Also in this playlist...
This transcript is automatically generated
-- ten years since the collapse of the dot com bubble and new Internet economy has risen in its place.
We're gonna spend the next hour look -- -- the web and the way it's changed our lives in the broad band that makes so much of our online technology going to show well.
The company that could not exist without the Internet plus what will wed -- -- -- -- lookalike.
Yeah we start today with Ryan -- chairman and chief investment officer -- asset management one of the first Internet -- fourteen years ago -- he's joining us right now.
Via Skype and other Internet technology and Ryan let me start by asking you -- little one of the things that I guess people have always been concerned about since the bubble bursting in 2001.
I guess it was the dot com bubble.
How do you values and these Internet stocks because there's still a lot of them that are very high flying stocks aren't there.
Well surprisingly it's actually much easier today it was you know ten plus years ago you know back then we -- looking at.
Companies that they had barely any revenue losing money.
I'm trying to get a handle on where they might be -- five years actually most of the major Internet companies today are very profitable high margins.
Good to -- all.
And does so actually today -- -- we can argument valuations -- but many of these companies are very profitable.
And actually he really run the gamut between diamond group -- in the Internet sector believe it or not.
Brian I have to tell you that did you McDowell and I ten years ago certifying your -- when we were journalists -- thestreet.com I remember when it -- I remember at all bank.
And back -- the -- And we thought you were crazy could you are holding stocks that had didn't make money they're down seats are all bright red.
Think it -- it used to be a risky bet back then to get in your fund these days you can argue some of these stocks are you know -- big slow and steady -- of our economy now.
There are many who -- very profitable niche you know ironically I think one of the reasons why the technology sector in the Internet sector perform well this year.
Is that as a result of that crash many technology companies are probably over capitalized had a very little debt.
Lots of cash and the good news is for our sector is -- sluggish economy because -- these companies.
Our secular growers gaining shares in the market.
You know and again not kind of group we saw in the last few years but still growing.
The stalwarts Brian apple Google those U2 biggest holdings but you're missing Amazon explain to me that one.
-- -- -- -- You know -- really you know weekend.
Probably a little too bearish in terms of how they were merely maintain margins and we got really down -- the Amazon it would grow.
Or staff you know continue to establish -- -- dominant online e-commerce player.
But in the past they've been very and quick to our reduced margins and increased promotions to drive sales.
I this year they have -- do that.
So you know the numbers look spectacularly good right now I -- I wouldn't be a little cautious we still don't own it.
On this one obviously watch but I eat I get a little careful because you know again it's sales start -- slow.
Amazon won't hesitate to.
Cut prices increased promotions and probably lower margins so you know I think a lot about design and right now it is it's pretty fully priced in probably the -- separated -- we will work here.
I would have learned through the whole thing I mean you got hit the hardest -- when the tech bubble balloon and we -- Waltz in there watching the whole thing happen.
What did you learn from it I mean it does does your choice of companies change now although I -- is still on thestreet.com got a lot yet I haven't -- and that maybe the but you still on Red Hat that was something -- -- for years now I mean has has your -- your thought process changed after the bubble burst.
What has it in net you know now he -- it is much easier to value these companies.
And they really run the gamut.
From you know quads I value -- situation volatility Yahoo! two pure growth situation now -- -- -- Not work were Google's so.
-- you really can can can go in the sector and depending on what your risk tolerances are -- value or growth investor.
You can really find interest in stocks and he mentioned thestreet.com.
You know not treating not treating too much about that -- -- the balance -- so.
You know they're having their problems but -- decent franchise and you know we think that you know some -- some companies -- it -- and I valuations that we find attractive.
-- yet Baidu.com.
As -- the Chinese Google.
Odds when he is small holdings but yeah is that a way to play China -- see that is being just sort of a few years behind Google but still having -- had a growth that Google enjoyed.
During the bull market -- 40506.
Well as dominant as Google is in the US.
-- is in China.
And -- hasn't -- advantages that you will never had here in the US switches.
I'm implicit backing -- government -- government of China is very hesitant to allow.
Foreign media companies to gain that too much market -- so.
You know we think I give this isn't it usually -- position now paying ever higher price for the shares and that's -- the smaller position for us.
But -- -- -- very bright we -- Dallas search part of the advertising business and is the most lucrative so it's a good holding.
I'm the Chinese holdings for -- in general in this scenario -- increased are waiting Saddam.
We do you see.
Probably some of the best growth opportunities in China today with the Internet space especially given the sluggish outlook.
You know we expect here in the US.
Yeah right I'm gonna ask you actually -- that what -- you going forward what stocks you have your I am that you -- you might be dipping into going forward is it something in China.
Yet there's a few.
You know we'd you know we increased our positions in companies like -- cnet.com which is a very large -- in China.
We've but I increased had a a large position.
In -- in the past which is the largest online travel company China.
-- these are companies that that are trading it.
