Twitter Users Want News, MySpace Users Do Not, Unless it is Celebrity News

Twitter is a social networking medium, but it also is a news distribution mechanism, it appears. A new stydy by Chitika shows Twitterers mostly consume news while MySpace users want games and entertainment.

Click the image for a larger view.

Facebook also is a news site, but less so than Twitter is. About half the traffic (47 percent) that Twitter generates falls into the news category. In fact, Twitter users’ interest in the news genre surpasses that of Facebook users by nearly 20 percent, which would appear to make it the number-one social network for news-focused users.

MySpace users, on the other hand, seem to have no interest in news whatsoever. Instead, MySpace members seem to prefer video games (28 percent) and celebrity and entertainment content (23 percent).

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Free E-Book on Cloud Computing

Light and Electric, Thomas Howe's consulting company, has produced an e-book on cloud computing, featuring essays by 20 "thought leaders."

The idea was to capture thinking about where are in early 2010 and where we might be over the next several years.

Howe says that "in the not-so-long-ago past, the thought leadership for communications belonged to those large service providers, vendors and media outlets, as they were the only entities with the practical authority to comment on or effect changes large enough to matter."

That isn't exclusively the case anymore.

The e-book is free and available for download directly from this site: http://cloudcommbook.squarespace.com/get-the-book/.

In addition, for a nominal fee to cover printing and delivery, it is also available in tree-killing hardcopy edition, and bit-killing Kindle edition.

National Broadband Plan: Where Does U.S. Rank? Where Can it Rank?

A six-spot gain to 9th place in international broadband rankings would be a successful outcome for the Federal Communications Commission’s National Broadband Plan, says the Phoenix Center.

Historical trends suggest the United States will likely move to 13th in broadband adoption by 2012 even without significant policy changes, however.

The new Phoenix Center study, "Evaluating Broadband Stimulus and the National Broadband Plan: Establishing Expectations for Broadband Rankings", uses a variety of standard econometric techniques to determine where the United States is expected to rank given current trends, and where the United States should rank if the National Broadband Plan and federal broadband stimulus are successful.

“As we point out in our prior research, relying upon the OECD’s flawed methodology as an
accurate metric of a country’s broadband performance is fraught with peril,” says Phoenix Center
President and study co-author Lawrence J. Spiwak. “However, as some policymakers continue to
use the OECD’s methodology as the definitive broadband metric, our analysis establishes a
performance metric by which to assess the success or failure of new broadband interventions using
the OECD’s rankings. In so doing, we hope that our analysis can make a positive contribution to
the debate by establishing a standard by which to measure the success of new policies.”

Many observers point to U.S. rankings on global indices of broadband penetration, cost or speeds as evidence that the United States is lagging behind other nations. But comparing very-large countries with very-small countries, with different population densities, government policies, household sizes and incomes is difficult.

For example, the United States ranks no better than 15trh in global measures of telephone density. But nobody really suggests the United States has a fixed-line voice availability problem. In fact, most observers say demand for that product is declining.

So where does the United States currently rank on per-capita measures of broadband penetration? 15th, as it turns out; precisely where it has long ranked in terms of fixed-line voice line penetration. If one is not a problem, why is the other?

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Service Providers Now Will Have to Contend with Decades of Belt-Tightening

As if forecasting telecom, cable and Internet spending were not hard enough, it is about to become much-more uncertain, for reasons most of us probably could never have expected: a decades-long suppression of end user consumption to re-balance structural deficits.

Developed countries with big budget deficits--including the United States--must start now to prepare public opinion for the belt-tightening that will be needed starting next year, John Lipsky, says International Monetary Fund first deputy managing director.

Gross general government debt in the advanced economies will rise from an average of 75 percent of gross domestic product at end-2007 to 110 percent of GDP at end-2014, even assuming that temporary, crisis-related stimulus steps are withdrawn in coming years.

Reducing the ratio to the pre-crisis average of 60 percent by 2030 would require raising the structural primary balance -- before interest payments -- from a deficit of about four percent of GDP in 2010 to a surplus of about four percent of GDP in 2020 and keeping it at that level for the following decade.

That clearly implies an eight percent swing in balances, before interest payments.

Lipsky also says the scale of the adjustment is so vast that less-generous health and pension benefits, government spending cuts and increased tax revenues are needed.

The drops in government services to individual citizens and businesses could be unprecedented, some therefore suggest.

The obvious danger is that the U.S. Congress seems hell-bent on making the problem worse by continuing to spend as though it had the means to pay for its spending. The IMF has for decades both scolded and disciplined developing nations unable to balance their budgets.

Now it appears the United States, for the first time, is headed that way as well. The ramifications are not entirely certain, but slower economic growth is likely and social strife virtually inevitable.

