Peter Black's Freedom to Differ

Section 230 immunity and the Roommates.com case

Larry Downes looks at the section 230 immunity and the Roommates.com case:

I write in this month’s CIO Insight about the 9th Circuit’s en banc decision in the Roommates.com case. This important decision tested the limits of immunity for information service providers (in this case, the operator of a website that allows users to post roommate-matching ads) under Section 230 of the 1996 Communications Act. At issue was whether Roommates.com could be sued under fair housing laws for asking users about their age, sex, sexual orientation, whether they have children and their preferences for these characteristics in a roommate. Eric Goldman has an excellent post on the case at his website: http://blog.ericgoldman.org/archives/2008/04/roommatescom_de_1.htm

Writing for the majority, Chief Judge Kozinski held that the service was not entitled to immunity (the merits are yet to be decided) because the site was a “developer” of the potentially-illegal content. In short, Kozinski distinguished free-form text boxes (immunity intact) from drop down menus that offered only limited choices. The drop down menus, the court held, are not immune, because they cross the line between hosting and assisting in the development of the content, and Section 230 applies only to the former.

I’m troubled, as many people are, by the decision and some of its dicta. In particular, Footnote 15 signals increasing judicial resistance to the Section 230 safe harbor. It also falls into the trap of judges assuming they know more about the information economy than they do:

“The dissent stresses the importance of the Internet to modern life and commerce, Dissent at 3476, and we, of course, agree: The Internet is no longer a fragile new means of communication that could easily be smothered in the cradle by overzealous enforcement of laws and regulations applicable to brick-and-mortar businesses. Rather, it has become a dominant—perhaps the preeminent—means through which commerce is conducted. And its vast reach into the lives of millions is exactly why we must be careful not to exceed the scope of the immunity provided by Congres and thus give online businesses an unfair advantage over their realworld counterparts, which must comply with laws of general applicability.”

Kozinski cites nothing to support these comments. But what does it even mean to say that the Internet has become “a dominant…means [can there be more than one dominant mean?] through which commerce is conducted”? Despite double-digit growth for over ten years, e-commerce still only accounts for well under 10% of retail activity. And I can’t even find a measurement for services revenue, which Roommates.com represents. Which is to say, as far as I can determine, “the Internet” is still a fragile new means of communication.

Read more here.

Should we give Andrew Baron some credit?

Yesterday I blogged about how Rocketboom's Andrew Baron was auctioning off his Twitter account on eBay (see here).  Perhaps unsurprisingly this move has attracted a wave of attention from the blogosphere (and twitsophere).  Now Charles Cooper chimes in with the observation that we should give Andrew Baron some credit for pushing the right buttons:

What if someone started an auction and we all ignored it?

I was hoping that might be the reaction in the "Twitosphere" after finding out that Andrew Baron put his Twitter account up for auction on eBay. Silly me.

My first reaction was to chuckle. It sounded like something out of Seinfeld--an auction about nothing. Would anyone be so much of an egomaniac to believe anybody would care? Then again, if Rocketboom's founder is serious about "auctioning" his Twitter account, have at it, pal. More likely, I'm sure he's laughing about every click we waste agonizing about the supposed implications.

Credit Baron for knowing how to push the right button. He is reaping a PR windfall, generating the most discussion about Rocketboom since Amanda Congdon decided to seek fame and  fortune elsewhere.

Some folks are getting really worked up over the fact that the auction will include Baron's 1,400 something or so "followers" as well. Well, in case you haven't heard, slavery was outlawed in the 19th century. I'm sure Baron's "followers" will make up their own minds if there's a change in ownership.

I fell for the bait so here's my two cents. Everyone's going to get their 15 minutes' worth of fame, no matter how silly. So don't waste any more brain cells worrying about all this. As Stowe Boyd aptly notes, it's not like trading in hard goods. "When it comes to virtual relationships, we're still talking about human relationship. This will go down as little more than a transparent stunt in this hair-trigger era we inhabit.

Read more here (from CNET News.com).

Men are online fools

When the battle of the sexes moves online, Tom LaSusa explains that men are apparently more likely to be duped by internet fraud schemes:

They say girls develop much faster than boys. At the very least, they appear to be quicker on the uptake when it comes to avoiding getting duped on the Internet.

