Civilization V: The Singularity

I have been an adamant player of the Civilization series of games. I borrowed my brother’s computer just to play Civilization IV a few months ago as mine was too old and slow (I’ve been holding out to get a screaming new system, optimized for Vista). I have a great idea for the next version of this game. It would be an excellent way to do four things:
1. A framework for the tech tree (both past and future)
2. A great way to educate the world on the coming technological changes of our time in civilization
3. Increase credibility/realism of the Civilization series
4. Increase credibility/realism of Ray Kurzweil’s vision
5. A great new goal/end of the game and civilization

By incorporating the technological path described in Ray Kurzweil’s latest book, “The Singularity is Near: When Humans Transcend Biology”, it will utilize Kurzweil’s in-depth research of the time and speed of technological advancement (from a historical perspective) as well as how to create great technology “buds” for future technology. The end of the game, as opposed to growing to outer space (among other victory conditions), it would be to create Strong AI and thus reach the Singularity, or the point in the future which we can not see beyond.

Time could change to years and months, though current games go from many years per turn to single years per turn later in the game, utilizing the exponential curves described in his book may add credibility/realism. There may be mathematical paradigms that could be incorporated into the game engine. Turns may be as small as months later in the game.

There would be new disasters and threats later in the game (e.g. grey goo, genetic engineering run amok, etc.) and new units (e.g. nanobots) among other things.

The growing credibility of Ray’s vision among not only futurists, but also credible government bodies, the educational establishment and the general public, will increase sales of the game and his book while educating people. Titling the new game, “Civilization V: The Singularity” would surely be recognized as a landmark game, not just for the great gameplay and sales it would generate, but also for helping to prepare the world for the coming turbulent times we face.

Just a thought as I read my travel book for Costa Rica…

What Comes After Web 2.0?

This is a short update on web technologies. It references the Semantic Web and other visions of the next step on the web. I've never heard of FOAF files, so I think I'll look into those. Sounds like a great idea!

http://www.technologyreview.com/printer_friendly_article.aspx?id=17845

Me Translate Pretty One Day

This article discusses a new method of machine translation that seems significantly superior to the two primary methods used today. It is able to cut human translation speeds by one half (to achieve accuracy of a human translator), but it also does very well before it is fine tuned by a human. It requires more processing power than current machine translators, but as processing power improves exponentially, Meaningful Machines assumes this will not be a hurdle within a year. This article gives some good history on machine translation, where it is today and of course how Meaningful Machines fits into the landscape. I can wait for these to be perfect translators. How fun would it be to be able to travel the world and have the language barrier removed (besides all the practical uses in business and government)!

http://www.wired.com/wired/archive/14.12/translate_pr.html

Online world as important to Internet users as real world?

"43 percent of Internet users who are members of online communities say that they “feel as strongly” about their virtual community as they do about their real-world communities." And people don't beleive that many people will choose to spend significant amounts of their waking lives in virtual worlds?! Considering how rudimentary online communities and virtual worlds are today, and yet 43% of them say they feel just as strongly about them as their real-world communities - it is inevitable!

http://physorg.com/news84027254.html

Artificial intelligence applied heavily to picking stocks

Apparently "a third of all stock trades in the United States were driven by automatic algorithms last year." I personally know day traders and this article states there are tools for people to easy create rules. The cool thing this article is talking about, though, is that the rules are now being created, implemented, and altered based on their success, entirely by computers - "neural networks" and "genetic algorithms". Seems like it would be difficult to compete with these systems. Though "complicated stock-picking methods" have been to more or less a degree used for decades, these newer methods have recently "achieved a widespread use unimaginable just five years ago."

http://www.iht.com/articles/2006/11/23/business/trading.php

Cochlear Implants

I've spoken to people about cochlear implants a lot lately. Its the first sense that we've created an FDA approved implant for. They are relatively new, but over 100,000 people as of 2005 have them. As soon as a human sense is subject to the exponential curve of all technology, one can just imagine the potential. These are by no means a perfect replacement for normal hearing - yet! But as our understanding of how the normal signals a human ear sends to the auditory nerve grows, implants will eventually become better than a human ear. One could build in telephony technology for cell phone replacement. Why not just have a wireless computer connection for virtual reality? I wrote a blog about retinal implants currently in trials a month or so ago - http://climbingthecurve.blogspot.com/2006/10/silicon-retina-implants.html.

Here is a link to National Institute on Deafness and other Communication Disorders (NIDCD) discussing cochlear implants in case you would like more information.

http://www.nidcd.nih.gov/health/hearing/coch.asp

Costs
According to the American Academy of Otolaryngology -- Head and Neck Surgery (AAO-HNS), a cochlear implant is more expensive than a hearing aid, with "the total cost of a cochlear implant including evaluation, surgery, the device, and rehabilitation is around $40,000. Most insurance companies provide benefits that cover the cost. (This is true whether or not the device has received FDA clearance or is still in trial.)"

http://www.entnet.org/healthinfo/ears/cochlear-implant.cfm


Here is an interesting segment from Wikipedia about efficacy of these devices:

Efficacy
A cochlear implant will not cure deafness or hearing impairment, but is a prosthetic substitute for hearing. Some recipients find them very effective, others somewhat effective and some feel overall worse off with the implant than without. For people already functional in spoken language who lose their hearing, cochlear implants can be a great help in restoring functional comprehension of speech, especially if they have only lost their hearing for a short time.

British Member of Parliament Jack Ashley received a cochlear implant in 1994 at age 70 after 25 years of deafness, and reported that he has no trouble speaking to people he knows one on one, even on the telephone, although he might have difficulty with a new voice or with a busy conversation, and still had to rely to some extent on lipreading. He described the robotic sound of human voices perceived through the cochlear implant as "a croaking dalek with laryngitis". Even modern cochlear implants have at most 24 electrodes to replace the 16,000 delicate hair cells that are used for normal hearing. However, the sound quality delivered by a cochlear implant is often good enough that many users do not have to rely on speech-reading (lipreading). Rush Limbaugh, U.S. talk radio show host, says that everything sounds normal except that he cannot pick out the melody of new music that he had not heard prior to becoming deaf.

Adults who have grown up deaf often find the implants ineffective or irritating because their brain is unable to interpret sound after such a long period of time. Some who were orally educated and used amplifying hearing aids have been more successful with cochlear implants, as use of the hearing aid functioned to maintain perception of sound.

For small children, there have been mixed results. Almost all children with implants hear quite well with a cochlear implant, but for a rare few, the auditory nerve is unable to be stimulated. Patients without a viable auditory nerve are usually identified during the candidacy process. Fewer than 1% of deaf individuals have a missing or damaged auditory nerve, which today can be treated with an Auditory Brainstem Implant. Recent research has suggested that children and adults can benefit from bilateral cochlear implants in order to aid in sound localization and speech understanding. (See Offeciers et. al. 2005)"

http://en.wikipedia.org/wiki/Cochlear_implant

Palmisano Gets a Second Life

OK, so my blog is starting to look like a Second Life promotion! It just seems more and more likely that this company has the kind of vision necessary to create one of the first virtual worlds that will grab a mass audience - rather than just gamers. Here IBM is committing $100 million in a new business unit to explore the potential of new technologies like virtual worlds in commerce, e-learning, and customer service.

Palmisano Gets A Second Life
IBM is embracing the virtual world of avatars--and other big companies are close behind

It's not every day that you hear the captain of a $90 billion multinational gleefully bragging about his alter ego in the online world. But these days, so-called virtual worlds are all the rage, and IBM (IBM ) Chief Executive Samuel S. Palmisano is about to make his mark as the first big-league CEO to appear in a virtual-world setting. "I have my own avatar," boasts Palmisano. He likes the sound of that so much that he says it again: "I have my own avatar."

