Joi Ito's Web

Joi Ito's conversation with the living web.

Today I heard a presentation by Michael Molitor from Climate Wedge. He is an expert on environmental issues and his company has created a fund that buys and sells "Voluntary Carbon Units" (VCUs).

Carbon credits or Carbon Units are basically a unit that represents one metric ton of CO2 emissions. The EU has a market called a Compliance market where companies can buy credits to offset their EU Allowances. For example if company X only has an allowance of 100 tons of CO2 emissions, they have the choice of either buying carbon credits on the market or lowering their emissions by that much. Emission allowances will continue to go down driving prices of credits up and/or causing companies to innovate instead of paying for these credits. It is any interesting and now exceedingly common practice that makes it easier for companies to become "carbon neutral" while providing incentives for companies to innovate.

In addition to the formal compliance market which is mostly for EU regulated companies to buy and sell their credits to meet their allowances, there is a voluntary market which involves "softer" carbon credits and allows companies that are not yet regulated to play in this market. HSBC, for instance has announced that it is now "carbon neutral". It is not required by law to do this, but as people become more sensitive to the issues of global warming, carbon neutrality will have an increasing impact on customer and investor relations.

There are a number of individual level carbon neutral initiatives. Airlines, automobile companies, oil companies are beginning to provide carbon neutral products where a portion of the cost or the payment of an addition expense go toward making the use of that product or service carbon neutral. The interesting thing is that in most cases the costs are quite small. To make your whole life carbon neutral it costs roughly 1% of your income.

I think this is a great idea and the notion of being carbon neutral is very appealing. I am going to try to do this immediately.

However, a few things concern me.

I've googled around for companies and non-profits that offer carbon units and some look rather sketchy and/or expensive. There is also the issue of the quality of the carbon unit. Some little city threatening to build a coal power plant, then not doing it in exchange for carbon units seems less sincere than someone rolling out a photovoltaic power generator. "Good" carbon units like those on the Compliance Market trade at a premium because they are more closely audited and provided from reputable organizations. I think that these markets will grow quickly and hope the scam artists don't steal money from too many good intentioned people.

The other thing that scares me a bit is that although I like markets, I worry that a lot of money will flow to companies trying to innovate in this space. I see a VC bubble in energy technology right now too. When I see lots of money pouring into an industry like this, I worry that a bubble will form causing inefficiencies, reduction in quality of investors, noise level increases drowning out experts and other things that I saw during the dot com bubble.

Finally, this is not enough. This is all a huge step in the right directly, but we need to be doing everything we can, and even that may not be enough. It will sure feel good to be carbon neutral, but we definitely can't stop there.

On Friday, I met John Buckman. He runs Magnatune, a record label that uses Creative Commons. I've been a huge fan of Magnatune and had been looking forward to meeting him. At the meeting he told me about BookMooch which just launched today.

BookMooch is very cool.

It reminds me a bit of BookCrossing, but the approach is different. BookCrossing is a way to leave books for people in public places and allow people to find these books. You get to track your book and has a neat book-as-artifact element.

BookMooch is more systematic. On BookMooch, you register your books and others search for books. You use points to get books that you earn by listing books. Unlike many other used book services, they don't get involved in the shipping and payment. It's peer-to-peer. Of course, if the book isn't available, there is a link to Amazon.com.

John is very good at combining clean sharing with business to provide a win-win for the various players. BookMooch and Magnatune both have John's sensibility. I view John as a rare example of a serial sharing economy entrepreneur.

I heard a horror story the other day about someone who was traveling for an extended period on a ship. His phone was from Europe. In LA, he placed one called. For a month or so, people who called his phone got voicemail. Because he was last seen by the network as being in LA, all of his voicemail calls incurred roaming charges and he ended up with a $3000 voicemail bill. He argued, but they did not refund it.

I checked the T-Mobile web site and sure enough, after a bit of digging, I found this (link):

Unless you switch your device off or activate Unconditional Call Forwarding on your device, you will be billed for calls delivered to your voice mail box while you are roaming internationally.
The odd thing is, I'm quite sure he didn't have his phone on during the travel period. He said that they had told him that even without the phone on the call was still routed through LA. Does anyone else have any experience with this?

Last year, I blogged about how one of my favorite DJs from my DJ stint in Chicago back in the 80s, Jeff Pazen, filled up a Nano with music and made a few great playlists for me. They were playlists by club, year and tone. I nearly stopped carrying my iPod around and just carried the Nano picking the playlist that best suited my mood. It was like playing that favorite DJ tape over and over again.

The problem was, the iTunes Music Store music was registered under Jeff's name. In other words the Nano was "loaned" to me, so I didn't really own the music. I could listen to it directly from the Nano, but on on my computer or elsewhere. When I played the Nano through the computer, it would get stuff on the licensed music. I started buying the songs from the music store, one by one by hand. Then I noticed that there was an operation that said it would convert the ownership to me and copy over the songs with my copies. I, stupidly, thought it would be a fast way for me to purchase the songs on the playlists that I didn't own. Instead of doing that, it "reset" the Nano to an empty state. I was devastated.

As Tower Records Japan says, "no music, no life." So content I had been with the Jeff Nano, I hadn't been playing with last.fm that much lately so I decided to fire it up. Congrats guy on a great redesign. I fell back in love with last.fm which saved my day. I had left the comfy familiarity of the Nano and enjoyed wandering along a sometimes annoying but fun and eclectic musical journey.

