Counting the Hits

Some of you may have noticed the counter that popped up at the bottom of the page today; it's a relatively new feature of Blogspot, along with a user statistics function available from the dashboard. The upshot of all of this new software is that, for the first time in nearly four years, I have an idea of how many people are reading this blog, and where they are coming from. It's been a rather strange, if eye-opening experience...

To begin with, the stats function (and the counters) only go back to last summer, or less than six months total, and probably the least productive six months in the entire history of this blog as well. Despite this low spot in my productivity, I still seem to be getting somewhere around 500 to 600 discrete visits each month, or somewhere around 20 per day. Unsurprisingly, most of the individual page views seem to cluster around things that would be common search terms in their own right - almost 10% of the views were the result of my post about the ethics of Amazon, which probably means people were searching for web sites that mention "Amazon" and "ethics" and found my post about them. Still, it's a lot of interest for a little business blog written by a guy nobody ever heard of...

Even more peculiar, at least from my point of view, is the huge range of countries our readers seem to come from. Only a little over half of the hits are from the U.S.; almost one-sixth of them are from the Netherlands, and nearly 10% are from Germany, neither of which makes much sense. I also seem to have a number of readers in Brazil, or at least one who comes here often. The rest seem to be scattered across Asia, including Russia and the Far East. Some of my students have been from those parts of the world, but if any of them found the blog by searching under my name those hits would be coming from here, not from overseas...

Oddest of all, I think, is that a significant number of those hits came from people searching for my name on various search engines. Why people from other countries would be searching for me by name passes understanding; perhaps some of my students have told other members of their families about me, and people are combing the Web looking for leverage. In any case, it does give you an idea about the economics of blogging - and why so few of us can make a living this way...

If I average 500 visitors a month (which is at least 490 more than I thought we were getting), and 2% of them were to click through on an ad to a sponsoring website (which is more than most blogs-based ads get) and if I got a penny for each one (which is higher than usual) that would still only be 10 cents a month; not even enough to make a phone call. I'd need 500 times as many visitors just to cover my DSL bill; 50,000 times this number to generate a good living. And frankly, there aren't too many blogs that get 2.5 million visits a month...

I'm not sure how much different my blog is going to be now that I know how many people are reading it, but I don't suppose it will change much. I'm still reaching a tiny, and mostly random audience, and still writing mostly because I want to, and still declining to monetize, commercialize or civilize this space.

But I'll keep you posted...

Go Smurf Yourself

A long time ago, a major concern that parents had to worry about was having children who were too young to know any better calling those “976” pay-per-minute telephone services and running up huge telephone bills. Some of it was that these services had “adult” material, but mostly it was just that a three-year-old could call the recorded “Message from Santa” number six hundred times in a day (kids that age do not get bored as easily as you might think), and a few weeks later the parents might be faced with a thousand dollars in phone charges. Even otherwise intelligent people who were old enough to know better would occasionally make this mistake; using a phone service to get updates about their soap operas every weekday for a month until their parents started yelling at them about a $700 phone charge (at $4.95 per minute, it adds up quickly). Of course, that all seems so quaint now…

The phone-service menace had faded, if not quite vanished, when websites that charge for content became the new electronic threat. Most of these required a credit card in order to use, but those aren’t that hard for an enterprising young tyke to get hold of, especially when their parents use the same credit card number on the same computer to buy their own online content; in some cases the computer’s own auto-complete software will fill in those fields for them. For at least ten years now, we’ve been bombarded with stories of children as young as 2 years old placing orders for everything from pornographic movies to large construction equipment using their parents’ computers, and this along with the threat of online predators has convinced most reasonably sane people that you’d have to be an idiot to let small children surf the ‘Net unsupervised…

Now it would appear that Apple has pushed back this frontier, as they have so many others, with iPhone and iPad technology. A story from the Associated Press by way of the Yahoo News tech page presents the curious case of the “Smurf’s Village” video game, which is available for Apple gadgets as part of the run-up marketing for the upcoming Smurfs movie. Like a lot of the current generation of online games, the Smurf’s Village gives the user the option of simply buying resources (using real money) instead of working for them through game play. What’s special about this case is that the game is intended primarily for small children – and the usual failsafe of requiring the user’s iTunes password in order to purchase things within the application apparently doesn’t always work…