It'd -- relatively high valuations you know 2030 times forward earnings.
But they have terrific group to back it up music companies that are growing you know 304050%.
And and the profits look great and you know when you look at what we went through in the last year if China had -- -- -- GDP to about 8%.
And that's something that -- whole you know still can support a very.
Significant growth for for a lot of these companies so.
Just in terms of what we're seeing today it's where were you know allocating more capital.
-- -- -- -- I Apple's one that day that's what -- largest positions.
It's not undervalued here but I don't think it's overvalued.
I think that you know you look at apple again it's like China and that has a pretty long runway.
Very little market share in his cell phone business still low market share in the PC and laptop business.
You know as long think -- heated debate on the -- picture looks very good so we're very -- what.
And you certainly can't fight that it's moving and it's moving Gergen and Ryan -- you are so good to see actually -- that -- Santonio over the last ten and right Jacobs chairman and chief investment officer Jacob asset management.
I -- we're watching this and one and I can't you -- Little -- Well he's done well in the -- like you said you know this of surviving the bubble we actually talked to a lot of people.
That survived that Internet bubble that dot com bowl and the 992002001.
-- and hate.
Isn't one of the biggest things behind the Internet as we know yet certain Rebecca Jacoby senior vice president and chief information officer of Cisco Systems joins us right now -- the company had survived has survived you know.
Several downturns in the economy and -- -- you know one of the most fascinating things Rebecca.
I think about Silicon Valley in the 1980s.
-- insists he'll be in 1980 Fuller.
And I think all right -- so why is Cisco Systems why didn't somebody else like these two computer sciences at Stanford.
Think this -- there -- thousands of -- really Smart people around the world.
It couldn't figure this out how would -- able to do it and get routers and switches and get this ball rolling to what would at some point -- be the largest company in the world.
You know the founders of -- -- where.
-- husband and wife team that did work at Stamford.
And their basic challenge that they were trying to solve ways to communicate would be -- I.
Across and buildings where they were -- -- not a logical challenges between the buildings and so from that they basically came up with the idea but they multi protocol.
Router and isn't that being right here in the Silicon Valley.
That the basic fundamental offering that that.
Gave us was connectivity and connectivity across.
Of wider sphere than was previously.
I take that kind of I -- communications services that can be built around that kind of activity.
And really -- businesses today in bringing fundamental value to their customers.
I mean but but how do you maintain your leadership position in this because you guys are like the network of all networks in you big daddy -- -- say that the dad Vietnam -- the guts and you have.
-- the -- of the Internet.
The Internet is what we affectionately named Matthew.
In the -- they would be.
Basic business strategy -- Cisco is really based on catching market transitions.
And taking that fundamental offering of connectivity.
And applying it to the market transitions.
That are available they actually bring value to our customers and so basing our strategy on that and positioning ourselves.
As an end to end architecture that that enables that that kind of ability take advantage that market transition for both Cisco.
And for our customers to take advantage of those market transitions has been sort of the hallmark of our our ability to stand leadership position.
So Rebecca you start by connecting to buildings in and twenty buildings and and twenty cities and an entire world and basically that's where we are right now.
How do you continue to grow and such in -- quickly rapidly evolving industry where.
It seems like actually might have somebody nipping at your heels and on the sudden you've got to a brand new Cisco that that's found in 2010.
And is taken over from.
Well the fundamental.
Vision of what we believe this productivity -- there's plumbing of the Internet shoppers it really changes the way people work live -- learn.
And that fundamental offering still exist today and it's gonna continue to exist.
I into the future but we had to evolve our organization to be able to take advantage of the market transitions -- -- Am so what we've done is we've basically changed our leadership structure into -- that we -- councils and boards.
-- and a collaborative leadership model.
That allows us to be able to stay on top of the market transitions at hand and the market Jason sees that we -- get into.
To be able to take advantage of that opportunity.
In a collaborative fashion bring those ideas to bear and then allow the power of the large organization that we have tape to really go after producing.
And businesses in those areas at scale and with operational excellence.
Rebecca we're asking everyone today what do you learn from the dotcom bubble bursting -- you guys -- right through it.
And for the most part you held on fairly strong had to do it and what did you learn.
You know as a business and I was personally here all through that period.
That as a business I think what we really learned is to proactively look at that kind of an economic situation.
-- situation that we had in the industry at the time.
And I understand how to catch the market transitions of the future pro actively invest in those transitions.
And probably above all else keep the relentless focus on our customers what was happening to our customers at the time.
And what was the opportunity for our customers in the future and position ourselves.
With -- into an architecture to be able to again bring back I need to let the customers.
End to bring -- -- business as a result.
-- we've seen in the technology space IBM got too big they really did they weren't nimble anymore -- seen it in the industrial space in General Motors.
How do you avoid getting too big to where you can do you think you've got to be able to move rapidly and you avoid that can you get too big.
