...Google+Microsoft+Intel. In other words, the U.S. government has shoveled the equivalent of the entire core of the tech industry into Iraq. The Web is starting to bubble with interesting conversation about the cost of the war and how that money could've been otherwise spent. This has been touched off by government figures that show the U.S. has appropriated $523 billion for the war -- and the book The Three Trillion Dollar War, by Joseph Stiglitz and Linda Bilmes. As you might guess, the book says the war's real cost to the U.S. alone is more like $3 trillion. (The authors point out that for that, we could've given every one of the 24 million pre-war Iraqis a check for $250,000, essentially buying the country's allegiance one person at a time.)

Whatever figure you pick -- $523 billion or $3 trillion -- the obvious point is that the money could've been invested in technology that would do far more to secure the nation's future. Like, what if that had been spent on building nuclear power plants and electric cars? Could the U.S. have vastly accelerated its independence from Middle East oil? Not to mention what that would do for global warming. The latest Wired argues that nukes are the only way to save the planet.

It's all a moot point, of course. The investment opportunity is gone, the money dispersed to military personnel, defense contractors and all that. (As if, just coming off Memorial Day, the dollars even matter compared to the loss of life and other casualties.) But the debate needs to happen. Maybe it will help encourage better decisions going forward, and it's an interesting question of whether new technology can sometimes solve the same problem as a war.

Bad news for big downloaders who use Time Warner Cable as their ISP: you may soon face a higher bill. The nation's #2 cable ISP is set to begin charging customers more based on the amount they download.

A spokesman for the company says that the top 5 percent of downloaders can account for up to 50 percent of network capacity, which is why they are considering the new pricing structure. According to a report from the Associated Press, Time Warner Cable would offer various tiers of pricing, versus what could become painfully expensive pay-as-you-go charges for bandwidth. However, there is no need to freak out yet if you're currently a TWC customer for now, the new pricing structure is only being offered as a trial in Beaumont, Texas, and will only impact new customers.

While I imagine the immediate reaction to TWC's plan will be decidedly negative, it at least seems more reasonable than AT&T and Comcast's filtering of traffic for users that frequent p2p download services like BitTorrent.

On the other hand, if TWC's interest is truly to be fair, prices won't only go up for big downloaders, but they'll go down for those that consume little bandwidth (yea, right).

Is it fair for ISPs to charge heavy downloaders higher fees?
• Yes
• No
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While most of us were filling our bellies on Thanksgiving, James Hamilton took a dive into the balance sheets of Fannie and Freddie. And he's found some pretty scary figures:

• The total "book of business" held by Fannie and Freddie between them is now $4.7 trillion, mostly in the form of mortgage-backed securities as opposed to outright mortgages. That means their $65 billion in capital is just 1.4% of their book of business. That's worrying.
• Fannie and Freddie have been reasonably good at avoiding subprime: their $170 billion of subprime MBS is just 3.6% of their total book of business. But it's still $170 billion, which is 2.6 times their total capital.

In the comments, Anarchus has an even more sobering datapoint:

The majority of [Freddie's] book of biz is sound - 86% fixed rate, 91% owner-occupied and overall the garbage ratio is relatively small: 8% Alt-A, 9% IO and 1% option arm (note: due to the overlap of categories percentages are not additive). The problem FRE has is that the 38% of its book concentrated in '06 and '07 vintages has very different characteristics from the overall book: 39% Alt-A, 44% IO and 14% option arm. (WHAT were they thinking, these past 21 months, enquiring minds want to know?)

It's a very good question: Freddie Mac was not founded with the idea that it would buy a pool of mortgages 44% of which were interest-only.

Hamilton concludes that Freddie (and Fannie, too) should cut its dividend in order to increase and preserve capital: that's a no-brainer. But he remains agnostic on the question of whether OFHEO, Freddie's regulator, should relax Freddie's capital-adequacy restrictions and give it a bit more room for maneuver. Should the government use Freddie's balance sheet to try to restore liquidity to the mortgage market? Or should it first ensure that Freddie remains solvent? Anarchus is clear that "when we're probably no further along than the 2nd inning of a 9 inning game," the most important thing is to ensure Freddie's survival.

I have a lot of sympathy for this view, especially in light of what's happening to Countrywide right now. It doesn't seem to matter how big you are: if you're a mortgage company, you're at risk of failure.

So the next step, I think, is to take a very serious and realistic look at the downside of Freddie becoming insolvent. I really haven't looked into this, but I suspect that the implicit government guarantee would kick in, that Fannie and Freddie would continue to buy conforming mortgages, that their creditors would suffer no losses, and that taxpayers would be stuck with a bill for probably some 11-figure sum (over $10 billion, but below $100 billion). Not optimal, to be sure, but I don't see nasty systemic repercussions beyond the moral-hazard problems which have been a known issue for many years in any case. On the other hand, if OFHEO forces Fannie and Freddie to continue to dump performing mortgages into a downwardly-spiralling market along with everybody else, the damage to the multi-trillion-dollar housing market could be much worse.

