Tuesday, November 30, 2010

Censorship, Offensive Speech, Trolls and You

Julie Zhuo, product design manager at Facebook, says tow-mah-toe, while I say to two-may-toe. Apparently she's a thin-skinned woman who believes in the sanctity and goodness of those who operate websites, create videos or have some other presence on the Internet at which critics, disputants, opponents, rabble-rousers and trouble-makers hurl their abuse.

It seems Ms Zhuo fears the open anonymous forum where hecklers can run wild. That's too bad. However, there she is, assured of her righteousness and confident that stopping people from posting whatever they please is the path to a better world.

Unfortunately, in Ms Zhou's world, the offenders are those who post comments at Internet sites. Specifically, comments that insult or impugn the content found at the site. Thus, it seems she believes there's no harm in operating racist anti-black websites, or racist anti-white websites, or anti-Semitic websites, or hate-filled anti-American websites. Or, the most caustic and virulent of all -- websites devoted to sports. The problem is -- in her mind -- a problem of what readers write in response. Does this woman live under a rock? It seems she does. By the way, what are her thoughts on Internet pornography?

Moreover, based on her name, it's likely Ms Zhuo is Chinese. Does she not know how the communist government of China has used its total control of the press to maintain its control of the most populous nation on the planet? Is she ignorant of what it means to give a handful of people the power to decide what's good for the rest of us?

Her prescriptions for saving the Internet from "trolls", is troubling. Actually it's nuts. It amounts to something falling between brain-washing and a loyalty oath. Then there's to name given to the offenders: Trolls. As they say, one man's freedom-fighter is another mans' terrorist.

Unfortunately and dangerously, this woman demands niceness. Niceness and politeness from everyone. If the Internet had existed during WWII, would Ms Zhuo have demanded courtesy from those posting about Nazi atrocities? Seems she would.

Of course her demand for censorship and decorum would destroy the experience of being a sports fan. She would put an end to the raucous, threatening clamor that fills the air at every stadium, as well as the trash-talking among the competitors themselves.

In short, her goal is to remove the humanness from the Internet and its users. Obviously, the way to destroy the value of the Internet in a free society is to control and limit its content.

Where Anonymity Breeds Contempt


Published: November 29, 2010

There you are, peacefully reading an article or watching a video on the Internet. You finish, find it thought-provoking, and scroll down to the comments section to see what other people thought. And there, lurking among dozens of well-intentioned opinions, is a troll.

“How much longer is the media going to milk this beyond tired story?” “These guys are frauds.” “Your idiocy is disturbing.” “We’re just trying to make the world a better place one brainwashed, ignorant idiot at a time.” These are the trollish comments, all from anonymous sources, that you could have found after reading a CNN article on the rescue of the Chilean miners.

Trolling, defined as the act of posting inflammatory, derogatory or provocative messages in public forums, is a problem as old as the Internet itself, although its roots go much farther back. Even in the fourth century B.C., Plato touched upon the subject of anonymity and morality in his parable of the ring of Gyges.

That mythical ring gave its owner the power of invisibility, and Plato observed that even a habitually just man who possessed such a ring would become a thief, knowing that he couldn’t be caught. Morality, Plato argues, comes from full disclosure; without accountability for our actions we would all behave unjustly.

This certainly seems to be true for the anonymous trolls today. After Alexis Pilkington, a 17-year-old Long Island girl, committed suicide earlier this year, trolls descended on her online tribute page to post pictures of nooses, references to hangings and other hateful comments. A better-known example involves Nicole Catsouras, an 18-year-old who died in a car crash in California in 2006. Photographs of her badly disfigured body were posted on the Internet, where anonymous trolls set up fake tribute pages and in some cases e-mailed the photos to her parents with subject lines like “Hey, Daddy, I’m still alive.”

Psychological research has proven again and again that anonymity increases unethical behavior. Road rage bubbles up in the relative anonymity of one’s car. And in the online world, which can offer total anonymity, the effect is even more pronounced. People — even ordinary, good people — often change their behavior in radical ways. There’s even a term for it: the online disinhibition effect.

