Like so many of us, the New York Timeswriter Jenna Wortham seems to be spending less and less time on social networking site Facebook lately:
Just a few years ago, most of my online social activity revolved around Facebook. I was an active member of several Facebook groups, including one that helped me and others find apartments and sell used items. Another group was wonderful for organizing midnight movie screenings… But lately, my formerly hyperactive Facebook life has slowed to a crawl.
The company itself has admitted that, by its own measurements, many users are spending less and less time at the site – without deleting their accounts. More worrying for Facebook is its key teenaged demographic that’s been abandoning it the fastest:
This month, during a quarterly earnings call, David A. Ebersman, Facebook’s chief financial officer, made a startling acknowledgment. Facebook had noticed “a decrease in daily users, specifically among younger teens,” he said. Those teenagers, mostly American and likely around 13 or 14, weren’t deleting their accounts, he said, but they were checking the site less often.
Wortham looks at a number of possible explanations, including the possibility that Facebook is turning into the internet’s equivalent of a phone book:
Nathan Jurgenson, a sociologist who studies the Internet… said mainstream sites had evolved into a kind of “decoy social media.” In his view, it has become akin to a yearbook or yellow pages — a static home on the web that offers proof of someone’s existence, and perhaps little else.
Meanwhile, with people spending less time on Facebook, a range of new social networks and messaging services are springing to fill the void:
In recent months, it has become clear that seemingly harmless antics online can lead to serious repercussions in the real world. Young people may be particularly vulnerable.
Those cracks in Facebook’s veneer have provided a market opening for other messaging services among young people in the United States and worldwide. Mr. Sundar calls those services — which include WhatsApp, Line (popular in Japan), Snapchat, WeChat of China and the Korean service KakaoTalk — “mini social media,” because they satisfy one desire among teenagers: keeping in constant communication.
How the feds took down Silk Road
The court case prosecuting the founder of Silk Road has revealed new details about the FBI investigation into the online black market. Wired reporter Kim Zetter wades through the details of the case to uncover how the Feds trapped Ross William Ulbricht, the man accused of being website owner Dread Pirate Roberts.
The investigation began with a tipoff to Homeland Security:
The tip, which arrived about six months after Silk Road was launched and coincided with the emporium’s growing notoriety following a June 2011 Gawker story, spawned a multi-agency task force based in Baltimore — dubbed “Marco Polo” in reference to the drug market’s historical namesake — that eventually included investigators from the FBI, DEA, DHS, the IRS, U.S. Postal Inspection, U.S. Secret Service, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Silk Road’s use of Tor encryption and the Bitcoin virtual currency made detection more difficult:
Federal agents say the use of Tor and Bitcoin were major obstacles for them and that investigating the site was “uncharted territory” that involved a reversal of their usual investigative methods. Instead of starting with probable cause against a specific suspect who is already identified and then obtaining a search warrant to collect more evidence, the investigation of Silk Road involved collecting evidence from the site first and then trying to identify individuals.
It took the capture of a user named George, with the username digitalink, for investigators to make the vital break:
On July 6, 2011, shortly after authorities in Baltimore began looking at the drug emporium, digitalink revealed in a post to a Silk Road forum that a U.S. Postal inspector had contacted him about a package addressed to him that contained a suspicious white substance (that was in fact methylone) spilling from it. The postal authorities refused to deliver it. Fellow Silk Roaders warned George to ignore the agent and let the package go, but digitalink wouldn’t listen. Methylone, he reasoned, wasn’t strictly a banned substance if not used for human consumption, and he felt confident he could get it back. It was also the principle of the matter, he said. Seizing his package was illegal.
In a note to the forum, he described smooth-talking the agent to retrieve his package… Then he added, “Well that’s that. As to my address being watched, no worrys gentlemen/women, I guess I’m lucky my [girlfriend] lives about a five minute drive from me”.
