Deep Web Search Engine is here. This represents a new economic paradigm since increasing the available information increases the rate of change of knowledge across diverse communities. Keep your eyes on this one – it’s a big one.
(Editor’s note: some ideas adapted from writings of Peter T. Leeson and introduces the idea of IOUs trading as a proxy for production. The monetization of social media will likely evolve from such an idea)
No sane blogger would post an article suggesting that anarchy is superior to government as a means of producing widespread cooperation…or would they?
As Milton Friedman put it, “government is essential both as a forum for determining the ‘rules of the game’ and as an umpire to interpret and enforce the rules decided upon.” Most great anarchist theories are duly faulted for significant problems coping with cheating and violence.
Nonetheless, large swaths or anarchy exist today. For example, there is no World Court to enforce World Law, if such laws existed. Nor is there a Global commercial law to enforce contracts between Global traders. Even at a local level there is no guarantee that the government will protect your property or enforce your contracts.
A common objection to anarchy is that without government the strong will plunder the weak because the weak have an inherent inability to protect themselves. How can self-governance alone protect the weak?
The FTC recently issued guidelines for payola to bloggers. The impact and opinions are now emerging over what this means for social media. As with any game played on a new field, rules need to apply. The questions emerge regarding who the rules hurt, who they help, and how the game will develop in the future due to those rules.
Straight from the horse’s mouth:
The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers.
Extrapolate into the future:
As an Engineer, my respect for the Advertising/Marketing/PR, as an industry, is diminishing daily. I see what is gorged behind the curtain and I see what is reguritated in front to the curtain. The degree of hypocrisy defies social responsibility.
While many Marketing and PR professionals have a deep commitment to social values and the empowerment of people and their communities, many also see society as a big fat consumption machines whose collective minds can be mapped and channeled into “basic-needs” reactions designed to ultimately meet Wall Street priorities over social priorities.
Meet your maker
It is also not surprising that the advertising industry is also on the front line of social media where savvy gamers call themselves strategists, gurus, and experts over the very game that they cannot control. They are quick to define “Social Media Innovation” as new ways to penetrate the hearts, minds, and eyeballs of people and their paychecks.
The difference is that The Bookstore Classification system is attached to a huge multi-billion dollar marketing and production infrastructure. Think Barnes and Noble, Amazon.com, Borders, etc. Some would call it an egregious example of corporatism in the public library system. Others would call it an astonishing opportunity for corporate subsidization of knowledge asset development. I tend toward the latter.
Knowledge needs to be formatted to behave like a financial instrument. If this can be accomplished then entrepreneurs will innovate in the trade of knowledge assets. If you want to build an airplane, you need an inventory of parts. If you went to build a social media as a social infrastructure, then you will need an knowledge asset inventory. If you want to promote innovation, then you want to promote social media. First and foremost, knowledge assets must look like a buck, walk like a buck and quack like a buck – then they will trade like a buck.
Some say that WordThink dumbs it all down, others say it’s easier to browse – see article below for additional analysis. However, as you read the article suppose you are an entrepreneur not shopping for a book on SEO, but rather, shopping your neighborhood for a person that knows SEO. Then ask; what’ll it be; Dewey or WordThink?
Are you worthy ?
What if many companies dropped their advertising spend into a several different buckets of cash representing various lifestyle segments? Now, suppose that the cash was distributed to social media mavens corresponding to their social media reach in the lifestyle segments. The advertisers and the amounts contributed to the buckets are fully disclosed. The Social Media mavens are compensated by their Alexa rankings – again, fully disclosed and objective. The Social Mavens are simply paid to blog their lifestyle experiences with no contract or commitment to any brand, nor retribution for any assessment – just like always.
A new Financial Instrument
The debit card serves as a financial instrument modeled after the insurance industry that replaces traditional advertising with managed ROI risk. Of course, we are not the only ones trying to find a way to make the 300 Billion dollar per year advertising spend more efficient….
The following Rueters article demonstrates that the coupon is not dead – nor is it paper anymore. ASK.com will compile coupons and help people to find savings. This is good for advertisers since more can be given away on the coupon because less is spent on production and traditional media. This is also good for the consumer as more valuable coupons is more money in one’s pocket.
Feed the Entrepreneurs, feed the economy
Now we need to ASK – as the coupon value increases and the redemption time decreases and If the minimum wage is 8 dollars per hour – at what point can a person earn 8 dollars per hour cutting coupons? Can a Social Maven, in fact, earn a decent living doing other people’s shopping all on coupons? Why not?