Well you know the object and businesses to growl and so it's really a matter of how you get -- and really.
Looking at the marketing Jason sees that are able to -- be synergistic and take advantage of the Internet and the network as a platform as we move forward.
And the way that we are doing that is evolving our business in the -- councils and boards with a collaborative.
Business model -- that we can identify the appropriate market transitions and go after them effectively.
And rapidly and respond in a nimble fashion as -- -- polling.
Rebecca I've got to point out stacks up like 2.4 percent over the last ten years your holds -- on -- Cheryl this clearly -- happy about holding on.
Thank you so much for being with us Mike thank you thank you you have -- Jacoby senior vice president and chief information officer at Cisco that's ultimately -- -- At one point in time that the and -- so I can even say I don't think yet to be Smart enough to even -- -- -- not do it on the one point time there was five.
Hundred billion dollars during the dotcom bubble before a person they lost about.
Four fifths of their value and as you said it climbed out of that Lisa hey happy today hit -- they -- -- -- -- so many others.
You talk about coming expense five point two billion on R&D and that's why they're doing it we'll be right back.
So I welcome back we're talking about you at all our long -- a move that has been compared -- the new deals Tennessee Valley Authority.
The Obama administration has allocated seven billion dollars in the stimulus package to getting the entire country connected the broad band cable.
Joining us now to talk about where that stands Steve Friedman.
-- American cable association Chief Executive Officer of wave of broad band Steve.
Welcome to the show.
Thank you very much how is that money being spent how where are we in this process because that's what a lot of people want to know what the stimulus money.
Well at this point.
The initial applications have been submitted by.
Broadband providers we have submitted our from our company and in fact.
The cable association and -- represented American cable association.
Who represents small and independent sized companies we've submitted as much as a billion dollars in request for some of the stimulus dollars were waiting for the government to tell us.
If we get to use utilize the money to build out unserved and underserved areas.
Net that seems to be the theme across the board -- with the stimulus money -- backtrack a little can you give us a little background and history unaware.
We brought -- -- where it's going and what your plans are I guess with this money.
I guess I'll start with the last question first it.
The many that we've requested is really to build into.
Unserved areas we believe that there are areas.
Kind of towards the edge of our of our footprint of where we serve today that are not served with the -- -- broadband capabilities and we'd like to build that out to them.
The money will will help us upgrade areas that don't have broadband as -- -- as well as to allow us to build middle mile back.
To the Internet so that we can deliver the speech that they want.
As for our company we are a -- midsize cable operator that operates in some of the major market areas -- suburban areas of the West Coast.
Built out our networks all of our networks to provide.
Broadband access as well as all of that the video products that are customers would want.
We build a scalable network that allows us to provide.
Good reliable high speed services I'm very proud of how well we operate our Internet services to our customers.
We maintain high speeds are among the fastest and most reliable in the country.
And we constantly are striving to maintain that so so that we can provide a service that our customers expect.
Steadier in the midwest -- -- not the mints or the Pacific northwest Washington organ it area in the ASEAN -- nearly 11100 member companies.
How are you gonna get a coordinated effort to deal to bring broadband to all these rural areas or will it be very fractured.
Well it won't be fractured all I think it is.
Our members are the type of companies that have been building broad band out into the into these areas for years in fact we we've -- I think I believe we lead the way we have.
The cable network which is really -- fiber based network with.
Coaxial backbone into -- last mile.
Is really in my opinion the best way to deliver high speed Internet services to customers are members who are privately funded -- owned businesses.
Small independent companies have been doing this for years and other ones who have really expanded broadband throughout the country -- ready.
Still a big challenge could quickly is that you need the money to get brought back into the rural areas of our country.
That's really what you're waiting on the stimulus money for.
We we believe the best way to do this is for us to allow us to go build out into areas.
Better answer that's correct we're also trying to make sure that the government understands that our networks are really the best the do this.
And that we're also trying to make sure that the government doesn't start awarding money to places.
Two two operas are trying to build where we've already built broad -- we don't want we don't believe the -- should be intended for companies.
That are just gonna simply build another another -- -- reports -- -- -- Thank you Steve we appreciate you joining us today about advice.
Thank thank you very much -- Steve Friedman chairman of the American cable association Chief Executive Officer of wave broad that.
-- out there in the content that's how we produced I guess I guess do you want to pay court to go and to rural Thailand hate.
Anything these days I'm broke connectivity is also the key to another grant initiative upgrading the electricity grid and -- talk about the Smart grid.
He's a Smart guy -- leads market analyst at green tech.
The -- media OK I hear things we got to start with him.
It basics let's just presume Chris and I know nothing but desert that we are not Smart as you might not Smart would -- -- and I -- -- this is not a Smart grid here I would suppose actually in the last six months the terms marker easily hitting the pop left lexicon so.
Obama -- market on -- Our men John Chambers CEO of Cisco said this is it a market but could be bigger than the entire Internet what -- -- -- really is it's the convergence of three.
