Monday, December 29, 2008

It is the time to change

Many things have changed in 2008. The first time people in United States elected an African-American president. Through probably the most breathtaking Olympic game in history, China dramatically declared its rise once again being a leading nation of the world. And, we had the worst global recession (or a new great depression) since 1929. Any one of these events might have made a year be unusual, let it alone in 2008 we had all of them, and ... more.

In 2008, we experienced the heartbreaking earthquake that took the life of tens of thousands people. In 2008, we witnessed the astonishing swing of the oil price. In 2008, we watched the dramatic drop of the Web 2.0 hype. Also in 2008, the reality proved that the lasting financial risk computational model is indeed unsustainable.

What do all these events tell? Change is happening.

The American people look for change, and they have "changed" the skin color of their president.

The Chinese people look for change, and they have "changed" the image of China in the mind of people during the last two centuries.

The world itself, however, warns us what kind of "change" we should pursue for sustainable growth in our environment and our society through both of the natural disasters such as the SiChuan earthquake and the social crisis such as the largest economic recession since 1929.

In 2009, changes will continue. At Thinking Space I am going to launch a new series sharing my readings of what is changing. Look forward to your comments.

Happy New Year!

Thursday, December 25, 2008

7 best thoughts at Thinking Space 2008

To be my 2008 Christmas gift for the Thinking Space readers, these are the 7 best thoughts blogged in 2008 out of more than 100 original ones. Wish all of you Merry Christmas and Happy New Year!

7. The wisdom of crowds and the Brownian motion

The wisdom of crowds is a basic theory backing Web 2.0. The theory is, however, a reflection of a common physical phenomenon, the Brownian motion, in human society. The thought that the wisdom of crowds is the Brownian motion in human society was blogged in January 2008.

If this comparison is reasonable, there are general connections between the known physical laws and the unknown Web regulations. It thus may provide us a hint for the Web Science research. For example, since we can calculate the macroscopic velocity and direction of a flow based on the fluid dynamics computation over the microscopic-scale Brownian motion data of the flow, may we analogically compute the macroscopic behaviors of wisdom of crowds on the Web? Yes we can, can't we?

6. Automatic Character Switch (ACtS)

Automatic Character Switch (ACtS) is a proposed mechanism by myself to operate the resources produced by Web 2.0. In April 2007 I coined the term when I described my prediction of the next generation of World Wide Web based on the Web evolution model. In February 2008, I reused the proposed mechanism as a resolution for the issue of Web resource portability.

Although people think of Web 3.0 differently, something similar to ACtS should be an essential part of the picture of resolution. The ACtS intends to solving the problem of online identity overload, a milestone towards Web 3.0.

5. The expanding Web

The Web is expanding, and it expands simultaneously at the physical field, the computational field, the communicative field, and the financial field. I blogged this thought at Internet Evolution in October 2008.

We must know that the Web is growing in more than one aspect. We are seeing more variety of devices accessing the Web, more different methods to consume Web resources, better instant communication among Web users, and we start to construct new forms of asset because of the Web evolution. Only by well understanding these varieties of Web expansion, we may indeed get the purpose of Web evolution.

4. Invariants on the Web

Although the Web changes all the time, learning the unchanged side of the Web will help us understand better of the Web, and eventually let us be able to invent the changes we expect. The July 2008 post of Web invariants is about this topic.

In tradition, we have invented URI (references to facts) being a fundamental Web invariant. But the reference to a fact is essentially different from the fact itself. Therefore, it is questionable to enforce object reference replacing object itself being invariant. By contrast, may we ask epistemological procedure and Web thread (two more essential characters of objects) to new Web invariants?

3. Mind asset

The current economic crisis is due to the abuse of capital, the essence of the capitalist business. Hence some fundamental change of business must be done in order to avoid this sort of crisis in the future. On the other hand, if the change is done so fundamental to our society, wouldn't it lead our society into a new age? When people start to talk about new DNA of the next generation business, the new DNA I believe is the mind asset, which I have blogged since May 2008.

Mind asset is a compound new concept. In brief, it means a revolutionary way of monetizing human thinking. It claims that the general driving force of production is shifting gradually from capital to human mind. In the other words, mind starts to conduct money in contrast to money buys mind. This shift of power of production assigns thinkers a new role in the coming new society.

2. Mind, a universal fundamental in addition to mass and energy

Mind is always a mysterious thing. We hardly know where it comes and where it goes. After reading Seth Lloyd's brilliant book "Programming the Universe" at September 2008, I started to wonder whether the relationship between mind and mass is the same as the relationship between wave and particle. If this analogy truly holds, mind is another universal fundamental in the world in addition to mass and energy.

All of us exists in waves (the form of mind) when we are not under detection either by other persons or by ourselves. Once we are detected (i.e., once the consciousness starts to work), however, we see each other existed in particles (the form of mass) only. At the same time, mind remains existing such as when we think since at the moment the mind is out of any external detector. Therefore, the mind still exists in waves and remains being mind (instead of being materialized). If the former interpretation be correct, an exciting conclusion would be that we could invent a new type of mind detector to transform any thinking into mass immediately. This invention, if ever it could be realized, would bring our world new form of energy we cannot imagine.

1. Great transition, happening at the global scale

We are in a new transition, part 1 and part 2. This is probably the most critical message of today. Capitalism is dying. We are moving to a new age of human society, which is, however, neither the socialism nor the communism. Along with Adam Lindemann, I would like to call this new time the mind age (or the harmonious age by emphasizing the harmonious union of all human mind).

From land to capital then to mind, the most valuable (and the most essential) asset of human society is evolving. This fundamental evolution is beyond any other progress happening in our society. This is really what we need to be aware and what we should try to follow.

Through the post, I thank my savior and father in heaven, Jesus Christ, who give me wisdom and the ability of thinking. Happy birthday!

Friday, December 19, 2008

A good news for online retailers, but one more little thing

ReadWriteWeb has reported today that although economy is slow, online sales are going strong. This news somehow supports my prediction that the golden time of World Wide Web is coming. When more and more people have to stay at home because of the economic downturn, they are on the Web.

At the same time, now people are trying to buy cheaper stuff. The Web allows us to compare the price of a product in different retailers so that we may easily get the best deal. And we do not need to drive to the local stores, which again saves a few bucks.

There is, however, one more little thing that is worth of considering by the retailers: try their best to remove the shipping and handling fee. Amazon has done it quite well. With a moderate line of purchase, the Amazon customers get free shipping and handling. Believe it or not, this little thing may somehow be a determining factor, especially in this economic hard time. One dollar higher in price might be accepted by a little bit superior in quality (either on the product or on its service). One dollar on shipping and handling is, however, nothing but an overhead.

The coming of the golden time does not mean that we can now be careless on running the online services. On the contrary, now the online retailers must be more careful in details than ever because they might never get a better chance to enlarge the base of their customers, if they could not do well in this period of time.

Sunday, December 14, 2008

Big Idea

Big ideas have inspired us, and the inspirations last. However, is our time still an age of big ideas, such as the age of the 18th century when many great thinkers and innovators emerged? Moreover, what on earth is big idea? The following talk is inspiring if one is interested in thinking.