Now, the Apple leadership and the game publishers have correctly pointed out that parents can restrict all in-application purchases with a simple settings adjustment; it also seems reasonable to ask about kids and unsupervised online gaming in the first place. Any child who is too young to understand about money (and credit cards) is probably too young to be using web-enabled electronic devices without supervision, and letting your child do so isn’t functionally any different from letting them have access to X-rated cable channels, adult websites, or chat services, all of which are already on the list of socially unacceptable parent behaviors (and will probably end up in the legal definition of child endangerment soon if they aren’t already). A much more troubling point is how easy these applications are to abuse – and how blatantly the programmers are trying to get the user to do so…

Consider the case of the Smurf’s Village game, for example. Like most such applications, it has a wealth of challenges that can take days or weeks of constant play to overcome – or you can complete them instantly with the application of a few real-world dollars. Even adults who should know better can fall prey to this type of programming; expecting small children not to is unrealistic. And while children might consider the idea that purchasing a sword or a biological-warfare grenade launcher in order to slaughter other players might be bad, it’s hard to picture them applying the same logic to purchasing “Smurfberries” in order to build their village faster…

Even worse, in my opinion, is the attitude that some of the parents quoted in this article seem to be taking; that none of this is their fault and everything should go back to the way it was when they were children. Like it or not, in-app purchases are here to stay, just the way online communities and cyber-stalkers are. Letting your children play with a web-enabled computer/communications device that is connected to your credit cards is every bit as stupid as letting them play in traffic would be – and these electronic hazards are no more likely to go away than automobile traffic is…

On the Slope Again

Here’s a question I saw posed about an online news story this week: Suppose a businessman buys the contents of a storage locker that are being sold at auction, which happens every month in America when people stop paying their locker rental fees and ignore notices to do so or to clean out their belongings. In this case, let’s suppose that the seizure and auction were legally conducted; no one was swindled into giving up their possessions, the storage company gave the owners all of the time required by contract and law to pay up, and even notified the owners of the auction so they could attend and buy everything back. Does the man who acquired the items at auction have any responsibility to return them to the original owners, or does he have the right to sell his legally-obtained property as he sees fit?

Before you answer that question you might want to consider this case from the Chicago Sun-Times website. According to this report, a man who routinely buys abandoned storage locker contents was doing just that in 2006 when he came upon a lot that included the funeral flag, dog tags, medals, gold star banner, photographs and other memorabilia of the first U.S. servicewoman killed in Afghanistan. At this point the story gets a little murky; the purchaser says he attempted to make contact with the family about returning the items and they never replied; the family does not dispute this, but a non-profit group established in the late Marine’s name says they want the memorabilia and the purchaser has declined their offers for it. Meanwhile, the purchaser (who has violated no laws whatsoever) is being excoriated in the media and flamed everywhere online that this story appears…

Now, granted that the articles obtained in this particular auction have a high emotional meaning to the family, facts of the case do appear to be that these items were left in a storage locker for several years (from 2002 to 2006) and then abandoned after several billing notices, a seizure notice, an auction notice an so on; it’s also clear that the purchaser isn’t refusing to return them to the family, just to do as a third-party group is asking him to do. What makes this case interesting (at least to me) is the issue of where do we draw the line? A lot of what ends up being auctioned off from storage lockers probably has sentimental value to someone, but self-storage companies aren’t charities, and expecting them to continue providing a service you’re not paying for is ridiculous. For that matter, so is asking someone who purchased goods through such an auction to simply give you items they bought and paid for. At the same time, it’s hard to imagine anyone who wouldn’t want to return a dead servicewoman’s burial flag and decorations to her family…

So where do we draw that line? At what point is something so important, holy or sacred that possession of it should supersede the laws of property ownership and liability, and who gets to make that decision? It’s another one of those questions I’m really grateful I don’t have to answer personally; I’m just going to be a weasel here and suggest that anything that is of huge sentimental value to you and can be stored in a single file box is probably something you should not put in self-storage in the first place…

And if you do, make sure you pay the rent on time!