NEW YORK (Reuters) – Ask, the search engine owned by IAC/InterActiveCorp, unveiled a new service on Tuesday to help consumers seek out coupons for saving money when shopping online.
The new service, Ask Deals, helps users search the Web for deals available by aggregating the best offers to a proprietary database of more than 1 million offers from national and local merchants.
Ask’s management hopes by having a dedicated “deals” tab on its search engine page the feature will become a natural destination for consumers looking to save money with discounts on goods and services.
Ask has added features such as helping consumers share coupons and deals through email and social networks like Facebook and Twitter. Users can also sign up for “Deal of the Day” emails.
The majority of Ask’s revenue comes through a search advertising partnership with market leader Google Inc, which brings up links of relevant advertisers in response to a user’s search query.
The Ask network was the fourth most-used search engine in the United States with a 3.9 percent share of all search queries in August, according to Web measurement firm comScore. Google had 64.6 percent market share, Yahoo had 19.3 percent share and Microsoft’s new Bing search engine had 9.3 percent share.
(Reporting by Yinka Adegoke, editing by Matthew Lewis)
There are 3 characteristics of financial instruments which make them tangible in a market: They live in an inventory, they are exposed to vetting mechanisms, and they are subject to constraints.
Tangibility of knowledge:
Here at Conversational Currency we are constantly seeking examples where human knowledge behaves like a financial instrument because a true innovation economy will arise when all 3 characteristics are true for the ‘human knowledge’.
We believe that the platform for the Innovation Economy will be Socialized Media; not corporations, or government. So we get excited when we see posts like this from Brian Solis via Matt Marshall regarding Twitter’s monetization plans.
Twitter to becoming the vetting mechanism for business intelligence.
Think about the credit score; a list of independent variables run through an algorithm that correlate with the likelihood that you’ll fulfill a financial obligation. I’ll leave the rest to your imagination…read between the lines:
By Brian Solis:
Over at VentureBeat, Matt Marshall is reporting that Twitter will introduce its first revenue-generating series of premium services.
In an interview with co-founder Biz Stone, it was revealed that Twitter is in the initial phases of introducing commercial accounts to businesses seeking detailed analysis of activity in and around the brand on the popular network as well as other data not available to Twitter users directly.
In the next phase, Stone indicated that Twitter may also debut a new set of corporate-specific API’s that would allow the company to insert a customer layer over the profile and other aspects of the network to more effectively engage with the community, while increasing strategic visibility.
Stone revealed to Marshall, “Twitter will still be free for everybody and we’ll still tell them to go crazy with it. But, we’ve identified a selection of things that businesses say are helping to make them more profit.”
He further elucidated, “We want to build statistics or analytics that let users know — ‘How am I doing on Twitter?”
This news is the latest in a short series of information bursts following the company’s announcement that it is rolling out a new set of APIs to integrate geo-location into Tweets, mostly likely to contend with rising competition of geo-location networks such as Loopt and Four Square and also as a potential generator of hyper-local advertising revenue.
Social value lives in an emerging inventory that is ever increasing in granularity. Corporations have very little control over public opinion – except in retrospect – which amounts to a constraint on social value. Now, Twitter is the vetting mechanism. Wow, we’re getting closer to the next economic paradigm every day.
The implications are vast. Now we shall ask a few question:
At what point will Corporate Innovation reflect social priorities over Wall Street priorities?
At what point will Wall Street Priorities reflect Social Priorities?
If the Wall Street Manifesto is to “return shareholder value” and Twitter is vetting “social values”, what is the value of Twitter and who is really holding/voting those shares?
The New Reverse Order
If someone can track your spending, they can predict your behavior. It is also true that if someone can track your behavior, they predict your spending. The next economic paradigm is simply a higher order of the same.
On the next higher order, if someone knows your “Knowledge Inventory” they can predict how you will manage changing conditions – that is, how you will innovate. Likewise, tracking how people innovate exposes the development of new knowledge assets (the ‘gold-standard’ of conversational currency).
Everyday some new headline shows that we are getting closer and closer to that point – for better or worse – where humanity learns to manage an innovation economy.
Profound Issues Arise.
The following article about Wal-Mart adopting the debit card (Wal-Mart to Staff: Bye-Bye Paycheck, Hello Debit Card) as a means of issuing paychecks represents a quantum leap in the monetization of knowledge assets. We expect many more will closely follow in one of the most important financial developments in financial history – virtual currency. If food stamps can be delivered on a debit card, why not frequent flier miles, Disney Dollars, coupons, rebates, tulip bulbs, beanie babies, or a new global currency such as the Rallod?