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My comment on big ideas

1) Big ideas inspire people. Big ideas bring people hope, happiness, and courage. A big idea is not a theory even if it might be represented as a theory. A big idea is a charge of activity to people's life.

2) Big idea does not have to new idea. Read history, think of history, and discover the lost thoughts; this is also big idea.

3) Big ideas are not necessarily be original in its essence, while practical big ideas are always truly original in its instant interpretation. Try less on inventing big because it demands luckiness. But try harder on interpreting novel since it requires only diligence and persistence.

4) The emergence of a big idea demands collaboration. Due to the prevalence of World Wide Web, may new collaborative thinking services (such as Imindi) help us approach the new-age big ideas? I am optimistic to it. To the end, we are approaching the big ideas collectively, in contrast to thinking of the big ideas individually.

Monday, December 08, 2008

How to construct a high quality ontology?

More and more people start to understand and use the term "ontology" when discussing machine intelligence. Informally, an ontology is a set of specified human intelligence that machines can run automatically. How to build ontologies with high quality, however, remains being a hard problem.

In general, an ontology construction procedure has four steps:

• Identify purpose
• Encode content
• Evaluate construction
• Document product

Among the four steps, identify purpose is the first, the most crucial, and the hardest stage. We often have dozens (if not hundreds) varied ways of describing a domain. Many times, however, there is only one best resolution with respect to a designated purpose. Unless we have precisely identified the purpose at the beginning, we often result in low-quality ontologies that can cause much trouble in a long term.

In principle, there are five ways to identify the purpose for an ontology construction assignment.

(1) Decide goal. We obtain a precise description of the target domain, from which we capture the key entities and relationship sets. This is a typical middle-out ontology construction methodology.

(2) Describe scenario. We obtain a set of competency questions about the application scenario. From the scenario descriptions we define the entities and relationship sets. By applying these entities and relationship sets we should be able to precisely express the questions as well as the potential answers to the questions. This is also a middle-out ontology construction methodology.

(3) Narrow down domain description. Start with a general and broad description of the target domain, we gradually winnow the unrelated portions out of the scope until the remainder becomes satisfactory. This is a typical top-domain methodology.

(4) Determine typical activity. This methodology is particularly useful for creating the service-oriented ontologies. In this case, ontologies are created not for domain description but for application presentation. Thus, we need detailed service activity descriptions to build the right ontologies. This methodology is middle-out.

(5) Grow seeds. To produce an ontology for a broad domain, sometime it is easier to start with building a few small ontologies as the seeds. Then we can gradually grow these seed ontologies by adding them more concepts and relationships and connecting them when appropriate until we reach the final goal. This is a typical bottom-up sequence of ontology construction. To properly execute the method, it demands well understanding of many subtle ontology technologies such as modular ontology and ontology reuse.

In real practices, ontology developers need to carefully choose the proper methodology of purpose identification according to their particular assignment. A bad choice often leads to longer time of development and poorer quality of the results. This first step is indeed tough but truly crucial for creating high quality ontologies.

Friday, December 05, 2008

Some quick thoughts on Qi Lu's new appointment

Qi Lu, a former high profile Yahoo, joined Microsoft to help the traditional software giant fighting against the newly rising Google. I have a few quick thoughts of this news in the following. Readers who are interested in learning more of this news can read more reports from TechMeme. In particular, Kara Swisher at BoomTown had a unique interpretation of Ballmer's email.

(1) Congratulation to Qi! Great move, personally. Especially as a Chinese myself, I sincerely wish him the best being a great China-born technology leader.

(2) Will Live Search be reformed under the new leadership and be able to compete to Google? Cautiously, I doubt. Allow me be straight. If Qi has not led a compelling plan to compete Google under the visionary leadership of Jerry Yang, could he accomplish this hard assignment under the practical leadership of Steve Ballmer? Unquestionably Qi is a great Guru in the realm of search engine design and operation. However, it is impossible to defeat Google by following the Google way (i.e. the traditional thinking of Web search). Is the experiences that Microsoft lacks at this moment? I question it. Microsoft does not lack of experiences; and experiences can hardly help Microsoft fight Google. What Microsoft lacks is, ironically, the opposite, i.e., the less-experienced fresh soul of innovation. We have to be realistic that there are not many Steve Jobs in this world. Therefore, though I am pleased of Qi's appointment and believe in Qi's contribution to Live Search, this appointment is less than enough for Microsoft to threat Google.

(3) Microsoft seems having abandoned the plan of purchasing the Yahoo Search. It is good for Microsoft; and it is good for Yahoo. I am still looking forward to the newest experiments of BOSS and Search Monkey Yahoo is performing. The worst thing is that they might become another PowerSet.

Monday, December 01, 2008

Where do Thinking Space readers come from?

Join Fujifilm Medical Systems

FujiSome of you may have already known. I am joining Fujifilm Medical Systems USA (FMSU). Headquartered in Stamford, CT, FMSU is a leading provider of medical image and information products and technologies for acquiring, processing, presenting, managing and storing diagnostic images.

My duty as informatic architect at FMSU is to help the company design and produce a cutting-edge, Semantic-Web-compatible service that may eventually lift the present services for the medical devices onto a new level. The project is innovative. (If you regularly follow my blog, you should know when I say one thing being innovative, it is often more than just being innovative.) In few years, I foresee this new service produced at Fuji Medical Systems to be one of the classic examples of the Web-3.0 services.

Thursday, November 27, 2008

GoodRelations allow Semantic Web to improve E-Commerce

Martin Hepp, a professor at Universität der Bundeswehr and also affiliated at the STI Innsbruck (original DERI Innsbruck), recently released a 15-min Webcast that introduces a recent work of the GoodRelations project and explains his vision on bridging e-commerce and the Semantic Web.

I have known Martin since 2006 when I was an intern under his supervision at Innsbruck, Austria working on the multi-million-euro MUSING project. Since then we have kept close relationship with each other and co-authored several papers. Martin is a sharp and kind scientist. With his dual background on business and computer science, Martin is passionate on improving the efficiency of e-commerce by the Semantic Web technologies. I feel glad to watch his accomplishment of the GoodRelations project.

In brief, GoodRelations "is a lightweight ontology for annotating offerings on the Web." A little bit more detailed, the GoodRelations ontology is a lightweight vocabulary that can be used for describing the details of offers made on the Web in a machine-readable way. In particular, it may allow users to specify the relationships between "(1) Web resources, (2) offers made by means of those Web resources, (3) legal entities, (4) prices, (5) terms and conditions, and (6) the aforementioned ontologies for products and services." The targeted users of this ontology include Web shops, product manufactures, and software developers. After briefly examining the content of the ontology, I must say that it is an impressive product and I look forward to more real-world use of this product in the future.

Back to the talk itself. Martin has emphasized the audience of the talk to be the general public. After having listened to it, I agree that anybody with some basic knowledge of World Wide Web can easily understand the talk without the need of any particular technology background.

