Daily Digest
JP Morgan Cuts 2008 Outlook For
Online Display Ads
JP Morgan’s Imran Khan cut his 2008 and 2009
forecasts for online display ads in a research note today,
predicting increasingly conservative marketers will shift
dollars to search and performance-based advertising.
His new view: U.S. display ads will grow 14 in 2008
to 8.2 billion, down from his original forecast of 20
growth to 8.6 billion. Khan also dialed back predicted
2009 growth to 16 to 9.4 billion, down from 17 to 10
billion.
”As advertisers become more conservative with their
ad spend, we think that the long-tail advertisers will
shift toward performance-based advertising forms,” he
said. But even as dollars shift, search won’t grow as
fast as he once thought it might. Khan is calling for
27 growth in search advertising in 2008, down from an
earlier prediction of 32.
Khan joins a growing club of analysts that have
revisited their online advertising predictions, in some
cases multiple times, over the past year:
* August 27: Carat drops overall ad forecast, but
raises online advertising outlook to 23.7 growth in 2008
* August 13: eMarketer plans to drop ”a few per-
centage points” off its March estimate of 22.7 growth
* July 7: BMO Capital Markets cuts its 2008 U.S.
forecast to 1.8 from 3.6
* June 30: Zenith Optimedia cuts its U.S. ad fore-
cast for the second time in three months
* May 30: Lehman drops 2008 U.S. online ad fore-
cast from 24 growth to 23
* March 19: eMarketer cuts its 2008 online ad fore-
cast 6
* September 14: Oppenheimer cuts 2008 U.S. online
ad estimate 26 growth to 25
National Enquirer Web Traffic Spikes
On Edwards, Palin Scandals: Tabloid
Not Doomed?
The struggling National Enquirer may want to re-
think its strategy of spurning the web to protect its
dwindling print business. Ever since the John Edwards-
Reille Hunter affair, traffic has spiked to NationalEn-
quirer.com, and new allegations of a Sarah Palin affair
will no doubt keep American Media’s servers busy.
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In keeping with the tabloid’s practice, it’s keeping
its reporting about an alleged Palin affair off the Web
to drive print sales, one reason it still not in same league
as other celebrity/gossip sites.
Here’s how NationalEnquirer.com compared in July
unique visitors, according to Quantcast. Note that
massive Edwards’ spike.
NationalEnquirer.com: 906,000
TMZ.com: 3.9 million
PerezHilton.com: 3.5 million
People.com: 11 million
CNBC’s New Online Strategy: Partner
With LinkedIn
We’ve seen TV news networks make quite a few for-
ays into social networking. Conspicuously left out have
been CNBC and LinkedIn, but today they’re announc-
ing a partnership that actually makes some sense.
LinkedIn is the social network for careerists: every-
one’s resume on the Web. Presumably a larger per-
centage of LinkedIn’s 27 million users are interested in
business news than, say, Facebook, MySpace or Bebo
users, and the two share higher-income demographics.
Under the terms of the deal, CNBC will provide news
to the network, and tap the LinkedIn community to
develop content for TV such as polls, surveys, etc.
In addition, CNBC will integrate LinkedIn function-
ality into its Web site. That’s probably a bigger deal
for CNBC than LinkedIn, given the site reaches just 3.2
million people a month, according to Quantcast, but
the availablility of business information, stock quotes
and headlines on LinkedIn can’t hurt, either. CNBC
will add another source of news for LinkedIn users; the
network added headlines from the NY Times in July.
eMusic: UK P2P warning letter pact
”smells very funny to us”
The UK detente between ISPs and the music indus-
try hasn’t attracted the same vociferous criticism that
has followed other recent music industry actions; who
could be opposed to ISPs merely sending out friendly
letters to alleged file-swappers? But indie music store
eMusic has some olfactory concerns about the deal. It
”smells very funny to us,” CEO David Pakman tells
Ars.
eMusic has made a name for itself in the US as one
of the largest music download stores, a hub for inexpen-
sive indie music. The company expanded into Europe
in 2006, and European sales now count for 15 percent
of its total revenues. Pakman sees the UK, in partic-
ular, as one of the largest underserved music markets
outside the US; that’s why he’s concerned about the
new arrangement between ISPs and the British music
business.