Many forums and online communities are looking for ways to strike back. Back in February, Engadget, a popular technology review blog, shut down its commenting system for a few days after it received a barrage of trollish comments on its iPad coverage.

Many victims are turning to legislation. All 50 states now have stalking, bullying or harassment laws that explicitly include electronic forms of communication. Last year, Liskula Cohen, a former model, persuaded a New York judge to require Google to reveal the identity of an anonymous blogger who she felt had defamed her, and she has now filed a suit against the blogger. Last month, another former model, Carla Franklin, persuaded a judge to force YouTube to reveal the identity of a troll who made a disparaging comment about her on the video-sharing site.

But the law by itself cannot do enough to disarm the Internet’s trolls. Content providers, social networking platforms and community sites must also do their part by rethinking the systems they have in place for user commentary so as to discourage — or disallow — anonymity. Reuters, for example, announced that it would start to block anonymous comments and require users to register with their names and e-mail addresses in an effort to curb “uncivil behavior.”

Some may argue that denying Internet users the ability to post anonymously is a breach of their privacy and freedom of expression. But until the age of the Internet, anonymity was a rare thing. When someone spoke in public, his audience would naturally be able to see who was talking.

Others point out that there’s no way to truly rid the Internet of anonymity. After all, names and e-mail addresses can be faked. And in any case many commenters write things that are rude or inflammatory under their real names.

But raising barriers to posting bad comments is still a smart first step. Well-designed commenting systems should also aim to highlight thoughtful and valuable opinions while letting trollish ones sink into oblivion.

The technology blog Gizmodo is trying an audition system for new commenters, under which their first few comments would be approved by a moderator or a trusted commenter to ensure quality before anybody else could see them. After a successful audition, commenters can freely post. If over time they impress other trusted commenters with their contributions, they’d be promoted to trusted commenters, too, and their comments would henceforth be featured.

Disqus, a comments platform for bloggers, has experimented with allowing users to rate one another’s comments and feed those ratings into a global reputation system called Clout. Moderators can use a commenter’s Clout score to “help separate top commenters from trolls.”

At Facebook, where I’ve worked on the design of the public commenting widget, the approach is to try to replicate real-world social norms by emphasizing the human qualities of conversation. People’s faces, real names and brief biographies (“John Doe from Lexington”) are placed next to their public comments, to establish a baseline of responsibility.

Facebook also encourages you to share your comments with your friends. Though you’re free to opt out, the knowledge that what you say may be seen by the people you know is a big deterrent to trollish behavior.

This kind of social pressure works because, at the end of the day, most trolls wouldn’t have the gall to say to another person’s face half the things they anonymously post on the Internet.

Instead of waiting around for human nature to change, let’s start to rein in bad behavior by promoting accountability. Content providers, stop allowing anonymous comments. Moderate your comments and forums. Look into using comment services to improve the quality of engagement on your site. Ask your users to report trolls and call them out for polluting the conversation.

In slowly lifting the veil of anonymity, perhaps we can see the troll not as the frightening monster of lore, but as what we all really are: human.

Julie Zhuo is a product design manager at Facebook.

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Friday, November 12, 2010

GE to peddle influence -- buying cars from the government

Talk about apple-polishing. General Electric wants to look its best when it seeks more government contracts. Okay. That's good. But this time the grooming depends on buying overpriced cars from Government Motors. Not good. Stockholders should speak up.

GE to buy 25K electric fleet vehicles

GE said Thursday it will buy 25,000 electric vehicles for its fleet through 2015 in the largest-ever purchase of electric cars.

GE will begin with an initial purchase of 12,000 vehicles from General Motor Co., starting with Chevy Volt in 2011. The conglomerate said it "will add other vehicles as manufacturers expand their electric vehicle profiles."

The first Chevrolet Volt is expected to roll off production lines later this month.

GM confirmed the announcement with CNN Money.com.

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Tuesday, November 09, 2010

Leave the Driving to Us -- China Steers Detroit

It comes down to this: I'ts better to build it here, in the US, instead of there, in China. Meanwhile, Americans working for this newly Chinese company should learn all they can about doing, keeping and expanding business with China. This deal appears to open a window through which Americans can learn more about Chinese markets that will become huge in the coming decade.