One of the key points Martin mentioned in the talk is his view of the primary limitation of the current Web. He believes that "the loss of the data structure [of the data stored in its original source] over the Web" is the main problem. Because of this loss, it is fairly difficult for people to reverse engineer the displayed Web data into its initial structure. The Semantic Web addresses a solution to the problem by allowing Web data carrying its initial data structure when traveling over the Web. This is a very clear and convincing explanation of why we need the Semantic Web.

Why do the data producers need to care of this "overhead" of producing extra description of the data structure? This is a common argument against the Semantic Web. To the end, it seems that it is a user's problem in contrast to a producer's problem. Hence why should the producers spend their extra cost to produce the portable structure of the data when the effort seems not directly benefit themselves? Martin also provided a fairly good answer to this question in the talk.

Martin agrees that just by adding the semantic description to data it might not necessarily improve the ranking of the pages in search engines. However, the effort does provide extra support to the data producers because by doing so the pages may become more accessible to a wider range of queries, especially a wider range of "related" queries. It thus means connecting more related customers to the producers. This is why the data producers should spend their extra time and money to perform this technology.

At present, GoodRelations has been officially supported by the Yahoo! Search Monkey. I am impressed by learning this news from Martin too.

Anyway, the talk is worth of listening and the ontology is promising of use. Just check it out by yourself and try it if you are a commercial data producer. Please let me know how you feel of it.

Saturday, November 22, 2008

ǝɔıʌɹǝs ƃuıʇsǝɹǝʇuı uɐ 'ǝlʇıʇ dılɟ

˙ɟlǝsɹnoʎ ʇno ʇı ʎɹʇ ˙unɟ ɹoɟ uɐɥʇ ǝɹoɯ pǝsn ǝq ʎɐɯ ǝɔıʌɹǝs sıɥʇ ʇnq ˙unɟ ɹoɟ ʇsnɾ

Just for fun. But this service may be used more than for fun. Try it out yourself.

Monday, November 17, 2008

The Golden Time of World Wide Web is coming

I have justed read a great post by Drake Bennett at Boston.com, which is titled "Depression 2009: What would it look like?" Despite of this inevitable modern depression, this post actually delivers an implicit message that the author himself might have overlooked. The golden time of World Wide Web is coming!

The Boston.com post is unquestionably excellent and everybody should read it carefully, more than once at least. There is, however, a regretful flaw in the article. Despite of the many differences between this "21st-century depression" and the old Great Depression at 1930s compared by the author, he forgot to mention the most critical and fundamental invention that distinguishes the two depressions---World Wide Web. Astonishingly, even Tim O'Reilly missed this distinction too in his post of recommendation.

In the post, Bennett repeated emphasizing that people who lose their jobs are going to stay at home watching TV for "free time is one thing a 21st-century depression would create in abundance." But wait a minute! Why not the people staying with computers and killing time on the Web in contrast to watching dumb TV shows? This distinction is incredibly crucial. By watching TV these jobless people could hardly produce any substantial value to the society. On the contrary, Web 2.0 has allowed people making substantial contribution to the world even if they are "jobless."

Before this 21st-century depression, most of the regular Web-2.0 content creators are either the less-experienced young generation (who have much free time to kill) or the few computer geeks (who are passionate on the Web). Due to this 21st-century depression, however, the Web is going to welcome a great force of new Web content generators who are more experienced in real life and with much greater diversity on the professional background. From the positive aspect, these people are freed from their previous labor work so that now they can be more actively participating into the creation of a new world. A truly blooming age of the Web is coming.

In this time of depression, the last thing we need is another depressive news. By contrast, we need to seek hope out of hopelessness and we must look for chances from crisis.

So, Web companies and Web investors, now it is your chance. You are going to have more users who are more experienced in real life. The input by these new users would significantly improve the quality and diversity of the Web content. Are you going to grasp this opportunity? Have you noticed their compelling capability of producing (comparing to the earlier regular Web content generators)? Are you able to provide these people new ways of value production from home?

The golden time of World Wide Web is just ahead. Thanks to the Web, we should all be wishful but not be depressive.

Tuesday, November 11, 2008

Web evolution has to have a purpose

Most recently at the Web 2.0 Summit, Al Gore requested that "Web 2.0 has to have a purpose." I believe, however, though it is hard to tell whether Web 2.0 must have a long-term purpose in Gore's expectation, Web evolution as a nearly ever-lasting progress has to have a purpose.

Web 2.0 may already have had a short-term purpose, i.e., to engage more regular users actively into the Web content generation. By this mean, this short-term goal has been fulfilled by all the Web-2.0 practices till now. If one has to ask whether Web 2.0 has a long-term purpose as Gore expects, he must first think of a question: how long could Web 2.0 itself last? In fact, many people have already predicted that the Web might enter its next stage (Web 3.0?) after this economic crisis is over. Hence it means little to assign a long-term goal to the short-term Web 2.0.

On the other hand, Web evolution will last long time. Likely the process of Web evolution may last as long as the Web still exists. For this long-term progress, we thus has to ask this question: what is its purpose? There must be a deterministic purpose for any event that lasts so long, isn't it?

The purpose of World Wide Web evolution is to realize the immortality of human mind.

This belief is actually another interpretation of the Postulate 2 of my proposed model of Web evolution. Moreover, it is the reason beneath what I tell the religionary side of World Wide Web.

In this world, some people use the Web to make self-interest; some other people use the Web for entertaining; the rest might just kill their time on the Web. But an in-depth reason that lead all of them onto the Web to do these things instead of being somewhere else is because they may eventually leave their trace of activities in this virtual world. Before the Web, we have billions of people whom we have no ways to check the existence. After the Web, the existence of any Web user is checkable, at least in theory, even if he has been passed away.

When our bodies are turned into ash and there are no evidences in the real world about our ever existence, the Web preserves our mind forever discarding how great (or tiny) the mind is. This is thus the realization of the immortality of human mind. This is an intrinsic desire of nearly every human being. This is why the Web is so attracting.

I can imagine quite a few readers might still doubt of this exclamation. The Web is still at its very early stage of evolution. We are going to watch how the evolved Web being more and more able to embody human mind in higher and higher quality. This quality incrementation is going to be the main thread for anybody to study the progress of Web evolution.

Monday, November 10, 2008

The way to watch Web evolution

Web evolution is not mysterious. Here is a straightforward rule to check whether a proposed design of the Web would be the next generation of World Wide Web: checking whether the new proposal precisely solves the center problem of the current Web.

For example, if we ask whether some proposal (such as the Semantic Web or the Mobile Web) would be Web 3.0, what we need to do is to check whether the proposed Semantic Web or the Mobile Web precisely solves the central problem of Web 2.0. It is just that straightforward.

The Web evolves forward but not jumping ahead. A new era always and only begins when it solves precisely the center problem of its instant former stage.

What is the central problem of Web 2.0? This is another topic and I will write a separate post on this particular issue later.

In summary, the following is a formal way to check Web 3.0, if anybody is interested.

1) Identify a fundamental of Web 2.0 that without it being fundamental Web 2.0 is no longer.

2) During Web 2.0, the number of instantiation of this fundamental must bloom. The blooming, however, would inevitably lead to certain severe trouble.