The fear is that Britain’s BPI, which represents ma-
jor labels, may have offered a ”quid pro quo” to en-
courage ISP cooperation in its scheme. US ISPs have
been exceptionally reluctant to get involved in fingering
subscribers for the content industries without a court
order, but several major British ISPs have agreed to do
so, and two (Sky and BT) have gone on to announce
licensing agreements with the music business. Those
agreements could give ISPs the right to launch their
own music stores.
And that’s the issue. Should ISPs choose to launch
their own music services, would independent companies
like eMusic still receive a fair shake? It’s not a new
worry, and we’ve seen it in Canada when Bell Canada
started throttling P2P traffic (too much bandwidth!)
and then opened a bandwidth-intensive movie down-
load store of its own. Similar concerns were voiced in
the US when Comcast began interrupting some P2P
uploads even as it had a huge financial interest in hav-
ing people watch video through its cable system, not
an Internet connection.
BPI boss Geoff Taylor made the ISP music strat-
egy explicit in a column for the BBC this summer.
”We believe that ISPs, far from being a simple pipe,
can become significant distributors of digital media,” he
wrote, ”and share in the tremendous value that would
be unleashed if more music were accessed legally on-
line.” He then made a brief reference to ”ISP partner-
ships,” which are the ”next logical step in our maturing
digital music business.”
Pakman’s concern isn’t so much about crude prac-
tices like throttling traffic to eMuisc or cutting off ac-
cess to the site. That’s not going to happen. But what
worries him is the possibility for other arrangements-an
ISP’s own music offering being exempt from bandwidth
caps, for instance.
While Pakman’s not a fan of bandwidth caps in gen-
eral, it’s the link between caps and music licenses that
makes him uneasy. ISPs suddenly have an ”economic
interest to favor their own services,” a fear that ISPs
will have to address in ever case in which they attempt
to enter a content-delivery market.
Instead of sending letter to file-swappers, which Pak-
man doesn’t think ”is going to do anything,” he wants
to see ”hundreds of legitimate, well-priced alternatives.
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Instead, he says, there are two or three, in part be-
cause music labels are stingy in handing out licenses to
startups.
He admits that the concerns about UK ISPs are hy-
pothetical at the moment and that he’s thinking ”three
steps ahead of where we are today.” Still, he’s adamant
that the scenarios he sketches aren’t ”some fairy-tale
situation that could never happen.”
Pakman’s worries, floated in media interviews over
the last few days (see his similar comments to the Fi-
nancial Times), are themselves a form of action, even
though Pakman says that the company has nothing to
announce in the way of legal complaints at the moment.
But even as he rightfully looks ahead to competitive
threats to his business, there’s also the possibility that
this will all work out well for music download services.
Previous UK surveys have shown that sending out sim-
ple ”I see you’ve been file-sharing” notices strip away
the feeling of anonymity that pervades such activity,
and has the potential to lead to significant reductions
in illicit P2P downloading. As that happens, music-
loving consumers may turn increasingly to legitimate
sources, and that’s an opportunity that eMusic and the
six people working out of its London UK headquarters
would do well to capitalize on.
Selfish driving causes everyone to pay
the Price of Anarchy
Traffic jams are something nearly everyone can re-
late to. While driving is ideally a communal activity,
where people pay attention to each other and follow
the rules of the road, most people seem to follow their
whims, only occasionally within the confines of common
sense. This urge to do what is best for the individual
leads to headaches for the group, increasing the total
amount of time everyone has to spend on the road.
In a paper set to be published in an upcoming issue
of Physical Review Letters, physicists Hyejin Youn and
Hawoong Jeong, along with computer scientist Micheal
Gastner, look at the result of self-interested drivers
traveling on both hypothetical and real-world networks.
The abstract describes what happens very clearly:
Uncoordinated individuals in human society pursu-
ing their personally optimal strategies do not always
achieve the social optimum, the most beneficial state
to the society as a whole. Instead, strategies form Nash
equilibria which are often socially suboptimal. Society,
therefore, has to pay a price of anarchy for the lack of
coordination among its members.
To illustrate this principle, the authors discuss a
trivial example: two points A and B are connected by
both a short bridge and a long freeway. Here, the total
number of travelers going from A to B is constant, but
the bridge is narrow and prone to congestion, while the
freeway is wide and is less susceptible to traffic jams.
In this setup, the ideal situation for everyone is for half
the traffic to take each path. Even in this trivial ex-
ample, however, what is best for everyone is not best
to each person. Using their example numbers, a driver
taking the freeway under ideal conditions would reduce
his or her individual delay by 40 percent over taking
the bridge.
