WSJ writes:

Microsoft Corp.'s $240 million investment in Facebook Inc. -- a three-year-old company with more promise than profit -- represents a huge bet that the online advertising boom will continue and the popular social networking site will be among the biggest beneficiaries.
[Faceoff]

The software giant said yesterday that it will buy a 1.6% stake in Facebook, beating out Google Inc. after intense lobbying. The deal places a $15 billion valuation on the closely held Palo Alto, Calif., start-up. Facebook, which runs a site where people set up personal Web pages, expects to break even this year, on a cash-flow basis, with revenue of $150 million, according to people familiar with the company.

Facebook and Google move further into the competition for controlling the social graph. Microsoft's money give Facebook a little bit of a breathing room to improve their technology.
Also, it reminds me the early days of Internet Search engines when banner ads were all the rage. This is another sign that there's no new social networking business model yet. Good :)

From a system evolution perspective, the synthesis stage in social networking is over. Time to invest in performance improvement and discovery of a new business model. Remarkably, Google has not come up with anything new since search relevant ads.

Steve Balmer at CTIA show ( on mobile phone):

The goal of the industry--and of Microsoft--should be to create devices that work for both home and work and are capable of handling running business applications, unified messaging and gaming.

"In a sense we have to think about the phone as almost a universal remote control for your life," Ballmer said.

Ballmer even conceded that the phone is taking on a more central role than the computer for many people.

"The phone has a unique role," he said. "While the PC is the most powerful device, the phone is most popular device." In a world of services (think Windows Live) that run over a variety of devices, it is the phone that any individual is most likely to have at any given time, he said.

In some cases, the phone will be the computer.

"In many countries the phone will be the PC for people that have very little money," he said, pointing to a scenario in which the phone plugs into a docking station and connects up to a keyboard and television to act as a PC-like device, something Microsoft has been developing in its labs and hopes to start testing over the next 12 months.

As I noticed earlier, the phone becomes a disruptor for the PC ( displacement would be a more precise term). There are several factors that help it: the moore's law, maturing communications infrastructure, and, of course, opening up of APIs ( see Apple's announcement earlier this month).
Ad social networking, and you get an incredible potential for growth.

Brad Fitzpatrick on the Social Graph problem:

There are an increasing number of new "social applications" as well as traditional application which either require the "social graph" or that could provide better value to users by utilizing information in the social graph. What I mean by "social graph" is a the global mapping of everybody and how they're related, as Wikipedia describes and I talk about in more detail later. Unfortunately, there doesn't exist a single social graph (or even multiple which interoperate) that's comprehensive and decentralized. Rather, there exists hundreds of disperse social graphs, most of dubious quality and many of them walled gardens.

Social graph is becoming an important infrastructure for content/ad/goods distribution. Facebook emerged as an early leader in this space, but, clearly, Google intends to wrestle this control point from them. Brad proposes an open framework that would benefit a major established player, which doesn't have access to the graph.

Forty years after the publication of his law, which states that transistor density on integrated circuits doubles about every two years, Moore said this morning: "It can't continue forever. The nature of exponentials is that you push them out and eventually disaster happens.

"In terms of size [of transistor] you can see that we're approaching the size of atoms which is a fundamental barrier, but it'll be two or three generations before we get that far - but that's as far out as we've ever been able to see. We have another 10 to 20 years before we reach a fundamental limit. By then they'll be able to make bigger chips and have transistor budgets in the billions."

UCB Prof. John D. Kubiatowicz said in his CS162 lecture that Moore's law died in 2002. Silicon manufacturers moved from pushing clock speeds to building multi-core systems. This probably means that PC growth will slow down dramatically over the next decade. On the other hand, portable, mobile, and embedded computers, e.g. phones, that have a lot processing power headroom will spawn a large software industry.