3) To solve the trouble, we will have to substantially modify the fundamental. In consequence, Web 2.0 loses its credential and the Web enters a new era, which could be Web 3.0.

World Wide Web spreads like religions

I have previously claimed that according to its eternal goal the World Wide Web is a religion-like existence. Most recently, however, Michael Doebeli and Iaroslav Ispolatov at the University of Vancouver had a paper called "A Model for the Evolutionary Diversification of Religions". In the paper, the authors described the spread of religions in the way of the spread of viruses. After reading the paper, I would rather say that the spread of World Wide Web is closer to the spread of viruses. Or if the authors assessment is proper, World Wide Web spreads like religions.

The following is quoted from the paper.

"Religions are sets of ideas, statements and prescriptions of whose validity and applicability individual humans can become convinced. Thus, individual minds are the hosts of religious memes, which can exert considerable influence on the behaviour of their hosts."

In fact, we can apply nearly the identical statements on the construction of Web content and its impact to the content creators. The information on the Web is sets of ideas, statements and prescriptions of whose validity and applicability individual humans can become convinced. Thus, individual minds are the hosts of these Web memes, which can exert considerable influence on the behaviour of their hosts.

When we spread user-generated content over the Web, we spread the belief about the soundness of the information. A typical example is Wikipedia. Though we know that many Wikipedia authors are not professional and they have bare obligation of the correctness of their input, we often cite the Wikipedia entries as if they are the absolute truth. Unconsciously, we have applied the religion-like confidence onto the Web. When the Web spreads, it grows in the same momentum as a new religion grows. Moreover, the generated Web reacts to the people who create it as if it is a religion.

The relation between the Web and religion is an interest topic on Web Science and especially Web evolution that is worth of many future explorations.

Sunday, November 09, 2008

swing between big and small

In his recent Harvard Business Publishing post titled "Obama's Seven Lessons For Radical Innovators", Umair Haque had a few insight on how the business might walk into the future.

yesterday, we built huge corporations to do tiny, incremental things - tomorrow, we must build small organizations that can do tremendously massive things.

In fact, the swing between big and small is a natural phenomenon that exists not only in the business sector but also in nearly any domain sector. A similar statement was claimed at least as early as 14th century in a great Chinese historical novel named "Romance of the Three Kingdoms" (Chinese: 三国演义; pinyin: sānguó yǎnyì). The novel is based upon events in the turbulent years during the Three Kingdoms era of China, starting in 169 AC and ending with the reunification of the land in 280 AC. The novel is one of the greatest oriental literature not only because of its living story and characters but also because of the war strategies described in the book. For many Japanese and Chinese businessmen, Romance of the Three Kingdoms along with The Art of War are in the short book list of must-read.

At the beginning of the Romance of the Three Kingdoms, the author had written the following:

话说天下大势,分久必合,合久必分。[Said the general trend of the world: when being separated lasts long time it would be united, while being united lasts long time it is going to be separated.]

In the other words, the swing between big and small are constant cycles.

After the long time period that corporations compete to be bigger to survive, being big starts to gradually lose its superiority in innovation. By contrast, being big becomes, again, the obstacle of technological advancement. On the Web, many times we have witnessed the fade of innovation once a small venturous startup is acquired by some big company.

This phenomenon is not new at all in history. Just about two to three centuries ago, our ancestors had witnessed how the big landlords tried to buy the small but aggressive industrial factories into their own territory, and they also had witnessed how some comparatively bigger factory owners tried to acquire smaller factories and then mechanically link the factories together with the lack of long-sight plans. The old-style landlords thought that by acquiring new innovations they could still maintain their old glory. The new-style capitalists thought that by purchasing the newer inventions they might strengthen the leadership. Unfortunately, however, neither of them was right.

When we are in an age of innovation (or an age of great transition), we'd better thinking less of acquiring innovation, but growing proactively with innovation!

This is how being big is swinging to the side of being small.

Thursday, November 06, 2008

To Thinking Space Readers

Dear readers,

Thank you for loving this blog. Due to some tough schedule, however, I would not be able to blog much until at least the end of this year. I am going to miss you for a while.

Thinking Space will bring you back more exciting posts in the new year of 2009.

Yihong

Tuesday, October 21, 2008

Twine went public

Finally, Twine went out of beta.

To introduce this service, in Thinking Space I had written two pieces (first impression and second impression) of post that were synchronized with Twine's steps of going public. I am interested in this service because it is a representative Semantic Web application until now. After talking and debating Semantic Web for so many years, Twine is among the very few successful (or at least workable) real-world Semantic Web applications. Just by this mean, it deserves our special attention.

For readers who are still not familiar to Twine, Paul Miller had a fairly comprehensive discussion of the service at ZDNet that is worth of reading. Also, you may directly go for Twine.com to try the service by yourself. In this post, however, I continue my style of service analysis following the first impression and second impression.

The up side of the public version

1) from producing knowledge networks to producing interest networks

I vote this update of mind to be positive. Knowledge network is a great concept. Producing knowledge networks is probably the ultimate goal of Semantic Web. However, this intent is too broad to manage. How to project this broad concept of knowledge network onto a narrower and easier-to-manage alternative is a challenge. I am glad that Nova seems figuring out one---interest network.

Personal interest is a subset of personal knowledge. Moreover, personal interest is probably the most heavily cared portion of personal knowledge. By reducing knowledge network to interest network, it decreases the amount of potential information processing and narrows the size of the application domain. Hence it could significant improve the performance of the service if the service designers truly understand the meaning of this change.

2) emphasized personalization and privacy

Nova has emphasized that "What Twine will be doing will be to make excellent PERSONALIZED AND TOTALLY PERSONAL AND PRIVATE recommendations to users." Moreover, Nova mentioned that Twine would monetize its service through the coupling of recommendation and privacy protection. I agree to Nova. This is the right direction.

3) enthusiasm of the users

Nova reported that at present Twine users spend 12 minutes per session on average. This is a very encouraging number. It means that the service is sticky in some sense, or at least among the ones who really use the service it is sticky.

4) good quality of content

I use Twine regularly. Based on my experience, the quality of bookmarking service Twine currently performs is fairly good. When I search information inside a twine, the quality of searched results is satisfactory in general.

The down side of the public version

1) move towards 2.0 rather than to 3.0

I was said that Twine was likely a Web 2.5 application in its beta. Then I expected that Twine would gradually move towards 3.0 when it went public. However, my prediction is wrong. By inspecting this public version Twine, it is more similar to the other Web 2.0 applications than becoming a revolutionary new service. In the other words, Twine is moving towards 2.0 rather than to 3.0.

At the beginning we might instantly tell the difference between Twine and another standard Web 2.0 service. But now it has been very hard to tell why Twine is not another Web 2.0 application. By just adding a few semantic computation is not enough for Twine to claim Web 3.0.

Twine needs to hire some visionary service manager in contrast to (or in addition to) the experienced service manager it has now. By experienced Twine could only go for what is popular now. Only by visionary Twine might lead the trend into the future. Twine is losing innovation.