A Vetting Zoo
The only questions that remain are related to Vetting. By all accounts Social Media is developing into the mother of all vetting mechanisms. Who controls the card? What system is it replacing? Who can pull money off? Who charges fees to whom and why? Who gets the business intelligence? What is the PR spin? Can advertisers interact with the card to apply discounts and rewards? What types incentives motivate what types of people and can it go on a debit card?
A Steep Departure
Each of these questions, and the companies they spawn, will live or die by Tweet and Blog – this is a steep departure from the past. For example; 30 years ago, if every American were told that their social security number would be tied to a credits score that is tied to their driving record, employability, insurance premium, health care, mortgage rate, and, yup, their debit card – the cities would have burned in protest.
Nobody could have seen this future except those who designed it. Today, the designers are you and I – see the future now, see the future here at Conversational Currency.
The idea of trust as social currency is appearing in more articles, conferences, and books. This is all highly consistent with the TIP thesis on Innovation Economics which describes the necessity of a vetting mechanism among the knowledge inventory as a means for the emergence of a currency in a market – that is, a conversational currency. People need to trust the currency if they are to trade the currency.
Shefaly Yogendra provides some excellent insights below. Keep in mind that American Culture does not have a monopoly on the definition of trust. It should not be an American expectation to define the conversational currency in our own image. Indeed, convertability of such currency will be, and must be, global.
I kept the analysis sparse on this article because it is a valuable exercise to form one’s own perspective on trust prior to diving into someone Else’s opinion. After all, it’s your currency – you own it. Good luck.
Trust is a non-negotiable essential in business. The post linked here refers to web-based business-to-consumer interactions. But as social currency, Trust is the most significant in interactions amongst organisations, customers, employees and regulatory bodies.
Wikipedia defines social currency as “information shared which encourages further social encounters“. Social currency is different from social capital which refers to “connections within and between social networks and individuals“.
Social currency – some characteristics
a) No distinction between ‘physical’ and ‘virtual’ worlds
b) No distinction between ‘individuals’ and ‘corporate entities’
c) No distinction between validity of negative or positive normative labels
Determining the value of Trust as social currency
a) Verifiable Identity and antecedents
d) Peer recognition
e) Value of the network
f) Individuality and collaborative consciousness
The original article can be found here and it elaborates on each of the points above.
The Ingenesist Project and related blogs such as Relationship Economy and now Conversational Currency have long predicted that the resolution of social media space will vastly increase from “Monet” to “Blue Ray”. The segmentation and convergence of social media space will happen on two fronts: Knowledge Inventory and Proximity.
“As Facebook balloons to over 250 million users, many voice their appreciation for Facebook’s small social network feel. Unlike its so-last-year counterpart, MySpace, Facebook has successfully maintained a very personal feel, finding hundreds of ways to link the most relevant people, in the most relevant ways.
Even so, because Facebook has so many interesting people, useful content, and relevant apps available, many users would appreciate a broader search option that would enable the to quickly search ALL of Facebook’s content. Thus, Face says: “your wish is my command”. And so it is. Facebook has now announced that it will soon make the change allowing users to search the entire site, not to mention, do new things like share status updates with everyone, rather than just confirmed friends. Expect to see these changes in full effect some time within the next two months”
What’s in store for the next 2 years?
While the coolness of Social Media is still riffing through society as the late adopters drive huge growth, nothing “economical” happens until people actually get together and build something. In order to build anything, there must be an inventory of parts. All these parts need to be in physical or virtual proximity to each other. A financial system must support the initiatives of the entrepreneurs in any market.
The United States of Mind
We’re about 3% into this new paradigm today. At 20% the corporate structure will become increasingly mushy as many corporate functions are now handled in Social media space. At 30%, cooperation will “compete” with competition as a business model. At 40% a new currency emerges to hedge debt backed dollar with productivity backed “conversational currency”. At 50% people convert general dollar backed holdings to ‘conversational currency’ holdings. At 60% social priorities dominate corporate priorities. At 70% the Innovation Bond dominates financial markets. At 80% international borders become fuzzy as knowledge flows as easily as, say, avocados and T-shirts do today. At 90% global currency backed by productivity, dollar, Euro, Yen all expire. At 100%, the president is elected to a “State of mind”.
Hold on, not so fast….