Sunday, December 2, 2012


So much held in a heart in a lifetime. So much held in a heart in a day, an hour, a moment. We are utterly open with no one in the end—not mother and father, not wife or husband, not lover, not child, not friend. We open windows to each but we live alone in the house of the heart. Perhaps we must. Perhaps we could not bear to be so naked, for fear of a constantly harrowed heart. When young we think there will come one person who will savor and sustain us always; when we are older we know this is the dream of a child, that all hearts finally are bruised and scarred, scored and torn, repaired by time and will, patched by force of character, yet fragile and rickety forevermore, no matter how ferocious the defense and how many bricks you bring to the wall. You can brick up your heart as stout and tight and hard and cold and impregnable as you possibly can and down it comes in an instant, felled by a woman's second glance, a child's apple breath, the shatter of glass in the road, the words "I have something to tell you," a cat with a broken spine dragging itself into the forest to die, the brush of your mother's papery ancient hand in the thicket of your hair, the memory of your father's voice early in the morning echoing from the kitchen where he is making pancakes for his children.

by Brian Doyle, Joyas Voladoras (flying jewels) |  Read more:
Image: morfi jimenes mercado via:

Economic Bricolage

You don't need a physics degree to ride a bicycle. Nor, Nassim Nicholas Taleb realized one day, do traders need to understand the mathematical theorems of options trading to trade options. Instead traders discover "heuristics," or rules of thumb, by trial and error. These are then formalized by academics into theorems and taught to new generations of traders, who become slaves to theory, ignore their own common sense and end by blowing up the system. In a neat echo of its own thesis, Mr. Taleb's paper making this point sat unpublished for seven years while academic reviewers tried to alter it to fit their prejudices.

Mr. Taleb, a former trader and expert on probability, tells this story in "Antifragile: Things That Gain from Disorder" to illustrate the point that "we don't put theories into practice. We create theories out of practice." It is a startling insight, which he applies not just to finance but to medicine, science and philosophy. Successful medicine was a "craft built around experience-driven heuristics" that had to fight against entrenched, top-down theorizing from Galen and other wise fools.

Discovery is a trial and error process, what the French molecular biologist François Jacob called bricolage. From the textile machinery of the industrial revolution to the discovery of many pharmaceutical drugs, it was tinkering and evolutionary serendipity we have to thank, not design from first principles. Mr. Taleb systematically demolishes what he cheekily calls the "Soviet-Harvard" notion that birds fly because we lecture them how to—that is to say, that theories of how society works are necessary for society to work. Planning is inherently biased toward delay, complication and inflexibility, which is why companies falter when they get big enough to employ planners.

If trial and error is creative, then we should treat ruined entrepreneurs with the reverence that we reserve for fallen soldiers, Mr. Taleb thinks. The reason that restaurants are competitive is that they are constantly failing. A law that bailed out failing restaurants would result in disastrously dull food. The economic parallel hardly needs spelling out. (...)

Something that is fragile, like a glass, can survive small shocks but not big ones. Something that is robust, like a rock, can survive both. But robust is only half way along the spectrum. There are things that are anti-fragile, meaning they actually improve when shocked, they feed on volatility. The restaurant sector is such a beast. So is the economy as a whole: It is precisely because of Joseph Schumpeter's "creative destruction" that it innovates, progresses and becomes resilient. The policy implications are clear: Bailouts risk making the economy more fragile.

Biological evolution, too, is anti-fragile. The death of unfit individuals is what causes a species to adapt and improve. The body is anti-fragile: Without stress it weakens. To build muscles, you must push them to the point of failure. Though he has no truck with homeopathy, Mr. Taleb is intrigued by hormesis, an old idea, now enjoying a revival, that a small dose of a harmful substance is actually beneficial.

by Matt Ridley, WSJ |  Read more:

Saturday, December 1, 2012


Rift.
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Stairway to Heaven


The Haiku Stairs, or the Stairway to Heaven, is a semi-secret forbidden hike on the island of Oahu, Hawaii. The stairs were originally built in 1943 to install antenna cables as part of a larger military radio communication system to communicate with US Navy submarines as far away as Tokyo Bay. The original wooden steps were replaced by metal, cable-supported stairs in the early 1950s when the US Coast Guard took over the installation. 

According to Friends of Haiku Stairs, there are 3,922 steps.

