Rapleaf

Interesting article on Techcrunch about a company called Rapleaf. The nub:

Rapleaf will allow anyone to leave feedback for anyone they’ve transacted with. Others can use this feedback to help them determine if they are doing business with someone who’d likely to engage in fraud. Rapleaf is eBay feedback for the rest of the web, and the offline world.

Very interesting idea. Of course, there have been various solutions that people have tried to address the curse (and perhaps sometimes blessing) that, on the internet, no one knows if you’re a dog. I always thought encryption and the whole public key infrastructure thing would go somewhere, you know, with PGP and all being used, then of course the various bodies around the world setting up certification authorities, and then related legislation, etc. etc. That could have solved a lot of problems, including, amongst others, spam. And of course fraud. Surprisingly enough it never got off the ground all that well and in its stead we find reputational markers such as this.

Interesting how the internet has enabled the scaling of these sorts of reputational mechanisms. Where it was once a couple of neighbours chatting about the best butcher, its now millions of folks spread across dozens of countries having their opinions on thousands (or more) vendors. Talk about network effects.

Killer E-mails

Just one more before my “lunch” ends…. still trying to catch up. Anyway, a recent article highlights a real low point in spam. This is even worse than the Nigerian scams (which actually resulted in several real-word deaths). Anyway, the jist of it is as follows:

The emails claim that the recipient has been stalked by a hired assassin for 10 days, but that the hitman is prepared to drop the contract if he is paid a total of $80,000. Upon receiving an initial advance payment of $20,000 the hitman claims that he will produce taped evidence of the contract to kill the reader of the email.

Frightening. Even it is spam. Of course, this is nothing more than old-fashioned extortion, gone high tech. That being said, for me, it seems to have crossed a line that most cyber-criminals had not yet crossed until know – actually threatening physical harm to get paid.


Of Search Engines and Competition (Part II)

Read a very interesting article on the weekend on how Yahoo! blew it. No, they’re not really a search engine, or rather weren’t really a search engine, but thought I’d mention it given my previous musings on search engines. The article, I think, demonstrates pretty clearly how quickly things can change in the online world, and how the balance of economic power can very quickly change so that the one puny underdog can become the king of the junkyard, so to speak. Not that Yahoo! is exactly the picture of abject failure. But, relative to Google, they certainly have some catching up to do. And if Google isn’t very, very, very careful, they may very well be in the same position a few years from now – struggling to catch up with the brash young upstart that has come up with the Next Big Thing…

The Exciting World of Licensing Metrics

OK, off the policy/opinion track for a moment, and on to more technical stuff. Most of you will probably consider this topic rather dry, but it is something that lots of folks in the tech industry do think about (and should think about).

Just to quickly summarize, the article speaks briefly to the various types of metrics that can be used to price software, and the complexities that have arisen given things such as multi-CPU computers, multi-core CPUs, virtualization technology and clustering technology. Anyway, the article is a bit of a sales piece as it concludes that the answer to all the complexity is, of course, how the author’s company is doing it:

Subscription pricing models have become increasingly popular in the past few years. Open source software companies typically charge for support on an annual basis, rather than for one-time software licenses. But those contracts are still often based on the number of processors involved, leaving CIOs in the same bind. For our part, we at Sun want to simplify pricing and planning even more: Subscriptions for software are still actually subscriptions for support, as Sun’s software is now free and open-source. But pricing is based on the number of employees a company has. To simplify how to determine what that number is, we base it on what the company reports annually to the Securities and Exchange Commission (SEC).

Nothing super new but worth a bit of a read, particularly if you’re a software developer thinking about pricing models.

My $0.02: This works fine for established, cashflow positive businesses, but of course smaller shops very often look at big upfront initial license payments as a type of financing – moving to a subscription model does of course impact this. Yes, I know, sort of stating the obvious. Then again, that does bring up the interesting question of capitalizing subscription/maintenance payments… But that’s a topic for another day…
The Software Licensing Debate, Round 2 – Weigh In – weighin – CIO

Pretexting, Ethics and Clients

Still catching up a bit – very quick post on the HP “pretexting” thing. As you may recall, HP asserted that its practice of pretexting – i.e. pretending to be someone else to get confidential telephone records – was legal. They were investigated leaks to the press by one of their board members and had resorted to this practice to try and find the leak. I had commented elsewhere long ago when this story first broke that even if it were illegal, very few (if anyone) could consider such actions the least bit ethical.

As most of you know apparently there was some disagreement as to legality and a few folks at HP were charged. Then I read this recent story about how HP was ending its special ties to Larry Sonsini, of the California powerhouse firm of Wilson Sonsini:

Sonsini – famous for decades in these parts – gained national fame in September during HP’s spy scandal hearings in front of Congress. Emails between the lawyer, HP executives and former director Tom Perkins raised serious questions about how sound Sonsini’s advice was around the practice of pretexting. He seemed to indicate that phone record fraud sounded like fair game, after being nudged in that direction by HP’s internal lawyers.

My emphasis. Its unfortunate to hear of something like this. I don’t doubt that he took the time and effort to research the law to come to a reasonable opinion on the matter before advising his client – obviously it was a very grey area of the law. In those circumstances its unfortunate that he didn’t perhaps suggest, notwithstanding the black letter of the law, that it would be unwise do take the course of action they were contemplating. That as good corporate citizens with a significant public profile, that such a practice is not something they should even consider. But then again, maybe he did and they didn’t listen (and of course he would surely have the good sense never to say that in public and embarrass a major client) or maybe he thought that such comments were not for legal counsel to make. Who knows.