A study from the Internet Crime Complaint Center (IC3) suggests that men are far more likely to be duped by Internet fraud schemes than women. For every dollar that women lost to scammers, phishers, and other Net crooks in 2007, men lost a buck plus an extra 67 cents.

Last year, the IC3 -- a partnership among the FBI, the National White Collar Crime Center, and Bureau of Justice Assistance -- received nearly 220,000 complaints of Internet crime. Of the complainants, more than half (57.6%) were male and lived in one of the four most populated states: California, Florida, Texas, and New York.

...

Unfortunately -- and incredibly (in my opinion) -- lack of consumer awareness still plays a major part in why folks are duped.

It's hard to believe that after all these years, people could still believe an e-mail offering "a thousand blessings" -- and a tidy sum of cash -- if only they will help some poor rich family hide their millions in an American bank account!

Or what about an investment scam? Who gets a random e-mail from a stranger with a "sweet tip" on some mysterious stock -- and then dumps their money into it? Apparently New Yorkers, Texans, Floridians, and Californians. Go figure.

Me? I barely trust financial tips from people I know.

Read more here (from Information Week).

Just making sure that phishing is illegal

Techdirt questions why the US Senate is considering a law to make phishing illegal:

As the saying goes, when your only tool is a hammer, everything starts to look like a nail. The folks in Congress sure do an awful lot of whacking at various nails these days. The latest is a new bill in the Senate that seeks to outlaw phishing. One tiny point is important here: phishing is already illegal. So, really all this bill does is allow these politicians to claim that they took a stand to stop phishing. Except, it's actually worse than that. Not only will this bill not do anything to stop phishing, it will actually make life worse for plenty of non-criminals. That's because a part of the bill would outlaw hiding domain name registration information. Now, there are plenty of legitimate reasons for not wanting to reveal your info in the whois database -- but according to this bill, it won't be allowed any more. If you want to own a domain, you'll need to cough up your name, address and phone number to whoever wants it -- and they better be legit. If you provide false info, you'll also be breaking the law. So, it won't do anything new to stop phishing, but will make it much more difficult to own a domain anonymously. That's quite a nail.

Read more here.

Why phishing works

Rachna Dhamija, J. D. Tygar and Marti Hearst from the Harvard School of Engineering and Applied Science have published an academic paper explaining "Why Phishing Works".  Here is the abstract:

To build systems shielding users from fraudulent (or phishing) websites, designers need to know which attack strategies work and why. This paper provides the first empirical evidence about which malicious strategies are successful at deceiving general users. The authors first analyzed a large set of captured phishing attacks and developed a set of hypotheses about why these strategies might work. They then assessed these hypotheses with a usability study in which 22 participants were shown 20 web sites and asked to determine which ones were fraudulent. The study found that 23% of the participants did not look at browser-based cues such as the address bar, status bar and the security indicators, leading to incorrect choices 40% of the time. It also found that some visual deception attacks can fool even the most sophisticated users. These results illustrate that standard security indicators are not effective for a substantial fraction of users, and suggest that alternative approaches are needed.

Download the paper here.

How do you compete against free music?

Ars Technica's Nate Anderson explains why Last.fm's free music won't replace your music collection:

Can music companies compete against "free"? Sure they can; it's an issue I addressed in yesterday's feature on the changing nature of the music business, and confirmation came today from the oldest of old-guard sources, CBS. The company, which owns Last.fm, announced today that Last.fm will now offer on-demand streaming of millions of tracks from all four major labels and a huge host of indies. For free.

The business model is ad-supported, with a subscription offering also slated to come online once the current beta test has wrapped. Labels make their music available for streaming, they get paid each time a track is played, and everyone wins. But Last.fm has also opened the system to indies and even unsigned acts; anyone band with a music track to its name can create an artist account, upload content, and start getting paid (if they can convince anyone to listen).

Most exciting is that the free streaming actually works. This is more surprising than it might seem; Lala tried a similar strategy last year using tracks from only one label and instantly found itself swamped beneath the crush of requests. Last.fm's service, despite its worldwide popularity and the launch of the new feature, has been quite responsive in our testing today and delivers on its promise: you press play, and the music blasts forth a few seconds later.

