SeanReadsTheNews

BW on Getting Games to Play Overseas

Doug MacMillan of BusinessWeek has an interesting story today on the business challenge facing Zynga and its peers - making it's goofy "Farmville" type games play in other countries.  It's another example of how cottage industries can spring up and provide jobs in ways no central planner can anticipate.

Seriously, this guy makes a living translating social network games for Latin American markets.  How many days has it been since something like that has even been a job?

Internationalizing a game requires knowledge of country-specific traditions, architecture, holidays, and currencies—all crucial elements in games that are supposed to feel like simulations of the real world. "To really localize a game, it goes beyond translation," says Juan Franco, chief executive officer of Mentez. The four-year-old company specializes in adaptations for South and Central America, and has offices in São Paolo, Mexico City, Bogotá, and Medellin, Colombia. Russian company 101XP helps U.S. game designers crack the Eastern European market and target users on the region's biggest social networks, including Mail.ru. Hong Kong-based 6waves customizes social media games for Asian audiences.

I may not play the games - but that doesn't stop me from appreciating how cool that is and noting what a good article MacMillan writes about the growth of this new form of business.

 

TIME on the Economics of Newspaper Delivery

Tom Vanderbilt of TIME reports on the shift from newspaper delivery by kids to adults that has taken place over the last 20 years, a neat business story that covers social shifts, economics and the newspaper industry.  The most interesting observation is on how modern parents consider delivering newspaper too dangerous a job for kids.

The larger culture around the paperboy has changed as well. Many kids have stopped delivering papers for some of the same reasons many of them have stopped walking to school — the percentage of walkers has shrunk from nearly 50% in the late 1960s to just 16% in 2001. This is in part because of fears of stranger danger but also because families have been moving from suburbs to exurbs, which are simply too spread out for kids to cover on foot or on Schwinn Sting-Rays.

Vanderbilt goes on to explain that young adults who work in high school average higher wages throughout their lives, ostensibly from developing good universal work habits, and notes several famous people who started out as paperboys.

Maybe I'm only interested because I'm in the news business but I find the whole package intriguing.

Wired: Why Can't We Stop Botnets

The mighty Ryan Singel comes dangerously close to a "panic in the streets" post today - writing about how botnets defy efforts to destroy them without any victims identified in the story.

Based on his track record, however, we'll give him a pass, particularly since this post is a follow-up to a real news story on the arrest of several hundred cybercriminals last September.

I do love the "cure" recommended by the generic security expert in the story.

For now, experts recommend running patch-checking tools like Secunia PSI as a complement to your antivirus software. Windows PCs remain the most vulnerable, mainly due to their ubiquity. But attacks are targeting Macs, too, as they become more widespread. For true security, Runald suggests buying a cheap Linux netbook for banking.

If that's the answer, Singels' right, the thieves already won.

 

Norris on Madoff and The Banks: Telling Us Something We Don't Know

I've read a lot of the coverage of the Madoff fraud and it's rare these days for an entirely new issue to come up, so hats off, again, to Floyd Norris of The New York Times for spotting a fascinating hedge play by the major banks involving Madoff.

But there were other ways to make money off Mr. Madoff. He generated good, but not great, profits year after year. He never lost much money, even when the market was tanking. So some investors figured they could get fabulous returns by using leverage. That was where several banks, including Citi, came in. They would structure derivative securities that let people get multiples of the profits Mr. Madoff generated — less some very nice fees for the bank, of course.

The risk for the banks came in the fact they would have to pay out a lot of money if Mr. Madoff continued to have great results. So they “hedged” their exposure. That is a nice way of saying they invested in hedge funds that served as “feeder” funds for Mr. Madoff. The profits on those investments would offset their exposure. They were taking on no risks, or so they thought. The banks put in terms specifying they had no responsibility for any fraud that might be discovered.

The list of journalists with the chops to untangle something like that and then explain in such a compelling way is pretty small.  And Floyd's name is at the top in red.  

The article also contains a detailed explanation of how SIPC works, its post-Madoff future and why my old friends at  Baker Hostetler must be very happy they currently employ Irving Picard.  Read the whole thing.

 

Fortune: Insightful and Snarky on Hedge Funds' Love of Apple

Duff McDonald made an obvious but hilarious observation about hedge fund management in his Fortune.com piece on Friday - why do investors pay hedge fund managers 2% fees plus 20% of profits if all the managers are going to do is buy stock in Apple, the most obvious growth story  in the market? He was reacting to an analysis that showed that among hedge fund managers, Apple is the most popular position.

Don't get me wrong. I love Apple. I write this on a MacBook while simultaneously watching an episode of  Nip/Tuck over Netflix on my iPad. I bought an Apple II+ in 1980. But that's the point, isn't it? Why is our collective retirement money being spent on the inflated salaries of money managers who can't come up with better ideas than giving their money to overpaid hedge fund managers whose best idea is that Apple is a company on the up and up? Is there no better idea than this?

This is another in an ongoing series of stories we highlight that take a truth that is painfully obvious in hindsight, and was there for all to see, and find a way to make it news.