The situation is not unfamiliar to many lawyers – particularly when it comes to giving opinions – lawyers are sometimes subjected to pressure to deliver the opinion that a client wants to hear rather than the one they should probably be delivering. By this I’m certainly not suggesting lawyers are delivering bad or incorrect opinions. What I am saying is that there are often grey areas of the law (which tend to be the areas on which legal expertise are sought) and in respect of which opinions can go one of two or more ways. And sometimes, the client will want to hear a certain outcome – for example, in the case of HP, I’m sure they would have liked the comfort to hear from their external counsel that their actions were legal – it would serve as some evidence that they took some degree of diligence and could serve to mitigate consequences if it turned out governmental authorities differed. If he, on the other hand, refused, or proffered a legal opinion that it was fine but qualified with a recommendation not to take such actions, HP likely would have not been very happy with him. And everyone knows what happens when clients aren’t happy.

Its an unfortunate situation to be in. Particuarly in this case, where, at the end of the day, HP still, obviously, isn’t happy with him.

Kinderstart v. Google

Speaking of litigation, here’s another one, albeit rather old news. The short version: Kinderstart, a web startup focused on children, decides to sue Google because its PageRank drops when Google decides to fine tune its PageRank algorithms. PageRank, btw, is what determines where your site shows up in search results when someone searches on key terms in Google. So when your PageRank drops, less people see the link to your site, less people find your site, and therefore your traffic and revenue go down.

Because of this, they sued Google for damages and also sought an injunction to require Google to reveal their proprietary PageRank algorithms (which of course Google closely guards as a trade secret.

As with the Culligan case, yes, well written decision, etc. etc., and I understand the logic and all that, but there’s a little part of me that wishes that the court could have written a judgement like this:

Kinderstart, this is Google. Google is a separate business from yours. They don’t owe you a living. So, in response to your claim, the answer is no. Now go away.

Tip o’ the hat to the Stella Awards for mentioning this in their listserv. Highly recommended for their take on US litigation.

Valuation of Flies

One of the great things about working in a large firm is the sheer depth of expertise and knowledge. As an example, a recent case came out and was analyzed in short order by the folks in our litigation group, which discussed an interesting interpretation liability for negligence.

The first three paragraphs sum it up rather nicely:

[1] The Mustaphas maintain a spotless home. Cleanliness and hygiene are matters of utmost importance to them. On November 21, 2001, an incident occurred that offended their sense of sanctity in the purity of their home, and shattered Mr. Mustapha’s life. In the course of replacing an empty bottle of Culligan water on the dispenser provided by Culligan, he and his wife saw a dead fly, and part of another dead fly, in the fresh, unopened, replacement bottle.

[2] Neither Mr. Mustapha nor any member of his family drank from the bottle. He became obsessed, however, with thoughts about the dead fly in the water and about the potential implications for his family’s health of their having possibly been drinking unpurified water supplied in the past.

[3] The trial judge accepted the medical evidence that Mr. Mustapha suffers from a major depressive disorder, with associated phobia and anxiety – all triggered by the fly-in-the-bottle incident. In the result, Mr. Mustapha recovered judgment at trial in the total amount of $341,775, plus pre-judgment interest, for psychiatric injuries suffered because of the incident.

My emphasis. The decision goes on for many, many more paragraphs to ultimately overturn the judgement and absolve Culligan of liability. Its a well thought out judgement with cogent arguments supporting the conclusion.

All that being said, even as a lawyer, sometimes I read certain cases, such as this one, and wonder whether judges ever wish they could write a judgement more along these lines:

C’mon Mr. Mustapha. Its a fly. OK, a fly and a half. It didn’t kill you. It wouldn’t have killed you. Get over it. Fine, you freaked out. And I probably would also be a bit upset. But really, destroying your life? $341,000 in damages? No, the damages aren’t from the fly, they’re from you. So forget it. Not today. Not in my court. Appeal allowed. Good day.

Yes, I have my tongue firmly in cheek and yes, definitely, I understand the need for lengthy and well-reasoned judgements, etc. But sometimes, just sometimes, I scratch my head a bit and wonder what the world would be like…

Venture Capital Valuations

OK I lied – just a few quick posts since its been so long and I need a break from drafting.

For all of you out there looking to value your 2.0 startups go take a look at Bubbleprice. An amazingly sophisticated set of proprietary algorithms developed by industry veterans allows you to input primary and secondary valuation factors used by those in the industry to give a precise indication of economic value. Fascinating, fascinating technology.

An example can be found below:

In fact, I’d be happy to take a half of that. Or a third. Even a tenth.

Not Dead

Wow. The online world is tough. A few days of absence and readers drop to nil. Alas, tough to be a good lawyer, a non-absentee parent and a regular blogger at the same time. So when push comes to shove, the law comes first (since the boy doesn’t eat if it doesn’t). Things have been busy and I have a long backlog of somewhat interesting stuff to share with you – shortly.

Apples and Oranges and Mobile Phones

This won’t be long and has no legal bent to it and you’ve probably already seen it elsewhere, but if you haven’t, you really should take a look.

When the iPod came out, I though “meh” – its OK. Not great. Just OK. Of course, as everyone knows, it did very well.

On the other hand, the new iPhone? Wow. Stunning. Remarkable. I can’t imagine how this thing will *not* fly off the shelves.

After all the particularly bad attempts at doing this in the past, finally, someone got it right.  Sure, its not absolute perfection, but it comes pretty close.
My humble opinion? Unless some major disaster happens with it (like it doesn’t work as described, or breaks when you drop it, etc.), iPhone will make the iPod look like a wee, tiny drop in the bucket.
Live from Macworld 2007: Steve Jobs keynote – Engadget