The Chinese advantage decreases as its prosperity increases. Prosperity is the condition that will level the playing field among global competitors.

A GM Unit in China's Hands

You don't need to understand exchange rates and trade wars to grasp the economic change that has come to Saginaw, Mich. Remarkably, the largest private employer there will soon be the city government of Beijing.

In the weeks ahead, a 104-year-old unit of General Motors will be sold to new owners from China. The unit made steering equipment for decades under the name Saginaw Steering Gear. Now known as Nexteer, it employs 8,300 people around the world. Its new Beijing owners call themselves Pacific Century Motors.

You and the rest of the world probably missed this $450 million deal. General Motors, still controlled by the U.S. government, gave it little attention this summer as it readied its own high-profile return to the stock market.

But it is one of the landmark deals of the era, the first time Chinese investors have bought a U.S. industrial operation of such scale and history: Twenty-two factories around the globe, six engineering centers, 14 customer-support centers. All of it will be run from Saginaw, where devotion to the company extended to a now-defunct hockey team. It called itself the Gears.

The deal will, of course, test China's nascent foreign investment and management prowess. But it is shaping up to be more of a test stateside, where attitudes against China continue to coarsen as unemployment stays stubbornly high and politicians complain about China taking U.S. jobs, if not U.S. pride.

During World War II, Saginaw Steering Gear manufactured M1 carbines used by Marines in the Pacific.

"Did it really need to be sold to the Chinese?" asks Roger Kahn, a Michigan state senator from Saginaw. "I want to see businesses successful in the U.S. owned in the U.S. This doesn't meet the standard."

Ironically, at the G-20 conference in Seoul this week, U.S. leaders are trying to cajole China to buy more from the U.S., to help right a trade deficit that hit $28 billion in August alone. Such imbalances, they say, helped feed the credit craze that culminated in the 2008 financial crisis.

All of these things are conveniently abstract at G-20 meetings. In Saginaw, they are experiencing first hand the collision of two economies in motion, of Chinese ambition and American pride.

People inside and outside the company seem gingerly accepting of Pacific Century, a venture of the city of Beijing's investment arm and a closely held Beijing auto parts company called Tempo Group.

Nexteer was in bad straits in recent years. It has been starved for capital. Its customers—other car companies—preferred it to be independent and not a part of GM.

Once Nexteer hit the auction block, the Chinese investors proved surprisingly thorough, even though some of them didn't speak English, said a person familiar with the transaction. They funded their deal with all cash, using no debt. And the opportunity for Nexteer to penetrate the Chinese auto market, soon to be the world's largest, was a major selling point for GM, this person said.

Beating out Korean and U.S. private-equity buyers, the two sides announced their deal at a small July news conference in Saginaw. U.S. and Chinese flags flanked the dais.

"I'm sure there are a lot of people who are not happy they're Chinese-owned," says Scott Somers, who runs Mid-States Bolt & Screw just down the road from Nexteer, which is a customer. "But at this point it seems to be a positive thing. Lots of businesses are involved with that complex and depend on it for their livelihood."

The feeling is more begrudging for the workers inside the company. One, who called the Chinese "commies," complained to a union official that the U.S. flag and a P.O.W.-M.I.A. memorial flag were taken down when Chinese officials visited recently. A company spokesman said he had no knowledge of any flags being taken down.

And while they like the stability of new owners, "everyone is concerned about long-term viability," said one United Auto Workers official who asked not to be named. The union recently took a pay cut ahead of the transaction. "We don't know whether the intention is to buy the book of business and move to China or stay here. We do not feel comfortable."

One can sympathize with the union's worries of a Trojan horse. Auto parts have remained a key U.S. export. And Nexteer's new owners are eager to buy the company because of its more than 1,000 patents, says Jack Chen, an investment banker at Los Angeles's Transworld Capital Group who helped arrange the deal. "This dramatically shortens the technology gap between China and the rest of the world," he said in an interview.

It is hard to know just how the technology will make its way back to China in the years ahead. Nor whether that will hurt or help the people who work in Michigan or those served by the Beijing city government.