Actually, Palmisano has two avatars--a casual Sam and a buttoned-down one--who exist in Second Life, the most popular of a handful of newfangled 3-D online virtual worlds. It's the square Sam, complete with Palmisano's signature eyeglasses and dark suit, who will be taking a virtual stage in a virtual version of China's Forbidden City on Nov. 14.

This isn't all fun and games. IBM foresees a sizable business in providing the software, computers, and chips that power 3-D worlds, and in advising clients on how to take advantage of them to market or sell products. At a real-life town hall meeting for 8,000 employees in Beijing's Great Hall of the People, Palmisano will announce just before his virtual escapade that IBM is setting up a new organization to pursue the business. It's one of a handful of initiatives he'll lay out that emerged from an online "innovation jam" the company held for worldwide employees and business partners in September. All told, Big Blue plans to spend $100 million on these projects.

WIMBLEDON IN 3-D
IBM's foray is the latest sign that the virtual world phenomenon is going mainstream. Until recently, Linden Lab's Second Life had mostly been a playground for individuals who enjoy exploring, communing with like minds, and setting up virtual mom-and-pop businesses.

In the last few months, though, all sorts of established companies have been planting their flags. They're marketing goods, trying to sprinkle coolness on their brands, and testing new kinds of online meetings. About 40 corporations have established themselves on Second Life, which has gone from zero members to 1.2 million in just three years. Among them are Sony BMG Music Entertainment, Reebok, Starwood Hotels & Resorts (HOT ), and Reuters (RTRSY ), which assigned a reporter full-time to hang out and chronicle the goings-on.

IBM stumbled into virtual reality thanks to the curiosity of British IBM software strategist Ian Hughes (avatar: ePredator Potato), who is a longtime PC gamer. Hughes started raving about virtual worlds on his internal IBM blog and, before long, IBM scientists and programmers worldwide were buying virtual islands in Second Life and using them for group collaboration or solving computer science problems.

Hughes on Nov. 7 led a guided online tour of Second Life that showed just how diverse virtual reality can be. Stops included a replica of the Wimbledon tennis club, where Hughes runs 3-D replays of actual championship games, an IBM meeting center, a Reebok store, and (whoops!) a casino complete with virtual naked female avatars. "Being the Internet, you never know what you'll find!" quips Hughes.

The most impressive locale on the tour was the scale replica of The Forbidden City being created by IBM designers, which will be the scene of Palmisano's virtual debut. The setting was unfinished, but designers had rendered a platform, chairs, and podium. The visitors' avatars wandered around and tried out the chairs, until they were unceremoniously kicked offline. The reason: IBM needed to rehearse the Palmisano appearance. Apparently, in virtual reality it's tricky for those avatars to get their applause just right.

By Steve Hamm

http://www.businessweek.com/magazine/content/06_47/b4010068.htm?chan=search

Second Life Lessons

Here's another Second Life article from BusinessWeek. It is discussing what major corporations are doing, why, and what it's doing for them. I keep pressing that this is just a precursor of what's to come!

And here is a particularly important quote from the article (which has more information online if you have a BusinessWeek subscription):

Philip Rosedale, CEO of Linden Lab, says the supporting technology is continually advancing. "Second Life is improving in resolution and functionality at the rate of Moore's Law. The real world isn't getting better by the day."

NOVEMBER 27, 2006 INSIDE INNOVATION -- IN SIDE

Second Life Lessons
You may have heard the hype about popular 3D online universe Second Life, but setting up shop there presents unique challenges

For real-life companies from Warner Bros. to Adidas to Intel seeking to brand themselves as hip and forward-thinking, virtual community Second Life has quickly become a trendy marketing and advertising outlet. Opening virtual offices or shops, selling and market-testing digital replicas of products, and creating 3D online personas or "avatars" in Second Life are becoming items on the to-do lists of those eager to tap into the nascent market. The three-year-old Web-based world has more than one million "residents" who spent $9 million in October on virtual land, products, and services. And while advertising's traditional outlets are losing eyeballs, so far this year the population of Second Life has increased 995% -- a growing potential consumer audience for marketing messages.

Second Life, of course, is still a work in progress. None of the companies spending real money to launch campaigns can yet gauge how successful their efforts will be, and virtual campaigns aren't without their own unique dangers. One problem is hackers, who periodically shut down Second Life. Linden Lab, the company behind the site, recently met with federal authorities to address this cybercrime. In addition, many long-time residents view the arrival of big brands as a threat to established mom-and-pop entrepreneurs. Annoyed vigilante residents have set off bombs -- via malicious computer code -- that destroy virtual buildings or cause the application on your computer to freeze. American Apparel has had to deal with virtual protesters scandalized by the scantily clad models in the company's real-world ads. And there is one weird technical glitch: When a space is swamped with visitors (more than 60 to 90), a bug in the system can make avatars' clothes disappear.

But Philip Rosedale, CEO of Linden Lab, says the supporting technology is continually advancing. "Second Life is improving in resolution and functionality at the rate of Moore's Law. The real world isn't getting better by the day." Rosedale views Second Life not as a multiplayer online role-playing game, like World of Warcraft, or in the same category as Will Wright's forthcoming Spore, which allows players to design their own species. Rather, he sees it as a new social-networking platform, like MySpace.

In the future, Rosedale conceives of Second Life as a possible 3D Web browser. The ambitious idea, as he explains, is that instead of using your mouse to click on links, you would direct your avatar to walk into a 3D Amazon.com shop, browse shelves, buy books, and chat over a virtual cup o' joe with other people visiting the site.

The current flood of companies announcing a Second Life presence echoes the late 1990s, when every CEO wanted an e-commerce site. Yet while Second Life is cool and timely, it's not easy to make real money selling virtual goods (cars go for $2 each). Why? Not enough volume. The registered population has passed a million, but only 10,000 people on average are online at any one time.

What sets Second Life apart is that the big-brand products offered can be customized by virtual users. And Second Life is an interactive, intensely social environment where companies hope not only to find customers and strengthen their brands but one day also to connect remote employees to one another and recruit new hires.

Clearly, for a company considering jumping into Second Life now, serious homework is needed. Turn the page to see which real-world industries have Second Lives and learn what steps to take and mistakes to avoid.

By Reena Jana and Aili McConnon

http://www.businessweek.com/magazine/content/06_48/b4011413.htm

'Grey goo' engulfs virtual world

I've written a number of times about Second Life. This article is interesting and could potentially raise awareness of the potential of real world grey goo from future nanotechnologies. The other interesting aspect of the article is about a program someone introduced called CopyBot that can copy any object in Second Life. Since many people are actually making a living or earning some money from creating virtual objects, there is conjecture that future earnings in Second Life will mostly/only come from services. So will people be less inclined to spend time designing cool objects that people were willing to buy? The article makes intellectual property seem worthless as it would be futile to combat piracy - will this be true in the future, vastly more rich virtual environments? I picture people willing to pay for information, but if you can't protect it...

"The problem is, if you can see the object, you have to have the information in some form," she says. "A clever reverse engineer will likely always be able to grab that information."

Seems like there will be solutions to this. For example, off the top of my head - If the processing was done on a secure system and only the visual of the object is passed, then a copy would be similar to the video tapes some pirates make of new movies while they're still only in the theater - a reasonable representation, but not perfect. I'm not technical enough to know if this is reasonable. Perhaps the copy is really that good. Maybe the copies will be that good for just these rudimentary virtual environments, but perhaps future objects/information will be much richer and just coping the visual aspects of it won't capture the real information (encapsulation). We may have to wait to find out! :)

'Grey goo' engulfs virtual world
18:13 20 November 2006
NewScientist.com news service
Will Knight

The increasingly popular virtual world Second Life was overwhelmed by a flood of "self-replicating" objects, dubbed "grey goo", on Sunday.

The trouble began with the appearance of a virtual gold rings in several areas of the virtual world. As users touched these rings, they starting replicating wildly and, eventually, the servers on which the game is hosted began creaking under the strain of the additional activity.