It is not immediately certain what all of this fundamental change will mean for providers of communication and other services to businesses and consumers, but it probably will a mixed impact.

If one assumes consumers will have less disposal income, one would expect pressure on overall revenues and profit margins. But consumers will also have to make choices about discretionary spending, and past behavior suggests that communications and entertainment services are high priorities.

All indications are that broadband access will become, with mobility, anchor and foundational services, the key issues for service providers being the cost of delivering those and other services, as well as creating a sustainable new role in the revenue chain for application usage.

It is not so clear what will happen to demand for today's packaged multi-channel video services. So far, mobile and online video usage seems incremental to other existing forms of video consumption, but much depends on what content owners decide is in their best long-term interests. Major change in distribution methods is possible, but not likely in the short term.

But businesses also will be forced to operate more frugally, which could have a variety of effects. In the recent recession business revenue dropped, except for providers taking market share.

The upshot is that most consumers will have less to spend, though. That could send the United States and other developed nations into a downward spiral where muted consumer activity undermines GDP growth.

The point is that our historical experiences with post-recession recoveries will be stressed in new ways this time around, specifically because the macro-economic stresses are so novel. The United States never before has had to be told by the IMF to adopt austerity measures, and people have not had to live through such a period.

But we are about to. And means everybody who tries to forecast revenue for telecom, cable and Internet companies, as well as others in the ecosystem, must face increased uncertainty. That doesn't necessarily mean the underlying assumptions will change. They might not. But it is not clear at the moment what could change, and we might not know for several years what the nature of those changes are.

Reuters article

Get Ready for a Test of Social Cohesion, Says Moody's

It isn't immediately clear how soon debt service will become a major business issue in the United States, but it is clear it will be. Moody's analysts, looking at sovereign debt loads in the United States, say there is no way to "grow" our way out of the problem.

“Growth alone will not resolve an increasingly complicated debt equation,” Moody’s says. “Preserving debt affordability” (the ratio of interest payments to government revenue) “at levels consistent with Aaa ratings will invariably require fiscal adjustments of a magnitude that, in some cases, will test social cohesion.”

Note the phrase "at levels that will test social cohesion." What Moody's means is that, to keep its credit rating, given the fact that economic growth, even robust growth, would not grow tax revenues enough to take care of the problem, the federal government likely will have to cut spending, though it also will try to raise taxes.

And that is going to lead to protests, anger and unrest.

But there will not be a choice. If the United States does not act to preserve its credit rating, it will be more costly to borrow money, driving the debt burden even higher and threating yet another round of downgrades.

Such a downgrade also would force an immediate reduction in debt-financed spending. And that is precisely what the United States currently is doing: spending more than it raises in taxes and borrowing to support the shortfall.

Moody’s says the United States and other major Western nations, particularly Britain, have moved “substantially” closer to losing their current ratings. The ratings are “stable,” but “their ‘distance-to-downgrade’ has in all cases substantially diminished,” Moody's says.

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Weaker Market for Fixed Line Services Due in Part to Housing Market Changes

As if fixed-line providers of entertainment video, voice and broadband did not have enough problems, it appears there are fewer households to sell services to, these days.

Lower housing starts and a severe job market are obvious reasons why uptake of new services has been challenged.

But it appears there are other demographic changes at work as well. More young people, for example, are living longer with their parents than once was the case.

Also, more people in their 20s have moved back in with their parents. That is important as younger people represent one of the biggest groups of "single person" households. If there are fewer of those sorts of households, there are fewer potential occupied homes to sell services to.


A 2009 Pew Research survey found that among 22- to 29-years-olds, one-in-eight say that, because of the recession, they have boomeranged back to live with their parents after being on their own. That suggests as many as 12.5 percent of those 22 to 29 have removed themselves from the ranks of households with a possible need for fixed line communications or entertainment services.

Those trends, in turn, seem to have been driven by the recession's impact on younger workers.

According to a Pew Research Center analysis of Bureau of Labor Statistics data, as of 2009 some 37 percent of 18- to-29-year-olds were either unemployed or out of the workforce, the highest share among this age group in nearly four decades.

In 2000 there were about 42 million people living in multi-generational households. In 2008 there were 49 million, and one suspects that number grew in 2009.

National Broadband Plan is Mostly a "Grab Bag" of Proposals

There were few, if any surprises, when the Federal Communications Commission finally released its proposed "National Broadband Plan," whose centerpiece is an effort to free up about 500 megahertz of spectrum for wireless access. A modest amount of incremental spending for rural broadband is proposed. '

Perhaps the real story here is a recognition that not much really can be done, or perhaps ought to be done, about the existing fixed-line broadband access market, except to encourage existing providers to upgrade speeds.