2) too low traffic flow in monthly visits

Based on the information provided by the CrunchBase, the number of Twine.com's monthly unique visitors at the past September is only about 50K. Be note that Thinking Space has monthly unique visitors in the same September more than 5K. In this month, the unique visitors at Thinking Space is close to 10K. But Thinking Space has no invested money at all, with respect to Twine.com has $13 million only in its series B round of fund raising. Isn't it a serious problem of Twine?



Referenced resources:

Monday, October 20, 2008

Build new centrifugal momentum on the Web

Nicolas Carr shared a keen observation of a present trend on the Web---the centripetal force is currently driving the progress of the Web. An invisible force is pulling Web users away from the comparatively smaller Web sites and towards the bigger nodes sitting on the center of the Web. For instance, more Technorati blog search users now adopt Google blog search, and more users of Bloglines now switch to Google Reader. In short, the effect of Long Tail is decaying.

Nick's observation is illuminating. Innovation is the centrifugal force on the Web. Due to innovation, new Web sites can attract more users away from the large existing sites on the center of the Web. The more innovation the Web has, the stronger the centrifugal force is.

On the contrary, when the centripetal force starts to dominate, Web innovation is at its downturn. In particular, this time the downturn tells that the principles of Web 2.0 may no longer keep on generating the centrifugal momentum great enough to sustain the high-speed expansion of the Web. The Web evolution is entering a comparative contraction process (i.e., still expanding but in the low-speed mode).

Be note that this is the second time the Web enters a comparative contraction process. The last time was during the period of the dotcom bubble in which many small Web sites went out of business and the majority of Web users flowed back to the few major sites on the Web. After the dotcom bubble, however, the Web expansion re-accelerated in a new stage---Web 2.0.

Based on all the analysis, we should be confident to expect another new round of rapid Web expansion ahead despite of the present contraction. Now it is the time for us to build new centrifugal momentum on the Web.

Virtual economy calls for new institution

The financial crisis is an inevitable result of the conflict between the economic form and the economic institution.

A market is a fundamental institution relevant for economic growth. The crash of a market often synchronizes with the beginning of an economic crisis. By contrast, the recovery of the broken market shows the end of an economic crisis.

We are at present experiencing a severe economic crisis whose symptom is the crash of the financial market. At January 2008, George Soros predicted that this crisis would be the worst one since the World War 2. Until now every evidence, unfortunately, supports the claim.

Despite of the human nature of greed, the crisis happens due to the conflict between the virtual economy and the present economic institution that was designed to support the "real" economy.

A comparison may help us understand the conflict better.

Back to the ancient time in the agricultural society, the logic of keeping the stable development of society was to well feed the general public, especially the slaves. The fundamental of the feudal economic institution was to control the level of laborers' consumption to be low. Therefore the landlords could maximize the share of profit from labor work.

This old logic continued to the early time of the industrial society. The newly risen capitalists tried to grasp their greatest benefit by minimizing the wages of the workers. Such a policy suppressed the majority of people's power of spending. The consequence was the economic crisis of overproduction because the general public was lack of enough income to consume the rapidly increased amount of product.

The overproduction crisis forced people to restart with the principle of supply and demand balance to manage the economy. The capitalists realized that to maintain a stable and sustainable growth of economy they need to let their workers have more money. The more money the workers have, the more product they can consume, and thus eventually the more money the capitalists may gain. This new logic constitutes the fundamental of the modern economic institution. A significant consequence of this new logic was the invention and prevalence of credit.

Now we are standing at the door of another great transition. This time the economy is transformed from the "real" economy to the virtual economy.

In this crisis, many people complained the virtual economy and believe it was a poison. Indeed, however, the virtual economy is an inevitable consequence due to the growth of the capitalist economy. In this world, product and service are no longer restricted to be the traditional "real" and tangible ones such as car or in-store customer service. By contrast, now they include new components such as currency and Web services, which are virtual and intangible (explanation shortly later in this post). The percentage of these new components is increasing abruptly. The main body of the economy is shifting from the "real" domain to the virtual domain.

The price of a product/service in the "real" economy is based on the meantime supply and demand market requests. There is an important assumption behind the valuation of a "real" product/service: a "real" product/service has an equivalence to a certain amount of mass/energy. To produce the same quantity of product/service output, people would have to consume the equivalent amount of mass/energy. This hypothesis is crucial because it defines a baseline value for any "real" product/service. The existence of the baseline protects the integrity of valuation in the free market.

Things, however, become very different when entering the realm of virtual economy. No matter are they currency transaction or Web service consumption, virtual product/service mainly consumes information instead of mass/energy. Therefore, it generally does not exist an equivalence between a virtual world product/service and a certain amount of mass/energy. The previous hypothesis fails in the realm of virtual economy.

In the virtual economy, we may arbitrarily overvalue or underestimate the price of a virtual product/service if we perform the same economic institution as we have applied in the "real" economy. There is no bottom line to protect the integrity of the valuation. And this is the intrinsic reason behind this financial crisis.

On currency transaction, we may estimate the cost of risk high or low arbitrarily because there is no equivalence between risk and mass/energy. In similar, on Web service consumption we may value a service in any value because at any time an illegal copy of the service could make it be totally valueless according to the market institution in the "real" economy.

All the discussion discloses one thing: the present economic institution does not fit for the rising virtual economy. It is not that the virtual economy is wrong. It is the present economic institution that is out of date. In similar to that our ancestors had updated the old labor economic institution to the modern market economic institution, it is the time now for us to design a new economic institution that fit for the new virtual economy.

Monday, October 13, 2008

More private, more focused, survive the economic downturn

Today at ThinkerNet, Mike Moran had an interesting post about virtual worlds going private. It reminds me a few thoughts in my mind for quite a while: is the Web industry moving to a sector that is more private and more focused (in contrast to more public and more general)? Moreover, is it the way that IT companies may survive through this economic downturn?

What is the difference between Unisfair and Second Life? Or what is the difference between Yammer and Twitter? Private versus public, target-focused versus general-purpose.

During an economic upturn, free, public, and general-purpose services could be great in revenue generation. The model maximizes the door to allow as many users as possible. The service providers may then monetize the traffic flow in a decent way.

However, the former model could be dangerous in an economic downturn, such as at present.

By nature, we humans would like move closer to our family or close friends when a danger is coming. In an economic downturn, people become less interested in casual social activities. By contrast, they want to make their actions more focused and more private. Either may they get comfort from the relatives, or they may obtain serious help by communicating with particular groups of people. As the result, the small private and target-focused social sites might become more popular than their general-purpose and much larger competitors, even if they may ask for a small amount of subscription fee.

As a brief summary, World Wide Web and the Web industry are still new. There are so many new phenomena that need us to think and discover the new regulations. A crisis is indeed a terrible thing to waste.

Saturday, October 11, 2008

Save the eleven troubled companies

Yesterday at CNet's Webware, Rafe Needleman posted 11 troubled companies in his mind. Nevertheless do I agree to his analysis in general, I want to share a few my own thoughts on the eleven ones. That is, what we/they need to do to save themselves out of this period of crisis. To make a little bit fun, I will list the companies in the reverse order as they are in Rafe's post.