Sectors that we specialize in.
Energy and networking and so you're bringing three core competencies of this nation and the American converging on together.
-- -- -- -- His religion and grit like it's information flowing through wires so right so -- -- -- upgrade our greatest for parts of the generate the energy and everything transmission.
Distribution and the consumption.
What we're doing this and like the iPhone were -- -- -- communication platform on top of it.
So you have the you utilities -- the network the wide network the neighborhood network in the novel home networks and about Smart home that Jackson -- So once you have this platform in place.
What what's really studies -- -- on top of it so we're now building did that four billion in and stimulus funds when the Smart grid.
Plus the four in matching grants a billion that's -- primarily go into building this network that's the Smart meter at the home.
Which -- that the communication networks and that's that's the reason the last six months Cisco oracle Intel Microsoft Google.
-- all on board Lockheed -- everybody wants in on this.
You mentioned a billion dollars that's out when I think that a Smart -- tying all this stuff together at the eight million dollars is going to be a drop in the bucket outspent of this union as a -- well that's a good question I mean the electric power research institute at street estimates the -- -- -- -- 165.
Billion over twenty years -- -- that actually breaks out to eight billion a year -- so.
What while on the one hand these.
Mean this is a pretty.
Awesome endowment that -- -- is giving this industry.
You know it actually may just be the bare minimum to time and time will tell I mean what I have seen as I got the guys see that.
The CEO of China state -- speak a little while ago in what what they're doing is.
I mean they -- unlimited budget for Smart -- and Korea are all of these nations they have the same.
You know it I mean just huge global market in play here so.
We're really you know I think there's an -- national issue here really -- -- counted silicon valley -- smarter.
Can address a bunch of people have written in saying that this market is the road to more government control can you address how we're gonna keep the government out of -- Well in some sense you need some government intervention I mean protecting the grid is fundamental so.
Deter foreign hackers so there have to be some.
Federal involvement in this is everything sits on electricity.
But in terms of one of the applications this market when should -- about this -- layer.
If you can -- demand response that's incentivizing.
Utility hurt customers to turn down power.
On demand so you know that the Con -- sends you a message of PGA.
Turn down air conditioner and you autumn -- automatically do that be some contracts arranged so there is a little bit the Big Brother feel there.
But it's only what you agreed to -- contract.
And the savings there here's the thing in Germany and -- -- think they've already got in the homes.
These home energy management networks the average age is 5050 years old at the users so it's not just young -- people.
When people and especially a downward economy there's a recession people going on they retire in the pension fixed income.
It's really attractive energy savings it's really dead simple -- you have the right technologies in place it's a lot of coal companies are playing in this market.
The -- -- -- companies you mentioned some of them I know the Cisco's of the world and whatnot.
Are they gonna put the money forward to make this thing happen.
And do you see that as -- reason why somebody might wanna -- you know invest for the Cisco with any of these companies because you're talking about twenties -- on about long term.
You got -- -- and really putting a significant investment.
Into this market.
Yeah I Cisco -- China said their budget for Smart grid is unlimited so you can expect.
These companies that really built the Internet I mean it's their core competency at play here networking.
You know it's kind of a very similar to its infrastructure network in and points the difference here though is that -- trillions more in points everything you plugged in it's part of the market.
And also a big -- -- market is actually on mentioned.
-- renewable energy.
Well and that's that's how the whole thing's gonna come together -- has sent out of this maybe -- come back we'll keep talking about David -- I think market analysts agreeing tech media.
While we're talking about these days aren't well and you throw in everything -- You literally renewable energy in there and that gets a lot of it was cited exactly I still ahead the CEO of -- company that survived.
The dotcom bubble yet again we talk about them -- -- -- Welcome back everyone we're talking about the Internet all our in on the latest change the way we do business and we -- -- -- photo sharing company Shutterfly has been around since 1999.
That's that was like the perfectly wrong time to start out at February Internet company it may have been the dot com bust though it went public in 2006.
Six -- house and bold -- the sealed Shutterfly and joins us from -- redwood city California never go to some beautiful parts of the country today aren't we Redwood City is awesome.
Jeff thanks for joining us today.
All right tell us a little bit about how important the holiday season is before you didn't you know how you guys -- survived -- what does this holiday season how you guys doing.
On the holiday seasons very important to Shutterfly it's the time when people want to make personalized gifts correspond with the people that matter most in -- life.
And they're using our award winning photo books and how hard sell stationery.
Personalized calendars to tell those stories and to give -- that matter to people.
From a business standpoint.
You know it's just a couple days about busy.
Fourth quarter but the period from Black Friday to Cyber Monday was good for us and consistent with the overall trends where online retailers.
Our continue to steal share -- traditional offline retailers.
Stepped up first I have to tell you I'm a faithful user -- me.
Yeah a creative or eighty I can -- -- I can't put too close together and I make Christmas cards this.