The men who made the first ascent up Keahiakahoe in 1942 required 21 days to pioneer the route up the south wall of Haiku Valley. They considered it a "sissy's climb" when the way was made easier by laying wooden ladders along the trail, held in place by four-foot metal posts pounded into the lava cliffs. The ladders were later replaced by a wooden stairway. When the wooden stairs were done, the trip to the summit could be made in 3 1/2 hours. Ten years later, the wooden stairs were replaced by the galvanized steel stairway that was used until its closure in 1987. In spite of corrosion, shifting, and missing sections, a fit climber can now reach the top in two hours or less, passing remnants of the original wooden stairway cast off to the side.

The Haiku Stairs, however, are more than an artifact of World War II history. Climbers can experience a variety of micro-climates and ecological communities on the way up. Progressing from a disturbed area of mostly alien plants at the base, the Stairs ascend into a relatively undisturbed plant community, where more than 50 native plant species can be observed. On a clear day, the panorama of Windward Oahu opens to view, with glimpses to leeward through the mountain gaps. On a typical trade wind day, a full range of weather can set clouds swirling in motion, bringing sunshine and pouring rain, sometimes both at once. Much more information in sublinks at the organization's website. 

The Best of It


The office park sat in a patch of desert eight miles off the Strip. I pulled the address out of my pocket. I hadn’t imagined gamblers doing business alongside divorce lawyers and accountants. In my denim miniskirt and Converse sneakers, I felt more like a teenage runaway than an interviewee. I pulled my hair out of its ponytail so that it fell over my shoulders and hid my bra straps.

I was twenty-four and had moved to Las Vegas to be with a guy I had been dating for a few months. We broke up soon after I arrived. I didn’t know a single person in town. But no one else seemed to either. It was 2001, and Vegas was the fastest-growing metropolitan area in America. Almost fifteen hundred people were moving into the city each week. Everyone I met was very much like me and had just ended up there.

After the breakup I rented a room in a motel just north of the Strip in a neighborhood known as Naked City. In the fifties it had been home to strippers who sunbathed in the nude to avoid tan lines. Now bail bondsmen, hookers, Vietnam vets, and irritable motel clerks added color to the place. My motel was within walking distance of the Little White Wedding Chapel and Johnny Tocco’s Boxing Gym and a short drive to the downtown casinos: Binion’s Horseshoe, the El Cortez, and the Aztec—home of the fifty-nine-cent strawberry shortcake. The cigarette burns in the motel’s bedspreads were big enough to fit a leg through, and the staccato of stilettos across the floor upstairs made it hard to get a good night’s sleep. But at seventeen dollars a night, it was affordable, and it allowed dogs. So Otis my sixty-pound chow chow and I moved in. The wooden nightstand showcased the room’s only decor: a Rand McNally Road Atlas and a Magic 8 Ball.

My odyssey through the sports-betting underworld, however, would considerably change my lifestyle. Though broke and having no idea how to place a bet, in four short years I would be working fifteen hour days as a figures girl at an offshore sportsbook in the Caribbean, living in a ranch house with a maid and a cook, taking meetings in an open-air strip club, and wiring money across international waters. But today, I just needed a job.

In a row of offices with signs like NEVADA INSURANCE and COLDWELL BANKER stood a suite with no sign and white plastic blinds covering its windows. Next to the door was a square address plaque and scrawled in its center, in Wite-Out correction pen, was DINK INC. From inside, a television blared. The sound of a bugle summoned horses to the starting gate at a racetrack. I knocked.

The door opened, revealing a guy about six foot four, 280 pounds. His hair was a heap of shiny, springy brown curls, the kind you see in ads for home perms. Tucked into his armpit was a Daily Racing Form, and in his hand was a puffy white bagel overstuffed with lox. He introduced himself as Dink, then took a bite of his sandwich. With mouth full he asked if my dog had an opinion on the Yankees game.

Dink was in his late forties, but his bashful smile and distracting habit of twisting his curls around his pointer finger made him appear much younger. He dressed like the adults with mental retardation I had met while volunteering at a group home. His Chicago Cubs T-shirt was two sizes too small for his expansive frame. Royal-blue elasticized cotton shorts were pulled high above his belly button. White tube socks were stretched to the middle of his pale, hairless shins.

Inside the suite, a long banquet table was cluttered: hockey digests, baseball encyclopedias, a baseball prospectus, sports pages from USA Today, the New York Post, the Las Vegas Review-Journal, dozens of calculators, telephones, mechanical pencils, computer monitors, and several copies of Fuzzy Creatures Quarterly, a magazine that offered tips on how to better love and care for one’s hamster, ferret, or guinea pig. At the front of the office, a tower of six forty-inch televisions balanced on a flimsy metal stand, each tuned to a different sport. Dink took his seat at the head of the table. In front of him, stacks of cash were piled as high as his bottle of Yoo-hoo. I stared at the money, mesmerized, and took a seat.

