Weekend news roundup

30 May 2011

A trawl through the weekend’s newspapers, including a revealing glimpse inside the Groupon machine, Twitter’s controversial decision to reveal an anonymous user who breached a gagging order and how Sarkozy is a bit of an eG8 when it comes to governing the web.

Groupon’s secret sauce: words, simply words

Groupon’s staggering success as the deals of the day champion has many wondering how they did it, and what’s the secret glue. The company is potentially in line to be the next major tech IPO. The New York Times carried a fascinating analysis on how Groupon ticks.

Words are not much valued on the internet, perhaps because it features so many of them. Newspapers and magazines might have gained vast new audiences online but still can’t recoup the costs from their web operations of producing the material.

Groupon borrowed some tools and terms from journalism, softened the traditional heavy hand of advertising, added some banter and attitude and married the result to a discounted deal. It has managed, at least for the moment, to make words pay.

In 177 North American cities and neighbourhoods, 31m people see one of the hundreds of daily deals, and so many of them take the horseback ride or splurge on the spa or have dinner at the restaurant or sign up for the kayak tour. Groupon is raking in more than a billion dollars a year from these featured businesses and is already profitable.

There used to be a name for marketing things to clumps of people by blasting messages at them: spam. People despised it so much it nearly killed email. The great achievement of Groupon – a blend of “group” and “coupon” – is to have reformulated spam into something benign, even ingratiating.

Twitter reveals an anonymous user’s identity

The Guardian has closely followed the issue of gagging orders and how it effects social media, with much of it centring around these super injunctions celebrities can take out in order to quash negative coverage of their private lives.

Twitter’s decision to reveal the identity of an anonymous user raises a Pandora’s box of issues. Namely, as old media was required to protect the identity of sources, how far will social media go to protect the identity of those who wish to work behind a wall of anonymity?

It is believed to be the first time Twitter has bowed to legal pressure to identify anonymous users and comes amid a huge row over privacy and free speech online.

Ryan Giggs, the Manchester United footballer named as being the plaintiff in a gagging order preventing reporting of an alleged affair with a reality TV model, is separately attempting to unmask Twitter users accused of revealing details of the privacy injunction.

However, Giggs brought the lawsuit at the high court in London and the move to use California courts is likely to be seen as a landmark moment in the internet privacy battle.

Ahmed Khan, the south Tyneside councillor accused of being the author of the pseudonymous Twitter accounts, described the council’s move as “Orwellian”. Khan received an email from Twitter earlier this month informing him that the site had handed over his personal information. He denies being the author of the allegedly defamatory material.

“It is like something out of 1984,” Khan told The Guardian. “If a council can take this kind of action against one of its own councillors simply because they don’t like what I say, what hope is there for freedom of speech or privacy?”

Defence contractor besieged by hackers

The Telegraph reported how military technology giant Lockheed Martin computers have come under “significant attack”.

Lockheed Martin, the Pentagon’s biggest IT and arms supplier, has thwarted a “significant and tenacious attack” on its computer network, it reported.

In what appeared to be one of the most audacious acts of cyber warfare conducted so far, the breach came against a backdrop of repeated attempts by rivals of the US, chiefly China and Russia, to infiltrate information networks and glean details of major weapons systems.

The company said that no customer or employee data had been compromised during the attack last week, while the Pentagon said the impact on its operations had been “minimal”.

Sarkozy acts the eG8

It seems G8 governments actually don’t really trust the web, according to The Sunday Business Post.

French President Nicolas Sarkozy, host of this year’s summit, was keen to have the internet discussed because of a number of pressing issues, including privacy concerns, how new high-speed infrastructure should be financed, the issue of music and movie piracy removing revenues from artists, protection of freedom of expression and dealing with the threat of the internet being used for criminal activity, such as hacking, fraud and cyber warfare.

It is understood that even before the summit began, Sarkozy was on the defensive. In a speech last year, he described the internet as ‘‘the new frontier, a territory to conquer”.

‘But it cannot be a Wild West,” he said.

Unsurprising, the web industry this year was unanimous in its rejection of greater government control of its affairs.

Tech disruption and age-old neurosis

The Observer also covered Sarkozy’s imperious views on how the internet can be controlled.

Tech writer John Naughton wrote how Oscar Wilde described fox hunting as “the unspeakable in full pursuit of the uneatable”. If Wilde had been able to see the president of France going on last week about bringing the internet to heel, he might have updated his hunting metaphor to “the clueless in pursuit of the unattainable” perhaps.

Sarkozy was speaking at the eG8, a gathering of those whom the French government thinks are the important players in the online world. But in a way, he was just acting as a mouthpiece for the political, judicial, commercial and security establishments which are becoming increasingly hysterical about the way the internet is upending their respective apple carts. In that sense, Sarky was echoing the fulminations of England’s lord chief justice that “technology is out of control”, by which he meant, as Peter Preston has pointed out, is beyond his control.

Establishment panic about the net’s disruptiveness is matched by renewed outbreaks of an age-old neurosis – moral panic about the impact of new communications technology on young people. This was fuelled last week by a report that Facebook was going to allow children under the age of 13 to become members. US law currently insists that websites that collect information about users (as Facebook does) aren’t allowed to sign on anyone under the age of 13.

But Facebook CEO Mark Zuckerberg is, apparently, determined to change this. Learning is a social process, he argues, and social networking has great educational potential. This is true, but what Zuckerberg omitted to mention is that kids also represent a great, er, marketing opportunity.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years