MySpace

Unlike many of the other companies in the list, MySpace does generate quite a decent trunk of revenue until now. Therefore, Rafe primarily complained its momentum of growth into the future in contrast to the ability of money making at present.

My word on MySpace: do not be a portal!

MySpace is losing its momentum of growth because it is now a 2.0-age Yahoo. By trying to embed everything into itself, nearly nothing in MySpace is significant. New users of MySpace are likely to get lost (such as myself) because the site is a mess of everything.

There is a great metaphor for MySpace---a chicken rib. For anyone eats chicken he must know: a chicken rib is something that not tasty at all if you eat it, while it is a waste if you throw it away since there is still meat on it.

Cut the number of services and make the remained ones focused. This is the way to save MySpace.

Netvibes

The central idea of Web 2.0 is community. To construct a community, there must be a focused domain of interest. Then by providing irreplaceable commercial information for the people who are interested in the domain, it comes the model of revenue generation. This is the common paradigm of Web 2.0 business. Netvibes, however, misses the point from the beginning because building start pages does not construct a community.

My word on Netvibes: complementing instead of aggregating.

Netvibes is not a Web 2.0 site despite of its heavily Ajax-based implementation. In essence, Netvibes is a 2.0-like but indeed Web 1.0 site. It build 2.0-like Web-1.0 homepages. This intrinsic conflict inevitably leads to its failure on pursuing successful Web 2.0 business model.

Refocus the service from aggregating varied Web services to complementing varied Web services. This is the way to save Netvibes. If Netvibes may successfully make this transition, it would be one of the first adopters of Web 3.0. Otherwise, as Rafe predicted, Netvibes' end is foreseeable.

DailyMotion

Video sharing is cool, but to make it a successful business is another story. DailyMotion, in similar to all of its peers including YouTube, suffers this problem.

My word on DailyMotion: help video loaders to make money.

Just a hint for DailyMotion as well as to all the other video sharing Web-2.0 sites. Don't just think of making money by yourself. Greed is often the killer for setting up real successful business. Think of helping the video loaders to make money, and then you are going to make money.

Ask

In this age of Google, no other Google-like search engines have future. Ask, despite of its good quality (actually Ask.com is the most favorite search engine to my 7-year-old daughter, she is not a Google-fan yet), is not the only search engine suffering.

My word on Ask: merge with a social search site.

Either buy a new social search site and convert itself to it, or sell itself to a social search site, Ask must do one. Otherwise, I am wondering either why Ask.com is still not dead yet.

Skype

A bad transaction may destroy an innovation. Has anybody said it before? Anyway, I think at least on Skype we have seen it.

My word on Skype: well, it's not your problem.

It's eBay's problem.

Second Life

Maintaining the running of a virtual world must be a costly business.

My word on Second Life: deal with Facebook.

Why? I have shared the reason one year before.

Pandora

Copyright, it is a problem.

My word on Pandora: move to China.

It is not kidding. Though copyright is something we should protect, innovation is a more valuable thing we must protect. Please remember, the reason of copyright protection is to encourage innovation instead of protecting income for greedy people! Therefore, if copyright begins to kill innovation, we throw away copyright but embrace innovation. China will be a great place to incubating new-age innovations.

Zillow

Poor site, it is now a real estate winter.

My word on Zillow: develop new buyer side services.

The focus of the real estate market has changed. Now it is buyer's market instead of seller's market. Hence the seller-oriented advertisement model would not generate enough revenue to support the site as Rafe predicted. It is the time to call innovation.

Inventing and developing new buyer side services (and indeed there should be quite a few, in my mind I can think of several immediately) would save the site from this winter.

TripIt

Another site is going to suffer this economic downturn.

My word on TripIt: focus on local.

Economical crisis does not mean that people are less willing to travel. It only means they have less money to travel. Therefore, think of their likely budget and plan local travels for them within their affordable budget.

Again, this is the time calling for really innovation. Or, this is the time to demonstrate the power of human thinking.

Meebo

Unquestionably, Meebo is cool. But, as Rafe said, its service is too narrowly focused. Therefore, its sustainable growth is doubtful.

My word on Meebo: try the best to last through this crisis.

Meebo would be a successful business on the new Web after this crisis, if it survives.

Twitter

Finally, we come to a real hype. Twitter is great, but it is also troublesome on making money. Comparing to Kozmos, yes, Twitter is very likely to be the 2.0 stage Kozmos.

My word on Twitter: seeking collaboration with Imindi.

Imindi is the piece Twitter is missing, though actually Imindi has more potential than Twitter in long term. This collaboration can solve the main problem in the present Twitter as well as bringing Twitter a brilliant business model of success.

Thursday, October 09, 2008

The Web is Expanding

Today's ThinkerNet has a post of mine on "a closer look at the expanding Web." It is a summary of my recent thoughts on how the Web is evolving.

In the post, I discussed four simultaneous trends of Web expansion---in the physical world, in the computational world, in the network communication world, and in the financial world. Based on the discussion, here is a few more thinking of the topic I want to share exclusively with the Thinking Space readers.

(1) Mobile computing could only be more and more popular in normal Web users' regular daily life. The data transmission rate through wireless network will increase tremendously in the near future. It represents a great opportunity on investing wireless communication. It might also mean that we are looking for a "healthy" bubble of wireless communication (as if the bubble of the optical network) so that eventually normal users could have cheap but also fast enough wireless connection everywhere.

(2) User-centered control gradually becomes an essential issue. In the physical world, we will have more variety of computational devices; in the virtual world of the Web, we will have many more choices of Web services. The merge of the two trends demand actually one common thing---enhanced user-centered control. The question is, however, how we may really approach this goal.

The only right solution in my mind is to turn the site/service-centric Web 2.0 structure back to the traditional user-centric Web structure we had experienced before Web 2.0, but certainly it would be at a higher level. It thus immediately means a brand new stage of the Web, i.e., Web 3.0. We need to build up a new form of online individual that matches the requirement of the new age. Human mind management services such as Imindi (or services like it) would be a critical component in this new identity formation process.

Coincidently, Trend Adams posted an article about randomness and user-centered control today. I would recommend that article to be a complementary reading to this post.

(3) Mind reading devices have great potential into the future. This research is still at its very early stage. By the trend of Web evolution, however, this type of devices seems inevitable in our future life.

(4) From the financial point of view, mind asset is in its process of formation. I have discussed this issue many times at Thinking Space.

In short, the Web is just becoming more and more exciting.

Wednesday, October 08, 2008

Fear and Leadership

Fear is reality when dealing with tough times, but how you manage it is the measure of effective leadership.

I learned it from today's Twitter. The statement was to advertise a new post at Harvard Business Publishing telling about managing your own fears.

Nevertheless is the post worth of reading, I particularly love this tweet more than the post. Yes, many of us have the feeling of fear at this tough time, even if one might be a CEO. But being fear should not lead to being panic. It is the time to look for hope out of the fear.

When a danger is coming, the cowards would see nothing but darkness. The true leaders, however, will see one opportunity after another chance. This is the real leadership is about.

The financial crisis: who will be the winner?

The financial crisis at Wall Street seems to become more and more severe with the plunge of Dow Jones in recent days. A question is, however, generally overlooked by many people---who will be the winner in this financial crisis?