He nodded to one of the TVs, and in a heavy Queens accent he said, “We need Minnesoter and undah, for a decent amount.”

Having no idea what he was talking about, I said, “Okay.”

In the long silence that followed, Dink twirled and twirled his curls, engrossed in the basketball games and horse races. The action on TV reflected off his eyeglasses, which were as thick as hockey pucks and cloudy with thumbprints. Rising from the floor were stacks of books, all of which appeared to be on the subjects of hockey and New York punk bands, except for one on the very bottom: Hide Your A$et$ and Disappear: A Step-by-Step Guide to Vanishing Without a Trace.

On the TV, a player for Minnesota made two free throws. Unsure of whether or not this was a good thing for Dink, I stayed quiet and massaged Otis’ back with the bottom of my sneaker. Dink clicked the eraser of his mechanical pencil, then scribbled something down in his raggedy five-subject notebook. Then he took a swig of his Yoo-hoo and asked me what I knew about gambling.

by Beth Raymer, Lapham's Quarterly |  Read more:
Photo credit: unknown

Mr. China Comes to America


Whether you call the business history of the past 15 years the age of hedge funds, the age of Google (or its rival Facebook, or its other rival Amazon, or its other rival Apple), the age of Walmart, or even the cautionary age of Lehman Brothers and Countrywide, in no case would you call it the age of American manufacturing. Manufacturing’s share of the total American economy has fallen by about the same amount as its workforce share: it went from about 20 percent in the early 1980s to just over 10 percent now. For comparison, manufacturing accounts for some 30 percent of China’s total economy. Still, the U.S. economy is so much larger that our manufacturing sector, even in its battered condition, remains the largest in the world.

I’m used to hearing excitement from people at American infotech companies—or from biotech innovators, or people in other enterprises who believe the future is on their side. I’m used to hearing it in China. I’ve gravitated to tech topics and to fast-growing parts of the world because I like hearing from people with big plans and dreams. And this year, for the first time in decades, I have been hearing upbeat accounts from business officials and entrepreneurs engaged in American manufacturing.

The heart of their argument is this: Through most of post–World War II history, the forces of globalization have made it harder and harder to keep manufacturing jobs in the United States. But the latest wave of technological innovation, communications systems, and production tools may now make it easier—especially to bring new products to market faster than the competition by designing, refining, and making them in the United States. At just the same time, social and economic changes in China are making the outsourcing business ever costlier and trickier for all but the most experienced firms.

For Americans, the most important factor is the emergence of new tools that address an old problem. The old problem is the cost, delay, and inefficiency of converting an idea into a product. Say you have an idea for—anything. (For me, the list would start with silent leaf blowers, which I’d give to all my neighbors as gifts.) Before you can earn the first dollar from the first customer, you have to decide whether the product can be built, at what cost, and how fast, so you can beat anyone else with the same idea.  (...)

For the past 30 years, all of the largest forces have pushed in favor of China’s manufacturing expansion, from very low labor costs and a deliberate policy of welcoming foreign investment, to ever faster and cheaper global cargo-shipment networks, to a deliberately undervalued Chinese currency. Within the past two years, nearly all of those advantages have become more complicated. (In his accompanying article for this issue, Charles Fishman explains some of the large forces pushing in favor of America’s manufacturing renewal.) In China, wages are rising, workers are becoming choosier, public resistance to environmental devastation is growing, and the Chinese “investment led” model is showing strain.

That model has involved a kind of hyper-Keynesianism far beyond what the United States experienced even during the most government-run periods of the New Deal. China has created jobs by building factories, highways, railroads, and dams—and airports where there are no cities, and cities where there are no people. “Americans are used to thinking of ‘savings’ and ‘investment’ as absolute goods, because we’ve done too little” of both, Michael Pettis, of the Guanghua School of Business in Beijing, told me. “But there is such a thing as too much savings and investment and infrastructure, and too little consumption, all of which we see in China.” If the American public challenge is “reinvestment” of all varieties—in education, in infrastructure, in a sense of community, in everything but houses—the Chinese counterpart is a need for a comprehensive rebalancing. Indeed, Pettis’s forthcoming book on the Chinese economy is called The Great Rebalancing. Reliance on exports needs to come into better balance with domestic consumption; economic growth with environmental sustainability; political liberties with the new level of economic prosperity; and on down a long list.