The new service is available to residents of the US, UK, and Germany, though more countries are planned soon.

Unfortunately, there are the inevitable drawbacks.

...

The move is another step forward for a music business in search of new models for making money off its tunes, but it won't replace your personal music library. The biggest problem is that you need an Internet connection and the ability to load Last.fm at any time. While that's fine for laptops, it doesn't work out well for portable media players. Since the player applet is crafted in Flash, we weren't able to use the service on the iPhone, either.

 

Read more here.

Banning banks in Second Life may be problematic

In an article FindLaw's Writ, Anita Ramasastry considers the consequences of banning banks in Second Life:

Just last week, Second Life, an online virtual world, banned unregulated banks from its cyber-realm. Linden Labs, the operator of Second Life, announced that only banks or other financial institutions (such as investment companies and credit unions) that have a real-world presence and are licensed and regulated by real governments (U.S. or foreign, apparently) would be allowed.

 

Second Life has said it will verify this status by requiring "an applicable government registration statement or financial institution charter."

Previously, banks could exist solely within Second Life. Thus, in theory at least, a customer's deposits or investments were governed only by their agreements with Second Life and with their cyber bank there.

Banks on Second Life accept deposits of Linden dollars, Second Life's currency, which is convertible into real U.S. dollars. As I discussed in a previous column, bank failures and frauds on Second Life have caused its citizens to lose some funds. . According to Linden Labs, it has also received complaints about several in-world "banks" defaulting on their promises of very high interest rates. .

Plainly, Second Life's hope regarding the ban is that banks with real-world presences will operate safely and not defraud consumers. And in theory, Second Life's ban is a good idea. But in practice, as I will explain in this column, it may be unnecessary at this stage; will surely cause more confusion for regulators and Second Life citizens alike; and may not stop fraud.

 

Moreover, there was an interesting alternative that might instead have been employed: Linden Labs might have allowed its participants to create their own regulatory schemes - tailored to the geographies and customs of Second Life.

Read more here.

How to get your hands on that Tom Cruise book

The Sydney Morning Herald looks at how some Australians are getting a copy of Andrew Morton's Tom Cruise biography:

An underground market for the new unauthorised Tom Cruise biography has sprung up on auction site eBay, with Australian buyers willing to pay a significant premium for the book.

At midday today there were dozens of auctions for Tom Cruise: An Unauthorized Biography - many offering multiple copies - and bidders willing to pay up to $61.50. The book is available on Amazon.com for about $30, including shipping.

The book is now number one on the Amazon best-seller list.

It will not be printed in Australia and US distributors have now said they will no longer export the book, by British author Andrew Morton, outside the US and Canada.

...

smh.com.au was able to buy the book from website Amazon despite a note on the item saying it would not be shipped outside of the US and Canada. Amazon emailed today to confirm the order had been shipped.

But eBay sellers are getting around the ban on the book by having partners make bulk retail purchases in the US.

"We've got two shipments coming, the first is 150 books," said a man selling the books on ebay, Wojtek, 38.

"We're buying multiples of 100 at a time. The demand is quite substantial, we need to get in as many as we can as quick as possible."

...

Wojtek said it was "pretty bizarre" that the book was not available in Australia.

"We have got no reason not to sell unless someone official bans the book," he said.

"We don't see it as a black market.

"It's a product that has been parallel-imported because distributors are not willing to sell it .

"There is demand for it and we've decided to plug a hole in the market.

"Our copies are due in on Monday."

Wojtek said that it was now almost impossible to suppress information because of the internet.

"People will get a hold of it," he said.

"One just has to see what has happened to the music and film industry.

"Their stranglehold on the content is diminishing with time due to the internet.

"We are becoming a global economy and people will find a source elsewhere if they cannot obtain the product locally.

"In my personal opinion it is an act of censorship because someone is trying to limit somebody else from having access to a book."

He said there was a possibility that someone would pirate the book and make it available on file-sharing sites.

"I'm sure someone is bound to scan the book and put it in a PDF format where people will be able to download it for free," Wojtek said.

