Hal Stern's thoughts on the economy, software, services, technology, and snowmen. Hal Stern: The Morning Snowman

The hullabaloo, hoopla, hearsay and hand-wringing over the Microsoft-Yahoo deal has me more than mildly amused, and not just because it would fill the H-stanza in King Crimson's (entirely appropriate) Elephant Talk. Somehow, Google thinks that the deal will damage the internet in some way that having opaque code that colors our search glasses doesn't. Having one overwhelming path to an answer, whether it's search, email, personal productivity apps (there's a misnomer), or advertising, is bad for the internet. I'm regularly reminded of Larry Wall's comments about the ornate and duplicative nature of perl: it's is about having many ways to accomplish the same thing, it's about having paper and crayons and not just an Etch-a-Sketch with which to express your crudely drawn ideas. That's what makes the internet good, frightening, disruptive, harsh and useful, all at the same time: there are many paths, some of which seem wrong but all equally transparent.

Personally, I think the Microsoft-Yahoo mash-up is a Truly Bad Idea, but not because of competitive or market forces. It's something that "can only end in tears" to quote one of my favorite staff peers. I'm neither a financial analyst nor do I play one in my blog, but on the surface, the deal seems to have interesting, material impacts like accounting for the premium paid, and the minor bump in net income to cover other Microsoft experiments in media. And finally, I don't see how owning an advertising platform makes Microsoft into a media company, if that's where their joint strategic vector is aimed. It's difficult to discern sources of other operational leverage, unless Microsoft wants to re-engineer Yahoo's platforms (pure cost always has a bad return on investment unless the future cost savings are measured in orders of magnitude, not percentages). The New York Times summarized the situation quite neatly by comparing the deal to building a spaceship out of spare parts.

So what bugs me about the whole deal, and makes me smile to see Google grating? It's a long prolegomena to any future meat-physics, built on three premises: (1) The difference between advertising platforms and media companies; (2) Yahoo's creed of "connecting people" and (3) the decreased utility of thinking in hierarchies.

Yahoo is an advertising platform, not a media company. True media companies make their money from end users paying for content, and in a world of long-tail economics, they grow those markets through other types of content -- blogs, linked references, word of mouth, email, tagged content, or just about anything else that expresses opinion or organizes ontologically related thoughts. The "head of the tail" will still be advertising driven, but the long tail doesn't rely on ad displays, click throughs, or content analysis to drive volume. Part of the itchiness here is that Microsoft only makes those "head of the tail" products, and monetizes essentially nothing in the long tail. So buying an advertising platform aimed at other heads seems reasonable -- and is a reflection of the media company == advertising platform structure that brought us the writer's strike.

Yahoo's creed is to connect people to their passions. I love ice hockey, eBay, baseball, the New Jersey Devils, Princeton, and my family, and aside from some very infrequently used Yahoo group-based mailing lists, there's zero net interaction with Yahoo there. I used flickr but switched to SmugMug; anything I want to tag I put on Facebook. I'm not sure where the connections are supposed to come from, and I certainly don't find clumps of targeted ads useful in these narrow, single-topic facets of my life. So Yahoo hasn't helped me find any other parts of my interest taxonomy, nor have its ads stimulated me to buy things based on intersections of those interests. Some might claim that I'm not taking full advantage of the Yahoo experience, but that's because I find the experience too much like using the Yellow Pages (the alphabetical, printed kind, not the maiden name of NIS). I don't want more content, I want more organization. Which leads me to...

The "H" in Yahoo means "hierarchy". Perhaps the root cause of Yahoo's consumption stems from holding on to the "H" in the likely ex post facto Yang and Filo acronym for too long. Hierarchies imply that you start at the general and work your way to the more specific; in the advertising platform of the future (or better yet, the media company growth platform of the future), you'll go from specific to specific. When I do my annual Locus magazine sci-fi shopping run, I'm not starting with "Books" or even "Space Opera" but rather looking for additional input from writers and editors whose output I trust, and in three years of picking my beach reading this way I've discovered half a dozen authors and consumed all of their works. No click-throughs, no banner ads, and no in-store display required.

That, in a nutshell, is the issue: connecting people to concepts (things, communities, ideas, markets) is a graph problem, and if you want to focus on the graph problem, you need to think about the edges of the graph, not the nodes in the graph. Let the nodes (the content sites, the media companies) flourish, and build a better, richer, more wonderful graph traversal experience, and you have succeeded. It's why I read BoingBoing and why getting slashdotted is so powerful. It's why FaceBook has promise, once it figures out how to get around the walls of its content garden.

But unless Microsoft dramatically changes its designs on media company status, I believe the focus will be on the nodes in the graph, and advertisements for those nodes, rather than the edges connecting the nodes. And at some point, the "Yet Another" part of the acronym expansion dominates the end result, while the "Officious" and "Oracle" potentials - to create node-to-node links that nobody suspected were interesting until they discovered passion in their targets - are forever encapsulated in the cells of an M&A spreadsheet. And that's something to cry over.

Finished Jodi Picoult's latest novel, Change of Heart, this week. As disappointed as I was with her two previous works, this one is a definite top-three list nominee. It is as rich and detailed as My Sister's Keeper, but rather than what felt like forced literary devices or a plot that rushed to get through difficult turns, this one moves smoothly from start to finish. I didn't guess a single surprise (which makes them surprises), and her new lawyer type is a wonderful character with a neurotic Jewish mother, neither of whom venture into stereotype. Most of all, her treatment of religion and belief is fantastic, in both the fantasy and exemplary use of the word. I think the book should be required reading for anyone who shapes their personal conduct framework on an element of faith.

On the heels of a recommendation, I picked up Neil Gaiman's American Gods next. The themes are similar; but Gaiman deals in non-mainstream religions while also making me question exactly what constitutes true home-grown religion in America -- something faith based, or something consumption oriented, or something we construct? And I'm reminded of William Gibson's Mona Lisa Overdrive that asked some of the same questions (using some of the same phraseology) in a very different way.

I've loved sailing and sailboats since the early 1970s, when my family would spend Sunday afternoons tooling around the Shrewsbury river in our day sailer. My father and I crewed for one of his friends on a 30-foot boat, competing in a summer race series that taught me (at the age of 12) what it was like to perform under pressure. Minus a professional league or local team to root for, we developed an interest in the America's Cup, particularly challenges held in 1974 and 1977. As I reached young adulthood, any thoughts I had of actually joining an America's Cup crew were dashed by three factors strongly against me: weight, strength and Australian affiliation. I had too much of the first, not enough of the second, and no idea on the third.

And so the thought went dormant for 30 years, until this week when we participated in the 12-meter challenge off the coast of St. Maarten. Having acquired both of the American entries in the 1987 Challenge, as well as the entire fleet of Canadian boats, the 12-meter challenge lets you get two sheets to the wind on a racing sailboat that has remained unchanged for 20 years: no bathroom and no shade. However, there was an immensely helpful policy update: no weight limit.

I fulfilled something of a teenage fantasy as I got to be a "main grinder" (half of the winch operating team for the boat's main sail), along with my son, while my wife was a primary (foresail) grinder and my daughter fed the line connected to our winch. Along with a dozen others passengers doubling as crew members, we raced on Dennis Conner's Stars & Stripes, the boat that brought the America's Cup back to the States after a brief stay Down Under, although we didn't duplicate his feats in our race for tourism dollars. Partly that weight and strength thing again, proving that some other things don't change.