Fernando J. Corbato in his 1991 Turing Lecture On Building Systems That Will Fail said:

What I am really trying to address is the class of systems that for want of a better phrase, I will call "ambitious systems." It almost goes without saying that ambitious systems never quite work as expected. Things usually go wrong and sometimes in dramatic ways. And this leads me to my main thesis, namely, that the question to ask when designing such systems is not: "if something will go wrong, but when will it?"

All inventions are, to follow his definition, seeds of ambitious systems.

need to work through this paper to extract good complexity/scalability problems

Guardian on the latest trends in book publishing:

The survey reached across the globe, from Afghanistan to Vietnam, with book industry workers, whose professions ranged from editorial to marketing to booksellers and literary agents, responding from 86 countries. Over half identified digitisation as the greatest challenge facing the industry, with concerns strongest in Anglophone countries (71% of North Americans and 68% of UK respondents). User-generated content was cited as a challenge by 22%.

Digitisation is one of the key themes of this year's fair, with a number of sessions aimed at helping publishers learn how to tackle the developments in electronic publishing. Amazon and Google are in attendance, and suppliers of digital products have taken around 10% more exhibition space than in previous years.

Well, maybe I shouldn't be trying to publish my book through traditional channels.

From a system evolution point of view this would be a change in packaged payload that will ripple through the whole publishing business.

Guardian on social aspects of book purchase motivation:

Social competitiveness about which titles we read has become one of the new mass forces of the era and only middle-aged people are relatively free of it.

Driven partly by pressure from incessant literary prize shortlists, more than one in three consumers in London and the south-east admit having bought a book "solely to look intelligent", the YouGov survey says.

The biggest group, more than two in every five people, follows the traditional method of choosing their reading; relying on recommendations from close family and friends.

I started listening to UC Berkeley podcast CS 162 Operating Systems and Systems Programming with John Kubiatowicz as it star performer, and was immediately rewarded with phrases like "taming complexity" and "scalable madness". He is absolutely right - programming billions of transistors, living and breathing electrons at astronomical speeds, is a huge control challenge. Operating system presents a software engineer with a "virtual machine" that is orders of magnitude simpler, and therefore much easier to deal with.
In a similar fashion we give students, inventors, and innovators a five-element system model, i.e. a technology-independent virtual machine, that they can play with without knowing all the gory details about mechanics, psychology, or biology of the underlying elements. Like a child, who accepts the magical nature of things around her, a person working with a model frees her mind to focus on her creative transformation impulse.

Should use it as an example in the five element analysis chapter

Tyler Cowen writes about, what he calls the "Me Factor" in "his book "Discover your inner economist (p. 52):

To put it crudely, we must force ourselves to keep on paying attention. Ranking the pictures focuses our attention on our favorites. It also focuses our attention on ourselves, which is in fact our favorite topic. Me, me, me. It sounds crude, doesn't it? But if the "Me Factor", as I will call it, is operating against the art rather than working with it, our love affair with museums won't last very long.

This a very effective technique. We deliberately activate this factor during Reverse Brainstorm sessions, when participants are asked to "invest" into problems. The attention, and as a consequence, the quality of input is much higher than during regular brainstorming. People tend to take their investment responsibilities very seriously, even when it is done with "funny money". We further strengthen their motivation later, by giving them several more opportunities to make their choice count, either through problem analysis or problem solving.

on p. 54 he also mentions the biggest scarcity of all: "our time and attention are scarce."

another thing that is really scarce, especially in the group dynamics context, is trust.

Stephen B. Dubner writes about energy creation and consumption in the new SimCity:

On a broader scale, it will be interesting to see how the millions of people who spend time in SimCity, Second Life, and other virtual worlds contribute to solving real-world problems. Experimenting virtually with the costs and benefits of different energy sources is a great start.

Virtual environment is quickly becoming an experimentation ground for exploration of social phenomena. This trend can be compared to the Gallup revolution of the 1930s when a new opinion measurement technique (model) led to much better predictions of complex society-wide outcomes.