"Then you are in breach of copyright and whatnot.

"That's a grey area we would not legitimise it. That possibility is there."

Read more here.  (And see my earlier post here.)

eBay for Cruise book

The Australian reveals how some Australians are getting their hands on a copy of the controversial Tom Cruise biography:

CONSUMERS hungry for Andrew Morton's Tom Cruise: An Unauthorized Biography are turning to eBay to get a copy.

US publisher St Martin's Press has instructed its distributors not to sell the book outside North America.

Some copies were selling for more than $60 on the website last week. The book retails for $US26 ($30) in the US.

An eBay vendor, who wished only to be referred to as Wojtek, had sold more than 150 copies in less than two days, through his eBay company "memorymate".

"We don't usually sell books, but we are interested in exclusive products with massive potential and this is as good as it gets," he said.

"These things don't happen too often. The book has generated so much attention and the more people are hearing about it, the more that they want to buy it.

"The censorship factor has also had a major impact."

Wojtek, who works for an Australian branch of a US-based company, has ordered 800 copies from the US so far and is finalising a deal with an independent bookstore in Sydney.

Read more here.

The future of social networking

Over at Google Watch, Clint Boulton looks at MySpace's recent pledge to 49 states' attorneys general to better protect minors and suggests that it was "not just a gesture of self-preservation" but rather was an act that foreshadows the future of social networking:

The protection MySpace has "agreed" to provide will take on greater importance over the next several years because if you believe the popular thinking, social networks will become the hub of people's Internet access experiences.

I'm not certain what form this will take, but at some point, we may well be shopping online through our social networks, connecting with Amazon and eBay through MySpace and Facebook.

We will eventually conduct business transactions through our social networks, which, as the Plaxo folks suggest, will be an aggregate of people, family, colleagues and business associates.   

Is this so difficult to believe? How often do we hear that someone has stopped using regular e-mail in favor of Facebook, or LinkedIn? Companies such as TalkShoe are adding voice to social networks.

Social networks are getting rich enough to warrant use beyond simple communications.

Every time someone builds an application for Facebook, MySpace, or any of the other sites that enable programmers to build on their platform, he or she is adding another layer of functionality to the network.

Beyond the virtual food fights and digital sheep throwing, developers are creating ways to hold virtual conferences on these social networks. The convergence of virtual reality avatars with social networks is happening now.

What better way to do your banking, online shopping and business deals from your social network, which will become your own personal Yahoo or Google?

We are years away from this, but if vendors start baking in the appropriate layers of security now, it can become a rapid reality.

Read more here.

The road to free legal music

Writing for CNET News.com Greg Sandoval has a good post on the roadblocks en route to free legal music:

Free music--the legal kind--is supposed to make a splash in 2008.

A handful of analysts are calling for the music industry to focus less on CDs, digital rights management, and subscription services, and more on giving their product away for free. Whatever gold that is still left to be mined from the music industry is supposed to be had through advertising revenue, according to some.

But exchanging songs for ad money is a frightening proposition for music executives who have depended on hawking discs for decades, and are still putting up major roadblocks for the free, ad-supported model. Couple that with less-than-stellar execution on the part of companies trying to give music away, and you have a business model still trying to get into first gear.

"The major labels must embrace an ad-supported model for downloadable music," wrote Pali Research analyst Rich Greenfield last week. "We sense they have no desire to do this."

Indeed, one of the problems is that some of the services in the free-music sector have been less than impressive: Some of the competitors have been plagued by operational troubles. Some were forced to delay launching for months while others have suffered financial setbacks.

...

Then there are the numerous restrictions set by the services that hinder people from easily accessing songs. How good is a free-music deal if users are prevented from downloading songs to an iPod, forced to fill out questionnaires before they're allowed to listen, or have to be a college student to get access?

Consider that none of these hurdles exist at illegal file-sharing sites.

Read the rest here.

"A Privacy Manifesto for the Web 2.0 Era"

Alec Saunders, co-founder and CEO of iotum, proposes four principles that form a Privacy Manifesto for the Web 2.0 Era:

1. Every customer has the right to know what private information is being collected. That rules out any secret data collection schemes, as well as monitoring regimes that the customer hasn’t agreed to in advance. It also rules out any advertising scheme that relies on leaving cookies on a customer’s hard disk without the customer’s consent.