From 2245 GMT on Sunday, for about half-an-hour, tens of thousands of Second Life users were locked out of the world while staff removed the objects. The objects were dubbed "grey goo", after the concept of out-of-control self-replicating nanotechnology (See How safe is nanotech).

"An attack of self-replicators is causing heavy load on the database, which is in turn slowing down in-world activity," an administrator wrote on the official Second Life blog on Sunday evening (GMT). "We have isolated the grey goo and are currently cleaning up the grid. We’ll keep you updated as status changes."

Simple hack

Experienced Second Life residents dismissed the incident as unremarkable, although inconvenient. "Grey goo is not a clever hack or anything ingenious," says Aimee Weber, who develops virtual objects within Second Life for companies and research institutes. "You could write one in 5 minutes."

Weber notes that self-replicating objects have been released before and says the ability to create such objects is, in fact, a crucial aspect of the world. "Linden Lab considered making self replication impossible – it's certainly within their power to do so," she told New Scientist. "But there were enough legitimate and cool uses for self replication that they decided to keep it."

The incident follows a more controversial episode within Second Life – the release of a program called CopyBot, which can be used to copy any in-world object. CopyBot bypasses the game's in-built copy controls, analysing network communications in order to gather the information needed to replicate an object. As some users make money by selling virtual objects within Second Life, Weber says this program could transform the economy of Second Life from being based on objects to focussing on services.

In the long run, there may be no way to guard against programs such as CopyBot, she adds. "The problem is, if you can see the object, you have to have the information in some form," she says. "A clever reverse engineer will likely always be able to grab that information."

http://www.newscientisttech.com/article/mg17723880.900-how-safe-is-nanotech.html

Big brother is listening to you

One major area of concern over new technologies is the tempting use of it to create a surveillance state. As I listed in a previous blog about what people think will come about in 10 years, they listed the ability of people to record their entire life - video and sound. Well, the same is true for government - they will be able to record all public areas (and I imagine private ones, legally or not, but I'm not big on conspiracies). Check out his new step in the Netherlands.

REVELLERS planning a night out in the Netherlands this weekend should keep their voices down.

To prevent fights breaking out, surveillance cameras in the city of Groningen have been adapted to listen out for voices raised in anger. Microphones attached to the cameras feed the sound signals to software that can detect voices that are aggressive in tone. "Aggressive people tend to tense their larynx, and the sound made by their vocal cords is distorted," says Peter van Hengel of developer Sound Intelligence, a spin-off of the University of Groningen. This means that high frequency vowel sounds span a broader frequency range. "A truly aggressive voice is very hard to imitate," he says.

In a trial earlier this year, police made three arrests after being alerted by the system. Tests are also under way in Rotterdam, on Dutch trains and in stations.

From issue 2578 of New Scientist magazine, 18 November 2006, page 27

http://www.newscientisttech.com/channel/tech/mg19225780.159-big-brother-is-listening-to-you.html

Launching a new kind of warfare

Very interesting article discussing the current state of robotics in our military, where it is going, and even a discussion of the ethical and social impacts (that both are and are not taking place). Some people may not realize how quickly this transformation is taking place. I remember a Wall Street Journal article discussing a Stealth Bomber pilot taking off from the US (Kansas or something like that), flying a bombing mission to Iraq, landing back in the US, and then picking his kids up from a little league game. I was pretty blown away by that at the time, but this is sure taking it to the next level. Good read.

Some selected quotes to whet the appetite:

“By 2015, the US Department of Defense plans that one third of its fighting strength will be composed of robots, part of a $127bn (£68bn) project known as Future Combat Systems (FCS), a transformation that is part of the largest technology project in American history.”

“The US military has 2,500 uncrewed systems deployed in conflicts around the world. But is it Star Wars or I, Robot that the US is bringing to reality? By 2035, the plan is for the first completely autonomous robot soldiers to stride on to the battlefield.”

“…scientists at Qinetiq told the Guardian two years ago that it had built a robot fighter plane. When flown on test flights, they said, the fighter is accompanied by two crewed fighters, whose role is to shoot it down if it malfunctions.”

“With the increasing likelihood of more autonomous systems being deployed, some US generals have also raised concerns about the reliability of software and its vulnerability to hacking and viruses, pointing out that a rogue robot could inflict considerable damage on humans on its own side in a battle.”

“This is a very historic period; we are now determining who will fight wars in the future and how we will fight them. The human monopoly on war is being broken. Science fiction has now become science reality and we are changing the rules of the game. It's something we have to discuss and it's better we talk now than afterwards."

http://technology.guardian.co.uk/weekly/story/0,,1930960,00.html

Computing, 2016: What Won’t Be Possible?

Interesting article about a symposium of major corporations about computing in 2016. I can't help but think they aren't going to disclose anything revolutionary, or else they might loose their competitive lead. But some interesting perspectives nonetheless. Here's a few interesting quotes from it:

“Biology, Dr. Karp said, is now understood as an information science. And scientists seek to describe biological processes, like protein production, as algorithms. “In other words, nature is computing,” he said.

“computer science is the systematic study of algorithms”

“Future trends in computer imaging and storage will make it possible for a person, wearing a tiny digital device with a microphone and camera, to essentially record his or her life.”

“But clearly, the technology could also enable a surveillance society. “We’ll have the capability, and it will be up to society to determine how we use it,” Dr. Rashid said. “Society will determine that, not scientists.”

http://www.nytimes.com/2006/10/31/science/31essa.html?_r=3&ref=science&oref=slogin&oref=slogin&oref=slogin

Tuning In to Crowdcasting

For some reason it hasn't been posted on Business 2.0's website, but the printed article is very interesting. Crowdcasting is like Donald Trump's show, The Apprentice, sans reality TV. You get a bunch of MBA teams to work on a specific problem in a competition and big league companies (e.g. , Hilton, Eli Lilly) get to tap into young bright minds. I would love to participate in one of these. I found the concept intriguing, but it also shows more companies who are organized around the production of creativity and the creation of intellectual property. Idea Crossing (which runs the Innovation Challenge) and Innocentive are two they mention in the article.

If Business 2.0 posts this article, I will update this - if someone finds it, please leave it in the comments section. Thanks!

In the meantime, Wikipedia has an entry on Crowdcasting, and also culled some of the information from the B2.0 article.

http://en.wikipedia.org/wiki/Crowdcasting

Tuning into Crowdcasting: Business 2.0 - November 2006 Volume 7; Issue 10 page 66

The Semantic Web & Best-kept secret agent revealed

I've sent this Scientific American, article wirtten by Tim Berners-Lee, to many of friends, including one recently interviewing at companies asking him what Web 2.0 means to him. It really gives a great roadmap to the web. Web services are starting to make the web more friendly for the kinds of computer agents they discuss. I just read an article in Computer Weekly about how these computer agents' domains have just expanded signifcantly. Read the first page of the Scientific American article; it illustrates a great example of how smart agents will be able to make our lives easier once the sematic web is realized. This article was written in 2001. Berners-Lee is quite the visionary and sits on many important internet standards bodies.

http://www.sciam.com/article.cfm?articleID=00048144-10D2-1C70-84A9809EC588EF21

http://www.computerweekly.com/Articles/2006/10/12/219087/Best-kept+secret+agent+revealed.htm

Rerouting Brain Circuits with Implanted Chips

Here's a pretty cool breakthrough. I think I've blogged about Ciberkinetics, but if I haven't you should check these guys out: http://www.cyberkineticsinc.com/content/index.jsp

Though while Cyberkinetics is connecting brains to computers (to control keyboards and electronic wheelchairs as starting points), these University of Washington (go Dawgs!!) researchers are connecting nerves to other nerves via a computer link. This has many implications, but one of the most immediate applications has to do with people with spinal injuries.

