Oook!

Here’s your business model:
1. Attract people who don’t want to pay for movies by giving away free movies.
2. Try and charge people for something they specifically come to your site to get for free
3. Wonder what went wrong.

“Dear netbook makers, whoever you are — I don’t know your names because we don’t pay any attention to you, but we know you’re out there, polluting the world with your cheap, ugly, underpowered machines — but here is my command: Surrender and prepare to be boarded. Yes, you’ve been pwned. We told you we didn’t care about the netbook market, so you went ahead with your plans, but now we’re about to put you out of business — iTablet is in the final stages, which means Apple will be taking over the market you created and then reinventing it in such a way that it immediately becomes 10 times bigger than it used to be, and all the money goes to Apple.”

When Dan Lyons gets into a groove, he really hits the mark. Welcome back FSJ.

“Sounds like you don’t understand what’s going on - please educate yourself.

4chan is being SYN flooded, various ISPs were getting a lot of collateral traffic from the resulting ACKs going back to spoofed IPs. Since those ISPs had nothing to do with either the attacker or 4chan, there was nothing they could do but pull the plug on the source of the collateral ACKs (4chan). i.e. the ISPs who blocked 4chan weren’t trying to protect 4chan from an attack, they were protecting their own networks from the fallout.

Sadly, like you, the vast majority of users are clueless and won’t investigate to see what is only going on. I’m sure there will be a kneejerk reaction against AT&T and the other ISPs who tried to protect themselves and everyone will make out that they are the bad guys.”

My bet is that Apple won’t approve this, and Spotify will promptly sue.

“Is this true? How is it possible? NPD vice president of industry analysis Stephen Baker says it’s simple: “The average price of a non-netbook Windows PC is under $600. It’s hard to see what functionality you could add to a Windows notebook to make it worth $1,200 to $1,500 to someone.”

So what is Apple giving people for an extra thousand or two thousand dollars? “Apple is giving them Apple,” Baker said. “They’re the only ones willing to sell computers at that price level. They’re like Mercedes that way. In tech, we tend to think performance is most important, but most people want functionality. Yet there are lots of people who want to say, ‘I want to be cool and drive around in a fancy car.’ An Apple computer makes you cool, it makes other people jealous.”

In other words, you’re getting nothing much more than brand kudos for spending the extra $1000 on an Apple laptop.

(Please note before commenting: I don’t actually agree with this. But I think it’s worth reminding people that “Apple has 91% of the $1000+ market” has a negative spin, as well as a positive one.)

“Also, I wonder what Apple’s share of the sub-$1000 computer market is. I’m guessing it’s less than one percent. In a recession. When everyone is avoiding spending money, so they’re buying sub-$1000 computers. My guess is that as much as we all want this to mean that Apple is finally rising to destroy PCs everywhere, all it really means is that there are far more crappy sub-$1000 non-Mac computers being sold than normal, so that the decrease in normal PC sales in the above $1000 price range is being mistaken as a huge triumph by Apple surging forward to success. I mean 91% of what? What were the total dollar sales during June? I need more data. There’s every chance that the 91% of June above $1000 market is actually less in raw profits than the 66% it was in Q1 2008. That would seem probable given Blodget’s report that the Mac market is still shrinking.”

But CK! Asking questions like that is heresy. Didn’t you get the memo?

“Undeniably, there is money to be made in digital publishing with free reader access, but whether that revenue leads to profits depends upon the scale and scope of the organization. The potential revenue does not appear to be of the magnitude that will support the massive operations of existing news organizations. What works in today’s web landscape are lean and mean organizations with little or no management bureaucracy — operations where nearly every employee is working on producing actual content. I’m an extreme example — a literal one-man show. A better example is Josh Marshall’s TPM Media, which is hiring political and news reporters. TPM is growing, not shrinking. But my understanding is that nearly everyone who works at TPM is working on editorial content.”

I think that John’s on to something here. One of the things that I’ve been pondering lately is whether it would be possible to do a news site devoted to a small, niche market which didn’t follow the usual norm of “cover everything in little depth”.

Instead, it might be possible to do few stories, but high quality ones - two or three stories per week which really dug under the skin of a topic, getting real exclusives.

In other words, do real reporting rather than rewriting everyone else’s stories.

Of course, you couldn’t support a newspaper-sized organisation like that: But one person, working on their own, might just be able to make a decent living out of it. In a sense, it might be the long-hoped for “real” internet revolution: true disintermediation.

“The rough argument is we do things that are strategic because they get people to ultimately use the Internet in a clever and new way. We know that if they use the Internet more, they search more, watch more on YouTube, and we then know that our advertising [will reach them]. We do not require each and every project to be completely profitable or not profitable — we look at them in a strategic context: are they making the Web a better place? By making the web a better place, by getting more and more people online — especially on broadband connections — we have lot of data that says this results in very, very strong revenue growth from us because of targeted ads that we offer.”

I’d love to ask Schmidt exactly how many additional ads that Google Chrome will help it sell. My suspicion is that he doesn’t know, and that the actual number will be as close to zero as makes no difference.

And if he doesn’t actually know what the hell is he doing signing off on this multimillion dollar tilt at windmills?