2. Every customer has the right to know the purpose for which the data is being collected, in advance. Corporations must spell out their intent, in advance, and not deviate from that intent. Reasonable limits must be imposed on the collection of personal information that are consistent with the purpose for which it is being collected. Furthermore, the common practice of inserting language into privacy policies stating that the terms may be modified without notice should be banned. If the corporation collecting data wishes to change its policy then it’s incumbent upon the corporation to obtain the consent of customers in advance.

3. Each customer owns his or her personal information. Corporations may not sell that information to others without the customer’s consent. Customers may ask, at any time, to review the personal information collected; to have the information corrected, if that information is in error; and to have the information removed from the corporation’s database.

4. Customers have a right to expect that those collecting their personal information will store it securely. Employees and other individuals who have access to that data must treat it with the same level of care as the organization collecting it is expected to.

Read more here (from GigaOM).

 

Cybercrime 2.0

The Washington Post pays tribute to those clever cyber-crooks:

The year 2007 may go down in the annals of Internet crime as the year when organized cyber criminals finally got serious about their marketing strategies -- crafting cyber schemes that were significantly more sophisticated and stealthy.

Security experts say criminals are increasingly trying to ensnare Internet users by lurking on familiar Web sites and using purloined data to craft scam e-mails that are more believable, and thus more likely to entice an unsuspecting user.

"The attackers are now following the same path that businesses have, in trying to advertise themselves in their own special way on the more popular Web sites," said Tom Liston, an incident handler at the Bethesda, Md.-based SANS Internet Storm Center and a senior security consultant with Intelguardians, a Washington-based Internet security consulting group. "They're doing exactly what every business tries to do, which is to find innovative ways get themselves out in front of as many eyeballs as possible."

Read more here.

Trends that shaped 2007

Mashable has identified the following trends that shaped 2007:

• politics meet social media;
• social networks;
• citizen movements;
• e-commerce;
• open source.

Read more here.  They seem about right to me ...

Two significant decisions

There have been two significant decisions from the US this week - and both constitute bad news for Perfect 10. 

In the first, the US Supreme Court turned down Perfect 10's appeal of a decision holding that credit card companies were immune from liability for users' violations of state intellectual property laws.  From Media Post:

The Court let stand a ruling by the 9th Circuit which held that the federal Communications Decency Act shielded Web companies for users' violations of laws in California and other states. If that expansive opinion is followed by other federal courts, Web companies will be shielded from liability in a wide array of lawsuits stemming from state intellectual property laws, says Eric Goldman, an assistant professor at Santa Clara University School of Law and director of the High Tech Law Institute.

"This leaves on the books a very important 9th circuit ruling," Goldman says. "It wipes out a bunch of claims."

Perfect 10, which sells images of models to paid subscribers, sued credit card company CC Bill and Web hosting company CWIE for enabling piracy by doing business with sites that sold pirated images. Perfect 10's theory was that CC Bill and CWIE violated trademark law in California and other states by providing services to the infringing companies.

CC Bill and CWIE claimed immunity under the federal Communications Decency Act, which gives Web companies immunity from liability for information published by other content providers. That statute contains an exception for intellectual property claims, but the 9th Circuit held that the exception applies only to federal claims and not those brought under state law.

If other courts follow the 9th Circuit ruling, many state intellectual property laws could effectively be gutted, including Utah's recent Trademark Protection Act. Enacted earlier this year, that law attempts to ban marketers from bidding to appear as sponsored links when people conduct searches for the names of rival companies. Although that law was quietly passed in March, it hasn't yet gone into effect.

Read it here.

In the second, the 9th Circuit held that Google can display tiny photos in search results, even when the images are copyrighted, under the fair use doctrine.  From the Los Angeles Times:

The U.S. 9th Circuit Court of Appeals on Monday reaffirmed its earlier support for the socially redeeming value of searching the Internet for nudie pictures.

The San Francisco court, in reviewing a case it initially considered in May, reiterated its finding that Google could display tiny versions of photographs by Perfect 10 Inc., a Beverly Hills-based adult publisher, in search results, even when those images were copyrighted.