My holiday -- -- -- already.
And his group I make albums for my mother I and really I am.
A creative technological idiot and I can do this but let me ask you started.
Back when you started we had snap fish we head back.
And you survived you've -- then he came out on top you won an award bad in 2009 good housekeeping -- -- overall winner.
What website for photo books award how did you how did get through all that.
I think -- core to our success and why -- the market share leader.
Is our relentless focus on the customer can continue to make it easy for people to interact with their memories and to create lasting.
-- products like photo books and cards and calendar.
Howard designed forward as static.
How -- fantastic quality because we've only once in the industry that own our own manufacturing.
And then the way we treat our customers.
We have a 100% satisfaction guarantee.
We don't force people to sign in.
We never delete your photos we hold them in the original resolution.
And I think it's really knowing that customers treating them well and continue to invest in innovation.
Like on new simple path -- sharing platform that's allowing us to keep ahead of the competition.
Jeff I gotta think social networking is at the top of every strategic planning meeting you guys have whether it's.
You know MySpace certainly all of these -- IPhone apps that Google phone apps all the stuff now that it was starting to use I gotta think that you guys got to be really dialed in the that.
We are social mobile media is core to our go forward strategy.
Our Shutterfly share sites allow people to take the best of blogging.
Social networks and photo sharing site in a very secure password protected way to be able to share their personal memories of the kids.
Of the soccer games and and we memories in a way.
That they feel comfortable but we also opened up -- platform and we integrate with FaceBook with MySpace with your personal blogs.
-- but we give customers the control and in from a mobile standpoint there's nothing better than being able to take your memories with you on the -- wherever you are.
And so throughout iPhone sharing -- and a recent acquisition of tiny pictures which is providing new products and services in the mobile and social world for us.
We think we're very well positioned for this explosive phenomenon that's going on right now.
Jeff is the way to go though did you have all your photos on the web and -- saying wits and made my ears -- you're never gonna delete these photos I mean.
I had three kids my thirds baby book is still on a box never and it it she's gonna beat me down Sunday in Canada have a rotten mother because I never did it.
Had I put everything on the web it would still be there so does that mean this is you see a trend in this.
We think holding -- regional resolution and never deleting -- customers.
Is both important to them you know -- hard drives crash and fires happen.
We think from a business standpoint.
It it further extends that customer trust and that award winning.
Loyalty that we have without customers and sit down the road where you gonna go for your memories it's going to be Shutterfly there's no reason to go anywhere else and like you I have three boys two and you know here's my -- hard and it's those precious memories that.
You know are really what's matters in life and the brand that we're building which Shutterfly and that trust with the customer I think is gonna return value for our shareholders for years to come.
Jeff thank god you guys weren't around when I was in college although the and some.
Didn't I second him tomorrow it could be seen all of these are not about -- We appreciate it and say yeah grace happy how I think that I -- I love this -- did house involves sealed Shutterfly.
Yet thank god.
About saving those photos for her parents and they're already you know we've already put them on the website if you -- that -- spring break and doesn't -- -- with a mullet.
-- it's historic in its weak a moment for the kids move on.
Our next guest is working to connect everyone to live by and you may set Martha -- is the CEO of wired towns muscle -- -- being here.
Thanks for inviting me OK so the notion is to just get everyone no matter where I go I can get on live.
-- do this without having anybody.
Well obviously people do pay fort.
We have three locations we'll launch -- New York City this year.
Times Square for the this -- improvement district there that's sponsored by Yahoo!.
And Rockefeller plaza and union square -- that sponsored by the site collection.
-- that's a that's a start.
One of the things I notice that those intriguing you you have.
That's when he Wi-Fi hotspots worldwide but from what we have and spread out at a news in the states and Africa -- -- an in your written.
Is this common.
In -- industry the way you would have and that's pretty well.
That stems from the fact that I formed a partnership with -- global wireless network integrator.
Headquartered Finland there in forty countries can be called them -- And and I figured -- we need that to really scale that's so it's it is they that actually built out those other location send there's a lot more to come.
There's a huge demand for Wi-Fi.
Largely because the carriers cannot carry all this mobile data traffic on the cell networks they absolutely need to -- those who have build a -- What's that that's a good point because each each year in the -- worked out -- -- you know disparage -- do you have of it.
There's so many people -- iphones that it eighteen C the network can't handle it you know another generation network it can't handle it and that's -- people always say disparage them because I didn't know.
I have -- people say it doesn't work.
Is that what you looked civil at some -- on down the road solve.
With Wi-Fi and having full life like -- while all all the carriers are are trying to solve headache eighteen Tebow played -- -- -- in part for that their victim of their own success.
So well they're needing to do it Cablevision.
Spent what 250 million dollars but wife and their footprints.
Reaching out to regional telcos who are looking at the same issues.
And we can we can roll this out.
