Posts filed under 'Online networks vs. industries'
Our society is in transition. It is applying new technologies to create new structures. Proprietary information is no longer necessary to encourage innovation or distribution channels. The internet provides a virtually free distribution channel in a services based economy. Online social networks have redefined how we interact with large numbers of people adopting new behaviours. Online industry network will redefine industry. Online political networks will redefine politics.
The following is intended to provide a summary of how our society operating in a Web 1.0 world and the emerging Web 3.0 world. This is one of a series of concepts that explain the evolution toward Web 3.0. I recommend you review the visual overview of these concepts in the Marcus.cake overview presentation.
Continue Reading August 19th, 2008
The era of online networks which manage information of no value is ending. The era of online networks that manage valuable information and reshape industry is beginning. The foundation for online networks has been building for decades. The most recent milestone may have been 90% broadband penetration rates in the major economies. The next generation of online social, industry and political networks will deliver unprecedented transparency, liquidity and accessibility in all aspects of society.
Continue Reading July 27th, 2008
There is an opportunity for a Linux style online community to coordinate the individual contribution of scientists, government, corporations, philanthropists and the community to pursue/deliver climate stability. Virginearth.com would be an ideal forum for this initiative. Richard Branson and Al Gore could inspire an global online community and encourage government and corporations to contribute essential intellectual property to a solution and deliver climate stability.
Continue Reading May 5th, 2008
We need to deploy five online political, industrial and social networks to avert disaster by 2012. Existing structures that rely on proprietary ownership of information, distribution channels, institutions and regional approaches are unable to solve our most pressing problems. Even if they could solve the problems, they are simply unable to coordinate a global endeavour in a rapidly closing timeframe. I had previously written that online networks could be delayed for up to 50 years by three epic battles. In some aspects of our global community, we can wait 50 years (and there is only an opportunity cost). However, for some specific problems, online networks need to be built, acquire a significant audience, and achieve their objective by 2012.
Continue Reading April 1st, 2008
Recent market turmoil is likely to eliminate the growth on stock exchange trading volumes. This growth had driven the growing revenue of stock exchanges in the last five years. Cost cutting has also contributed significantly to profitability. With growth unlikely and further opportunities for cost reduction minimal, stock exchanges will now seriously consider other strategic initiatives. Collaborative hubs are likely to be at the top of the list.
Continue Reading April 1st, 2008
At its simplest, the business of stock exchanges is the matching of buyers and sellers of quantities of shares. At its more complex are important functions of settlement and custody. The industry could, however, run on a single computer anywhere in the world and offers a very narrow niche of functionality for the equity market. Most of the stock exchange infrastructure in the world is obsolete. It could also be suggested that much of the software that runs enterprises is also obsolete. If the software is not obsolete, it could be replaced or rebuilt at a fraction of the cost. Stock exchange consolidation may just combine redundant technology, declining customers bases and a redundant business model. This legacy may prevent new initiatives to provide greater access to the equity market for smaller companies. We may have a larger organisation with the same redundant business model with limited access to a niche of potential market participants. Will this new organisation provide greater access to capital markets for all market participants?
Continue Reading September 29th, 2007
Grant Thornton conducts an annual review of global growth markets. The report confirms a number of key trends. Capital markets are becoming more global and less regional, financial centres and specialising and certain stock exchanges are growing strongly. The most popular growth exhanges are in UK (AIM), Singapore, Hong Kong and Canada. Companies are becoming increasingly comfortable listing on foreign exchanges. This is contributing the the rise of specialist financial centres and global growth stock exchanges. The internet provides investors with transparency and direct access to information. Many stock exchanges and their closed information networks will struggle to find a niche in a globally connected world and free flow of information. Globally distributed online networks are likely to support growth companies and growth exchanges. Online networks will deliver the international companies, advisers and investors necessary to deliver liquidity to small exchanges that have been historically restricted to local business.
Continue Reading August 31st, 2007
Regional stock exchanges are deprecated. They will be superseded by new structures in a global market. These new features include online industry networks, global and specialist stock exchanges and a global private equity industry that can provide capital for any size of transaction - small and large in any market. Companies will need time to change their approach and use these new features of the global equity market. Regional stock exchanges are likely to throw up a lot of deprecation errors, or public relations messages, as they struggle with emerging global exchanges and online industry networks. The pace of industry consolidation has rapidly increased in the last 18 months as the global stock exchange is created. With economies of scale, a global stock exchange may be able to provide access to the equity market for companies which previously could not get access. It is unclear whether the global exchanges currently being created will improve access to the equity market by smaller companies.