The court focused on the legal question of which party holds the burden of proving whether Google's use of Perfect 10's images constituted a "fair use" under copyright law. Fair use is a defense that allows the use of copyrighted works, under certain circumstances, without the owner's consent.

The appeals court initially said Perfect 10 had the burden of proving that Google couldn't make its case. It corrected itself Monday, saying it was up to Google to articulate its defense, even in a case such as this one, which dealt with whether the courts could issue a preliminary injunction.

Nevertheless, the court said, Google met that test. The justices ruled that a larger public interest in searching for information -- or, in this case, images of partially clad women -- amounted to a "transformative use" that trumped Perfect 10's copyright claims.

The small legal tweak did not change the appeals court's original May decision.

The court overturned part of a ruling by the U.S. District Court in Los Angeles, which had found that Google's thumbnail-sized images of Perfect 10's nude models constituted infringement. The lower court imposed an injunction barring the use of the images, but the appeals court invalidated that decision.

It also asked the district court to reconsider the question of whether Google or Amazon .com Inc., which also was named in the suit, could be held liable for damages because they linked to websites that displayed Perfect 10's copyrighted images without permission. The 9th Circuit judges wrote that the lower court erred and needed to consider whether the search engines knew of the infringement but failed to take simple steps to stop it.

Read more here.

ZML: AllOfMP3 for movies

Ars Technica reviews ZML:

The MPAA won't be happy, but fans of rogue digital music site AllOfMP3 (and its many new iterations since the shutdown of the original) will be pleased over news of a movie site mirroring the cheap, DRM-free model of its musical cousin. ZML has made a quiet debut over the last couple of months, but boasts over a thousand movies thus far, ranging from old classics to recent releases. We took a look at the service and found that, while it doesn't have everything, it's certainly good for stocking up on cheap (and not-very-legal) movies.

...

ZML attempts to skirt around copyright laws in the countries where most of these movies are created by following the Russian Organization for Multimedia and Digital Systems (ROMS) policy. Without paying royalties to the movie studios involved in making these films, though, it's clear that ZML is just about as legal as AllOfMP3 was—that is, it's not. As noted by Zatz Not Funny!, ZML makes a feeble attempt to warn you not to do Bad Things™ by stating on its site, "You can't buy movies on the site if it violates the laws of your country." But that won't stop the authorities from going after ZML, especially if the MPAA jumps on the Russian government's back (it should be noted that ROMS ultimately turned on AllofMP3's business model, which is why the site was eventually shut down).

Comparing ZML to other movie download offerings is difficult, then, considering the questionable legality of the site. Selection is decent (if not incomplete) and has more in one place than almost all other movie download services. And the price... well, it doesn't take a genius to know that $1.99 to $4.99 for DRM-free, full-length movies is an absolute steal—much like your favorite P2P app.

 

Read more here.

"Australia's Spam Legislation: A Modern-Day King Canute?"

Mark Bender analyses Australia's spam legislation in this research paper:

Bender, Mark R., "Australia's Spam Legislation: A Modern-Day King Canute?" (September 2006). Monash U. Department of Business Law & Taxation Research Paper No. 2 Available at SSRN: http://ssrn.com/abstract=916724

Abstract: This paper considers a number of aspects of Australia's recently introduced unsolicited commercial email (UCE or spam) legislation, the Spam Act 2003 (Cth). The magnitude and nature of the harm caused by the spam problem is outlined, as are the key provisions of the legislation enacted in an attempt to reduce spam. Observations are made as to some of the perceived shortcomings of the Act, and of lawmakers' approaches in general in trying to legislate against spam. The fundamentals of Australia's legislative approach are contrasted with those of the corresponding US legislation and some key distinctions drawn, notably the Opt-In/Opt-Out dichotomy, Australia having used the former approach, while the US used the latter. Some alternative approaches and suggested enhancements to the Australian legislation are also considered, including proposals by Bill Gates and Lawrence Lessig. Finally there is a summary of and some limited comment on the first case brought under the Australian legislation.