Some observers inside and outside China think that the strains are too great and the system too rigid to allow the necessary rebalancing in time for the party to maintain political control. For instance, Minxin Pei, a native of Shanghai who now teaches at Claremont McKenna College in California, has been warning for more than a decade that the economic, social, and political imbalances of the Chinese system would reach a breaking point just about now—and that Communist rule would have to give way to a multiparty system. Many others contend that, on the contrary, the Communist leaders will manage somehow to address each of today’s problems just before any one becomes an outright emergency, as they have done time and again for 30 years. Whichever view proves correct, the relevant point for Americans is a convergence of trends that make operations here more attractive and feasible, just as the cost and friction of operating in China are increasing.

by James Fallows, The Atlantic |  Read more:
Photo: David Høgsholt

Six Magazine Nº3 by Max Vadukul, 1989
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She’s Got Some Big Ideas


[ed. If Duck Soup had a soul mate, Ms Popova's site Brain Pickings would be it. We seem to share the same philosophy. Now, if we just shared the same traffic and revenues...]

She is the mastermind of the one of the faster growing literary empires on the Internet, yet she is virtually unknown. She is the champion of old-fashioned ideas, yet she is only 28 years old. She is a fierce defender of books, yet she insists she will never write one herself.

At precisely 9:30 on a chilly Saturday morning, Maria Popova slips out of her apartment in Brooklyn, scurries down a few stairs and enters a small basement gym. A former recreational bodybuilder from Bulgaria, Ms. Popova is the unlikely founder of the exploding online emporium of ideas known as Brain Pickings.

Her exhaustively assembled grab bag of scientific curiosities, forgotten photographs, snippets of old love letters and mash notes to creativity — imagine the high-mindedness of a TED talk mixed with the pop sensibility of P. T. Barnum — spans a blog (500,000 visitors a month), a newsletter (150,000 subscribers) and a Twitter feed (263,000 followers). Her output, which she calls a “human-powered discovery engine for interestingness,” has attracted an eclectic group of devotees including the novelist William Gibson, the singer Josh Groban, the comedian Drew Carey, the neuroscientist David Eagleman, the actress Mia Farrow and the Twitter founders Biz Stone and Evan Williams.

“She’s a celebrator,” said Anne-Marie Slaughter, a Princeton professor and former State Department official. “You feel the tremendous amount of pleasure she takes in finding these things and sharing them. It’s like walking into the Museum of Modern Art and having somebody give you a customized, guided tour.”  (...)

Unlike most blogger celebrities, however, Ms. Popova revels in remaining anonymous, which means her followers know almost nothing about her. In an age when many tweet what they put in their morning coffee, she rarely uses the word “I.” Her personal history is almost completely absent. Her photograph is not on the site. “I don’t feel the necessity to be in the public eye that way,” she said after reluctantly agreeing to sit for an interview. “There’s a certain safety in making people feel like you’re an organization and not a person. ”

So what exactly is it that she does? Ms. Popova says she views her job as “helping people become interested in things they didn’t know they were interested in, until they are.” One entry might discuss how to find your true passion, with links to a talk by Alain de Botton, a book by the cartoonist Hugh MacLeod and a commencement address by Steve Jobs; another, how she asked an artist friend to illustrate thoughts on love from Susan Sontag’s diaries. Recently she recounted an aging Helen Keller’s visit to Martha Graham’s studio.

Paola Antonelli, a senior curator at the Museum of Modern Art and a friend of Ms. Popova’s, said a good curator was someone whose own taste had somehow become the taste of millions. “What Maria has is the DNA of millions of people,” Ms. Antonelli said. “She somehow tunes in to what would make other people dream, or inspire them in a way that is quite unique.”

by Bruce Feiler, NY Times |  Read more:
Elizabeth Lippman for The New York Times

Friday, November 30, 2012

Stray Penises and Politicos

I can remember the specific moment when I swore off the sex lives of the famous as journalistic currency. It was the case of a national sportscaster — I won’t name him, but, alas, most of those old enough will remember the name, which is regrettable — whose sex life had suddenly become the media chow.

This man had been involved in a consensual relationship with another adult and for reasons both ridiculous and obscure, the other adult thought it just and meaningful to reveal herself and her complaints, making explicit all of the unique and varied ways in which she and this man had expressed their sexuality. And my, wasn’t he a weird one. And wasn’t it funny.

When that story broke, I was standing in the newsroom of the Baltimore Sun and I remember my growing distaste watching reporters and rewrite men as they were sucked, joking and snickering, into the breaking news. And no one had any doubt that it was news. The man was a national sportscaster, for the love of god. A more public figure this nation cannot muster.

