Blog of Leonid Mamchenkov

I came across a brief blog post titled “Social Networking - Do you do it?“.  While the context of the question in that post was more along the lines of “Do you use social networking to promote your products and servers, and drive more traffic towards your site?“, it got me thinking.  And, as usual, in a somewhat different direction.

If we are to ask “Social Networking - Do you do do it?” to a large Internet crowd, what sort of responses would we get?  I guess, the majority will be somewhere in between “No” and “What’s social networking?“.  I think that the majority of people on the Web have no idea of what social networking is, where to find it, and if they are using it already or if they should use it at all.  And I also think that the majority of Web population do use social networking, either for their personal or business purposes.

Examples from the top of my head include LiveJournal.com - the most popular blogging platform in Russia, Flickr - one of the most popular image sharing services, YouTube - the most popular video sharing service, Odnoklassniki.ru - the most popular (in Russia) social network for people to find and communicate with their class mates, and a few other, similar services.  A huge chunk of their userbase have no idea that these services are a part of social networking. “Oh, no, I don’t do no social networking.  I use this web site to communicate with some of my friends and share blah blah blah“.

And I’m not sure if we need to push the term “social networking” any further.  We are humans.  That what humans do - social networks.  Give us a communication tool and we’ll start networking with it.  Then, instead of asking us if we use the tool for social networks, just ask us how we use it.  Yeah.

The Next Web Boris has a thought provoking blog post titled “Achieving (and living with) Perfect Knowledge“.

One day, we will have Perfect Knowledge. Although we won’t know everything there is to know, our knowledge of the world will approach a perfect state. It will be ‘lacking nothing essential to the whole’

Recommended reading.

Quintura blog has this nice post with some statistics of Russian online shoppers - how often they buy, what they buy, and how they pay.  As any other bit of statistics, it’s rather interesting.  However, I think there is more to it than the article covers.  Here are my random thoughts in a bullet list format.

• “85% of Russian Internet users shop online”.  It would be extremely interesting to see at least some approximation of country population to its Internet users.  According to Wikipedia, Russian population is about 142,000,000 people.  How many of these are online?  According to some resources, such as, for example, Public Opinion Foundation Database, it’s somewhere between 18% and 25%.  And then again, it’s depends a lot on where you are looking at.  Moscow and surrounding areas have a much higher Intenret penetration than Central and Eastern Russia.  Moscow can have as much as 56% of its population online, while less than 20% of the Urals and the Siberia population are connected.
• “The Russian e-commerce market has doubled to $3.2 billion in 2007″. Sounds huge, doesn’t it.  But let’s see. I’ll pick 28,000,000 people or 25% of connected population as per Public Opinion Foundation Database for the calculations.  85% of these are shopping online.  That’s about 23,800,000 people.  $3.2 billion market devided equally between all those people comes down to $135.  So, the market is huge, rather because there are so many people around, as opposed to how much those people buy. If you need more numbers to explain you the situation, have a look at the state of the Russian economy at Wikipedia.
• “However, it’s yet to become a habit because only 16% of users shop online once a month”. Sounds like the other 84% shop less than once a month.  Why?  Maybe because it isn’t so easy to find a few people to batch into a single order.  Or maybe they just don’t have time to, between the two jobs or something.
• “Most of the shoppers or 70% paid for online goods in cash upon delivery while only 12% of responders used bank cards in online transactions and another 10% used online payment systems”.  Internationally recognized credit cards, like Visa or MasterCard, are probably either expensive to have or difficult to get or both.  Personally, I don’t have much experience in this area, but I’ve heard a few of my Russian friends complaining about the state of the banking system in the country.  Also, there is another thing to remember - language.  I don’t have any numbers at hand, but I’d say that people who can at least read and understand at least one foreign language are a minority in Russia.  With no credit card and foreign language knowledge, most of the purchasing activity would stay within the country.
• “The most popular shopping items included books (51% of responders), computers (43%), home appliances (42%), software (31%), movies (26%), beauty products (25%), and music (23%)”.  It looks like the majority of Russian online shoppers are rather young, tech-savvy people.
• All of the above make it sound like a lot of marketing opportunities - large number of people, who are roughly in the same age group, with somewhat poor geographic distribution and limited access to credit cards… And with that, it’s interesting to see at the advertising channels.  TV, radio, Internet itself.  And then, which Russian sites with some sort of ad campaigns are the most visited?

Feel free to throw in your thoughts and more numbers via comments.