Range Anxiety

I haven’t really be following the growing competition in hybrid and plug-in hybrid car systems, since at the moment I don’t need a new car, and even if I did I’m a graduate student, which means no one is going to give me a car loan anyway. I believe that there is a great deal of potential in this product category, especially if some of the new technologies to provide electricity generation at home pan out. Imagine having a bank of solar cells on the roof of your garage to charge up your car, which you then use to commute. Once you’ve paid for the basic systems (possibly including a battery in the garage to store energy gathered when you’re not home), your fuel costs would be effectively zero for however long the car lasted, and your carbon footprint would be effectively zero also. But for the moment, hybrids are expensive, and the plug-in hybrids are even more so, while the pure electric vehicles have issues of their own…

Consider the case of the new Nissan Leaf, as profiled by The New York Times website. The Leaf is a pure electric vehicle, which means it does not have a gasoline motor and has no emissions whatsoever. There’s some debate as to how much it would actually cost to operate, but the EPA lists the Leaf’s annual energy costs as being about $561, which is less than the Toyota Prius and less than one-third what it would cost to buy gas for a conventional mid-sized car. Unfortunately, the EPA also lists the Leaf’s range as being just 73 miles – much less than the 100 claimed by Nissan, and significantly worse than the Prius (which can, theoretically, reach 600 miles on a full tank under optimal conditions). Even more to the point, recharging stations can be hard to come by on the open road, which means that you probably shouldn’t ever go more than 35 miles from home unless you know ahead of time where you can plug in the car…

This particular worry is known as “range anxiety” to the industry writers, and it has always been a major drawback to electric cars. If you use them exclusively for short trips – such as a short-range commute like mine, or running errands around a small town – they’re reasonably effective, but once you consider a road trip to anywhere you start having problems. In my case, even the run to Detroit to see a baseball game is out of range, and going to Ann Arbor would be impossible unless there was a public charging station I could use there – assuming I’d be there long enough for the Leaf’s battery to charge back up. This limits the utility, and therefore the desirability, of the product, and removes a significant number of customers from the potential market for this vehicle, and who’s even mentioned long-term issues like figuring out how to dispose of the car’s battery yet?

Of course, similar objections apply to bio-fuels, ethanol, hydrogen fuel cells and even “clean” diesel engines (you can’t get low-sulfur diesel fuel in many larger cities), while hybrid vehicles (including the so-called “plug-in hybrids”) have the drawback of still using gasoline for fuel, albeit in smaller quantities. It’s possible that one of the various technological fixes, such as a network of public charging stations, recharging facilities at existing gas stations, larger storage cells for electric car batteries, or portable solar power panels will solve the problem, and in a few years you’ll see pure electric cars on the road the way we’re starting to see hybrids. On the other hand, it’s possible that some other new development is coming, and all of these alternative power sources will someday seem as quaint as the steam-powered cars of the late 19th Century…

I’m just grateful that for the moment, at least, my commute is only eight minutes each way…

Deficit Thinking or Thinking Deficit

Ever since the midterm elections the debate about the national debt has been heating up again, to degrees not seen since the mid-1980’s arguments about the same topic. This blog isn’t supposed to be political, but taxes, and especially business-related taxes, do relate to our primary topic, and there was an article this week in the Wall Street Journal that points out one of those traditional blind spots in which neither side of the political spectrum appears to have much of a grasp on reality: deficit spending and increased taxation…

The linked article follows up on a classic study in economics from the 1980s, which showed considerable support for the contention that every dollar of new taxes leads to more than one dollar of spending by Congress. In fact, the Vedder and Gallaway article found that for each new tax dollar, our Federal government generated $1.17 of new spending (17% more than the tax increase). The updated study is considerably more sophisticated, taking into account a much longer time period, and controlling for a range of different variables, but the alternative models suggest a tax-to-spend relationship of between $1.05 and $1.81, depending on where, when, and how the data is arranged. Nor does this pattern appear to be changing – in the years from 2008 to 2010 the present Congress has approved over $ 1 trillion, which violates all of the existing budget rules…