Really nationwide even worldwide if if -- to -- -- are you making money then.
These -- large contracts to two brought these networks so we're service provider to these tell -- and that would hopefully government salary.
So you should you then bring these people and they advertise basically all of the area has been -- so I go on the Wi-Fi that's for instance say the one in union square.
When I come on the Wi-Fi I get on and did advertising.
Business owners from that local area advertise on that Wi-Fi.
Well currently union square what we have is.
The scifi channel has that's a sponsor so you see.
Upcoming shows and events but you'll also see it interactive map where to shop for design points of interest.
Four local businesses.
-- it's a very local.
Technology I think -- -- that localization the Internet.
And it in this economy obviously you want to do as much as you can for local businesses.
How much government spending is there in filling out this Wi-Fi network right now well.
Well if you're talking.
About the -- -- -- package that's.
What seven point two million billion so you so your portable that well actually I'm not getting any.
I mean this is all self funded and but should.
A great recipient want to -- Look at where they plan to deploy we would certainly you know weighing in our opinion McCain got so what's the future -- -- next.
We are looking this coming year to creating the largest Wi-Fi hot -- and in.
In the US and in the in downtown in this city to be named.
You can't say that's right.
I love -- and -- -- your area -- today.
Thank you Marshall brown being that -- thank you -- of wired towns.
In my town wired you in New Jersey.
I'm guessing that's not where live -- and the big metropolitan -- that examines their Hummer I.
We'll be back stick -- all about the unit today that a lot of it's a bit of futurists coming up later on this again.
That virtual world and mind.
I welcome back from helping veterans deal with the stresses -- ward a fund raising for charities that job interviews the world.
Of second life keeps growing online marketing that is the CEO of Linden -- -- -- now from another drink cities San Francisco.
And now Marc welcome to the job.
Thank you for having me I'm virtually if it's -- first -- -- that was what Linden labs is that you.
I'll let you do that.
Sure about a decade ago Linden lab built a virtual world platform which we know today -- second life.
And over the last seven years and millions of users have created this amazing.
Virtual world that it for a land mass would be about the size of the state of Rhode Island.
And it's filled with incredible content and experiences.
Everything from art exhibits to.
-- beach fantasy locations to corporate conference centers and that today.
More than 750000.
Users and spend.
A great deal of their time in second life every month.
And on top of this incredible platform creativity.
We've built this virtual goods marketplace and this year there'll be half a billion dollars US in user -- user transactions.
So it's a virtual world where you can create an incredible experience that.
Enhances and extends the the real world.
And that allows you to go places that you may not be able to go.
OK so just so everyone understands this is an online three -- virtual world.
You create these characters so I could create my little avatar person to be.
You know -- -- like still Tuesday and you already -- -- -- Now I don't know whatever yeah you could -- right I -- we create and dream girl get a dream guy we can all go shopping live happily ever after.
You can be anything you want you can be a robot or you could be and you know as as a seven -- -- with -- -- -- Or you can be.
An exact facsimile of of who you are today and and every user creates an avatar.
Which is their virtual identity and and through that avatar they -- -- wonders of second life.
Know you could be an eighties teen with a modified anyway -- -- I think I.
I understand each day you've summed up for sale somebody gives you money you give them the product and there's an actual transaction.
In -- virtual reality.
Where's the money being generate ideas whereas the commerce being generated if there's nothing really -- being transferred back and forth.
Well am I would add people buy digital goods today that are that are.
Something we can all relate to you buyer ringtone for your cell phone or you buy.
A -- forward having your iPod.
Those certainly those are digital goods that people pay real money for today and the same is true in the virtual world space if you -- -- buy clothing for your avatar.
It's very real because you don't want to walk around -- as an avatar.
Adam and and people will spend and do spend.
Quite a lot of money.
I'm making their virtual identities -- identity -- their comfortable way they buy houses they furnish those houses.
And all of that is supported by our virtual goods marketplace.
Mark on the you don't know my habits I would be more than comfortable walking around -- -- I haven't because again it's virtual reality it's not real -- But wait we're -- struggling today to pay the bills on our real home thing now you're saying that went right and put aboard real close and she is so this is.
An additional costs are you still seeing people come to the table and clothed and housed.
Absolutely -- a matter of fact that our virtual economy is growing in an incredible -- Last year for the full year it was that 350 million dollars and this year it'll be 500 million dollars so.
The cost of virtual goods are incredibly compelling very entertaining and it's also very functional.
But I think the most powerful story about the virtual goods marketplace is that.
People are coming to second life they're -- businesses and they're making a living that they can't make in the real world.
By creating and selling virtual goods into me and an economy like this that's an incredibly powerful story.
-- you think this is it L wave of the future that people are gonna start doing this more and more.
Oh absolutely I think it's we see it already right I mean it's already a very very credible business with 500.
Million dollars in user -- -- transactions and.
Growing at a rapid clip in the reason is because increasingly.