Some people may answer by no winners and we are all losers. But it could not be true. Whenever there are losers there must be winners. For example, is Warren Buffet a winner? Many people may say so since Mr. Buffet is likely to gain more than he loses in this crisis. So will the winners just be a small group of the Buffet-like people? The answer might be surprising to many people. Believe it or not, United States of America as a nation could possibly be the biggest winner of all!

A private Chinese economist, Junluo Liu (Chinese: 刘军洛) published recently a brilliant analysis on the eventual effect of this crisis. If you may read Chinese, I would strongly recommend you going to read the original article yourself. Otherwise, I am briefly introducing his analysis here and add a few of my own comments at the end.

Crisis: rebuilding the foundation of USA

Crisis, its Chinese translation says "danger and chance" (Chinese: 危机). Unlike the western tradition that favors precision and strictness of the meaning of words, the oriental tradition (especially the Chinese tradition) respects broadness and thoughtfulness of the meaning of words. Hence when we translate the English "crisis" into Chinese, it becomes "extreme danger but with lots of chances." This is exactly what Junluo shared.

Junluo claimed that this crisis to USA might be a great chance of reformation while to the rest of the world (especially China) would be a true disaster. This claim is quite a controversy to the present mainstream opinion that China might replace USA being the leader of global economy after the crisis.

Who will be the winner? It would be the United States of America, Junluo answered.

There is one common character between Junluo and me. Both of us like to discover the essence of a present event by historic comparison. This time, Junluo carefully compared the present financial crisis to the financial crisis at the late 80th last century when USA eventually defeated Japan's challenge on gaining the power of economic leadership. Based on the history, by using nearly the same strategy the Wall Street stock market dropped 20% in short time of period. The result was, however, that Japan fell into a 19-year-long recession while USA rapidly regained the power of economic growth after just three years. This history is repeating. The only difference is at this time the victim becomes China.

There are some simple (but easy to be overlooked) facts we must be aware. Everybody knows that the root of this financial crisis is the loss of control on the real estate loan. In short, many low-income, poor-credit people got the loan (which they should not get) to buy houses they could never afford. One consequence is, however, that at USA real estate investors were able to build many houses in these years despite of the fact many of the new house owners actually could not afford these houses.

This story has two effects: (1) the break of the credit system (nearly everyone is experiencing the pain now), and (2) a huge amount of new houses have built all over the United States (few, however, are considering this fact now). If we take a look at the two effects closely, the new houses will be on the land of USA forever (nobody can move them to China) while the whole world (especially China) is now paying for the credit disaster. When Dow Jones dropped 20%, the stock market at Shanghai has dropped over 70%. This fact identically matched what had happened at Tokyo 20 years ago.

If this time USA could execute the successive strategies as brilliant as the last time when handling Japan, USA would recover and gain a even stronger momentum of economic growth in three years. China, however, will be the next Japan, which inevitably falls into a long time recession. The final winner of this financial crisis thus could only be---the United States of America.

My comment

Certainly this summary I shared is oversimplified. Junluo's original discussion is much more complicated and delicate. However, I want to share a few more of my own thoughts by comparing the consequence of this financial crisis to the consequence of the last IT crisis at the beginning of this century.

By studying the dot-com bubble, researchers have found that the optical network built during the hype period had become the foundation of the following economic boom at the Web industry, namely the Web 2.0 hype. Without the investment of these optical networks and without the bankrupt of the original optical network investors, we were not able to obtain the cheap price of network usage which is an essential reason behind the Web 2.0 hype. By this mean, it was the IT crisis that constructed the foundation of the new Web-based industry.

However, such a foundation is still not enough to boost the full-scale rise of Web-based industry. Another obstacle is the price of real estate. In order to boost a new form of industry, we need to have a large amount of small businesses in this type. High price of real estate, however, is a deadly killer for the blooming of small businesses.

This financial crisis solves the problem. There are now more new houses than they could be properly consumed. As the result, the dropping of price at real estate market is inevitable.

Combining the two effects, the Spring of Web-based small businesses at US is coming. In the next decade, we are going to see that USA again becomes the base of innovation and the leader of the new industrial revolution.

In comparison we may watch China. The future is, however, not optimistic at all because of this financial crisis. The deep drop of the stock market will greatly hurt the industrial innovation. Moreover, western investors are going to invade China on its debt market and real estate market to cause severe economic inflation in China. As we have discussed, the high price of real estate in China will hurt the formation of Chinese Web-based small businesses. As the result, the technological distance between USA and China will not decrease but increase. As a Chinese myself, I am quite sad on this prediction of the future. However, be honest I would say that it is the future most likely to happen.

I have predicted several times in this blog that a great economic, technological, and even social transition of our human society is happening right now. USA is actively facing this challenge while many of the rest of the countries are still unaware of it. I have to say that the age of United State has not passed yet.

Sunday, October 05, 2008

Cartoon 2.0


The Can from Carlos Lascano on Vimeo.

Yihong's comment: everything could be 2.0. And here are another one:


Inspiration (stopmotion) from Carlos Lascano on Vimeo.

And here is Allan's pick, another fascinating and moving clip.

Saturday, October 04, 2008

Revisiting Web 3.0, When Web Sites Become Web Services

Today I happened to revisit a popular post written by Alex Iskold at March 2007. In the post, Alex claimed that Web 3.0 might be realized when the major Web sites have transformed themselves into Web services. After more than one year and a half, it is interesting to check how well this claim is realized in the real life.

From one aspect, the prediction is becoming true. During this past one and a half year, many Web sites have started to reform themselves into Web services. One typical example is Yahoo. Yahoo was the representative of the traditional Web portal philosophy. By the most recent Y!OS proposal and the release of SearchMonkey and BOSS, however, Yahoo has rapidly transformed much of its original site into Web services. If even Yahoo has made this change, it is convincible to tell that the transformation is close to its successful ending.

In the original post, Alex has worried about the legal issue of Web scraping that may be a result of this transformation. The real world practices show that this worry is probably unnecessary. By transforming a site into services, the site owners actually often gain more (instead of less) control over the site content. Through service design the site owners may more actively prevent external users from illegally copying the information that is not free for sharing.

On the other hand, the Web is still at its 2.0 stage though all the predicted changes are happening. Even after the major sites have already transformed themselves into Web services, Web 3.0 is still an unknown future.

We must have missed something. By just transforming sites into services, the original Web sites actually have not provided anything significantly new to the users. Therefore, how could the Web be entering a new age without a new revolution? This is why the transformation, despite of its inevitability, is not enough to trigger the transition into Web 3.0.

We are still waiting.

Thursday, October 02, 2008

Wall Street, Fall 2008: crisis, capital, risk, computation, and information

Crisis is an unstable situation of extreme danger or difficulty. This term precisely describes what is happening at Wall Street now.

The Wall Street banks, especially those investment banks, claimed to have produced capital more than (a lot more than) the capital they indeed have produced. This unbalance between the real output and the claimed output leads to an unstable situation. When the unstable situation has lasted for years without proper fixing, it accumulated and finally grew to be extreme danger or difficulty. Hence we have the financial crisis now.

