A few years back, we wrote a post debunking the ridiculous notion spread by some that Craigslist was somehow 'anti-capitalist' or not 'maximizing profits' because it actually offered most of its services for free. As we noted, much of Craigslist's long-term success was because of these decisions -- which in all likelihood did increase overall profits for the company in the long run by building up further trust in the company. It may not have maximized profits for this quarter, but it most likely was doing a pretty good job in generating profits for the long haul by keeping customers happy, rather than trying to squeeze them for every immediate dime (and who was just saying that Silicon Valley doesn't have a long term view?)

Now we've got another similar story, as the LA Times is positively amazed that the popular virtual world Habbo Hotel limits its users to spending no more than $35/month, on the theory that many of its users are teenagers, who could get sucked into spending on stuff, which could lead to eventual backlash. Its CEO made this clear in a recent interview, saying: 'We didn't want a situation where teens were raiding their parents' credit cards to be able to play.... We really don't want teenagers to spend more than the price of two movie tickets a month on Habbo.'

So, how does the LA Times describe this decision? It points out, partly in jest, that 'turning down money seems un-American.' Again, even if this wasn't meant as a serious comment, it's similar to the silly claims about Craigslist. Habbo Hotel has simply made a strategic long-term decision on ways to best maximize its success for the long haul. And, part of that probably included the calculation that Habbo would have been in quite some trouble if news stories started showing up about kids bankrupting themselves buying virtual trinkets for their Habbo Hotel world. Limiting how much people can spend isn't anti-American or anti-capitalist or even anti-profit maximization. It's just taking a much longer term view of the best way to maximize profits over the long run.

Permalink | Comments | Email This Story

Remember all that hype about the paperless office? The paperless home? Heck, even the paperless life! Well, so do some Sony executives who think the persistence of paper proves that Blu-Ray discs is here to stay. Speaking at an expo in Denver, Sony SVP Andy Parsons said, 'I'm fond of recalling the old visions of the past that the paperless office would completely obliterate the need for paper. It seemed like a very reasonable, logical prediction decades ago that turned out to be completely wrong.' The only problem with this self-promotional position (besides the fact that recent research shows younger people aren't interested in using paper) is that it ignores the many formats of information that have come and gone. Paper is unique in its ubiquity, but Sony should know all about formats which die; after all, they invented a couple. While discs may be around for a while due to existing infrastructure, the clear trajectory is towards digital only as evidenced by the swing towards net-centric devices like Apple's MacBook Air, the iPhone and Dell's new netbooks. As bandwidth and net-connected devices increase, shiny pieces of plastic will disappear (for everyone but the collectors) along with their tape-based predecessors.

Kevin Donovan is an expert at the Techdirt Insight Community. To get insight and analysis from Kevin Donovan and other experts on challenges your company faces, click here.

Permalink | Comments | Email This Story

A court ruling in New Jersey doesn't seem all that surprising, but may lead to more legal questions in the future. The case involved an employee who was stealing from his employer. The employee was eventually found guilty of the theft, but argued that the evidence used against him was gathered illegally, in that it was in a password protected file on his company-owned laptop. It's actually a little more confusing, as the guy actually claimed the laptop was his, but that turned out not to be true. He had originally purchased the computer using his employers credit card... but then still pretended the computer was his personal laptop. Yet, later, he 'sold' the laptop to the company -- so realistically, the company had bought the laptop twice.

So, then the legal question was whether or not the guy had a 'reasonable expectation of privacy' for stuff stored on that laptop, especially in a password protected file. The court ruled no, that an employee does not have a reasonable expectation for privacy, and that, effectively, anything on the computer is fair game for the employer (even if it's password protected).

You can understand the reasoning there, as it makes sense that a company should feel free to go through the contents of a computer it owns. However, it does raise some other questions. Earlier this summer, we wrote about another case in which a company continued to read the personal email of a fired employee, because he had left his personal online email account logged in from the company-owned laptop. While that seems different, is it really that big a leap from data stored on the local hard drive, to data stored on a remote hard drive, accessed via a web browser? It does, however, start to become a much trickier question, especially as more data and apps move from the local laptop into the 'cloud' and as work and life boundaries blur.

Permalink | Comments | Email This Story