We live in a society when people are too willing to passing third-party judgement on the employment arrangements of others and it should stop - but that doesn't mean not asking smart questions of people who make big salaries and force them to defend the arrangement.  

McDonald has now set the first question for any hedge fund manager doing an interview for the next while - what about your strategy is different from buying retail?  Well done.

The Daily: Not Good Enough to Motivate DRM Circumvention?

We try to keep track of emerging news outlets like The Daily, Newscorp's Ipad-only publication.  According to Ryan Singel of Wired, so did Andy Baio who set up a way to look at its content on the web.  After two weeks, he's quit because the content isn't interesting enough to make avaialable.

Andy Baio, who founded and sold Upcoming.org to Yahoo and who writes on Waxy.org, announced he would no longer be creating a daily page with links to all the stories in The Daily after the expiration of his two-week free trial of the much-anticipated e-tabloid (even though The Daily announced that it was extending the free trial).

His reasoning?

“It was a bit of a headache to maintain, and I’m not interested enough in the articles to keep it going,” Baio told Wired.com by e-mail.

That's one way to protect yourself from piracy - which Singel makes clear this wasn't.  If no one wants your content, well then you don't have to worry about it.

WSJ on Service Animals: I Weep for Society

Ann Zimmerman's a-hed article in today's Wall Street Journal is on people who abuse the multiplication of service animals in our society to take their pets where they don't belong, counting on the quesyness most people have about calling people on their disability claims.  Basically, it reads like a real-life version of the Seinfeld episode where George pretends to be handicapped to get special treatment at work.

Still, Ms. Kimmel says the vest, which she purchased online, no questions asked, makes people think otherwise, so they don't object to Maxx. "They know they are not supposed to ask," Ms. Kimmel says, alluding to the federal law that protects people with service animals from inquiries about the nature of their disability.

You have to be a special kind of warped to take advantage of human nature like that.

WSJ: The Big Business of Used Phones

My favorite story in today's Wall Street Journal is James Haggerty's surprising look at the market for used cell phones and how refurbishing them is turning into big business.

Global sales of used phones total a few hundred million units a year, estimates Andy Castonguay, an analyst at consulting firm Yankee Group. That compares with the 1.6 billion new phones sold world-wide last year, he says.

Though a few used-cellphone dealers have been around for decades, the business is expanding now because today's most advanced "smart" phones are costlier to begin with and can fetch hundreds of dollars even after a year or more of use. Meanwhile, a weak economy encourages thrift, and some people seek out simpler phones made years ago to avoid having to learn new routines.

My standard disclaimer about technology analyst group numbers applies here - if you pay them enough they'll find an eight-figure market for second hand pencil erasers - but clearly there is a market here that a smart entreprenuer identified.

Another thing I love about the story it that is spells out a web of companies that orbit around the main resellers - web retailers, Latin American middlemen and others - that shows how the one key idea at the core generates jobs and revenue for many.

 

I Read Today's WSJ, Oh Boy...

I don't have much of a post here but I should be able to pull my morning paper out of the wrapper without being confronted with a cover flag for a story on the horror of overweight pets.

Buffy, Hershey and Fridge are pets battling excess weight and obesity. As more Americans confront their own weight issues, furry housemates increasingly struggle alongside them. New data due out this week indicate the problem is reaching epidemic proportions, with more than half of U.S. dogs and cats now overweight or obese.

Again, you already own the New York Post - that's where the stories on overweight pets go.  Love both papers but they each have their own missions.

The fact that a veteran, talented small business reporter like Wendy Bounds was sentenced to this trifle just makes it worse.

No, Robots Won't End Business Travel...

Drake Bennett of BusinessWeek uncorks a classic Halley's Comet - my term of art for stories that reappear unchanged on set intervals - how technology is going to end business travel.  

In the past few years, a set of technologies has emerged with the potential to change that calculation. The term the creators of these new tools use is "telepresence." Some are custom-built meeting rooms with a bank of high-definition screens and cameras, others take the form of vaguely humanoid robots. None of them fool people into thinking their distant interlocutors are right there, any more than viewers at a 3D movie really think they're in danger during an onscreen car chase. The moviegoers still flinch, though.

This is just an update on video conferencing, conference calling, skyping, etc, and has the same the same self-interested quotes from product vendors the same dubious assertions from corporate executives that - this time for sure - all business meetings are coming to an end.

Still, the experience that telepresence provides is qualitatively different from other remote technologies—richer and more immediate. Trying them out, I found both the telepresence rooms, with their high-definition immersiveness, and the robots, simply by providing a remote body to take for a spin, defused many of the cues that make distance feel distant. The technology has its limits, but it will almost certainly get better even as it gets cheaper. Just as most people 15 years ago felt uncomfortable shopping or dating online, it is easy to imagine that interactions now understood to require physical interaction may soon become perfectly acceptable to do by telepresence. Even today, expensive as the technology can be, for many users it's being there in person that's beginning to feel like a luxury.

Bennett signals right there that he is ahead of the story.  The piece actually has a lot of valuable information in it and has examples of companies spending big on virtual suites using state-of-the-art technology to conduct meetings.  But we've heard it all before and at the end of the day, people still want in-person meetings.