I was no Candide on a first promenade through Paris. I’d held pen and notepad akimbo and reported hypocritically at points. Not a year earlier, I think, I’d been guilty of dragging to the front of the metro section some sad sack who happened to serve on a mayor’s advisory committee — an unpaid position, mind you — and happened to get arrested in a car with a lit marijuana cigarette between his lips. At the price of that misdemeanor, I’d messed that guy up good. Wasn’t my fault he caught that charge; hey, I was just the cop shop reporter calling districts and reporting arrests. Don’t shoot the messenger.

And then, like the shitbird that reporters often are obliged to be, I probably left work that night and smoked a joint with the night editor, after which, we went to Burke’s for onion rings. Which we did just about every other night.

Hypocrisy will never go out of style in American journalism or American life. But sitting there and watching the rewrite and sports desk mobilize to surround the sexual wanderings of a sportscaster, I remember making a decision: Enough. This is just sex. This is nothing more than the odd, notable penis or the odd, notable vagina staggering off the marked path and rubbing against the wrong tree. This is just people.

I told myself that I wasn’t in journalism to chase something so ordinary, so adolescent as other people’s sexuality, that I wouldn’t play this game, that there were better reasons to be a reporter, and there were better things for readers to consume. I knew that one soldier opting out from such a lurid and exalted battlefield of the media wars meant nothing, but I did it anyway. Fuck Gingrich’s divorces. Fuck Lewinsky. Fuck where Anthony Weiner found some happy online moments. I’m not playing anymore. I long ago ceased to even pretend to care.

The arguments about character? That human sexuality isn’t the most compartmentalized element of our nature? That if someone will lie about sex, they’ll lie about other things? Really? No, sorry, fuck that tripe. Character has become the self-righteous rallying cry of far greater hypocrisy than any cheating husband. It’s the excuse that makes our prurient leer seem meaningful and reasoned.

Observe the process by which we remove some of the most essential American figures of the last century for having failed to corral their sexual organs in the marital bedroom: Roosevelt, gone. Eisenhower, gone. Kennedy, gone. Lyndon Johnson, gone. Clinton, gone. Martin Luther King, Jr., gone. Edward Murrow, gone. Follow the gamboling penis to an arid expanse of sociopolitical wasteland, where many of the greatest visionaries and actors can never tred, a desert in which only the Calvin Coolidges and Richard Nixons remain standing. Anyone who looks at the history of mankind and argues that private sexual fidelity exists in direct proportion to political greatness or moral leadership is either a chump or a liar.

And now comes General Petraeus.

by David Simon, The Audacity of Despair |  Read more:

The New Media Priesthood: Learning How to Code

Great news: The New Yorker is hiring!

What are the requirements, you ask, to work at the greatest literary magazine in the English-speaking world? Do you need to have gone to Princeton and edited the august literary magazine The Nassau (b. 1848) before you were 22? Should you have edited Toni Morrison for a decade and done the definitive translation from the Turkish of Nobel laureate Orhan Pamuk’s short stories?

No. Not even close.

You need to know computer code.

Or—rather—it would be ideal if you could code. And we know what that means. Your job at the literary magazine would not be fixing commas or assigning foreign stories. It would be running tech projects.

Nicholas Thompson, the editor of The New Yorker website, posted the tantalizing job listing on Friday. And just so you know, he didn’t whisper it at the Yale Club or the Round Table of the Algonquin Club. He didn’t try to see if someone’s clever ex-boyfriend from the Harvard Crimson and The New Republic wanted it first. Instead, Thompson posted the New Yorker staff opening to Twitter. And this is what he said: “Hiring a digital project manager. Help us at@NewYorker run cool, ambitious tech projects. Ideally, code too. Ping me.”

If you’re making media in this world—prose, journalism, photography, graphics—you ought to know how to code. And you don’t need to type up a letter extolling the legacy of Janet Malcolm and E.B. White on buttery letterhead. Just ping @nxthompson.

Literary work—editorial work—is now computer work. We’ve known it, on some level, for years. But now it’s right there in the job descriptions. And Thompson’s might not have been such a striking tweet if it didn’t come two weeks after Wired magazine announced a new editor in chief. An eloquent TED talker from MIT with three best sellers about digital literacy and neuroplasticity?  (...)

The stories we tell and how we tell them. The content is the form. And how we tell stories—distribute them, display them, monetize them even—is inextricable from the stories themselves.

by Virginia Heffernan, Yahoo News |  Read more:

nicholas de stael
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Steve Bishop  Staring at Cat Staring at Cat Staring (2007)
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Won’t Someone Take iTunes Out Back and Shoot It?

iTunes 11 did not arrive on time. Apple originally promised to deliver the next version of its ubiquitous music-management program in October. Last month, though, the company announced that the release would slip to November, because the company needed “a little extra time to get it right.” This week theWall Street Journal, citing “people who have seen it,” reported that the real cause was “engineering issues that required parts to be rebuilt.”  (...)