Continue Reading June 4th, 2007
Online networks which embody every facet of industrial, social and politcal aspects of our modern society are inevitable. They simply offer a superior way to interact and transact. The transition to a global community based around online networks will take six months, sixteen years or fifty years. The timeframe will depend upon the outcome of three epic battles. The battles are economic development vs geostrategy, community knowledge vs intellectual property, and online networks vs closed systems. Online industrial, political and social networks which are involved in these battles could be delayed for decades.
Continue Reading May 22nd, 2007
Information technologies which capture, store, process or transmit information double in performance or halve in cost every 18 months. Moore’s law has been working patiently for 40 years. In an information economy, this should have had a dramatic effect. However, political, industrial and social structures largely remain the same. Advances in technology have not changed the fundamentally way that our society or economy has operated. The right information in the right place at the right time will transform the world. This transformation will only start now. This article will discuss why such a process should only begin now and what role information is likely to have.
Continue Reading May 15th, 2007
Amazon web services are pioneering essential building blocks for economic development. These blocks will provide a foundation for the next phase of online networks which will pioneer new structures. They reduce processing power and information storage to basic utilities, just like telephone, gas and electric supply. The storage service (S3) and web hosting service (EC2) cost less than 50% of traditional approaches and are more flexible and simpler to use.
Hackers can design their online network at home and simply drag and drop it onto the Amazon cloud. The conventional approach would require a large number of employees or consultants to deliver equivalent functionality. Ofcourse, a significant amount of time was required to raise capital from investors to pay for it. Today, a hacker can create an application on the (free) Linux desktop and an open source development platform. A major ebusiness could be built by a hacker with less than US25k in external development. If you are not a hacker, then you will need to raise some serious capital because you will need significant support to navigate unfamiliar ground and achieve your outcomes.
Continue Reading April 24th, 2007
The objectives of open source will change over time. As open source evolves and proves its capability, it will move beyond technology, beyond specific industries, to all other aspects of our society. This has been suggested in the past. However, existing organisations are not sufficiently motivated to apply advances in technology to promote development. Business, social and political entrepreneurs that establish online networks are likely to be the primary force for change.
This article outlines the first four stages of the development of online networks and the .Net boom. The objective of the online network in each stage is identified.
Continue Reading March 24th, 2007
The patent system emerged to motivate business to organise people to develop new technology. Without providing an exclusive opportunity for profit, business would not assemble the structure and people necessary to create new technology. Technology means ways of doing things. This includes information technology, biotechnology and healthcare. If the global objective is the creation of new technology, then there is another way to organise.
Continue Reading February 26th, 2007
Regulations have trailed the opportunities and benefits presented by technology. The SEC has only recently changed its regulation to allow the delivery of shareholder information by the internet. The internet presents the world with an opportunity for a truly global capital market. Regulation is critical to the integrity and credibility of equity markets. However, in an era of global business and the internet there are limits to the reach and effectiveness of regulation. My spam filter receives at least 10 emails a day recommending the purchase of the shares of a listed company. I suspect many receive similar emails. It is difficult to see how any method of regulation could protect an investor from Spam, or point to point communication. Can we protect the “investor” in a world where information can travel from individual to individual, companies can shift countries and advisers could use the internet to mask their identity. The challenge for global regulators is real. A careful balance must be struck between the need for efficient and effective capital markets, effective investor protection at a minimum of transaction costs. The efficient and effective operation of global capital markets is critical to capital formation, economic growth, taxes to fund government and having available resources to address the critical environmental, health and social problems of our time.
Economic development and new technologies can require significant adjustment for existing players. In financial markets, many of these business models were formed in the early 1900’s. Large organisations and signficant infrastructure was required to distribute information from point to point. In an era of the internet, the cost of distributing information point to point is almost zero. Information distribution business based upon old business models must adapt. Given the significant investments, many current players are unable to change. Only new entrants have the flexibility to offer new business models offered by the internet.