"The findings also have implications for the development of neural prosthetics. For example, the device could be connected directly to the spinal cord or muscle rather than to another part of the brain. "If a person had a spinal-cord injury and the link from brain to muscle is impaired, this connection could bypass that injury and reconnect brain cells to the muscle," says Fetz. His group is currently working on this application. "

http://www.technologyreview.com/read_article.aspx?id=17678&ch=biotech&sc=&pg=2

Researchers teach computers how to name images by 'thinking'

Some Penn State researches have "taught" a computer to identify images with a 330 word vocabulary. By creating words from an image, whole image collections can easily be searchable without the need to manually tag each image. The software seems to work pretty well already, but will obviously need to get a little more "education"!

Selected Quote:

"By inputting tens of thousands of images, we have trained computers to recognize certain objects and concepts and automatically annotate those new or unseen images," Wang said. "More than half the time, the computer's first tag out of the top 15 tags is correct."

In addition, for 98 percent of images tested, the system has provided at least one correct annotation in the top 15 selected words. The system, which completes the annotation in about 1.4 seconds, also can be applied to other domains such as art collections, satellite imaging and pathology slides, Wang said."

http://physorg.com/news81606726.html

A.I. Makes Music

I saw this short but great segment on CNN last month about David Cope, a professor of Music at UC Santa Barbara. He spent 7 years to write 20,000 lines of code that uses A.I. to create musical composures based on the styles of others. Some people have been having problems with computers generating music that's actually artful, as it symbolizes a revered area of "human only" that is being ceded to computers.

The video is only viewable via CNN's Pipeline, which is a subscription service, but you can read more about him in the following Wired article:

"The houselights darken, and a half-dozen musicians dressed in black take the stage with violins, a viola, a violone, and a violoncello. A woman sits down at the harpsichord; another tunes a lutelike instrument called a theorbo. The audience hushes, and the ensemble begins: A single, piercing violin races through Vivaldi-esque arpeggios while the rest of the strings measure out a deep, deliberate complement. The second movement is different – slower, sadder, carried along by mournful viola. During moments of quiet beauty or apparent emotion, it is jarring to consider what the music means to Emmy – numbers, built on patterns, built on a database of more numbers."

http://www.wired.com/wired/archive/14.09/posts.html?pg=3

Firms point to biometric future

Keys, cards, passports and PINs could soon be a thing of the past as biometric technology makes our bodies the only passwords we need.

http://news.bbc.co.uk/2/hi/technology/6070576.stm

Are we the Mongols of the Information Age?

Interesting article about paradigm shifts in military revolutions. How the ability to translate technological revolutions (gunpowder, industrial, information, etc.) into military strengths have been significant factors in the change of power on the global stage. I guess with our $71 billion budget for pure R&D of new weapons, we're definitely spending the dough, but the key will be what technologies we develop. Do we really need a new jet fighter? I don't know the numbers, but I just remember the investment seemed ridiculous. We need "we need to get much better at human intelligence, counterinsurgency, information operations and related disciplines. We need more speakers of Arabic and Pashto, more experts who understand tribal relations in Iraq's Anbar province and Pakistan's Northwest Frontier province, more diplomats who can win over audiences on Al Jazeera."

http://www.latimes.com/news/opinion/la-op-boot29oct29,0,4082775.column

ETFs: Sliced, Diced, and Razor-Thin

Here's a little more on ETFs, as they are relatively new and risky, but if you want to invest in a narrow area of technology, are a pretty cool investment option. They even have them for specific diseases!

BusinessWeek
MAY 5, 2006
Frontiers of Investing
By Marc Hogan

ETFs: Sliced, Diced, and Razor-Thin
These exchange-traded funds are super-specialized and promise new opportunities. But are they right for you?

There are new exchange-traded funds in town. The Barclays' iShares Silver Trust (SLV ) tracks a hot commodity, while the First Trust Advisors IPOX-100 Index Fund (FPX ) is a collection of the latest IPOs. The latest ETFs tap previously untouched niches and make exotic investment plays available to ordinary investors (see BW Online, 3/27/06, "Funds to Cover Every Angle"). While they can jazz up portfolios, most investors should think twice before buying.

ETFs, baskets of securities that trade throughout the day like stocks, are no longer a low-cost way to get exposure to broad indexes. Assets in these funds swelled to $321.3 billion at the end of March, up from $151 billion at the end of 2003, according to the Investment Company Institute (ICI), the mutual-fund industry group. While the broader mutual-fund industry has increasingly come to embrace simplicity and diversification, the trend in ETFs has been a move toward greater sophistication and smaller industries.

WIN BIG, LOSE BIG. Two sector-specific ETFs have been among the year's top performers. PowerShares WilderHill Clean Energy (PBW ), which invests in companies promoting clean energy, has beaten the Standard & Poor's 500 index by 36.81% this year through Apr. 30. PowerShares Water Resources (PHO ) has outpaced the index by 15.9%. But both carry expense ratios of 0.6% -- hefty for ETFs. "If you're right, you will make a lot of money," ETFGuide.com publisher Ron DeLegge says of niche ETFs. "But if you're wrong, you might lose a lot of money."

With memories of the ill-fated late-1990s explosion of Internet funds still fresh, some analysts don't recommend specialized ETFs. "In the long term, the record shows that more expensive, more volatile, more narrowly focused funds don't do a very good job of serving shareholders' interests," says Morningstar (MORN ) ETF analyst Dan Culloton. Unlike traditional no-load mutual funds, ETFs carry a brokerage commission charge each time investors make trades, so they don't make sense if you're putting money away gradually.

Meanwhile, fund managers are serving even thinner slices of pie. State Street Global Advisors, the second-largest ETF shop behind Barclays Global Advisors, recently released a trio of ETFs focusing on individual industries: SPDR Biotech (XBI ), SPDR Homebuilders (XHB ), and SPDR Semiconductor (XSD ). "A lot of investors are looking for industry-specific plays, moving down from the sector plays," says Paul Mazzilli, director of ETF research at Morgan Stanley.

Fund companies aren't stopping there. In February, a new joint venture called Ferghana-Wellspring filed with the SEC to launch 12 ETFs. Dubbed "DAISies," for 'D' arrayed investment securities, the ETFs would each track an index concentrated on a different subsector of the health care industry. There would be an ETF for cardiology, another for ophthalmology, two ETFs for cancer, and so on. Ferghana-Wellspring is a joint venture between biotech-focused investment bank Ferghana Partners and Wellspring Partners, a financial-services entrepreneurial group.

'FAT CENTER.' The Ferghana-Wellspring approach offers investors increased precision, says Bill Kridel, executive chairman and founder of Ferghana Partners. Rather than investing in giants like Amgen (AMGN ), Genzyme (GENZ ), Merck (MRK ), and Pfizer (PFE ), the DAISies would focus on "the fat center of innovation and growth," Kridel says. "This means you can slice and dice as an investor very finely," he says.

ETFs allowing ordinary investors to tap exciting, up-and-coming technologies aren't completely new. Launched late last year, the PowerShares Lux Nanotech Portfolio (PXN ) invests in nanotechnology shares like Biosante Pharmaceuticals (BPA ) and Veeco Instruments (VECO ) (see BW Online, 4/17/06, "How to Invest in Nanotech"). The $113 million fund has beaten the S&P 500 index by 11.5% this year through Apr. 30.

At the same time, other funds are finding a niche investing in the newest public companies. Kicked off on Apr. 13, the First Trust Advisors IPOX-100 Index Fund (FPX ) aims to reflect the market for U.S. initial public offerings, in the wake of closely-watched IPOs by companies like Chipotle Mexican Grill (CMG ) and doughnut seller Tim Hortons (THI ).

YOUR STYLE. The fund invests in the 100 largest IPOs by market cap, buying the new stock on the seventh day after the IPO and selling it on its 1,000th trading day. The fund follows less than a year after Van Kampen's more narrowly focused IPOX-30 Index Portfolio, which is a unit investment trust, not an ETF.