Not knowing the numbers

I've blogged before about Radiohead's recent experiment (for example, see here and here).  Ars Technica takes stock and highlights the difficulty in knowing whether Radiohead's experiment was a success - financially or otherwise:

When people want to know something really badly, someone, somewhere will step up and offer them a number. This number may not be accurate, but that's almost beside the point: if people want a number and only a single number exists, it won't be long before pundits start citing it as true. Besides, even if it's not quite true, it must be in the ballpark, right?

Take the case of Radiohead's new album, for instance. Released to fans as a direct download that could be had for any price, In Rainbows became a breathlessly-watched experiment in the ways that Internet distribution could be used to bypass the major labels and offer music directly to fans. How many fans picked up a copy? What did they pay? Did US visitors pay more? What's Radiohead's total take from the experiment?

Et cetera.

These are excellent questions, and everyone wants immediate answers. At the beginning of this last week, Internet metrics firm comScore obliged. They had the numbers; it was all there in black and white. $6 average downloads. 60 percent of downloaders unwilling to pay anything. US users paid more than everyone else ($8.05 vs. $4.64).

Just one problem: Radiohead says that the numbers aren't true. In a statement later in the week, the band called the figures "purely speculative" and "wholly inaccurate." The group claimed that no outside organization could possibly have truly accurate information. Of course, they didn't bother to tell us what the real numbers were, either.

Read more here.

Virtual law

Writing for ZDNet News, Eric J Sinrod looks at what happens when When virtual legal chickens come home to roost and the case of Eros LLC v. Thomas Simon:

Netizens are spending more and more of their time living their lives online in virtual worlds. But while many virtual world interactions are not real and take place in fictitious places, virtual disputes increasingly are landing in real courts back in terra firma.

Second Life is one of the best known virtual worlds. Through interactive computer simulation, participants act through their avatars and are able to see, hear, and work with simulated objects in a computer-generated environment.

Participants, who come from the United States as well as various other countries, number in excess of 9 million people, according to Linden Research, Second Life's owner and operator.

Second Life residents are governed by terms of service which specifically allow users to retain all intellectual property rights in the digital content they create or own in Second Life. Although we're talking about a virtual world, users conduct transactions that cumulatively involve more than $1 million per day.

But when dollars are at stake, disputes inevitably follow. And just as it is true for real world transactions, this is becoming true with respect to virtual world transactions that involve real money.

This brings us to the case of Eros LLC v. Thomas Simon. The complaint was recently filed in federal court in New York on behalf of several plaintiffs. Let's focus on the allegations of the lead plaintiff, Eros.

Read more here.

Consumer privacy

Online Media Daily reports that regulation could harm the online ad industry:

Google, Microsoft, and Facebook joined a host of other Web companies in Washington Thursday to argue that they already fully protect users' privacy interests, and said that additional regulations could harm the online advertising industry.

"Billions of dollars of services and information are provided today for free, or nearly free, because of online advertising," Google deputy general counsel Nicole Wong told the FTC at the first day of a town hall meeting about privacy and behavioral targeting.

Wong, along with other industry executives, faced off against consumer advocates on a host of privacy-related issues ranging from the implications of behavioral targeting to why companies store search queries to allegations of Facebook employees spying on users.

Representatives from the online publishing and ad industry argued that companies already had robust privacy protections, while consumer and privacy advocates like the World Privacy Forum and the Center for Democracy & Technology took the position that collecting and storing data creates the potential for misuse.

Read more here.  All of this worth noting, but Ad Age asks the really interesting question - do consumers really care about online privacy?

When asked whether they care about privacy, consumers will almost always say yes, but internet privacy and data collection, unlike childhood obesity or pharmaceutical ads, has yet to become a consumer hot-button issue with real ramifications for marketers and media sellers. Even privacy advocates admit there's not as much consumer outcry as there could -- or should -- be.

Ahead of consumer outcry
"I think this is a bit ahead of the real consumer outcry," said Colin O'Malley, director of strategic business for TRUSTe, a nonprofit privacy organization that outlines acceptable practices and certifies online business. Advertisers, not only consumers, usually become more interested in the topic after a privacy matter gets a lot of attention and is embarrassing for marketers, Mr. O'Malley said.