Continue Reading February 26th, 2007
Industrial use of the internet is at an early stage. Existing corporates have used the internet to reduce costs by distributing information in a lower cost means. However, there are few examples of industries that have been completely transformed. The primary purpose of some major industries is distribution of information between market participants. They have significant economic rents for taking information from one market participant, mildly transforming it and delivering it to another market participant. The internet offers free (almost) distribution and the ability to find other market participants. These significant economic rents for distribution seem redundant in an age of the internet.
The next wave of internet companies are likely to target the distribution of information with a commercial value. These are Online Industry Networks. These networks will simply break down existing labour intensive interactions and coordinate them in the internet. They will rely significantly on user generated content and each user assuming responsibility for the distribution of that information. The current intermediaries are unwilling to sacrifice the high economic rents for distribution by adopting new business models. Only new entrants will apply new business models to take advantage of the internet to deliver products and services at significantly less cost, in less time and without needing to visit a specific retail location. These businesses will facilitate the exchange of information from people to business. Freelancers from all around the world will manufacture the information and deliver it directly to the end user. An online industry network promote products and services of the community. Service providers can find customers and customers can search for service providers. The consumers of the information may have access to products and services previously denied by closed distribution channels.
Continue Reading February 12th, 2007
If Moore’s law continues, then the cost of hardware will continue to decline and the ability to run a bank from a desert island a reality. The ability of software to take advantage of these hardware advantages may be limited. The advances in hardware and emergence of Utility computing will overcome much of the limitation. The result will be unpredented opportunity for entrepreneurs to create applications to global audiences in an increasingly service oriented world. Linux is likely to be best placed to take advantage of advances in hardware.
Continue Reading January 31st, 2007
Skype made internet telephony popular. It added video functionality to Skype last year. It has now added remote desktop or application sharing. As the worlds most popular internet telephone software, this will have a significant impact on the number of people that work together over the internet. Could Skype make application sharing popular just like it did for internet telephony?
Continue Reading January 31st, 2007
The electronic distribution of shareholder information will reduce costs and provide immediate delivery of information to shareholders. Electronic delivery may bypass established channels for information delivery and may accelerate disintermediation. However, the change is likely to be a universally positive for market efficiency with more direct communication between a company, its shareholders and advisers. It may also be possible that reduced transaction costs could lead to improved access to capital markets by smaller companies.
Continue Reading January 31st, 2007
Hong Kong raised more capital in 2006 for the largest companies than any other market. In addition, it also offers small high growth companies a better opportunity for liqudity at significantly less cost than other markets. Hong Kong’s Growth Enterprise Market, a “Buyer’s Beware” market for informed investors, is specifically designed for these small growth companies. A company does not need to be incorporated in Hong Kong and “does not include any profit ‘track record’ requirement nor any obligation to forecast future profitability”. The listing fees are modest and comparable to many offshore stock exchanges. However, I suspect that the opportunity for liquidity may be greater in Hong Kong. I have previously highlighted the lack of liquidity in offshore exchanges, but perhaps the weight of capital in the world generally and Hong Kong specifically will boost liquidity in offshore exchanges. Ofcourse, any company that lists in Hong Kong would need Hong Kong or Chinese business to maximise appeal to local investors. I remain intrigued by the opportunity for online social networks to contribute to the stock exchanges and the equity market.
Continue Reading January 17th, 2007
Recent deals confirm that the process of industry consolidation is occurring at a global level. The major players have interest in markets beyond those of Europe and the United States. Some of my recent articles have provided an analysis of market share and described some of the activity in different markets.
Continue Reading January 14th, 2007
My previously article “The Isle of Man New Manx Vehicle - simple, more flexible, offshore and part of the EU for VAT purposes” provided an overview of the Isle of Man. It highlighted the attributes of the jurisdiction for internet businesses and the introduction of the “New Manx Vehicle” corporate structure (”NMV”). The NMV was designed to compete more effectively with the corporate structure offered by the British Virgin Islands. In 2004, the BVI incorporated 60,000 companies and the Isle of Man just 2,593. The NMV will be available for incorporation from the 1st November 2006. Apparently, there is significant interest in the NMV. A ballott is being conducted to award the honour of being the first NMV incorporated.
Continue Reading October 24th, 2006
Dubai is spending £140bn to transform itself into a capitalist powerhouse. The strategy being pursued in Dubai is unparalleled in history - a integrated and focussed strategy with unparalleled resources to make it happen. Dubai can build the hard infrastructure, but will the will the people, industries and businesses come? The comprehensive approach may deliver.