Now, as a political moderate, I’m not going to claim that the bailout wasn’t needed, or that we can just start slashing social programming without horrible long-term repercussions, or that our military spending is out of line with post-Cold War conditions, or any of the other standard formulae that people like to spout instead of actually wading through millions of pages of dust-dry government documents; I’m just pointing out that regardless of what you think of deficit spending (whether you’re for it or against it), our government has NEVER been able to reduce the deficit by raising taxes. It’s always possible that conditions will be different somehow this time around, but after 65 years and 13 Presidential administrations, no one has ever succeeded in doing so. Which makes the present call for things like a 6.5% national sales tax nothing more than political grandstanding…

From a business standpoint, there’s no reason to expect any member of Congress to show any fiscal responsibility, simply because there is no benefit for any of them to do so. On the contrary, the way most of our representatives continue to get elected is to bring economic advantages (e.g., jobs, entitlements, benefits and pork) to their home districts and/or states. Any member of Congress who could somehow manage to bring funds to their constituents while making somebody else pay for all of them would be elected for life, and in fact many of our longer-serving politicians have spend decades in office doing just that, or at least creating the illusion of doing so. By all indications, the problem with the current system isn’t that we aren’t being taxed enough, or even that we’re being taxed too much, but rather that our taxes are being spent on the wrong things…

Several authors have noted that deficit spending by our national government is, in effect, taking the benefits and making someone else pay for them – in this case, someone else being whoever the tax-paying public is twenty to fifty years from now. Personally, I believe that our government can dig itself out of the hole it’s currently in, by investment in industries and enterprises that will raise our tax base under existing tax law (and coincidentally create jobs, raise our standard of living, improve our trade balance, and fix our broken economy), and that might even be true. The two things that history teaches us about this issue are that whatever else tax-and-spend policies might be able to do, they won’t be able to reduce the Federal deficit – and that people never listen to history, of course…

Missing the Point – Yet Again

Two stories hit one of the news aggregation cites I frequent today in the “nutty lawsuits” category, which I think demonstrate why you should not take legal advice from people without law degrees – including bloggers without law degrees. I’m not going to comment on the validity of these cases (that would be the practicing law without a license I keep warning you about), but I think there are business lessons to be had in both of these instances, even if they’re not exactly the ones the authors or the people who tagged these stories as “humor” intended you to have…

First, we have the case from Alberta, Canada by way of the National Post website, about a woman who recently won a worker’s compensation case because her job caused a flare-up of an old repetitive motion injury. The job duty in question was scooping ice cream, which is an unfortunately thing to have problems with when you are employed by an ice cream shop to scoop ice cream for a living. Certainly, the people who aggregated this story thought it was an amusing case of someone trying to scam a living off of her employer without actually having to do any work. But anyone who has actually tried doing this for a living could have told them otherwise – and so could a lawyer…

Scooping a few helpings of ice cream for the family may be trivial, but having to scoop several hundred servings a day isn’t, especially when we’re talking commercial-grade ice cream, which is stored at a very low temperature to prevent spoilage. If you’ve every had to put a package of ice cream into a pot of hot water in order to get the scoop into the rock-hard surface you already know what I’m talking about; now imagine having to do this several hundred times in an 8-hour shift. Even a healthy person could easily injure herself that way, and keep in mind that she didn’t have a pot of hot water or any other way to soften the product before trying to scoop it. More to the point, perhaps, making someone who already has an old rotator cuff injury work such a shift is asinine. I’m not sure what somebody who can’t scoop would do for an ice cream shop, but there has to be some other duty you could assign such a worker, whether it’s running the register, heating up the fudge topping, or just sweeping up…