Anyway, so iTunes 11 finally hit the Internet today. If you start downloading it immediately, you might be able to get it up and running by the time the ball drops over Times Square. People always wonder why this is—why a simple music player weighs in at around 90 megabytes and requires many long minutes to install and “prepare” your library before it becomes functional. Don’t ask questions—this is just what you get with iTunes. Each new upgrade brings more suckage into your computer. It makes itself slower. It adds three or four more capabilities you’ll never need. It changes its screen layout in ways that are just subtle enough to make you throw your phone at the wall. And it adds more complexity to its ever-shifting syncing rules to ensure that the next time you connect your device, you’ll have to delete everything and resync. At this point, you shake your fists and curse this foul program to the heavens: iiiiiiiiiiiiiTuuuuuuuuuuunes!!!

Apple’s marketing material describes iTunes 11 as “Completely redesigned. For your viewing, listening, browsing, and shopping pleasure.” That sums up the software’s problem. Way back in 2001, Apple launched iTunes as a simple desktop music player for the Mac. It was a great one, too, because while it didn’t have all of the features that more-advanced software had, it was very simple to use. When iTunes was released for Windows, in 2003, it did seem like something truly novel—a great-looking, easy-to-use program for PC users. It was, as Steve Jobs put it, "like giving a glass of ice water to somebody in Hell."

In the decade since, Apple has added arsenic to the water, drip by drip. What’s iTunes for now? As its unpithy tagline explains, it’s for everything. It’s for music and movies and TV shows and books and podcasts and university lectures and apps and, most of all, for shopping. There were legitimate reasons for Apple to have added all these features. As its devices morphed from music-playing iPods into do-everything gadgets like the iPhone and iPad, iTunes had to grow to accommodate their capabilities. Eventually iTunes became less a music player than a sync-master—the software you used to set up and manage your iGadgets. Indeed, up until just a couple years ago, the only way to get a new iPhone or iPad up and running was to plug it into iTunes first. Apple’s “post-PC” machines still needed a PC to work—and, specifically, they needed a big, honking piece of bloated software.

The problem wasn’t that Apple added so much to iTunes. It was that it seems to have done so indiscriminately, without much thought to design or performance. The bigger iTunes got, the slower it felt, each new feature seeming to add a new weight atop its aging foundation. Now, every time I open iTunes, whether on a Mac or a Windows machine, I expect delay. The only other program I remember inducing such consistent panic was Microsoft’s Outlook 2003, which I was forced to use by office IT people before Gmail came along. In building the world’s most-downloaded Windows program, Apple has fallen victim to Microsoft-esque feature creep.

by Farhad Manjoo, Slate |  Read more:
Illustration: Justin Sullivan

Head c. 2500 BC-2000 BC  Cyclades Marble
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Who Do Online Advertisers Think You Are?


Beginning in the “Mad Men” era and continuing into the early Internet age, TV networks and magazine publishers sold ad space by persuading advertisers that their audiences included demographic groups likely to buy particular products. In the 1950s, it has been said, 95 percent of the success of advertising agencies came from the creative department, which designed the ads, and only 5 percent from the media department, which paid to place the ads. But the rise of independent media-buying firms has made it possible to identify the individuals most likely to be receptive to ads. This is bad news for magazines and newspapers: once advertisers were able to track and reach specific consumers, they became less interested in where their ads appeared and more interested in who, specifically, was seeing them.

This shift is transforming the economy of online advertising. Google still depends largely on ads tied to search. These are based merely on whatever terms you enter at a particular moment: search for “Hawaiian vacations,” and ads for Hawaiian hotels are likely to pop up on the results page. Such ads, which resemble old-fashioned classifieds, produced a vast majority of Google’s nearly $38 billion in revenue in 2011. On the other hand, only 0.1 percent of all display ads, which are more like magazine ads, with text and images that can appear anywhere, are clicked, according to one estimate.

But as consumers flock to devices like smartphones and tablets, the potential of personalized display ads is making them increasingly popular with advertisers. Since 1994, when Lou Montulli, an employee at Netscape, created the cookie as a way of distinguishing online shoppers, it has been possible to track the activities of individual users on particular Web pages. It wasn’t until the following decade, however, that real-time bidding first used cookies to tag individual Web browsers so that their users could be sent display ads at various Web sites. This makes it possible to build comprehensive profiles of users and then conduct an auction among advertisers to show a display ad to targeted users across tens of thousands of Web sites. Google hopes its revenue from ads that are not tied to search queries will grow significantly. In 2010, the worldwide business in display ads was about $25 billion, Neal Mohan, Google’s vice president of display advertising, told me. But, he added, “there’s no reason that $25 billion couldn’t be $100 billion in a few short years” — as the industry delivers more and more ads to mobile phones, tablets, smartphones and even interactive televisions.

