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44 percent of visitors to Google News scan headlines without accessing newspapers

Research firm Outsell has published its News Users 2009 Report , which is based on a survey about the online and offline news preferences of 2,787 US news consumers.

Analyzing the usage patterns on how users consume news content, the report concludes that less and less users are actually going to destination sites of publishers and instead are consuming content on so called aggregator sites (e.g. Google News etc.).

The report states “Though Google is driving some traffic to newspapers, it’s also taking a significant share away. A full 44 percent of visitors to Google News scan headlines without accessing newspapers’ individual sites.”

The report states that users are more likely to turn to an aggregator (31 percent) than a newspaper site (8 percent) or other site (18 percent).

The problem with aggregators such as Google News is however, that the publishers, thought providing their content to aggregators, are not participating in the revenues generated.

We at kikin believe that it is crucial to bring the content to the user rather than thinking the user would come to the destination site – which this study shows users do less and less often. We call this the ‘User Centric Web’ – let relevant content come to me rather than force me into silo’ed web experiences.

BUT: Publishers should be in control of how their content is displayed when it is served ‘offshore’ (i.e. outside of the publishers site) and publishers should be in control of how they monetize their content in such cases.

kikin is offering exactly that to publishers.

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Intellectual breakdown?

carrot-incentiveI have repeatedly asked me this one question when it comes to the financial crisis: Was it a lack of intellectual capabilities that made people invest into structured subprime assets believing the AAA ratings? What about leveraging 40-1? Does that sound smart?

An interesting article by Joe Nocera in the NY Times Magazine this weekend about the VAR (value at risk) risk models used on Wall Street made a point. The article is primarily about the VAR model and the problem of applying a statistical model that covers 99% of probable outcomes and leaves out the 1% outliers – good reading about the misuse that results from the yearning for simplification (only if you can stand reading more of Nassim Nicholas Taleb’s comments on ‘imbeciles’).

Without going into the article in too much detail, I noted one aspect:

Traders were not only incentivised by trading performance but as well to fool the VAR model – meaning to minimize the effect that the trade would have on the VAR model. This made them structure trades that would be of low risk in 99% of all cases, but that yielded at the same time devastatingly punishing risks outside the scope of the model, in the remaining 1% – the outlier event.

The point is: Professionals on Wall Street are not stupid – probably quite the opposite: They are smart, utility maximizing agents that play by the rules/incentives that were set. Only that these incentives have been wrong since the first investment bank, Salomon Brothers, transformed from a partnership into a public company in 1981. That shifted the balance: Upside lies with the executives, downside with the shareholders. Who can blame them. After all nobody was forced to buy shares of investment banks.

The incentives for Wall Street professionals were structured to take on maximum risk (VAR optimizing, overleveraging) to generate short term results (Yearly bonus). Everybody inside the industry knew, but ‘as long as the music is playing, you’ve got to get up and dance’ as Charles Prince famously put it. At some point the party would end – that was obvious – only when was the question. Until then you carry on.

The financial crisis is a result of smart inviduals playing by the rules (forget Madoff for a while) – but the rules created the wrong incentives. That is not a new discovery. People have been writing about that for the last couple of years (see for example here). Setting the right incentives will be key to repair this industry.

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Yes, America can

I came to the United States in 2002 during George W. Bushs first term. It was difficult to see him win his second term, given his track record. Given the way he represented this country and his internal and international policy choices that left the world wondering in disbelief.

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It was even harder to explain to friends from abroad why I chose to live in this country. Back then it seemed that the United States had lost all those reasons that attracted people around the world to come to the US. It seemed like this country had lost its path.

Yesterday has shown that these United States the world used to admire were not lost during those last 8 years. In fact what happened yesterday could not have happened it most countries on this planet. This is the strongest message that the United States sent out yesterday. Instead of using my own words, I just quote:

If there is anyone out there who still doubts that America is a place where all things are possible; who still wonders if the dream of our founders is alive in our time; who still questions the power of our democracy, tonight is your answer.”

and

And to all those watching tonight from beyond our shores, from parliaments and palaces to those who are huddled around radios in the forgotten corners of our world — our stories are singular, but our destiny is shared, and a new dawn of American leadership is at hand. To those who would tear this world down: We will defeat you. To those who seek peace and security: We support you. And to all those who have wondered if America’s beacon still burns as bright: Tonight, we proved once more that the true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals: democracy, liberty, opportunity and unyielding hope.”

Or, better see for yourself here.

As a legal resident alien, I was not allowed to vote – in fact only few of the guests at our house yesterday night were allowed to vote in this country. Nevertheless this election was important and personal to all of us.

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Karadzic captured – world looks different

Great news broke this week: Radovan Karadzic finally is captured. It was an embarrassment that this man during the Bosnian war could commit atrocities and fool the world and then after the war did not have to face trial for his actions. The timing of his capture is coincidentally close to the new government beginning work in Belgrade. I am convinced that the reason he was not brought to justice until now is a political one and not one of failed police investigation.

Looking at Karadzic’s picture it is quite amazing to see his transformation. But there has been as well another transformation in the last 13 years since U.S. Army’s 1st Armored Division rolled across the Sava River into Bosnia. Back then in Europe the United States were seen as the only global player that is willing and able to interfere and risk their soldiers lives for a humanitarian cause and a value system that was widely acknowledged and accepted. Furthermore Europe perceived itself as unable to prevent a humanitarian catastrophe at its own borders and was welcoming and admiring the United States for its initiative. In the end significant European military contributions joined the United States, but it was the US leadership that made it happen.

13 years later, after Iraq and after Guantanamo, that perception has changed significantly. By now the value system of human rights and freedom is perceived as a mask that is hiding other ambitions for intervention: Power, influence and most of all economical gains of a small elite that currently is in the right offices to control this nation. Much has been destroyed in those years – primarily to the detriment of the US. Being perceived as a just world leader ultimately is tremendously valuable for an nation to attract talent, capital and real influence. I think this can be rebuild by the next president. I think that from the two candidates, only Barack Obama is able to do this job.

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Kiva.org – Microlending directly to the source

Yesterday I stumbled over Kiva.org. Microlending directly to entrepreneurs in developing countries. I like the idea a lot and started to fund some projects. The site claims that 100% of all loans go directly to the entrepreneur and the site itself is non-profit.

Depending on the quality of organization (they have a rating system) that is managing the money locally on the ground they claim very low delinquency rates. But have a look for yourself.

Make a loan to an entrepreneur in the developing world for as little as $25. Kiva is the world’s first online lending platform connecting online lenders to entrepreneurs across the globe.
Sent from BlueOrganizer

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Netflix arrived on our TV

Yesterday I installed the new Roku Netflix setop box. It was truly simple to setup – took not more than 3 minutes. The box comes without manual, just a 6 step fold-out brochure.

Watching movies / TV series really works. The picture quality is a bit compromised but there were no lags or pauses. Well done. I should mention that we have Verizon Fios at home – so I don’t know whether the experiences is as good on a slightly smaller pipe.

Having video on demand with great titles and TV shows available at $0 per view makes sense to me – we do have to pay the Netflix subscription though. As over time the DVD rental market will decline under the pressure from on demand streaming, Netflix is doing the right thing to start exploring this space and locking in its audience that they have built on the DVD-rental model.

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