Power generation-usage mismatch

the grid is currently constructed to accommodate capital-intensive fossil fuel plants that need to run 24/7 to be most efficient and economical. The natural load, on the other hand, is the demand for electricity created by people's and the economy's daily rhythm. That demand naturally peaks when people are up and about and falls at night when they're asleep. Renewable energy sources, Mills argues, more closely mirror human behavior. Solar electricity production soars when demand does during the day. At night, stored solar energy and other renewable sources like wind, which tends to blow strongest in the evening, can more closely match lower demand as people and machines wind down.

The end-to-end power consumption grid is a large scale mature system, where infrastructure and control dominates production and use. As any other mature system it eventually gets out of sync with new ways to produce and/or consume goods/services/content/energy.
A mismatch between generation (Source) and consumption (Tool) patterns create an opportunity for new solutions, that enable more dynamic control over the flow of payloads ( electricity, in this particular case).

The game [Halo 3] is crucial to Microsoft's efforts to establish dominance in the $30 billion global video game industry that has been dominated by Sony the past few years. Microsoft also competes against Nintendo's Wii console, which has enjoyed stronger sales this year.

Successful innovation creates non-linear growth effects. Cool products lead to more device sales and service subscriptions, which in turn create a larger installed base that feeds demand for additional games and services.

The game is a control point of the first type ( Geoffrey More calls it "unmatchable differentiation").
Installed based is a CP of the second type ( often called "platform").

Domination, i.e. a company's ability to dictate the pace of innovation in the industry is a CP of the third type.

In attribution theory, the fundamental attribution error (also known as correspondence bias or overattribution effect) is the tendency for people to over-emphasize dispositional, or personality-based, explanations for behaviors observed in others while under-emphasizing situational explanations. In other words, people have an unjustified tendency to assume that a person's actions depend on what "kind" of person that person is rather than on the social and environmental forces that influence the person. Overattribution is less likely, perhaps even inverted, when people explain their own behavior; this discrepancy is called the actor-observer bias.

This is rampant in literature on invention and creativity. Attribution to personality is most often used to describe his/her work that had a major influence on the society.

From this perspective it is useful to describe invention as a personal event, while innovation as a social event. This way we can shift participants' attention from psychological to systematic effects.

As a result, some sites are turning to a new strategy to keep their services "sticky" and their users satisfied: They're not just encouraging them to network online, but to attend offline events and parties in the real world as well. Yelp now regularly hosts parties in big cities around the country.

Now smaller start-ups are trying use the offline-online hybrid model to gain momentum against community heavyweights like Yelp and Meetup.

Recently relaunched Going, for example, is a "social-event calendar" that aggregates announcements, encourages members to network with each other online beforehand, and lets them maintain profiles with favorite events and photo galleries.

"The secret to Yelp bridging the online-offline gap is the reviews," Yelp user Adrian said. "Someone's writing can reveal a lot about that person, so before I meet a reviewer in real life, I have a general idea of who they are and what they are like. With Facebook, I might get an idea of what a person looks like, what movies and music they enjoy, but reading something (that) someone has put a piece of themselves into makes a complete difference."

http://news.com.com/Social+networks+geared+for+offline+success+-+page+2/2100-1038_3-6192780-2.html?tag=st.num

For social networking web is becoming an orchestration layer that allows people to identify potential friends and control the flow of social events in their lives. Very similar to what Dell, for example, did to PC manufacturing, Amazon to book shopping, and etc. Also, very relevant to the emerging click-to-brick model.

ARM dominance

What's the most dominant company in the technology industry? Microsoft? Google? Intel? How about a 1,300-employee British company named ARM?

ARM has created the chip design that is at the center of virtually every mobile phone on the planet. About 98 percent of all mobile phones use at least one ARM-designed core on their motherboards, according to research from the analyst firm the Linley Group.
http://news.com.com/ARMed+for+the+living+room/2100-1006_3-6056729.html

On the history of the Cartoon Bank:

Q: Tell us about how the idea first came about for Cartoon Bank. Was it yours exclusively?

