Mark Stahlman (via RadioMail) on Tue, 11 Mar 97 17:29 MET

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nettime: The Great Brain Drain


As a follow up to my "What is New Media" post, let's focus for a minute on
the economics of online discourse.  As far as I can tell, the WELL is not a
particularly successful commercial enterprise.  At least it is not the sort
of business which would attract aggressive investors and it is not likely
to become a Wall Street darling nor will it make anyone particularly rich. 
It wasn't designed for that.

Furthermore, America Online (which has made many people rich) has never
really made a nickle in profits.  The apparent "success" and reported
profitability of AOL is largely a result of accounting practices which have
allowed them to delay expenses and, therefore, report near-term profits
while accumulating long-term liabilities on their balance sheet.  Since I
was the Wall Street analyst who brought AOL to the public market (the IPO
was in March 1992 at $11.50 a share), I have looked fairly closely at their
financials.  The stock has done well because of the Internet craze and the
lack of other "pure plays" rather than the profitability of the underlying

In order to reverse the collapse of AOL stock (among other reasons), the
company which was built on "hot-chat" (the dirty little secret hinted at
all the way back to my IPO roadshow with the company), is now re-fashioning
themselves to be a cable-TV network.  They have hired Bob Pittman
(originator of MTV and a gladiator show called "Morton Downey") to run AOL
and they are about to announce a deal with Brandon Tartikoff (ex-NBC
bigwig) to make AOL more TV-like.  They are now talking about offering
"premium" channels and "tiered" pricing -- just like U.S. cable companies. 
They know that they will *never* make money off two-way conversation --
although sex-talk is being considered as a lucrative option.  RealAudio
3.0, anyone?

This brings us to Howard Rheingold's Electric Minds.  It is clearly an
offshoot of the WELL (in uses the same Engaged WEB software) and it is
populated by WELL-sians.  They got $2+ million in venture money to launch
and commitments from folks like technocrat John Gage of Sun Microsystems
for continuing funding, so what gives?  Why would another WELL get funding?
 Since what happens on eMinds is just the sort of conversation which is
already proven to be a bad investment, what is it about their business
model which is different from all the others.

They intend to *sell* that conversation.  That's right.  They plan to
package the converstation as books and other "spin-offs" as expensive
cultural artifacts.  According to my investigations into the financial
community who are supporting eMinds, their business model is to sell the
words that do *not* belong to those who post them.  They have specifically
trashed the "you own your own words" (YOYOW) ethic of their parent the WELL
in order to attract investors and to be able to eventually cash out.  If
this sounds rather Faustian to you, then you are probably right.

But, wait.  It gets even better.  According to my financial sources, they
were asked the following question as they made the rounds to attract
investors, "What if someone like Mark Stahlman shows up and takes over the
conversation?"  (No kidding, I was specifically cited according to those
I've spoken to).  The concern seemed to be two-fold.  On the one hand,
there were concerns that the conversation would not be "controllable" in
the sense of what is discussed and how it progressed.  Perhaps the
"artifact" would be "polluted."  And, moreover, what if the conversation
began to revolve around someone (me or anyone) and that someone decided to
leave taking the conversation with them?  What would they have left to
sell?  What *are* the "barriers-to-entry" for talking when it revolves
around personalities who can walk out the door?

I began to notice some interesting behavior over at eMinds around the time
that I was first starting to ask some background questions in private about
how eMinds was funded.  Howard Rheingold decided to freak-out in public
with accusations that I was "paranoid."  Hmmm . . . I thought, he just
doesn't like me or my style.  Then he did it again and he suggested that
there was no reason why anyone had to talk to me at eMinds -- and he has
not recognised my presense ever since.

Then one of Howard's henchmen, Bob Rossney, started to send me private
emails asking me to leave his area ("Technos") or to shutup.  Hmmm . . .
maybe he's taking his lead from Howard and trying to discredit me
publically.  Then, he too freaked out (this time on the WELL) and launched
into a campaign to discredit everything that I'll been saying.  I was
mostly asking questions rather than telling people what to think, BTW, so
he attacked me for not supplying any answers.  Then he and another
colleague of his started in with the "filter" campaign.  The current
approach has been to advise people to just ignore me.  And, Rossney will
not post to those topics which I'm active in apparently in the hopes that
they will die out.  Hmmm . . . could there be any connection back to the
business model here?  Is this just personal or is it really business?

Could it have anything to do with my request for the royalties for my posts
if they are ever sold?

Yes, as all of you around nettime know, I am deliberately provocative
inthis part of my life.  I have decided that this is the best use of this
medium at this time.  I have also read enough of the literature of
Esalen-style "hot-tub" group-process (the "theory" behind eMinds and the
WELL) to know that the only thing which a classic "leaderless group" can't
tolerate is someone who understands how these groups work.  It is the
"meta-" level commentary which is really disturbing because it disrupts the
illusion that everyone is swimmning/pissing in the same tepid soup.  Social
psychologists understand this and that is presumably why the resident
soc/psych at the WELL, Donna Hoffman (Vanderbuilt now but trained at Duke),
advised them to not invite me into the "goofy leftists" hot-tub.

Will (or have) others emerge(d) who are judged to be disruptive to the
process of stealing people's words and re-packaging them for sale?  What
does all this mean for the eventual success of eMinds' Faustian business
model?  We shall see, won't we?  We shall see.

It's all an experiment and, so far, I'm having a great time playing with
the dials on the instruments.  I encourage all of you to enjoy yourselves
as well.  It's not that I'm asking for any concerted effort or anything.  I
prefer to act alone without any protective close air-support.  But, since
we are all guinea pigs in this rather open-ended social experiment, it
might be fun to put on a lab coat every once in a while and to pretend that
you are the doctor and not the patient.  My motto is your brain is your own
(YBIYO), BTW.  Don't let anyone drain yours without a fight.

Oh, yes.  I expressly forbid Bruce Sterling or anyone else x-posting this
note to the WELL or to eMinds or to any related system.  I FORBID it so
don't do it!

If there is to be any real discussion of the implications of stealing
people's words as payment in some devils' bargain then it should, by all
rights, happen in demon-free territory.  Thanks.

Mark Stahlman
New Media Associates
New York City
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