The Internet is becoming a three dimensional experience not you're starting to see it already.
In very very simple games on social networks people have a real desire for a richer level of engagement that you get on the two dimensional -- And that virtual goods are incredibly compelling.
Also for many variant -- entertaining and functional -- so yes we see this continuing to grow up I could on Christian movement on shoes in a virtual war on.
And their real world active feed my children my -- and CEO of Linden lab thank you so much for joining us and check it out at second life dot com.
Are often a virtual world to the real world of night -- tech entertainment is the place to go when you wanna go out into Fox's the CEO of track.
And you came into being here thank you fattening how do you use the web to make and I life.
Well we've commercialized -- all over the country so.
We've taken big brands.
Pepsi's the American Express hasn't given -- programs.
But the nightlife community but the relevancy there is that we have this really rich web -- club planet and New Year's dot com and all these holiday web -- the drive consumers out in the real world.
So at the end of the day consume comes -- one of our web properties and actually clicking on the real world and -- the the outset this was me trying to get in the -- to meet girls there was no business model is purely social.
Today it's a thirty million dollar revenue generating business so -- it's evolved a long way but it really started in the truest sense a guy was -- Federline until quite.
When you started this in the late ninety's.
I mean -- there where thousands of dot -- out there.
How did you make it through and we've been asking everybody is today when so many did not make it through 2001.
How are you able to do it.
I mean and -- this is the most appointing even today.
We always had revenue generation plant that was always revenue associated with -- and we do you look at the website today.
Tremendously -- in terms of e-commerce in this advertising.
-- we supply a real service we drive consumers in the -- these establishments and they pay for that so there's a value proposition there and.
When you're giving away ten dollar bills for nine dollars like a lot of dot -- war.
Inevitably there -- going to go out of business and inevitably investors literal run for the hills.
When they saw that Yahoo! can only post.
You know a hundred million dollar profit was worth more than GM Ford and Chrysler at the time combined.
So just great blocking and tackling I think that -- kind of stuck to our guns.
This year will be involved in over 101000 events.
-- produce upwards of a thousand of those 101000 events.
And that's a very compelling little business yeah.
And how you're involved they'll like let's say I went on the site I went to.
Miami that's just because that's what -- do.
And then let's say I wanna go to mansion dew I click on and somehow you get me in the door I don't -- -- -- on time kind of sense and no lines.
No lines so you can person prepaid ticket.
To the club.
Which will guarantee you admittance into the club.
As long -- you're dressed appropriately the club does have some discretion that's where you can -- -- -- Mom you probably could definitely not commercially yet.
Real -- they think because they -- and we have to feel that we have some great content we we've done probably a thousand plus videos on the site where we've decked out girls and ugly clothes and try to get them in the clubs and implement hot clothes and just to create content.
You know depending on how risky why -- always get them but I'm -- does miles from the guys like me people who really didn't have access and that opened it up for them yeah.
But OK so I pay online I don't have to wait online who -- -- -- -- paid here how does the money to.
-- so so the clubs basically on how the face value for that ticket and we basically make a market and that so we charge a commission to the club Freddie ticket that's sold and then the consumer -- a surcharge for a ticket.
So I'm Palin Marta -- online and again now actually pay the same amount in some cases they'll send the budget pre K so that they know how many people -- So the business model really is is that where they can't buy side and -- -- commission on the transaction.
-- also partner with some -- really big companies American Express and -- what are you doing with them because that's obviously on the individual aside individual goes on the site.
How are you working with -- to create big event.
That's what we're trying to say hey we've got is really relevant consumer base men since they're still relevant and and club plants case over a million unique because people a month overall outside so that eight million visitors a month so -- and what continues consumers online if you're Smart Brand.
Then let us coming and talking about -- reaches consumers in the real world also through compelling events and so.
The Heineken -- houses of -- all do these experimental events any way to reach consumers to my media bias the guys who are selling media to.
-- you know to the media buys -- going and saying hey listen.
You buy a 100000 dollar I don't know website were very appreciative.
But we can also blow this out and let us tell you -- and it's always around events and that's -- talk about those thousand events a year that we're producing.
We're going and market and we'll creating this lifestyle content -- Like what -- bikini contest on the beach sponsored by Heineken.
-- It -- -- for us it's a little bit more sophisticated but we -- single and fabulous events we have Halloween events we have New Year's events we have Thanksgiving events we have vowed to hunt.
-- every month from January would start to Sundance and New Year's -- that ends in December we have something every single month those consumers all over the country.
I've got to think that buyers media buyers want more of that interactivity and buying a billboard and things like that just seems to me while there's a lot of relevance is that right and you know the brands wanna touch -- -- potential target and I think that specialized e-commerce in the future is going to be very very successful.
Because vast majority of web -- can't just survive.
On advertising revenue it did just there's not enough meat on those -- because the top ten media companies take 99.9 percent of that revenue.