Then there are ETFs that concentrate on styles. Rockville (Md.)-based Rydex Investments on Mar. 7 unveiled six Pure Style ETFs, which home in on either growth or value among small-, mid-, and large-cap stocks. The funds track indexes that screen out stocks with both value and growth statistics, which may increase volatility.

ETFs have also picked up on the commodities craze. On Apr. 28, Barclays Global Investments launched the first ETF focusing exclusively on silver. Barclays' iShares Silver Trust finished its first day of trading up 7% at $138.12, with a volume of 2.342 million shares. Its 0.5% price tag is higher than the 0.4% expense ratio for both its existing gold ETF, iShares Comex Gold Trust (IAU ), and rival State Street's streetTracks Gold (GLD ). Still, some analysts, among them PIMCO Chief Investment Officer Bill Gross, warn against buying metals now that prices have already soared.

NOW WITH LEVERAGE. For investors seeking a more general commodities fund, Deutsche Bank's (DB ) DB Commodity Index Tracking Fund (DBC ) opened in February. It's the first ETF to invest in a basket of futures on crude oil, heating oil, gold, aluminum, corn, and wheat. But it costs a steep 1.3%. Another ETF investing in crude futures, Victoria Bay Asset Management's U.S. Oil Fund (USO ), opened Apr. 10. It has an expense ratio of 0.5%.

The biggest new wrinkle for ETFs could be the use of leverage, or more sophisticated derivatives, options, and debt securities commonly used by hedge funds. ETFs using leverage are expected to gain SEC approval this year, according to a report released in April by Tiburon (Calif.) financial services consultancy Tiburon Strategic Advisors.

For several years, Bethesda, Md.-based ProFunds has been awaiting the regulatory go-ahead for both long- and short-leveraged ETFs. The ETFs would likely carry lower expense ratios than ProFunds' corresponding traditional mutual funds. ProFunds fueled speculation about the funds late last year when the company hired former State Street ETF innovator Gus Fleites as chief investment officer. A ProFunds spokesperson says the company cannot comment on the funds during their registration period.

CHOOSE CAREFULLY. Finally, industry watchers say ETFs may soon cross into the final frontier: active management. All ETFs currently track indexes, but the SEC could approve actively managed ETFs as early as this year, according to the Tiburon report. "It's not will they be coming, it's when," says Tom Lydon, president of financial advisory firm Global Trends Investments. Still, questions remain about how such ETFs would address transparency, among other concerns.

Investors have plenty of ETFs to choose from. The number of ETFs on the market soared to 212 as of March, up from 119 at the end of 2003, according to the ICI. While more are in the pipeline, some experts think many investors should avoid ones that are highly specialized and cost more than the average index fund. Says Morningstar's Culloton: "Most people can live a long and happy life and be successful investors without a lot of these very nichey funds."

http://www.businessweek.com/investor/content/may2006/pi20060505_638080.htm?chan=search

How to Invest in Nanotech

If you have any belief in the future of GNR (Genetics, Nanotechnology & Robotics - Robtics is really just Artificial Intelligence), then here is one way you can profit from your beliefs.

Some quotes from the article below:

"...nanotechnology will increase to $2.6 trillion in 2014, equal to about 15% of global manufacturing output, from $13 billion in 2004."

BusinessWeek
APRIL 17, 2006
Market Views
By Palash R. Ghosh

How to Invest in Nanotech
IBM, Intel, and GE are taking this emerging technology seriously. An exchange traded fund means wary investors can get serious, too

Nanotechnology, which involves the development, manufacture, and application of products at the molecular level, should have a profound impact on virtually every business if implemented successfully. Although there are skeptics, the stock prices of companies using the technology, including blue chips IBM (IBM ), Intel (INTC ), and General Electric (GE ), could benefit. In fact, an exchange-traded fund (ETF) devoted to nanotech is taking off.

To understand the dimensions, consider that one nanometer is equal to about one one-billionth of a meter, or 1/75,000th of the diameter of a single human hair. At this level, materials exhibit properties that reflect quantum physics. "Nano-scaled" products range from tiny robots or micromachines to nano-particles that could help clean the environment (see BW Online, 4/10/06, "Tapping Nature's Tool Kit").

QUEST FOR PROFITS. Indeed, the growing importance of nanotechnology was underscored by President George W. Bush in the State of the Union address in January. He proposed to double the Federal commitment to the most "critical basic research programs in the physical sciences over the next ten years," including nanotechnology.

Lux Research, a nanotechnology research and advisory firm, estimates that revenues from products using nanotechnology will increase to $2.6 trillion in 2014, equal to about 15% of global manufacturing output, from $13 billion in 2004. By then, the firm believes nanotechnology will be a routine part of everyday living.

Jack Uldrich, president of the consultancy NanoVeritas Group, estimates that corporations around the world will spend more than $10 billion on nanotechnology R&D in 2006. He indicates that he closely follows about 100 U.S.-based nanotech firms, of which 60% are privately held. Of those, roughly 60 have commercial products currently on the market and about 22 are profitable.

TWO VARIETIES. "These firms are supplying nano-scale equipment to the nanotech industry, as well as to big companies like IBM and Intel," Uldrich notes. He believes the number of nanotech companies, profitable or otherwise, will continue to increase.

Late last year, Lux Research, in tandem with PowerShares Capital Management, launched an exchange-traded fund, the PowerShares Lux Nanotech Portfolio (PXN ), for investors seeking to invest in nanotechnology. The tiny $89-million fund invests in 26 stocks in the Lux Nanotech index. Year to date through Mar. 28, the ETF gained 11.8%, vs. 3.9% for the S&P 500-stock index. (The portfolio is too new to be ranked by Standard & Poor's.)

The Lux index consists of companies that make tools used to develop nanotechnology, and well-established firms integrating nanotechnology into their existing products. Components are broken down into two basic types of stocks: "nanotech specialists" and "end-use incumbents." The specialists, including FEI Co. (FEIC ) and Flamel Technologies (FLML ), are small- and mid-size companies that focus specifically on developing or funding nanotechnology applications. The end-use incumbents are large-cap companies applying nanotech to existing product lines. The two groups are then equally weighted with 75% applied to the nanotech specialist components and 25% for the end-use incumbents.

PROMISING TRIO. While some see the ETF as a good vehicle for those who want to invest in nanotechnology, others point to its drawbacks, such as holdings that are not yet profitable and the extreme volatility associated with industry-specific funds that seem gimmicky.

Srikant Dash, index strategist at Standard & Poor's, notes that narrow sector ETFs have two legitimate uses. "First, money managers who have a view on a narrow industry, but do not have a view on individual stocks within that narrow sector, can use these ETFs to implement their views," he says. "The second user group consists of trading desks and active traders who trade frequently on news about a narrow industry, or want to manage their risk exposure to it."

Another way investors can play nanotech initially is by investing in large-cap companies applying the technology to their existing product lines, thereby avoiding unstable and unprofitable startups. Nanotech is expected to have a powerful impact on three major industries initially: semiconductors, life sciences, and energy.

FACTS VS. FAD. Many well-known firms are already integrating nanotech, says Peter Hebert, chief executive officer of Lux Research. "For example, 3M Co. (MMM ) stated it has $800 million worth of nano-enabled products it is selling right now," he says. "American Pharmaceutical Partners (APPX ) has a new cancer drug, Abraxane, that is enabled by nanotech. It is on the marketplace as we speak."

Big pharma companies are using new nano-particles to reformulate existing drugs to make them more effective and potent, and therefore extend the patent and lead to bigger revenues, experts say.

While some observers remain skeptical about nanotech's near-term future as a viable investment, Uldrich is confident it is not an overblown "fad," like many dot.coms were. "There will initially be some excessive hype surrounding nanotech and some fraudulent companies trying to exploit investor excitement," he says. "But what distinguishes nanotech from things like the dot.com craze is that legitimate nanotech companies have to have a strong scientific and technical background and foundation. This will limit the number of companies that enter the field."

http://www.businessweek.com/investor/content/apr2006/pi20060417_587999.htm

The Power Of Ambivalent Thinking

Interesting snippet - and its quoting our local University of Washington - go Dawgs!!. A good friend of mine and I have often discussed how being the quintessential positive thinker may not always be best path to happiness and success. Here's a little scientific evidence supporting our thoughts (at least for creative thoughts, so I suppose you'd need to make a connection between creative thoughts and happiness or success - but close enough for it "supporting" our theory!)...