Browsing the playlists of various people I know or saw, I realized how different my taste was from many people I know and like. One in thing that struck me was how even after almost 20 years, Jeff's taste in music, even the new stuff, hit the spot for me and was perfect. Somehow, during my immersion in the music scene, my musical taste was set on some trajectory that included cycles. Somehow I am still in sync with Jeff. I'm not sure what this means exactly, but I found it interesting.

As I sat listening to radios of various people, I realized that continuing this process for a long time would make your "taste" appear similar to theirs and you would eventually show up in their neighborhood on last.fm as someone with similar taste. This would be a kind of weird stalking method if you were obsessed with someone enough to listen to their music collection all day every day. ;-P

Conversely, I won't say who, but looking at their music, I realized how difficult it would be to hang out with them too long even though I consider them my friend. I don't think I could ever take a road trip with someone who didn't share any favorite artists with me.

Disclaimer/Disclosure: I'm an investor in last.fm.

Last night was the launch party of CGM Marketing. It is a joint venture between Digital Garage, Asatsu DK, Dentsu and Cyber Communications (CCI). (Press release)

I co-founded Digital Garage in 1994. My little web/IT company called Eccosys made a joint venture with and later merged with the Garage group headed by Kaoru Hayashi. The Garage group was involved in advertising, marketing and content. We were their little Internet engine that could. In the early days of Eccosys, I had been talking to Yahoo about doing Yahoo Japan. After Softbank invested, it was clear that I wasn't going to get to run Yahoo Japan. I was offered 1% of Softbank Japan by Masa Son, but I turned it down. (Maybe I should have taken it. ;-P) Soon after, I was contacted from a friend at Infoseek about starting Infoseek Japan. We quickly shifted gears and started getting Infoseek Japan up. Softbank set up a joint venture with Dentsu, the #1 ad agency in Japan and called it Cyber Communications. They were tasked with figuring out how to sell ads on Yahoo Japan and interfacing with the agencies. We turned around and got Hakuhodo the #2 agency, Asatsu the #3 agency, Daiichi Kikaku, Yomiuri Kokoku and Daiko and created the Digital Advertising Consortium (DAC). In aggregate, these ad agencies approximately equalled Dentsu in size.

Infoseek had pioneered the idea of CPM ads, selling inventory based on impressions. At the time, none of the ad agencies liked the idea or thought they could sell it to their customers. They understood television GRP, but it was really a measurement of effect. The notion that you could sell ads by how many people actually viewed it, instead of the "value of the spot" was sort of a non-starter. We set up a study group/feasibilty study period for six months where we had people from all of the member agencies come together and talk and learn and eventually try to explain to sales teams in their respective groups. Infoseek launch around 6 months after Yahoo Japan, and we launched with a healthy rotation of ads.

Eventually, Internet ads were a big success and and CCI and DAC are now both public companies. Infoseek Japan now lives inside of Rakuten and is still one of the top portals in Japan, outliving the parent which was purchased and smothered inside of Disney.

In reflection, Infoseek and "home pages" didn't take off in the way I imagined. I thought we would have a lot more personal publishing. Instead, we ended up with big sites that were for all practical purposes, professional media sites. I had dreams of "the death of advertising" 10 years ago and had thought that personal publishing and targeted advertising would disinter-mediate some of the lying and stupidity. We didn't get that far.

So here we are - blogs, wikis, tags, Technorati, RSS/Atom, and the web looks a lot more like what I had envisioned 10 years ago. The online ad business is more innovative than its old media counterpart, but it has become mostly an inventory/sales business. So lets try this again. This time, we decided to hook up with Dentsu the #1 ad agency, Asatsu the #3 ad agency and CCI, the competitor to the company we set up to sell Infoseek ads.

Although I don't like the word "Consumer" in the "Consumer Generated Media Marketing" name, the idea behind this company is to try to take it the next step. (I wish we could use "user") At the first meeting yesterday, I said that I thought that advertising, PR and marketing would converge into "communications". That companies that created or improved good/great products would communicate with their users and that it was about getting involved in the conversation. It was not about spending money to force yourself in front of people who didn't want to hear about your message. It was also not about charging people to participate in "content". It was about people having conversation and about companies knowing when, how and where to say the right thing so that they contributed to the conversation and were welcome in it.

Clearly, the first step is to figure out things like ads that are smart about blogs, tags, time, context. It is also about treating the blogger and the advertiser equally where the ads reflected the desire of the person having the conversation as well as the desires of companies to participate in them.

I was saying all of this in a room full of ad agency executives. It is always sort of funny talking about the end of people's businesses. On the other hand, many of the senior members there were the same guys I was talking to 10 years ago trying to explain CPM and banner ads. I felt privileged to be allowed some suspension of disbelief as well as some trust that we'd try to figure out where the business was. (I don't think anyone REALLY thought that DAC was going to become a public company 10 years ago.)

I think the world is more complex than back in the Infoseek days, but we have a lot more experience and trust this time around. It was a really nice feeling shaking hands with people I hadn't seen for almost a decade - all of us very eager to work together again. This time we get to skip the phase where they think I'm crazy and jump right into figuring out the ad business around Technorati Japan, Six Apart Japan and hopefully soon Japanese Wikia. Technorati is the "secret sauce" and shiny new thing that Infoseek had been 10 years ago.

I am going to be on the board of this company, but will not run it. My role will be to bring new things to them, try to help them with their bearings and stir things up once in awhile.

Disclosures/disclaimer: I am an investor in Technorati, Six Apart and Wikia. I'm an advisor to Digital Garage. Digital Garage is the Japanese partner for Technorati and operates Technorati Japan. I am on the board of and GM of International for Technorati, I am the chairman of Six Apart Japan. I am on the board of Technorati Japan and and am involved heavily in its operation.