Capital is cash or goods accumulated and available for use in producing more cash or goods. Capital is the trouble maker in this crisis.

Capital represents wealth; and everybody likes wealth, hence everybody likes capital. So far there is no trouble.

In order to produce more wealth, a straightforward way is to produce more capital. Now the trouble starts. The trouble, however, is closely related to another essential character of capital---capital is a type of matter. Both cash and goods are matter. Although by the nature law the total amount of matter never increases, the value of the total amount of mass could increase. In order to produce matter in higher value, however, we have to at the same time consume some matter or energy (by Albert Einstein, there is equivalence between mass and energy). Ideally, to produce the same amount and quality of output matter, the less value of input matter/energy we consume the more wealthy we produce. This normal formula of wealth generation becomes the origin of all the troubles.

The Wall Street bankers have had a brilliant idea. How about we embody risk/security to be a type of mass and consume it to produce wealth? This idea is indeed brilliant because we can barely objectively measure the actual value of the embodied risk. As the result, the bankers may arbitrarily undervalue the input cost to claim a huge amount of newly produced value by subtracting the input from the output. Then the real-world trouble begins---the unbalance-based unstable (seed of crisis) is generated.

Risk is a possibility of incurring loss or misfortune. Risk is the central problem in this crisis.

The opposite side of the possibility of incurring loss or misfortune is the possibility of incurring gain or fortune, i.e., chance and opportunity. Gamblers love chances and opportunities, and so do the wealth tracers, and thus reasonably we have the bankers/capital-producers in the list.

In order to perform the arbitrary undervaluation of risks, the gamblers (i.e., the Wall Street bankers) hired top mathematicians (or they were themselves) to have created very complicated mathematic models of risk computation (such as the one in the right figure) that few people in this world (I doubt whether including themselves) truly understood. There is only one goal in all of these math models---to minimize the value of input (i.e. undervalue the cost of risks) so that the increased value of output is maximized.

However, computational sound does not necessarily represent in-reality sound. This is thus the problem.

Computation is a general term for any type of information processing that can be represented mathematically. Computation is the most tricky part in this crisis.

Computation is information processing. This recognition is critical because we have mentioned a little bit earlier that capital production is matter processing. Then we are facing one of the most tricky questions in this world---is information a type of matter?

The importance of this question in our situation is in three folds. First, if information is matter, the bankers are not cheating us but they do have miscalculated (if intentionally then they must have legal issues) the real value of information as matter. Second, if information is not matter and it could not be measured as matter at all, we are completely deceived by the bankers and all of the bankers should be put into jail since they literally robbed all of us. At last, if information is not matter while there is some unknown equivalence between information and matter, the bankers could be excused (but still need to be blamed).

Personally, I lean to the third facet. It is the unknown transformation between information and matter that causes this crisis. Certainly, however, without human's greed we would have never trapped into it either.

Information is a numerical measure of the uncertainty of an outcome. Information is the hope that may save us from falling into the crisis again.

Because of the crisis, US government has requested the remaining two major investment banks to transform themselves to be commercial banks. Will this political order eventually solve the problem forever? I don't think so.

This crisis happens due to the greedy nature of human beings beyond the danger of risk computation. In contrast to challenge the nature of greed, I would suggest a more pragmatic solution to the problem---start to study the real value equivalence between information and matter. That is, start to research the asset of mind.

Based on Seth Lloyd's discovery, information is actually another fundamental element of the universe that is the same as mass and energy. Hence it is reasonable to assume the existence of equivalence transformation between information and mass as we have proved the existence of similar equivalence between mass and energy. In fact, we even do not really need such a great scientific discovery in order to solve the immediately faced problems. What we are looking for now is only a measurement of the value equivalence (in contrast to the fundamental equivalence) between information consumption and mass consumption. Encapsulating human mind in a way that it becomes exchangeable in the market might be the straightforward answer.

If numerical measure of the uncertainty is the essence of information, we may solve the valuation of risk in the free market rather than handing the issue to the few smart people in dark room. This picture might represent the future of financial production.

Wednesday, October 01, 2008

A metaphor why cloud computing is inevitable

Cloud computing is an infrastructure that collaboratively computes any user-assigned task through all available Internet services. The name "cloud" is a metaphor for the Internet. Cloud computing is also the Internet-based computing.

There are many skeptics of cloud computing. Nicolas Carr mentioned a few in one of his recent posts. Within the comments of Nick's article, however, there are more. Some people believed cloud computing to be nothing more than a marketing term (and they talked about Web 2.0 the same way until now, didn't they?), while some others doubt whether cloud computing could be realistic since "If you use a proprietary program or somebody else's web server, you're defenceless. You're putty in the hands of whoever developed that software." Does this last accusation sound familiar? I bet.

History is repeating itself now and in the following let us see how.

From manorial economy to modern economy

Once upon a time, manorial economy was dominating. The manorial economy or the style of economic self-sufficiency was popular in both of the western and oriental feudal societies. Under this type of economy, people produce and then consume the stuff they produced nearly all by themselves. Goods exchange happens rarely in this type of economic system.

Then there is modern industrial economy, in which nearly no one may survive solely independent to the others. The input of one company is generally the output of another company unless it takes pure natural resources as the input. In the latter case, however, the company must produce something that is needed by another company or the end consumers (people) in contrast to self-sufficiency. Otherwise the company still cannot survive in the modern economy. In general there is no economic self-sufficiency in modern economy because everyone depends on somebody else.

Now here comes the question: how could this change occur? By revising the previous accusation for cloud computing just a little bit, we may get the following one.

If you use a trademarked product (proprietary program) or somebody else's product line (web server), you're defenceless. You're putty in the hands of whoever developed that product (software).

This is right. When our ancestors were trying to abandon the manorial economy and enter the modern economy, they were accused by the exact argument before. So nothing is truly new.

If we take this great transition of economic forms that had already happened in history as a metaphor, it is much easier for us to see the inevitableness of cloud computing. Moreover, this metaphor should have been strong enough to claim that cloud computing is way beyond a marketing term; it is a revolutionary CHANGE.

Lessons learned

So what do we have learned? Change is uneasy, especially to the ones who have benefited from the old format.

Actually few companies is actively anticipating this change now. Traditional firms such as Microsoft and Oracle still are living in their old dream of dominating the market through the proprietary standard policy. They are the old-style manor owners. Newer companies such as Google are acquiring every profitable new innovation into their own territory though they claim to support open standards. They are the new-style manor owners. Therefore, despite both Microsoft and Google speak about cloud computing, what they are doing is enlarging their manors, either in old style or in new style. They are pushing modern economy under the cover of manorial economy. By this mean, it might not be wrong by saying cloud computing to be just a "marketing term." None of the big players at this moment are sincerely preparing for the coming of the true cloud computing because it violates their present interest.

However, history never lies. If only we go over the history of the break of manorial economy in western society or the failure of economic self-sufficiency in China, we must have learned that this change is inevitable disregarding the willingness of the big players at the meantime. Resisting on the change will only lead to the ineluctable failure of the once-glory big names themselves.