The Power Of Ambivalent Thinking

Positive thinking may not always be a plus. According to a study by University of Washington B-school assistant professor Christina Ting Fong, ambivalent feelings -- the simultaneous anxiety and excitement of starting a new job, say -- may result in enhanced creativity. Fong divided about 100 students into four groups to write about life events that made them feel either happy, sad, neutral, or ambivalent. (Another test later assessed whether participants in each group felt the desired emotion.) The students then took the Remote Associates Test, a commonly used measure of creativity. Those who felt ambivalent came out on top. Complex emotions, theorizes Fong, may lead to complex thinking.

What's the link? MIT neuroscience professor John Gabrieli explains it this way: Problem solving requires access to all our mental resources, and an ambivalent state broadens thinking, perhaps allowing us "to cast a wider net" over the information in our brains.

By Lindsey Gerdes

http://www.businessweek.com/magazine/content/06_44/c4007010.htm#ZZZUX6DTGTE

'Tower of Babel' translator made

I've often said the technology is all there for language translations - voice to text, text language conversion, then text to voice, but this allows mouthing words to text, text to language conversation, etc. Of course the language conversion piece of these systems is the part that needs the most work, but it is continually getting better!

http://news.bbc.co.uk/2/hi/health/6083994.stm

'Tower of Babel' translator made

A "Tower of Babel" device that gives the illusion of being bilingual is being developed by US scientists. Users simply have to silently mouth a word in their own language for it to be translated and read out in another. The researchers said the effect was like watching a television programme that had been dubbed. The system, detailed in New Scientist, is not yet fully accurate, but experts said it showed the technology was "within reach".

"The idea is that you can mouth words in English and they will come out in Chinese or another language"

Tanja Schultz

The translation systems that are currently in use work by using voice recognition software.
But this requires people to speak out loud and then wait for the translation to be read out, making conversations difficult. But the new device, being created by researchers at Carnegie Mellon University, Pittsburgh, is different. Electrodes are attached to the neck and face to detect the movements that occur as the person silently mouths words and phrases. Using this data, a computer can work out the sounds being formed and then build these sounds up into words.
The system is then able to translate the words into another language which is read out by a synthetic voice.

Within reach

The team currently has two prototypes: one that can translate Chinese into English and another that can translate English into Spanish or German. If the prototypes used a small vocabulary of about 100-200 words they worked with about 80% accuracy, researcher Tanja Schultz said.
But, she added, a full vocabulary had a much lower level of accuracy. Professor Schultz said: "The idea is that you can mouth words in English and they will come out in Chinese or another language." The ultimate goal, the researchers said, was to be in a position where you can just have a conversation.

Chuck Jorgensen, a researcher at Nasa's Ames Research Center in Moffett Field, California, told New Scientist: "This is showing the technology is really within reach." Phil Woodland, professor of information engineering at the University of Cambridge, said: "This work sounds interesting. Most groups are working on translating audio data into different languages, but this is different to work I have come across before because they are not working from a real acoustic signal."

Silicon Retina Implants

Albeit rudimentary, if these crude images can be seen by blind people, I think it is nothing short of amazing. Since this retinal implant is silicon based, it is subject to the exponential gains of all technology. One can easily imagine the retinal implants of Lt. Jordi from Star Trek. Only in the show, it was thought of a handicap, with special benefits of seeing in different spectrums, but still an augmentation that would not be chosen. I think in the future, these implants will be able to see in the human spectrum of light and replicate our vision, only these implants would also have all sort of other benefits, such as true virtual reality (at least for the sight sense), seeing in other light spectrums (night vision, thermal, zoom, etc.). The VR will be the biggest benefit for people with normal sight. Hopefully they can make them look like normal eyes by that point...

http://www.newscientisttech.com/article/dn10340-silicon-retina-mimics-biology-for-a-clearer-view.html

Annihilation Omens

Very interesting article. The book this article quotes looks like its short and worth a quick read. I've often said that a great civilization has a good balance between science and philosophy (as my belief is that they are mutally exclusive). As our religious beliefs have waned (and religion is just an organized philosophy, while politics are the indoctrination of one's philosophical beliefs), it has not been the teachings of Aristotle or Kant that has filled the void, but science. This book seems to highlight the issues this presents. It also looks like it touches on some of the issues of the inevitable development of computers with human intelligence and beyond. Of course, if you're truly interested in my last sentence, you'll need to start with Ray Kurzweil's latest, "The Singularity is Near: When Humans Transcend Biology". This book will change your vision of the future, radically (for most, but perhaps not all of you).

http://www.washtimes.com/commentary/20061009-094036-6851r.htm

Second Life Update: A Virtual World but Real Money

Here’s another interesting article about Second Life in the New York Times today that I read over lunch. I was talking to Chris, Keith and Mel about this on Saturday at lunch (among other things!). It just keeps growing and getting more and more recognition. Now more than 30 well known brands (e.g. Reebok, Nike, Nissan, Amazon and American Apparel) have real estate in this virtual world and are doing campaigns and promotions. Keep an eye on this. This is but an early glimpse of the 3D world the internet is going to become. Use your imagination as to what exponential growth in computing and software capabilities will do to this over the next decade…or two!

http://www.nytimes.com/2006/10/19/technology/19virtual.html?ref=technology

Colin


A few noteworthy exerpts from the article:

“On Tuesday, a Congressional committee said it was investigating whether virtual assets and incomes should be taxed.”

"...these sites meld elements of the most popular forms of new media: chat rooms, video games, online stores, user-generated content sites like YouTube.com and social networking sites like MySpace.com."

“...the flurry of corporate interest stemmed from the 10 to 20 percent growth in the number of people who had gone into virtual worlds each month for the last three years. Though exact numbers are difficult to come by, the figure should top a few million by next year, he said.”

“Linden also makes money on exchanging United States dollars for what it calls Linden dollars for around 400 Linden dollars for $1 (people can load up on them with a credit card). A typical article of clothing — say a shirt — would cost around 200 Linden dollars, or 50 cents. As evidence of the growth of its “economy,” Second Life’s Web site tracks how much money changes hands each day. It recently reached as much as $500,000 a day and is growing as much as 15 percent a month.” This trend would mean about $2.7 billion US dollars a day in just one year from now in/on this site alone!! No wonder major corporations are starting to take notice!

“Some corporate events have been met with protests by placard-waving avatars. And there is even a group called the Second Life Liberation Army that has staged faux “attacks” on Reebok and American Apparel stores. (The S.L.L.A. says it is fighting for voting rights for avatars — as well as stock in Linden Labs.)” I'm sure their talking about voting rights within Second Life, but still - politics are begining to take place withing a virtual world! :) That coupled with the Congressional committee - there will be political bridges to be formed...

A Dystopian, Luddite Perspective by Ray Kurzweil

A Dystopian, Luddite Perspective

The dystopian, Luddite perspective of the Wachowski brothers can be seen in its view of the birth of artificial intelligence as the source of all evil. In one of Morpheus' "sermons," he tells Neo (Keanu Reeves) that "in the early 21st century, all of mankind united and marveled at our magnificence as we gave birth to AI [artificial intelligence], a singular construction that spawned an entire race of machines." Morpheus goes on to explain how this singular construction became a runaway phenomenon as it reproduced itself and ultimately enslaved humankind.

