which of these detergent strategies do you want to use to clean your linen? Well, I don't want to use any of those, I want to use nuts or something -- which apparently you can use, some kind of nut shells that you stick in the wash. It's the sense of being bombarded by choice and then equating all of this increased choice with autonomy. It's just not. Every time you have to choose, you are submitting to the obligation to choose. And you're breaking your flow, you're breaking your concentration, you're breaking whatever it is you're doing to make that choice. 'Do I take this call waiting, or not?' You don't have to choose. That's a choice -- 'none of the above' really is a choice. And it goes beyond Coke or Pepsi, McDonald's or Burger King, to the fabric of reality, which is not this leaping from choice to choice but the existence that happens between the choices."

"A.D.D.: Adolescent Demo Division" by Douglas Rushkoff and Goran Sudžuka is available now.

http://www.comicbookresources.com/?page=article&id=36683

NPR TheTakeAway Interview: Will Facebook IPO Change Soul of the Company?

2012-02-02T14:01:51Z

When Facebook becomes a publicly traded company, it will have a duty to its shareholders to maximize company profits. As it traverses from social media start-up to massive, publicly traded company, one media theorist says the company will have to battle to maintain its identity.

Facebook filed the first papers for it's Initial Public Offering Wednesday afternoon, just before the business day ended.

According to Bloomberg, Facebook has chosen Morgan Stanley to lead their IPO efforts, which are expected to generate $5 billion to $10 billion for the company and give the company a valuation of perhaps as much as $100 billion.

The IPO is expected to be one of the largest in U.S. history, certainly larger than Google and rivaling many of the largest on the global stage as well.

But the IPO will bring big changes for Facebook as well and will challenge the company to try and keep its own engineers and leaders from seeing this as the perfect time to cash in their stock shares and try to do something on their own.

Douglas Rushkoff, author of "Program or Be Programmed: Ten Commandments for a Digital Age," said the more money Facebook takes on, the more like money it will become. In other words, when a social media company is a social media upstart, it will have vastly different motives than the motives it has when it's responsible for acting in the best interest of its shareholder — a requirement for being a publicly traded company.

"The more public company you become on a stock exchange, the more really business-as-usual you become," Rushkoff said. "The more like corporate capitalism you become."

And, Rushkoff points, out that could mean some changes for Facebook users. Because profits for Facebook don't directly come from users — but rather from advertisers and social marketing firms — to maximize profits, Facebook will have to look for ways to improve that are in the best interest of advertisers and marketers.

"Rather than us, who are the people who are using this service for free, in exchange for surrendering our data," Rushkoff said.

To some extent, Google's IPO provides at least an indication of how Facebook will respond to becoming a publicly traded company, Rushkoff said.

"When Google became public, they had much more of an obligation to prove their devotion to their shareholders' interests," Rushkoff said. "They did that. They cut programs. They have to show earnings growth. They have to show focus. The got rid of Google Labs. You don't see Google talking so much about how every employee is going to have 20 percent of their time to do what they want."

In essence, Rushkoff said, the Facebook IPO isn't so much about social media taking over the economy, but rather about how the economy forces a tech start-up, a social media company, to adapt to the economy.

http://www.pri.org/stories/science/technology/will-facebook-ipo-change-the-soul-of-the-company-8242.html

CNN: Facebook's IPO - Zuckerberg Faces reality

2012-02-02T13:58:31Z

(CNN) -- We all knew he'd eventually get around to it: Mark Zuckerberg is expected to finally bring Facebook public. The company is reported to be preparing to file for an IPO -- initial public offering -- through which anyone will be able to buy shares of the social networking company on an open stock exchange.

As a media theorist, I used to ignore these business shenanigans. Who cares if these companies are private or public, profitable or in the red? How many non-Wall-Street-Journal readers even knew what an IPO was back before the Internet created the likes of AOL, Netscape, and Google?

But the fact is we do now think about the stock market. Many of us are aware that Apple's market capitalization is fast approaching half a trillion dollars, making it either the largest or second-largest company in the world behind Exxon Mobil - depending on the week. So when we hear that Facebook is preparing for an IPO that will likely dwarf Google's entrance to the public markets in 2004, particularly considering that the company doesn't sell tangible goods or services in the traditional sense, we can't help but wonder what this will mean for the future of Facebook, its users, its competitors, and the greater economy.

The way it appears at first glance - particularly for those who have been following Mr. Zuckerberg since he launched "The Facebook" from his college dorm or, better, those who have seen the movie "The Social Network" - is that the Zuckerberg juggernaut is continuing unabated.

This new form of media -- social networking -- will not only redefine the Internet, change human relationships, create a new marketing landscape, and challenge Google, but it will now rescue and alter the economy itself. Like virtual kudzu, it will infiltrate the financial markets, creating new sorts of opportunities for this peer-to-peer "social" economy to take root. We will all make our living playing Farmville, or designing new versions of it, or investing in companies that do.

In reality, however, I don't think we are witnessing Facebook's victory over the financial markets as much as its acquiescence to them. Yes, Apple challenged Microsoft for software supremacy, just as Facebook now challenges Google for Internet supremacy. But there's another operating system churning away beneath all this high tech activity, and it's called corporate capitalism. If a company is big enough -- and that means simply holding enough money -- then sooner or later that money influences the rest of the company's activities.

In Facebook's case, it meant approaching the legal limit of 500 investors, which triggers a requirement to open the books to regulatory scrutiny. It also meant dealing with a few thousand coveted employees who took jobs at Facebook instead of Google or Apple or anywhere else because they were hoping to get in on a big thing. The promise of cashing in a few million dollars worth of stock options helps many a programmer make it through a late night of coding.

The same goes for those who invested in Zuckerberg five or more years ago and want to cash in before the "social web" bubble pops, if it's going to. Facebook was taking so long to get to market that many people had begun selling their shares privately on what are known as secondary markets, putting Facebook's valuation even further out of the company's own hands.

Simply becoming a multi-billion-dollar company changes the essence of its goals, activities, and purpose. Its bloodstream becomes filled with cash, and cash has its own agenda. For just like print, TV, or the Internet, money is a medium, too. It has biases, or tendencies, programmed right into it. The kind of money we happen to use -- bank-issued central currency -- is biased toward lending. That's why we call our system "capitalism." It's about the capital: Our money is designed to favor those who lend it to others who actually use it to build companies or create value.

The more money a company takes in, the more obligated it becomes to function in accordance with the properties and rules of money. For example, since becoming public, Google has had to prove its devotion to its shareholders' interests by cutting pet programs, showing earnings' growth, and demonstrating focus over big dreams. Out with public experiments like Google Labs, in with products like Android try to compete with Apple's iOS and G+ to compete with Facebook. No more touting that employees get 20% of their work hours to do whatever they want. It's a real corporation, now, and has to behave like one.

By all accounts, Zuckerberg was trying to delay this eventuality as long as possible. He knows that becoming the CEO of a public company will not be nearly as much fun, or as free, as running an Internet startup. However much we may not like his vision for our future, his primary purpose was to change the world. He wanted to create the operating system on which human social activity took place.

What he has ultimately succumbed to, however, is the fact that Facebook was running on top of another operating system all along. Instead of revolutionizing our reality, by filing an IPO Mark Zuckerberg is finally getting with the program.

http://www.cnn.com/2012/01/31/opinion/rushkoff-facebook-ipo/