-- thanks so much -- thank you very much and.
It's in contact with some like that thank you -- -- out of track entertainment.
After the break what -- web.
Three point oh look like fully ponder that -- little I'm pondering will be back.
Matt -- by the Internet our.
Do we see in the bubble of the collapse and now they rebuild so what comes next Patrick Tucker senior editor of the user.
Magazine and director of communications World Future Society.
Joins us now from Washington DC.
Patrick thank you for being with us some we're -- hating me having our charts before the end of the half.
So please tell us -- what what is the future of all this is man it is survived ups and downs and still hear the -- not going anywhere.
What we're used to.
Thinking of the Internet as a communications medium.
We exchange little messages back and forth in the next ten to twenty years.
The Internet becomes more like -- utility it's as common and every day as running water and -- begin to expect the presence of the Internet.
In a lot of different objects to come in contact -- Our beds of seats that we interact with our clothes possibly but -- -- thirty it's not.
Far fetched to imagine that we -- incorporating the Internet directly into our biological functioning and it's were interacting with -- in what we see and what we hear it literally in our brains.
Patrick I was just.
Closer and closer all the time.
How do you come up -- that.
Had made it twenty years from now we're gonna grow so much it if we become more technically advanced.
Then we did throughout history in the next twenty years so how can you even conceive of that you're in 2000 not.
Well if -- all of the arc of technology has advanced of the twentieth century.
We made more technological progress the twentieth century event.
Throughout the rest of recorded history and will probably make more technological advancement the next 25 years in -- and over the course of the twentieth century could file.
Just the art of technology.
Do you not have -- computerization that we have the price of that computerization and how that leads to further renovation.
And you look at something that we have already today that point two out of his future and how it's going to be there for all of us.
For instance right now we're having a great big debate about health care and how to pay for health care and how to care for 64 million baby boomers that are getting kind of older every second well.
Big portion of of caring for old people in the future comes from the Internet it comes from constant monitoring.
People and their biological functioning all the time.
In the next five to ten years we'll do this in a very terrestrial way.
You'll come in contact with sensors of the course of your day that will tell you about your caloric levels -- activity levels all of that goes to a website your doctor can see it.
And you're going to.
Be able to dialogue with him about how you're feeling at any time you're gonna know someone else that might -- we'll know who are symptoms and before you do.
And this is happening right now there's -- out of North Carolina called Renaissance and what they've done is they've created -- am.
Outpatient health monitoring system for asthmatics.
If you suffer from asthma you -- this device in your house and fewer doctors able to monitor the pollution levels in your house the -- levels in your house at any particular time.
And let you know.
That door house currently harbors and I'm a very high level of of allergens and -- -- -- -- take -- while it's just.
So Big Brother while that's the point I was gonna make Patrick yet I can I'm not gonna have to talk to -- -- -- in Greenwich Village about the ACLU.
The next time down there and Miami.
Go -- like it would that's what it sounds like it sounds like in twenty years it was going to be about before I don't know anything about -- Well privacy is going to change drastically of the next thirty years you know what kind of music yet.
Well it could be something that you sort of pay for.
It's not something that our culture seems to value was highly as we did and what we're talking about right now are our voluntary.
I'm displays of your health and what you're doing that you would share with your doctor but it is a real concern -- More and more data about you was collected all the time you're constantly networking.
Even if you're not doing consciously.
By just sending signals by your heart rate your caloric -- -- this information and all of that theoretically can be readable over the Internet by them.
By someone who has either you know communicate firewall hacking software program -- someone else.
Patrick that's great stuff thank you very much we appreciate it.
Thank you Patrick Turner senior editor of the futures magazine's record communications for the World Future Society realism on the set and I was really kept -- kept -- -- -- -- -- -- -- -- -- -- My privacy I mean -- -- woman who has three kids I can go to about about myself I love I live for my privacy and now you're gonna just pretty much tell me that it's going to be Gama.
I have I have my bucket list with -- and ask them what yeah.
If I settle without looking very good -- gonna walk out of here that -- wasn't the only thing and it -- -- -- -- -- -- I got to take care but please say however I already have Google Maps and you can zone into like the Cadillac you know from -- He does -- the point he made.
-- -- was the most interesting thing is we don't value privacy as much in our society as we used to and that's a look at what he does he basically extrapolate that twenty years from now.
Today that would have value it much less even then.
I do now so we will all be living in glass house since they let the president picture of me naked running to a hotel lobby in spring break with a mullet on on FaceBook rights and attacked me was that it was up -- -- 48 hours before I didn't do it I -- admit that -- don't want this and that little privacy if it's over with it's done.
I'm not even concern about the way slated -- -- -- drive myself nuts in here.
-- Lauren thanks for joining us.
Live in -- Saturday at -- generally come into game 6 tonight every morning ladies that took that picture off -- -- at all befriending not on the -- -- line.
Filter by section