The movie celebrates those humans who choose to be completely unaltered by technology, even spurning the bioport. Incidentally, in my book The Age of Spiritual Machines2, I refer to such people as MOSHs (Mostly Original Substrate Humans). The movie's position reflects a growing sentiment in today's world to maintain a distinct separation of the natural- and human-created worlds. The reality, however, is that these worlds are rapidly merging. We already have a variety of neural implants that are repairing human brains afflicted by disease or disability, for example, an FDA-approved neural implant that replaces the region of neurons destroyed by Parkinson's Disease, cochlear implants for the deaf, and emerging retinal implants for the blind.

My view is that the prospect of "strong AI" (AI at or beyond human intelligence) will serve to amplify human civilization much the same way that our technology does today. As a society, we routinely accomplish intellectual achievements that would be impossible without the level of computer intelligence we already have. Ultimately, we will merge our own biological intelligence with our own creations as a way of continuing the exponential expansion of human knowledge and creative potential.

However, I do not completely reject the specter of AI turning on its creators, as portrayed in the Matrix. It is a possible downside scenario, what Nick Bostrom calls an "existential risk3." There has been a great deal of discussion recently about future dangers that Bill Joy4,5,6 has labeled "GNR" (genetics, nanotechnology, and robotics). The "G" peril, which is the destructive potential of bioengineered pathogens, is the danger we are now struggling with. Our first defense from "G" will need to be more "G," for example bioengineered antiviral medications.

Ultimately, we will provide a true defense from "G" by using "N," nanoengineered entities that are smaller, faster, and smarter than mere biological entities. However, the advent of fully realized nanotechnology will introduce a new set of profound dangers. Our defense from "N" will also initially be created from defensive nanotechnology, but the ultimate defense from "N" will be "R," small robots that are intelligent at human levels and beyond, in other words, strong AI. But then the question arises: what will defend us from malevolent AI? The only possible answer is "friendly AI7."

Unfortunately there is nothing we can do today to assure that AI will be friendly. Based on this, some observers such as Bill Joy call for us to relinquish the pursuit of these technologies. The reality, however, is that such relinquishment is not possible without instituting a totalitarian government that bans all of technology (which is the essential theme of Brave New World). It's the same story with human intelligence. The only defense we have had throughout human history from malevolent human intelligence is for more enlightened human intelligence to confront its more deviant forms. Our imperfect record in accomplishing this is at least one key reason that there is so much concern with GNR.

http://www.kurzweilai.net/meme/frame.html?main=/articles/art0580.html?m%3D6

An Email I was going to send until I decided, I'm done with emailing and will blog this stuff from now on...

I know I've sent some of you some information on Second Life in the past (bottom of this email), but I just read a litte piece about them again this morning (article just below). Besides Starwood Hotels, "American Apparel, Universal Music, and even the American Cancer Society have already set up shop in this cyberworld to push their brands". Keep an eye on this operation and others like it...its a taste of what's to come! Virtual worlds are going to be more and more pervasive. Their growth will be like all technology - exponential (not linear). "In 2006, there's a good chance $100 million USD dollars worth of transactions will flow through the virtual world of Second Life. Linden recently rolled out their own exchange, Lindex, meaning - they're almost a bank now." Lindex is Second Life's real world exchange between US dollars and the virtual Linden used in Second Life! Over $100 millian USD spent in one game on virtual land, clothes, etc! I can't remember the number, but I recently read an article that put virtual economies well into the billions of dollars, with people making their livings, often in the third world, by playing the games to get the better equipment or characters to sell to others on ebay and such. People are already choosing to live in the virtual world and it is so extremely primitive yet...just wait another 10-20 years!

Colin

BusinessWeek
SEPTEMBER 11, 2006
Up Front
Edited by Deborah Stead

INN CROWD Booking A Room In CyberspaceThink of it as a virtual focus group. Starwood Hotels (HOT ) is showcasing its newest hotel brand, aloft, in cyberspace, complete with a launch party on Sept. 18. The chain -- which owns Sheraton, Westin, and W, among others -- is now constructing a model of the hotel inside the world of Second Life, the virtual community visited by users who create digital personas, or "avatars," to interact with one another.Starwood's entry into Second Life will certainly build buzz about aloft, which will cater to design-conscious, tech-savvy travelers. Outfits like American Apparel, Universal Music, and even the American Cancer Society have already set up shop in this cyberworld to push their brands. But the real payoff, says aloft Vice-President Brian McGuinness, is the feedback about the hotel-in-progress from Second Life denizens, who post their reactions on SL's message boards. "It's the next generation of marketing," he says. Operated by Linden Lab, SL so far has about 595,000 "residents" (43% female, median age: 32). Behind each is a wallet Starwood hopes will open when real aloft hotels launch in five U.S. cities in '08.

By Diane Brady and Aili McConnon

I know I sent this out before too, but its where I got a quote I used above and quite interesting:

http://www.makezine.com/blog/archive/2006/03/the_future_of_credit_cards_ear.html



And here's a little sidebar from the coverstory of BusinessWeek on May1st, 2006:

(Here's the link to the cover story, but you probably need to be a subscriber to reach it - http://www.businessweek.com/magazine/content/06_18/b3982001.htm)

MAY 1, 2006
COVER STORY COVER STORY

Online Extra: Virtual Worlds, Virtual Economies

An economist talks about how online games can blur the line between fantasy and reality

When economist Edward Castronova wrote his first paper in 2001 about the economies of online games, he did it mostly as a joke. But even by then, he realized that in online virtual-world games such as Sony Entertainment's EverQuest, people were creating new economies that were as good as real to millions of participants. His studies eventually drove him to write an entire book about the subject, Synthetic Worlds: The Business and Culture of Online Games, published last year.

Castronova, now associate professor of telecommunications at Indiana University, says the growth of online games, from the No. 1 World of Warcraft to Linden Lab's open-ended virtual world, Second Life, has happened even faster than he predicted in his book. He spoke recently with BusinessWeek's Silicon Valley bureau chief, Robert D. Hof, about why they're becoming so popular, as well as the real-world implications of entire new economies sprouting inside online games. Here are excerpts of their conversation.

What did you think of the virtual-world economy of EverQuest and other online games when you first saw it?

I thought it was a fake economy. I found out that it really didn't feel fake at all. When I saw how it connected to the real economy, as you can see clearly in Second Life with its translation of Linden dollars into real dollars, and then you imagine how big this phenomenon could get, it started to have real-world macroeconomic implications.

I thought a study of the video game economy would be an illustration of the deeper lesson -- the subjectivity of value in economics. In econ, there is no difference between reality and fantasy.

Were you surprised at the explosion of virtual economies?

For people born after 1985, there isn't any such thing as virtual reality. There's just another way that you talk to people. This business of having characters and buying and selling stuff for gold pieces -- it's very natural.

These products like Second Life, and the way that World of Warcraft broke out, have just shocked the hell out of me. I thought the big impact might take until maybe 2010.

What accounts for Second Life's growth?

The inflection point for Second Life was this meeting in April, 2003, with me and [journalist] Julian Dibbell and Larry Lessig [the Stanford University law professor and author] and a couple of venture capitalists like Jed Smith and Mitch Kapor. They were basically talking about the idea of user-created content. What we told them was that ownership, and the ability to liquidate the value of your virtual holdings, would in theory spark economic development. If you let people capture the value of what they create, they're going to create a lot more.

So we told them to change their model from one of taxation and share-the-wealth to: "You pay us for the land, you can build whatever you want on the land, you can charge people Linden dollars to do things on your land, and you can take those Linden dollars and turn them into real dollars. And if you build something that's cool, you make money off it and we will too."

So what's the deal with the growth at World of Warcraft, which doesn't do that?

World of Warcraft, in terms of its structure, isn't different from the older games. But they threw writers at the product. There are just so many story lines that are interesting. You just spend all of your time going from one quest to another. Plus the art direction makes it a very pleasant experience to be in. It's the difference between the Mustang and the Edsel.

Do you see those as the two business models for virtual worlds, or are there other models as well?