Continue Reading October 22nd, 2006
Striking a balance between consumer protection, compliance costs and maintaining an effective market to raise capital for companies is very difficult. The following two articles suggest that the balance is skewed heavily toward consumer protection to the detriment of companies. Companies are simply moving to new markets where capital is easier to raise and costs are lower. If the balance is not right, the migration of companies will result in lost jobs and lost tax revenue to other financial centres.
Continue Reading August 15th, 2006
When world oil production peaks, there will still be large reserves remaining. Peaking means that the rate of world oil production cannot increase; it also means that production will thereafter decrease with time. “When world oil peaking will occur is not known with certainty. Some experts believe peaking may occur soon … within 20 years.” It may occur as early as 2010. World oil demand is expected to grow 50 percent by 2025. “Peaking will result in dramatically higher oil prices, which will cause protracted economic hardship in the United States and the world. However, the problems are not insoluble. Timely, aggressive mitigation initiatives addressing both the supply and the demand sides of the issue will be required.” North America has 5% of global oil reserves, a declining 17% share of global oil production and consumes 30% of the worlds oil. The Middle East has 62% of global proven oil reserves, produces 31% and consumes 7% of the worlds oil.
Continue Reading August 7th, 2006
Markets of buyers and sellers will come “full circle”. Thousands of years ago, “transactions” between buyers and sellers were negotiated “under a tree” and face to face. As markets became larger and global, industry constructed proprietary and closed systems to match buyers and sellers. In an era of the internet, much of this infrastructure is redundant. A global internet displaces regional and proprietary communications systems. The internet will significantly impact many industries. We are likely to return to negotiating “under a digital tree”. The internet and the emerging “semantic” web will bring the people together in the global market place.
Continue Reading July 30th, 2006
The global economy is 70% services based. Broadband penetration is growing. The opportunities for open source technology to change the status quo are staggering. LAMP is the technology which underpins most of the major web sites in the world today. It will be a key tool for the social and commercial entrepreneurs of tomorrow and underpin the the .NET boom.
Continue Reading July 17th, 2006
The key reasons that Europe and other regional economies have not developed a “Silicon valley” is not cultural and not lack of capital. There are enough entrepreneurs and the capital will mobilise. There needs to be predictable risk for involvement in early stage, greater transparency that reduce the costs of involvement and a significant reduction in the time/cost to find opportunities. Entrepreneurs and investors need to know who to call. The recipients of those calls need to be willing to get involved.
Is there a way to achieve transparency, without waiting for decades to pass and relationships to form in the conventional way? There must be a role for an online social network to assist each regional economy, company, advisers and investors with sincere early stage aspirations.
Continue Reading July 10th, 2006
The Isle of Man is a world class financial centre. I recommend the Isle of Man Finance web site for more information. It is a very competitive offshore offering, but may have been less flexible and more expensive than other “offshore” jurisdictions. Amongst other requirements, an Isle of Man company had to have at least one resident director and a resident company secretary. This is about to change. The Isle of Man is about to introduce the “New Manx Vehicle” (”NMV”) company structure. The NMV has many of the attributes of the International Business Companies of the BVI and other offshore jurisdictions. With the NMV, the Isle of Man is a compelling offshore proposition (particularly for European E-Business). The opportunity to use “meeting rooms earmarked for use by Manx companies” in the Isle of Man’s London office is an innovative marketing tactic.
Continue Reading July 7th, 2006
“The Semantic Web (or Web 3.0) promises to organize the world’s information in a dramatically more logical way than Google can ever achieve with their current engine design.” The lack of metadata around information and closed information systems ensure financial markets remain a highly profitable industry. In Web 2.0, the information could be organised into structured databases from a single location made available over the internet. Web 3.0 must still be organised, but intelligent distributed agents could answer your question - “Which corporate adviser should I use to list my Web 3.0 company in Bermuda?” and “What are my chances of getting liquidity?”. It will be very interesting to see what type of answers Web 3.0 gives us?
Continue Reading July 5th, 2006
An online social network which trades in information with high instrinsic value will have a lower break-even point, less technology risk, a clearer value proposition and less investment risk. There is nothing remarkable about this statement. I am intrigued that there is not a greater proportion of online social networks which trade in high instrinsic value information. I am surprised at the amount of funding that some low intrinsic value online social networks have received.
Continue Reading July 2nd, 2006
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