When I visited the offices of BlueKai last year, I met Omar Tawakol, who helped found the company in 2008. After studying mechanical engineering at M.I.T., Tawakol went to grad school for computer science at Stanford, where he became obsessed with the idea that data about individual Internet users could be valuable in itself, regardless of where it was collected. “Right now, data looks like black, gooey material,” Tawakol told me at his office in Cupertino, Calif. “Oil was to the industrial revolution as data is to our information economy.” His sense of the potential scope of the marketplace he would help create is reflected in the name he chose for his company: “kai” means “ocean” in Hawaiian.

BlueKai’s customers — which have included travel sites, like Kayak and Expedia, that want to advertise to individual consumers — now track more than 80 percent of the U.S. online population and have created more than 200 million individual profiles based on what we browse and buy online. (By some estimates, there are more than two profiles for every person in the United States.) At the time of my visit, Tawakol told me that over the previous 30 days, BlueKai’s cookies indicated that 38 million people had been to travel sites, and 635,000 of them had plugged in “Hawaii” as a destination. Next, he explained how the BlueKai data exchange then worked. Let’s say you’re planning a trip to Hawaii. You visit a travel site that works with a data intermediary like BlueKai. With the travel site’s cooperation, BlueKai puts a cookie on your computer that records the fact that you have looked up flights from San Francisco to Maui with a seven-day advance purchase. BlueKai’s extensive partnership network enables it to follow more than 160 million people every month who are looking to buy things like cars, financial services, retail and consumer goods or travel accommodations. By sorting users into categories based on our interests and purchasing power — “midscale thrift spenders,” for example, or “safety-net seniors” — BlueKai’s software helps advertisers determine how much each of us is worth following, and at what price. Advertisers for Hawaiian hotels, restaurants, car-rental companies, souvenir shops and so on then place bids starting at one or two cents for each anonymous consumer.

The winning bidder — the Maui Hyatt Regency, for instance — next goes to an advertising exchange, like Google’s DoubleClick Ad Exchange, which conducts a separate auction to determine what the Hyatt has to pay to send you an ad whenever you show up on a Web page that has a relationship with DoubleClick. The Hyatt bids against the entire pool of other would-be advertisers who may not know that you want to vacation in Hawaii and therefore bid less to send you an ad. The automated auction is conducted in real time, which means that as soon as the Maui Hyatt wins the auction, its ad shows up within milliseconds of your loading a given Web page. “What real-time bidding did is to open up a world where the advertising buyer can come in and very specifically, person per person, decide who they want at what price,” Tawakol said. On one occasion after I searched for flights to Maui on Orbitz, the display ad that suddenly showed up at the top of The New Republic home page was for package deals to Kahakuloa Bay.

Two years ago, Tawakol concluded that businesses would rather create their own user profiles and restructured his data exchange accordingly. BlueKai no longer collects and sorts data about consumers; it provides the software that enables Web sites to track their users and put them into market segments. A travel site where you look into flights to Honolulu, for example, will take your profile to a real-time bidding exchange and bid on the right to flood you with ads about Hawaiian hotels, no matter where you show up on the Web. “This is shockingly big, now that people are using their own data,” Tawakol told me. “We’re talking about 80 billion times a day” that ad transactions are taking place. In addition to changing the structure of the data exchange, Tawakol also expanded a separate BlueKai service — its “data management platform” — that allows advertisers to send customers ads or discounts across a range of digital platforms — from the Web to mobile devices and eventually to Web TV.

As Tawakol contemplates the future, he imagines a personalized world that extends beyond users’ Web experiences. “There will be a concept of a unique and anonymous consumer across platforms — online, offline, mobile and digital TV,” he said. “If you’re looking for a trip to Hawaii online, you will see an offer on your mobile phone and your home TV.” Tawakol added that “once we figure out the privacy rules” the tracking will all be connected: “Ads you see on TV will be informed by where you logged in, what you saw online and what products you’re using.”

by Jeffrey Rosen, NY Times |  Read more:
Illustration by Edward del Rosario

Rich Man, Poor Man

Jack Whittaker's big Powerball win cost him -- and everyone around him -- dearly

It was coming up on Christmas, and Brenda-the-biscuit-lady was inexplicably happy as she walked to work in the predawn darkness. Brenda didn't just make biscuits over at the C&L Super Serve for $6 an hour. She served up good cheer.