So I'm still in favor of charging Fannie and Freddie with doing their job, and, in the process, of running the risk of insolvency if the mortgage market continues to deteriorate further. But I do appreciate that reasonable people can differ on this one.

I've been thinking about RSS a lot over the last few weeks/months and with all the hub-bub about RSS stats this past weekend, I thought it is a great time to talk about why I think RSS is "broken" and in it's current form isn't sustainable over the long-term. Before I begin let me state that I like what RSS offers a lot and do read several feeds. Let's look at RSS from two different "broken" angles: subscribers/metrics and marketing. I put broken in quotes because my guess is that RSS was never intended to be what I will discuss but we are here now and it's time to fix these issues so RSS can move forward as the vehicle of choice. Note: this conversation is mainly intended for a business audience, not for a personal blog's feed.

Subscribers/Metrics

The big discussion this past weekend was around subscriber numbers and Google Reader. The discussion has crossed the spectrum from begging to be added to a spreadsheet (which is already out of date) on TechCrunch to Pete at Mashable claiming that "Google Reader Stats are Bullshit". I wrote about RSS subscriber numbers being equivalent to the "hits" metric of the mid-90's. It's so easy to game, and even more than with hits, those that are defaults (or bundles) on any network get additional subscribers that could produce no end-value. A simple example - check out most of the start pages - upon entry, you are have automatically become a subscriber to the defaults they offer.

Let's compare RSS subscribers to E-mail list subscribers. I managed several marketing lists in my former role with millions of users, we had a policy of purging any user who didn't engage with a newsletter in six months (we sent several warnings before the purge). Why did we do this? Two reasons: email cost and annoyance/spam levels. Are we at a point now where RSS lists should be purged? If engagement with the feed doesn't happen, should that user be purged? Perhaps then we can get to real numbers. With the CN feed, I know that every single subscriber has physically selected that they want in. This is because CN is not a default on any network. Rick Klau from FeedBurner/Google noted the following today, "a Yahoo "subscriber" is not necessarily the same as a Bloglines "subscriber" or a Google "subscriber". Is this for real?

It appears that other sites are also looking at removing their RSS subscriber counts, and I applaud them. Until we can get to a metric base that is agreed upon, shouting from the mountain top about how many RSS numbers you have is meaningless.

Since we are starting with a clean slate, what metrics would you be interested in? Some of my very basic ones are:

• gender
• income
• technical specs (some of this is available today)
• past engagement (which stories appealed to x user group)
• time spent in feed
• comment to read ratio
• physical location
• feed referrer (where did they pick up the feed from)
• forward a story - did they do anything with the story after reading it in the reader?
• story rating
• ad clicks/interaction
• network involvement (facebook, myspace, etc.)

Marketing/Monetization

This is the area in which I believe RSS is severely "broken". Let's assume I have 100 people on my feed, what in the bloodly hell do I know about all 100 of them? Nothing. Zip. Nada. Ok sure, I know they are using Google Reader or Snarfer. And I know if they click a story, that's it. Great, how does that help me as a marketer?

If we compare again RSS to email, with email I can force a user to provide the data points I want before they subscribe. With RSS, I have no ability to do that. As RSS grows in popularity across the mainstream, the ability to customize a feed will become more crucial.

From advertising to tracking, the current RSS model just doesn't handle what's needed. Why should I show a blanket ad to everyone, wouldn't it make more sense to customize per user? With some sites showing potentially millions of ad impressions daily, isn't it time for a real RSS monetization engine?

There is such an excellent opportunity here for all of us to capitalize on the revenue which RSS can (and will need to) provide to our blogs and Web sites. We can either seize the opportunity and create an advertising system for RSS or we can leave the money on the table. Imagine how much easier it would be to sell a targeted ad versus a blanket ad like we are forced to today. I don't know about you but I need to pay my NYC rent.

Conclusion

I don't know what version number we are on with RSS, but it's time for a new version. One that addresses the need for marketing data, monetization customization and metrics that we can all agree to. Otherwise, let's just start publishing hits numbers again, I will start with 20 trillion.

• a) Facebook was worth $100 billion dollars
• b) Facebook would crush Google
• c) Facebook would crush MySpace
• d) Facebook application platform is as important an innovation as the graphical user interface
• e) The top Facebook applications were worth $500M

Deceased Malayan hit with $218 trillion mobile bill Roaming in the valley of the shadow of death What otherworldly ectoplasms lurk in the oblivion of such an unholy place as accounts receivable? A Malaysian man who paid off a $23 wireless bill and disconnected his late father's cell phone

Source: The Register
Author: Burke Hansen
Link: http://www.theregister.co.uk/2007/08/12

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