Meantime, Saginaw must strike a most practical of arrangements. Chinese capital and access to its home markets is once again giving the city some optimism after unemployment spiked to 14% early this year. The company is adding 100 engineering jobs this year. It is expected to increase its United Way contribution after having to reduce its gifts in recent years.

More broadly, direct Chinese investment on U.S. shores may help improve the countries' fraught trade relationship, in the same way that a wave of Japanese auto plants did here in the 1980s and 1990s.

More investment may also give the U.S. leverage to encourage China to open up its borders to U.S. firms, which are frequently hamstrung by onerous investment rules.

The U.S. was built on foreign investment for centuries, reminds Dewey & LeBoeuf attorney Alan Wolff, a former U.S. trade negotiator. "And we should bolster any investment that encourages U.S. manufacturing, including from China. We'd rather build it here than there."

And so it begins. The Pacific Century.

First stop, Saginaw.

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Tuesday, November 02, 2010

Government Motors to Unload Some Stock

As of today, the US government owns 61% of GM. Later this month, after the pending stock sale, government ownership will drop to somewhat less than 50%. Big deal. The reduced ownership will maintain the government's dominant position. Our CEO-in-Chief, Obama will still hold the cards, still have the power to call all the shots and the public will continue to see GM as an agency of the government. Because it will be. And it will be an agency with plans to sell people a $41,000 electric car they do not want.

The Obama administration will have the same success it had selling electric cars as it's had staging an economic recovery. Meanwhile, to restore its potential for growth, the newly restructured GM must look for foreign markets. Mainly China. For that it must reduce domestic operations and put its limited capital into new facilities outside the US. Here, the UAW is still running the factories and there's no evidence the bankruptcy enlightened those UAW members who remain employed.

Sources: GM IPO expected to raise $10 billion; US taxpayers to reduce stake in automaker

Monday November 1, 2010

DETROIT (AP) -- The sale of General Motors stock is expected to raise about $10 billion in an initial public offering that will reduce the U.S. government's stake in the automaker below 50 percent, three people briefed on the sale said Monday.

GM common stock is expected to sell for between $26 and $29 a share when the IPO takes place around Nov. 18, according to the three people, who asked not to be identified because they are not authorized to speak on the matter. That would value the company at more than $46 billion -- roughly on par with crosstown rival Ford Motor Co.

U.S. taxpayers, who bailed out GM last year, would see their ownership stake drop from 61 percent to around 43 percent, not including any extra allotment of shares bankers could offer to satisfy strong demand, the people said.

GM has wanted to shed government control, contending that it hurts the company's sales and public image. The government will get the lion's share of the $10 billion and recoup another chunk of the cost of bailing out the automaker.

GM will not make any money from the sale of the 365 million common shares that make up the IPO. Instead, it will sell roughly $3 billion worth of preferred stock that will convert to common stock in 2013, the people said. Preferred shares pay a set dividend and are considered more like bonds. GM will use the money from the sale of preferred stock to repay loans and make pension payments.

Terms of the sale are not final because GM's board could still change them, one of the people said.

GM and its bankers will begin a "road show" to woo investors in the IPO later this week. The show, which could begin as early as Wednesday, will be aimed at hedge, pension and mutual funds, but presentations are expected for individual investors. Common shares worth roughly $2 billion would be sold to investors in the Middle East, Europe and Asia, one of the people said.

The expected price range of the IPO is higher than a forecast given by GM Chairman Ed Whitacre last month. He said each share would sell for about $20 to $25.

Bankers leading the sale are recommending that the final share price be revealed Nov. 17 and the sale take place a day later, according to the people.

Companies generally hope that shares offered in an IPO rise to the high end of the range or above it, showing strong investor appetite.

Once the IPO begins, GM shares can start trading on the New York Stock Exchange, where the company symbolized America's industrial might for more than 92 years. GM was booted off the exchange last year as financial troubles sent it into a government-funded bankruptcy.

GM is now a private company that's owned by the U.S. government, a United Auto Workers health care trust, the Canadian and Ontario governments and former GM bondholders.