“Oh wow, the idiocy is unmatched!,” wrote a user named itmux. “It seems very possible that digitalink will be busted sometime soon…. Judging by his behaviour so far it wouldn’t surprise me at all if he rolls over and gives them full access to his accounts here. It also wouldn’t surprise me if he keeps the addresses of past customers around.”
Having access to a seller’s account opened a number of new leads for investigators to follow:
The real value in arresting George wasn’t in removing a drug seller from the streets, but in amassing more intelligence that took them deeper into the drug site and a little closer to Dread Pirate Roberts.
Once they had access to George’s Silk Road seller’s account — rich with emails, shipping records, and the financial details of his drug transactions — investigators were able to identify other potential targets. By posing as drug buyers, they gathered evidence against still more.
To keep the arrest secret, investigators refrained from filing charges against George until after Ross Ulbricht was arrested on October 1. George pleaded guilty early this month in Maryland to conspiracy to distribute drugs.
Leads gained from George’s account and a series of resulting requests ultimately pointed them in the direction of Ulbricht.
After authorities intercepted some fake ID’s that they say he ordered online, investigators from HSI visited Ulbricht’s home in San Francisco. Ulbricht, agents say, had by then made a number of mistakes that allowed them to tie him to Silk Road, including using the name “altoid” to post messages advertising Silk Road to a forum and then using that same name to post to a Bitcoin forum seeking workers for a Bitcoin startup. In the latter message, “altoid” told would-be job applicants to contact him at [email protected] A subpoena to Google provided information about the accountholder.
Despite all the high-tech encryption used on the site, it seems that old-fashioned detective work and a series of simple slip-ups ultimately led to Ulbricht’s arrest.
Why a technologically advanced app couldn’t save this Silicon Valley start-up
One of the perennial features of Silicon Valley is the tech start-up with a product set to revolutionise the industry.
Over at The Verge, Casey Newton tells the tale of just one such start-up: A photo-sharing website called Everpix. Certainly, judging by the credentials of the founders, there is little to suggest the venture would be anything but a success:
Everpix began as the brainchild of Latour, a 34-year-old French entrepreneur who sold his first company to Apple in 2003. That company, PixelShox Studio, made motion-graphics software that was later renamed Quartz Composer. It became a key part of OS X, powering the operating system’s screen savers and iTunes visualizations, among other applications.
At Apple Latour met Kevin Quennesson, a fellow French computer scientist who joined Apple in 2006 and became the project lead for Quartz Composer. Quennesson’s background is in math and physics; his name is listed on six patents related to motion graphics, image processing, and graphical user interfaces.
It also managed to raise $US1.8 million and gained the attention of some very well-known venture capitalists:
Everpix had gotten started with small investments from former Apple executive Bertrand Serlet and 500 Startups, the incubator run by former PayPal executive Dave McClure. In the wake of Disrupt it raised money from investors including Index Ventures, Strive Capital, and Picasa co-founder Michael Herf, for a total of $1.8 million. “The use case was incredibly compelling,” said Nuno Gonçalves Pedro, managing director at Strive. “The product really looked very robust. And finally, we really liked the team.”
When it came time to release its product, Everpix won rave reviews from both users and critics. Despite its premium price, in many ways, it was the best on the market:
For $4.99 a month or $49 a year, the service would let you store an infinite amount of photos. A feature called Flashbacks sent users daily emails of their photos from the same day in prior years, which led to a huge spike in the number of users who returned to Everpix daily. Critics raved.
However despite a positively reviewed product, a small but loyal fanbase, the start-up went out of business. It turns out a few key mistakes ended up sinking the company:
The founders acknowledge they made mistakes along the way. They spent too much time on the product and not enough time on growth and distribution. The first pitch deck they put together for investors was mediocre. They began marketing too late. They failed to effectively position themselves against giants like Apple and Google, who offer fairly robust — and mostly free — Everpix alternatives.
The moral of the story is simple. Without a workable business strategy, even the most experienced founders with the best product on the market will fail.