The other case comes to us from San Rafael, California, where two men are suing a restaurant because they claim they were injured and their clothing was damaged when two escargot they were eating “exploded” on them, spewing melted butter on their polo shirts and faces. The restaurant’s insurance company is refusing to pay them anything, on the grounds that having butter spill onto isn’t particularly harmful and the two diners have not produced any evidence of actually being injured or damaged in any way. Undeterred, the two butter-splashed customers are brining a case in small-claims court, where they are making a big show of representing themselves (attorneys are not allowed in small claims court in California even if they wanted one) and boasting about how they are going to “put the restaurant owner on the stand” (they can’t, and no small claims judge is going to listen to their explanations of why they should be allowed to in this case anyway). The owner is treating the whole thing as a frivolous lawsuit, and everyone in the community seems to feel that he’s right, but there’s no guarantee the court will see it that way – and even if it does, this will still be an annoying drain on his time…

You and I weren’t there when the snails exploded, so we don’t really know how the restaurant handled the incident. But if they can prove that they attempted to make things right at the time (paying for the dry-cleaning bill, offering a replacement dish) they probably can have the court case thrown out. My point here is that even if the case is ruled to be frivolous, it’s still a potentially costly waste of time and resources for the business owner, and has the potential to make the plaintiffs a laughing stock of the local community, particularly if their actions cost them their neighbors’ good opinions. It could also backfire on them, if (for example) they have businesses of their own which are suddenly struck by waves of frivolous lawsuits…

My point here being that these stories may sound humorous when you read about them in the news, but from a business standpoint, they’re not really very funny…

Gaming the System

The other day I stumbled across a rant on the Consumerist website where someone was complaining that the new Burger King sweepstakes (they’re giving away the new “Kinect” controller for the Xbox) was recycling the same codes over and over again. For those not familiar with these games, the large drink cups you purchase as part of this promotion each have a supposedly unique code that you type into the game website to see if you’ve won anything. While you’re on the site the company running the game gets the chance to bombard you with ad copy, propaganda (in favor of their food), other offers and anything else they think might induce you to give them more money – which is the point of this exercise, of course, along with getting the customer to buy more $1.79 soft drinks that cost about three cents each. The real issue is why you would need dummy codes…

In the Burger King promotion being discussed the “prize code” is a six-digit alphanumeric, which means that six of them in sequence should yield 36 to the sixth power unique combinations, or 2,176,782,336 unique codes. It is possible that Burger King did, in fact, print that many special promotional drink cups, I suppose, although assuming that you will serve over two billion customers during the short span of the promotional period seems a bit overconfident to me. Even if they did, however, there’s no way two customers should have received the same number – unless they printed up two sets of each code, or somewhere in excess of 4.3 individual “prize code” cups. Even then, the odds of consecutive customers getting the same number should have been 2,176,782,336 to one. What seems more probable is that Burger King printed up however many winning codes actually correspond to all of the prizes they are giving away, and then filled in all of the other “prize code” cups with a few (or even just one) inert codes…

Now, one could legitimately ask what difference this makes to anybody. After all, in any corporate sweepstakes/contest of this type, 11 out of every 12 or 599 out of every 600 or 999,999 out of every million “game pieces” is going to be a dud; what difference does it make if every one of the duds has a unique code or not? That would be true if all you wanted the customers to do was collect codes or tokens or whatever (in addition to buying your product); the difficulty here is that Burger King also wants customers to go to their website and be exposed to advertising material – and nobody is going to go look up the same code they got the last three times, or which their buddy got in the previous order. Even worse, in this case, is that you can also text your code numbers to see if you’ve won anything (incurring text charges a fees, of course) – which means that Burger King is effectively telling their customers that it believes they are stupid enough to spend money verifying “prize” codes they already know are duds…

I’m not picking on Burger King here, even though the workers at my local store are so inept that they occasionally leave the top half of the bun off certain products; McDonald’s pulled a similar stunt with the “Free Entry” code for their last Monopoly™ game (it was the same code every time), and they also had to end their last iteration of the game three weeks early because they had already run out of prizes. My point here is that any sweepstakes or game is really just another advertizing gimmick, and like any other gimmick, it won’t work if it ends up costing you more in prizes, lawsuits or offended customers than you make on increased traffic, advertising sales or kickbacks from wireless service providers…