"How you doin', honey?" she'd greet customers, with such enthusiasm that they had no choice but to smile back.

"Dad-gonnit, you are growing up on me!" she'd call to schoolchildren, just to see them grin. "What grade you in now?"

At 39, Brenda Higginbotham didn't have much to show for a lifetime of good cheer. No car. No home. No picture-book Christmas on the horizon. In spite of that, in spite of everything, she had a sense of her place in the world as unsullied as a holiday snowfall before folks trample it ugly, like folks do. That abiding sense was Brenda's gift.

"What do you need, dear?" she'd ask a weary workman eyeing her hot-food carryout case. For a moment, Brenda could make the man with chapped hands and muddy boots feel like somebody was looking after him.

"You want a roll with that, baby?" she'd say, smiling even bigger.

Of all her customers, the person Brenda loved to josh with most was the cowboy-man who pulled into the C&L Super Serve in Hurricane, W.Va., by 6:30 a.m. weekdays to gas up and buy breakfast. Brenda would spy him out at the pumps and start his order: two of her famous biscuits stuffed with bacon.

Brenda and the cowboy-man joshed so much that fellow clerks teased they must have some kind of "rendezvous deal" going on. Brenda would laugh and say, "It ain't like that!" She didn't even know that the cowboy-man's name was Jack. Jack Whittaker. She just knew he dressed in black like Johnny Cash and carried himself big -- big as the cowboy hat he always wore. She liked how polite and cheerful he acted, as if trouble were a stranger.

In the days before Christmas in 2002, Jack bought a Powerball lottery ticket along with his biscuits. Some fools couldn't get enough of those tickets. Not the cowboy-man. He'd buy one only when the jackpot got big, like anything less than a couple hundred million wasn't worth his trouble.

On Christmas Day, the lottery ticket-buying frenzy peaked at 3:26 p.m. In convenience stores and gas stations across West Virginia, 15 people every second commemorated Jesus's birthday by plunking down $1 for a chance at a different kind of salvation: that Powerball jackpot.

It was about 11 o'clock Christmas night 2002 when Channel 3 out of Charleston announced what it said were the winning Powerball numbers. Jack was slumbering when his wife of nearly 40 years, Jewell, jostled him awake to say that his lottery ticket matched four out of five. Jack was clueless about what kind of payoff a four-number match brought, but he figured it had to be good for at least $100,000. He went back to sleep while visions of a six-figure windfall danced in his head.

The next morning, as always, he rose at 4:30 to get to work. Jack, 55, had been working construction since he was a poor 14-year-old in the hills. He'd built himself a nice life in this patch of West Virginia hard by the Kentucky and Ohio borders. He had a wife and a granddaughter who basked in his attentions, a brick house in a nice subdivision in neighboring Scott Depot, and a water and sewer pipe-laying business that employed more than 100 people. At 5:15 a.m., Jack snapped on the television and heard, to his surprise, that the winning ticket had been sold at the C&L Super Serve. What are the odds, Jack later said he was thinking, that one little convenience store would sell two lucky tickets? Just then the winning numbers flashed. The numbers broadcast the night before had been wrong. He had a match on all five numbers, not four.

Jack Whittaker had just won $314 million, the largest undivided lottery jackpot in history.

A few hours later, he ambled into the C&L Super Serve and calmly handed Brenda a bill, saying he'd been meaning to give it to her before Christmas. Brenda figured it was a $1 tip for helping him diet, taking care to pinch a little dough out of his bacon biscuits so the cowboy-man's big burly wouldn't go soft.

"He handed me a $100 bill!" Brenda recalls. "I looked at it, and I'm, like, 'Oh, no, no, no. I'm not taking this from you.' And he's, like, 'Oh, yes, you are.'"

Then it hit her.

"Did you win?" Brenda whispered.

Jack nodded and grinned.

The day would come when many West Virginians recalled the story of Jack's Powerball Christmas with a shudder at the magnitude of ruination: families asunder, precious lambs six feet under, folks undone by the lure of all that easy money.

But for now, Jack's big win was viewed as one of the greatest Christmas gifts in his poor state's history, a holiday miracle to be heralded around the globe. Jack proclaimed that he would tithe a biblical 10 percent of his winnings, donate millions to his family's favorite pastors and build big new churches. He vowed to start a charitable foundation to help needy West Virginians. "I just want to thank God for letting me pick the right numbers . . . or letting the machine pick the right numbers," he said as he claimed his check.

by April Witt, Washington Post (2005) |  Read more:
Photo: John Sommers - Reuters

Thursday, November 29, 2012