Privacy advocates contend that the time for government to protect privacy is before, not after privacy violations take place, infuriating consumers and sparking outcry. But even that outcry might be hard to come by. In the wake of AOL's release of search data a year ago (that data was not explicit, but it could have been used to implicitly retrieve identifiable information by looking at a user's search log terms) consumers didn't seem overly concerned and it was left to advocates and activist bloggers to make a stink.

But it appears consumers can't be bothered even by serious infractions. Advocates suggest consumers would care more about privacy if they understood data-gathering better. Some advocates hinted that "bombshell" revelations about data-gathering tactics will be revealed this week that could wake a public that has appeared largely unaffected by sophisticated online ad-targeting schemes.

Read more here.

Monetizing social networks

Social media guru Laurel Papworth has an interesting blog post suggesting sites like social networking sites like Kwoff and Bloggerati should revenue share when be monetizing:

I predict the next really big social networks will make sure their members can earn revenue. MySpace is the Social Network 1.0 - marketing driven, closed in. Social Network 2.0 will be open and affiliate and online community revenue driven. Facebook is heading in that direction. Second Life is well down that road. If you think I am being naive remember the generation we are talking about - Gen Y - and the strange mashup of materialism and ideals that exists in their bright goofy souls. God bless their little cotton socks. :)

Read more here.

At least they tried ...

From News.com.au:

FANS of British rockers Radiohead yesterday took advantage of the band's offer to let them pay what they want for their new album, In Rainbows, with one third deciding to pay absolutely nothing for the download, reports said today.

The hit art-rockers, already authors of six albums, drew widespread publicity when they announced earlier this month that fans could decide the price themselves, saying “It's up to you” on their website.

Yesterday, about a third of fans decided to pay nothing, according to The Times daily, citing a poll of 3000 people who bought it from the website.

Read more here.

Battling click fraud

NewsFactor has an excellent report on what is being done to combat click fraud:

It's an issue that is costing search engine marketers millions of dollars each year. Click fraud is the act of repeatedly clicking an online advertiser's pay-per-click ad with sinister motives. Since the advertiser has to pay for each click the ad receives, fraudulent clicks can be very costly when foul play is involved. Take, for example, the competitive vendor who wants to bleed his rival's ad budget dry. Or, it could be an angry customer who is trying to get even with a merchant.

Whatever the motive, the costs can mount quickly when the intent is malicious. An estimated average of 14.6 percent of billable pay-per-clicks are fraudulent, according to Outsell Inc., an information industry research group. Outsell estimates that advertisers wasted over $800 million on click fraud in 2005. This nemesis of search engine marketing (SEM) has prompted nearly 30 percent of advertisers to stop spending on search-engine click-based initiatives, the firm reported, and losses to Google and Yahoo total more than $500 million to date.

So what is being done to stop the money drain? Web analytics vendors and software makers are running to the firing line with their own solutions designed to eliminate -- or at least curtail -- click fraudsters. But is it enough to get to the root of the issue, or will these money-motivated schemers find a way around the technology? What roles do search engine marketers and ad networks play?

The answers to those questions demonstrate that click fraud is a complicated issue that may mean the unwanted traffic is here to stay. Let's take a look.

Read more here.

"Virtual marketers have second thoughts about Second Life"

The Los Angeles Times looks at the fortunes of businesses in Second Life:

SECOND LIFE — a three-dimensional online society where publicity is cheap and the demographic is edgy and certainly computer-savvy — should be a marketer's paradise.

But it turns out that plugging products is as problematic in the virtual world as it is anywhere else.

At  http://www.secondlife.com — where the cost is $6 a month for premium citizenship — shopping, at least for real-world products, isn't a main activity. Four years after Second Life debuted, some marketers are second-guessing the money and time they've put into it.

"There's not a compelling reason to stay," said Brian McGuinness, vice president of Aloft, a brand of Starwood Hotels & Resorts Worldwide Inc. that is closing its Second Life shop and donating its virtual land to the nonprofit social-networking group TakingITGlobal.

Read more here.

And read Duncan Riley's analysis here (from TechCrunch).

Combating phishing

Technology Guardian has a good summary of the various techniques being used to combat phishing.  Read it here.