A: I’ve been a cartoonist for the New Yorker magazine since 1977. For most of those years I would submit between 10 and 15 cartoons each week and might get one accepted for publication. That’s the case for most of the other cartoonists at the magazine. In 1990, during a week when I had sold no cartoons to the magazine (despite having drawn 15, some of which I thought were pretty good), it dawned on me that perhaps there was a market for the cartoons that the New Yorker rejected. I convinced friends of mine, who, not coincidentally, were also New Yorker cartoonists, and who, not coincidentally, I was buying drinks for, that they had nothing to lose by having me scan their rejects and try to market them.

So, the original Cartoon Bank was made up not of New Yorker cartoons, but of the rejects. The New Yorker got the cream of the crop, and the Cartoon Bank got the rest. Commercially, second-best proved good enough, and these rejected cartoons went into many textbooks, newsletters, CD’s, intranets, and onto the fledgling Internet, creating a profitable business.

The network's patents are available royalty-free to any party that agrees not to file infringement suits involving its own patents "against the Linux environment." Under the network's terms, that environment includes not just the kernel at the heart of the open-source operating system, but also higher-level components including the open-source MySQL and PostgreSQL databases that compete with Oracle's own core products.
http://news.com.com/Oracle+bands+with+open-source+patent+group/2100-7344_3-6170717.html

Patent aggregation/pool as a way to stave off competition.

For EA and its industry brethren, USC is looking more and more like it will be an invaluable source of talent and ideas. That's because the university is in the process of forming what it calls the USC Games Institute, an "umbrella of activity" surrounding the research, development and design of video games that is set to encompass the various programs of study currently being held at the university's engineering school, its School of Cinematic Arts, its Annenberg School for Communication, its Institute for Creative Technologies and its Roski School of Fine Arts.

http://news.com.com/At+USC%2C+developing+game+coders/2100-1043_3-6183014.html?tag=nefd.lede

Virtual world is increasingly becoming real.

SCOTUS majority opinion on non-obviousness
http://www.supremecourtus.gov/opinions/06pdf/04-1350.pdf

One of the ways in which a patent’s subject matter can beproved obvious is by noting that there existed at the timeof invention a known problem for which there was anobvious solution encompassed by the patent’s claims.

So if I teach in my class that there's only four types of problems, and there's only three types of solutions, then every patent claim that uses any of the 4x3 combinations should be denied as obvious.

The question isnot whether the combination was obvious to the patentee but whether the combination was obvious to a person withordinary skill in the art. Under the correct analysis, anyneed or problem known in the field of endeavor at the time of invention and addressed by the patent can provide areason for combining the elements in the manner claimed.

I guess there's a premium now on discovery of a new problem.

A person of ordinary skill is also a person of ordinary creativity, not an automaton.

A curious statement. Before courts had trouble identifying what "ordinary skill" was. Now they will have to figure out what "ordinary creativity" is.

We build and create by bringing to the tangible and palpable reality around us new works based on instinct, simple logic, ordinary inferences, extraordinary ideas, and sometimes even genius. These advances, once part of our
shared knowledge, define a new threshold from which innovation starts once more. And as progress beginning from higher levels of achievement is expected in the normal course, the results of ordinary innovation are not the subject of exclusive rights under the patent laws.

The difficulty of course is how to establish the threshold in each and every technology area at any given time.

BBC NEWS | Technology | Mouse brain simulated on computer

BBC NEWS | Technology | Mouse brain simulated on computer: "US researchers have simulated half a virtual mouse brain on a supercomputer.

The scientists ran a 'cortical simulator' that was as big and as complex as half of a mouse brain on the BlueGene L supercomputer."

The researchers say that although the simulation shared some similarities with a mouse's mental make-up in terms of nerves and connections it lacked the structures seen in real mice brains.

Imposing such structures and getting the simulation to do useful work might be a much more difficult task than simply setting up the plumbing.