STARTUP

Crowdsourcing and One Exec's Case for Regulating Google

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Start-up helps keep your, and Tom Brady's, private info private. After Sept. 11, the government launched a personal data-gathering campaign, understandably alarming privacy advocates. A small California-based start-up, Palantir Technologies, claims to have a partial solution, reports NPR. Alex Karp, Palantir's CEO said the company only provides intelligence agencies with information to which they are legally entitled. "Most people in America believe you can either fight terrorism or you can protect our civil liberties, and that dichotomy used to be true," Karp said. "We've found a way to tag information so the only people who can see if are those who are allowed to see it." Because Palantir's system tracks when data is collected and reviewed, it instills a sense of accountability. That might have helped New England Patriots quarterback Tom Brady; his personal information was sought 968 times by law enforcement officials for their own amusement. Bob McGrew, Palantir's director of engineering, said this never would have happened under his company's umbrella. "When some of these officials were looking at Tom Brady's data, they would be leaving a trail," he said. "It is all captured in a log that you don't need to be a technical guy to understand. A compliance officer or a civil liberties group would be able to see exactly who was looking at what information."

Power to the people. The customer may always be right, but does that mean they should have a say in the way you run your business? Today's Wall Street Journal takes a look at a few businesses that are turning to their customers for advice on such topics as what products to sell, how their products should be designed, and even what the company's name and logo should be. The technique may provide cheap and easy feedback, but industry experts warn that following the whims of the crowd may stifle innovation and lead to middle-of-the-road thinking. For a deeper look at a company that was a pioneer in so-called crowdsourcing, check out Max Chafkin's profile of the innovative T-Shirt maker Threadless.

Does Google need to be regulated? Today at TechCrunch, an anonymous author, described only as a "well known executive at one of the largest sites on the Internet" opines on the state of search engine marketing and SEO. The gist of the argument is that the success of businesses that operate online, specifically small businesses, is almost wholly dependent on an arbitrary set of rules levied by one entity: Google. "Due to Google's dominance, and the fact that it controls such an enormous amount of consumer behavior through paid and organic search listings, the company in essence governs commerce on the web," he writes. More to the point, he explains that because "the rules of organic and paid search change frequently," most businesses need to hire an agency or consultant to give them an even decent shot at ranking high, making the website start-up process significantly more expensive. For this author, the only real answer is mandatory public "disclosure" of the methodologies used to rank sites.

Main Street businesses speak out for healthcare reform. In today's The Oregonian, small-business owner Jim Houser writes that public health care is a must. Houser's group, Main Street Alliance, lobbied in Washington this weekend for health-care reform. At 18 percent of payroll, in Houser's case, he says the current model simply is not sustainable. The United States spends more than $2 trillion for medical care each year, Reuters reports, which is more than twice what any other country pays. While many have agreed that reform is necessary, how to afford it is a hot-button issue. According to Reuters, President Obama's plan to increase taxes on Americans who earn more than $200,000 was met with resounding disapproval this weekend, mostly from Republican legislators. Republican Sen. Judd Gregg says Congress' goal to pass health-care bills by the August recess is "highly unlikely."

"The crack cocaine of auction sites." The Big Money's Mark Gimein says online auction site Swoopo.com has created "the most efficient, addictive way to separate people from their money." The site, which started in Germany as a phone and TV auction, describes itself as "entertainment shopping" and manages to hook buyers by hyping amazing sales like 90 percent off a MacBook Pro. Like eBay, prices start as low as one cent and go up as members bid on the item. But unlike eBay, Swoopo charges 60 cents every time you make a bid. For the amount of savings they're advertising, 60 cents might look at first glance like chump change to the bidder, but the winning bidder of that 90 percent off MacBook Pro, for example, bid 750 times, yielding Swoopo a tidy $469.80 in fees. "What makes Swoopo so fiendishly addictive," says Gimein, "is the tendency of people to think of the bids that they have already put in as a "sunk cost," money that they have already put toward buying the item." Which isn't actually the case. The behavioral economics Swoopo applies to its auction work so well that they even make money auctioning off packs of Swoopo bids.

Recession a boom time for rehab centers. Speaking of addiction, it seems that this stressful economy has led to an increase in unhealthy behaviors. The BBC reports that the recession has boosted business for The Causeway Retreat, a rehab center on the island of Osea, Essex. It's seen a 60 percent increase in clients from the corporate sector since the recession took hold late last year. "We've been at max capacity for the past year," said Mark Gregory, the retreat's general manager. "The recession isn't hurting us, I say it with sadness - it's aiding our business." The new residents' most common career field? That would be investment banking and law, not surprising when you look at the price tag for a week's stay: about $16,000.

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Last updated: Jul 13, 2009




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