I’ve recently enjoyed the “Indiana Jones and the Kingdom of the Crystal Skull” movie.  However there was one particular scene which sticks out.  It was the moment when Indiana yet again avoided his certain death, this time by hiding in the kitchen fridge.  He was supposed to die of a nuclear explosion, but the fridge saved his hat.

Impossible?  Of course.  But there was something more to this.  Something that bothered me for the last few days.  Something that I could not find the words to express.

It turns out, I am not the only one.  There was a hot discussion at IMDB forums, and at other places that have crowds of movie watchers and reviews.  And apparently, a new term was born - “nuke the fridge“.

This is also a nice example to illustrate how the world changes with the Internet.  Lots and lots of people talk about lots and lots of things.  24×7.  Non-stop.  That generates lots of ideas, sub-cultures, products, and services.  And, in tern, lots and lots of money for people who dig it.  Nice.

Web Worker Daily links to the article titled “AT&T: Internet to hit full capacity by 2010“. Here is a summary:

Speaking at a Westminster eForum on Web 2.0 this week in London, Jim Cicconi, vice president of legislative affairs for AT&T, warned that the current systems that constitute the Internet will not be able to cope with the increasing amounts of video and user-generated content being uploaded.

Well, thank you for pointing out the obvious, Mr. Jim.  The current systems that constitute the Internet will not be able to cope indeed.  That’s why they will be upgraded, updated, redesigned, and multiplied to cope with the increasing amounts of video and user-generated content.  That’s how it was before and that’s how it will be in the future.

There is this nice concept that I’ve learned about back in the college days.  I don’t remember how it’s called, but it is very related to three terms: “supply”, “demand”, and “equilibrium”.  I’m sure that current economics aren’t as simple, and that there are many better concepts to explain things, but I liked the simplicity of it.  I am also a big believer in the ultimate power - natural balance.  Things can be pulled a little bit left and right, and that’s possible, but in the long term, everything will balance out.

Looking through that prism on the problem of ever increasing Internet traffic, that seems to be like a lot of demand.  If big companies, such as AT&T won’t be able to supply enough, it doesn’t mean that the Earth will stop revolving and wait for them to catch up.  This has been proved before and will be proved again, if needed.  If it will come to the worst, ISPs can be decentralized by self-managing network units (individual or small networks) that interconnect with each other.  That’s actually what happens in areas which are not covered by major Internet Service Providers.  People install their own wireless networks, connect to each other, and between those who can connect them further.  If there will be too much demand for solutions like this, they can be rather easily automated with hardware units and simple software packages.

As to the claims of how fast the traffic will rise, I don’t quite agree.  It will continue to rise at dramatic rates, but not as dramatic as:

“In three years’ time, 20 typical households will generate more traffic than the entire Internet today.”

That’s just insane.

Cicconi added that more demand for high-definition video will put an increasing strain on the Internet infrastructure. “Eight hours of video is loaded onto YouTube every minute. Everything will become HD very soon, and HD is 7 to 10 times more bandwidth-hungry than typical video today. Video will be 80 percent of all traffic by 2010, up from 30 percent today,” he said.

HD is a promising technology, and it has its niche, but saying that everything is will go HD very soon, well… It reminds me of all those claims about radio disappearing when TV came along, and TV disappearing when Internet appeared.  HD will be pretty popular, but there are many areas where it is not applicable.  For example, it will take a long time before mobile phones will learn how to create HD content.

And not to forget the money issue, people are prepared to pay today than they used to before. And they are paying more.  Think about it.  Ten years ago not a lot of people had a dial-up account.  Which was a really crappy way to connect to the Internet.  And it was priced at about $20 USD a month.  Today I pay about $60 USD a month to my ISP, which brings me Internet, television, and telephony through a single cable.  And guess what - I am prepared to pay more.  And guess what - I am by far not alone.  I know more people today who pay $60 USD for their Internet connectivity than I knew before paying for their dial-up connection.

The Internet is changing.  If before it was mostly good for checking email and reading an occasional web site, today it is a powerful tool that solve a whole range of communication and entertainment problems.  Make it better and we’ll pay more.

Oh, and you’ll get paid from the other side too - web services, and the rest of the crowd who make a lot of money on the Internet.  10 years ago a service such as Flickr would be possible.  Or it would have been rather useless.  Today I now more people paying for a Pro account to Flickr than I knew before paying for their dial-up connection.  How’s that?  I’m sure Flickr is ready to pay more for better connectivity.

So, Mr. Jim, stop whining.  It’s not the end of the world.  It doesn’t even look like it. Quite the opposite.  It’s the golden time for the people who work in technology.  Let’s get back to work and make the world a better place.