If you're not in the position to be making that content yourself, like in World of Warcraft, you're thinking of a user-content model like Second Life. A hybrid would be something like Guild Wars, which is a game that doesn't have a lot of pre-made content in it and relies on player vs. player combat to do most of the entertaining.

Microtransactions is another possibility. The Xbox 360 model is apparently to get a bunch of people together and get them into a marketplace facilitated by the console. It comes as part of the product, instead of the current games where a lot of the commerce is basically leeched by third parties.

Given the surprising growth of online games and virtual worlds, what will be the impact on entertainment, or even society?

There's going to be a policy debate a lot sooner than I realized. The focus seems to be on single-player violence, but I don't think it'll be too long before they focus on this idea of toxic immersion -- the idea that people spend too much time in fantasy worlds.

Will the critique have an impact on games and the industry?

Every time there's another politician who doesn't know anything about it, who doesn't the play the games all the way through but just stands up and says all video games should be regulated, that creates a problem for me. That's like saying that everything that's on a moving picture image is bad.

Right now my job is talking to people and trying to peel away the dragon skin, and look at the underlying social networks and markets that are forming and then express [those] insights.

So who is inviting you to talk to them, and what's their interest?

There's this cadre of 20-something and low 30-something workers who keep talking to higher-ups. Every company, if they're smart, will give younger people an open-portfolio job and just say, investigate what's out there.

Best Buy (BBY) started exploring the opportunities for Best Buy to make a game like this, maybe sell product through a game like this, or set up their own affiliate fan site with respect to the game. They didn't go forward with that, but they're keeping an eye on these virtual world technologies. There's a broadening understanding of the uses of this technology for business applications both by blue-chip companies and by startups.

How far along are virtual worlds in terms of reaching a mass audience?

Every single gaming company and gaming platform is going online now. Actually, I keep wanting this not to happen so fast.

Why?

I like the games that you can escape into. The concept that it's becoming a global commercial phenomenon, that's intimidating to me.

What do you mean?

I like the body. I was watching a ballet recently. I was crying because I was thinking the bodies are so beautiful, and we're losing the body. I'm just afraid of losing the body.

At the same time, I love playing these games. Also, I have a kid. I also think, well, I should introduce him to these worlds at an early age so it's very natural for us when I'm older to go hang out together no matter where he lives.

As if that's not enough, do you have other concerns about online games?

I'm also concerned that this commercial impulse could swallow up the separateness of these places. I would hate to see all that lost because of unregulated profit-seeking.

I would like there to be some kind of provision, like a wilderness preserve sort of law, for these places. We would need to have a law saying that if you promise you will seal off this world so people can't money-launder with it and can't liquidate the returns, we won't come in and tax all the transactions, and we won't subject you to child labor laws.

Second Life seems to be embracing commercialization, though.

That's part of its core plan. This is where I would set Second Life apart. This is unique technology here. It would be really bad for Second Life to be closed off from the real economy. It's a big part of its raison d'être, to be an economic space that is well-integrated into the real economy. That's different from a fantasy world.

I think there should be a line between Second Life and World of Warcraft, and my concern is that judges and legislatures will draw a line that puts both in the same group.

What's the appeal of Second Life, in your view?

It's an infinitely scalable content creator's dream. It's an extension of the land mass of the Earth. As long as somebody wants land to build on, Second Life will make land. If you're into creating content -- whether it's a building or a logo, anything -- it's just a dream space. That's what explains how it's growing.

I think the question is the ratio of content creators to content consumers, and keeping that healthy. You want to have enough creation, but you also need to have consumption. You need to have creation that people consume for the world to be lively.

Subject: The Virtual Rockefeller
I thought this article was interesting. It is more evidence that we are moving towards, and beginning to develop, a virtual world where people will choose to live more of their waking, spare (and eventually professional) time than in the "real world". The success of games like the Sims being a top selling game, people now making money developing virtual real estate - living and earning in a virtual world... I always liked many of the premises of the Matrix movie, but never liked the premise that we were forced or captured in the virtual world while our bodies are being used as batteries. I believe one day we will choose to live there. I'm not attributing we should or that it'll be better, but it will happen...

Colin

The Virtual Rockefeller
Anshe Chung is raking in real money in an unreal online world.
By Paul Sloan
December 1, 2005

(Business 2.0) – To understand the lucrative real estate empire Anshe Chung has created, it helps to spend some time with her "in world." There, she might teleport you to one of her islands, on the continent she's named Dreamland. You can stroll through the floating city she built 700 feet above a desert, walk through elegant Arabian-style homes on land she leases, strike up a conversation in Japanese amid her Asian gardens, or shop for a grand piano in one of her 600 boutiques.

It's all virtual, of course--part of a flourishing online universe called Second Life. And if it sounds absurd, consider this: While Anshe won't talk about how much money she's making ("I'm careful not to stir animosity," she says), Philip Rosedale, the founder and CEO of Linden Lab, which runs Second Life, estimates that she's bringing in around $150,000 a year--in real, hard cash.

First, a primer. About 70,000 people "play" Second Life, though it's not really fair to call it a game. People don't rise through the ranks by slaughtering sinister beasties, for example. No score is kept. Linden Lab, based in real-world San Francisco, simply sets up computer servers and creates a limited supply of undeveloped land. Then it auctions off parcels, typically to developers like Anshe. Rosedale, who launched his virtual universe more than two years ago, characterizes Anshe as the "Rockefeller of Second Life."

She has many schemes, but here's one basic play: Anshe buys up Second Life land, paying Linden Lab roughly $200 a month for each 16-acre plot, plus a one-time fee of $1,250. Then she develops the land, using Photoshop to add rivers, mountains, and forests. Sometimes she hires subcontractors to improve the acreage by designing or building houses. Then she sells or rents to other Second Lifers, who pay good money to inhabit her creations. As in the real world, prices vary by location. But often someone will pay Anshe $100 up front to buy a one-acre plot, plus $20 a month in land tax. In a case like that, Anshe makes $112 in her first year. She's done more than 10,000 various real estate deals. "I'm like Wal-Mart," she says. "The margins are small, but the volume isn't."

Anshe's real-world name is Ailin Graef, though in Second Life she has Bono-like notoriety and is known simply as Anshe. She grew up in China and now lives outside Frankfurt, Germany, where she teaches Chinese, English, and German. But her main gig is running her Second Life empire with her husband. When she joined Second Life just over a year ago, she did so out of curiosity about virtual worlds--to explore how people behaved there and how the experience was different from, say, playing a videogame. "What I found were real people with real emotions and real friendships," says Anshe, 33. "I also found the economy was very real."

Like any good businessperson, Anshe researched the market. She began chatting with participants to figure out what they were looking for. She found that people were frustrated with land developers who asked huge prices and wanted to negotiate, so Anshe began brokering land at fixed prices. Players also wanted neighborhoods that amounted to more than drab slabs of virtual turf, and they wanted some order. So she began creating the equivalent of gated communities, complete with zoning rules. She doesn't allow malls or clubs in certain regions, for instance, and limits the heights of buildings. "She is the government," Rosedale says.

Second Life is still an emerging nation, and Anshe believes it's rife with moneymaking opportunities. The key is to find a niche. As in the real world, for instance, Anshe discovered that people want to spend time with those who are like-minded. So she created specialized areas--places for people who like Asian architecture, for example, and a community for gays and lesbians. She also owns stores that she leases to other virtual merchants.

A strange way to make a living? Perhaps. But for Anshe, it's no stranger than spending tens of thousands of dollars on a designer piece of clothing. It's just a lifestyle, she says, "and I make customers happy."

Some Article I plan to review in future blogs.

http://www.businessweek.com/magazine/content/06_18/b3982010.htm

http://www.businessweek.com/magazine/content/06_18/b3982001.htm

http://www.businessweek.com/innovate/content/mar2006/id20060307_123989.htm?chan=search

http://www.makezine.com/blog/archive/2006/03/the_future_of_credit_cards_ear.html