The Canadian governments are expected to cut their stake from 11.7 percent to 9.6 percent, while the UAW retiree health care trust would sell less, cutting its stake from 17.5 percent to 15 percent, two of the people said.

U.S. taxpayers became GM's biggest shareholder when they gave the automaker $50 billion to survive bankruptcy restructuring and emerge as a smaller company with far less debt.

GM has either repaid or has plans to repay a total of $9.5 billion, and the government hopes to recoup its remaining $40 billion investment with the initial stock sale and several follow-up sales.

The four owners hold about 500 million shares total, and the U.S. government's stake is about 304 million.

But the total shares for sale in the IPO and subsequent stock sales will be increased through a move called a split that would give the owners three or four shares for every one they currently hold, one of the people said.

The split, which will take place before the IPO, will create roughly 1.6 billion shares of GM common stock, one of the people said.

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Chapter 11? -- Inquiring Minds Want to Know

When the grandest grandaddy of the supermarket tabloids is heading into a chapter 11 restructuring, a world of readers want the story. Meanwhile, some, like John Edwards, wish the Enquirer had gone bankrupt and disappeared before its reporters discovered him, Rielle Hunter and their baby together in a hotel. However, the planned restructuring will give renewed life to this tabloid, which, over the years, has broken lots of other hard news stories. Like the time its reporters found the store from which O.J. Simpson bought the knife that he used to murder his ex-wife and Ron Goldman.

Bankruptcy case looms for National Enquirer owner

Bankruptcy tale: National Enquirer owner American Media plans to seek Chapter 11 protection

(AP) November 1, 2010

After years of dishing tales of celebrity folly and misfortune, The National Enquirer's publisher has fallen on hard times of its own.

American Media Inc. plans to seek federal bankruptcy protection in the next two weeks or so. The privately held company, based in Boca Raton, Fla., announced its intention Monday without sharing any details about its finances.

Calls to American Media weren't immediately returned.

American Media, whose other publications beside The National Enquirer include Star, Shape, Men's Fitness and Fit Pregnancy, is trying to get most of its creditors to back its reorganization plan before it files for Chapter 11 protection. About 80 percent of American Media's bondholders already have expressed their support, the company said.

By cobbling together a pre-packaged bankruptcy case, American Media hopes to gain court approval of its plan within 60 days of its filing. That would be much quicker than most corporate bankruptcy cases are resolved.

Like other publishers of newspapers and magazines, American Media has been struggling to recover from the worst recession since World War II while also trying to adapt to technology that has driven more readers and advertisers away from print to less expensive -- or even free -- alternatives on the Internet.

The challenge has proven to be too daunting for some and has culminated in bankruptcy filings by more than a dozen U.S. publishers of newspapers and magazines since December 2008. Many of the publishers seeking refuge in bankruptcy court were saddled with heavy debt loads that they took on during better times.

American Media appears to fall in this category. One of its subsidiaries, American Media Operations, had $1.1 billion in debt as of December 2008, according to a filing made with the Securities and Exchange Commission in early 2009.

The company reached an agreement with its major bondholders in July to reduce its debt by $200 million. It didn't disclose how much debt it still had at that time.

If its reorganization plan is approved, American Media indicated that much of its debt would be wiped out in exchange for giving its bondholders ownership of that company. The bondholder group includes hedge fund Avenue Capital and distressed debt specialist Angelo, Gordon & Co., which already has gained stakes in major newspapers such as the Star Tribune in Minneapolis and The Orange County Register in southern California through bankruptcy proceedings.

"American Media is engaging in this strategy from a position of financial strength and confidence," David Pecker, the company's CEO, said in a statement. "It will provide us with the ability to compete even more aggressively with our peers in the industry."

Stiffening competition for celebrity gossip and news has hurt American Media's publications. Besides other print magazines such as Time Warner Inc.'s People and US Weekly, National Enquirer increasingly finds itself chasing websites, such as Time Warner's TMZ.com, that dig up the latest news about celebrities.

The increased coverage of celebrities may be one reason that fewer people are buying National Enquirer and other American Media publications. The company's website says its magazines currently have a combined circulation of about 6.8 million. In March 2008, the company's publications were selling a combined 7.5 million, according to an SEC filing.

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