But as more and more people move away from the
global optimum and take the bridge, the total time in-
volved in traveling from A to B increases and a Nash
equilibrium is reached. This is the point where ”no sin-
gle user can make any individual gain by changing his
own strategy unilaterally.” In other words, no matter
what route you take, you’re going to be stuck in traffic.
By looking at the ratio of the cost at Nash equilibrium
to the equilibrium representing the global optimum, one
can calculate the price of anarchy (POA)-a measure of
inefficiency caused by the lack of coordination.
Imaginary bridges and freeways can only take us so
far, so the authors decided to apply the analysis to the
real world. They calculated the Price of Anarchy for
three real-world commutes: from Harvard Square to
Boston Common in Boston, from Washington Market
Park to the Queens Midtown Tunnel in New York, and
the trip from Borough underground station to Farring-
don station in London. Using a well-established func-
tion to model traffic delays, they find that at an average
traffic flow of 10,000 vehicles per hour in Boston-a typ-
ical number-the POA peaks at 1.3. This means that
drivers waste 30 percent more time because they are
driving with their own interests in mind rather than
a group concern (not a news flash for anyone who has
driven in Boston). New York and London had similar
peak POA values of about 1.27 and 1.22, respectively.
To gain a better theoretical understanding of the
nature of POA in networks, the team applied their
methodology to various types of idealized networks.
They came to the conclusion that, to improve the Price
of Anarchy, you must close off various roads-something
known as Braess’s paradox. In the network representing
Boston, the researchers find six possible road closures
that would reduce the delay in the suboptimal Nash
(selfish) equilibrium. A similar analysis of the London
and New York networks found that there were seven
and twelve roads, respectively, that could be closed to
improve the overall travel time.
While still theoretical, the work has the potential to
aid future urban planning. Since the obvious solution
of adding more roads may actually make the problem
worse, an analysis of this sort could prove invaluable in
determining real-world driving conditions.
PAX Technica: Ars goes inside the
gamer’s ”Burning Man”
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Penny Arcade Expo (PAX) is one of the biggest
yearly events in gaming, and the draw is easy to explain.
The lineup of developers and publishers who hawk their
games at the show is much larger than even E3’s list this
year, and the games to be seen and played comprise a
list of the biggest-name titles coming out this year and
next. The best in geeky music, including video game
cover-bands like the OneUps, nerdcore rappers like MC
Frontalot, and troubadours like Jonathan Coulton, are
performed during the two nights of concerts. In short,
PAX has become the destination for gamers all around
the world who wish to connect with the community of
games, music, and all other kinds of Internet culture,
and this year was no different. Well, except for one
thing: it was much bigger.
The problem for how people perceive PAX is that
there is no precedent for this sort of thing. While things
like ComicCon may come close, even that wide-open,
varied show doesn’t have the type of intense focus and
community that PAX enjoys. Others argue that PAX
is the new E3, which any game writer will tell you is ab-
surd. While it’s wonderful that the public gets to play
all those great games at the very public PAX, there is
precious little news that comes out of the event. In-
terviews and hands-on posts are great, but many of
the booths are stocked with PR people, not develop-
ers. More than one prominent writer in the press room
complained about not knowing exactly how to cover the
show. Other writers complained that doing any kind of
job at PAX is nearly impossible; the show makes you
want to quit your job and join the mob of gamers as
everyone chases their own idea of what PAX should be.
Anyone who goes has an easy word for what PAX
is: magic. The best things, the things that people re-
member after they go home, are rarely planned events.
Rather, the impromptu and collaborative nature of the
events, mixed with a community that has a strong sense
of giving and friendliness that extends to every line,
game, and happening, means that the best way to ex-
perience PAX is to fall into it, and to let the event
create itself minute by minute around you.
Not everything is wine and roses, however, as a few
cracks have begun to show at PAX08. Let’s take a look
at the highs, and lows, of the show this year.
As we arrive at the gates in Seattle’s airport, every-
one at SEA-TAC knows something is up, but no one
can quite put their finger on what. The airport is fill-
ing up with a very specific crowd: almost completely
male, almost exclusively white, and mostly unshaven
and looking either malnourished or over-fed. The pre-
ferred uniform for the crowd milling about the termi-
nals is beat up jeans and T-shirts bearing arcane look-
ing symbols and images. For anyone with eyes to see,
the geeks have arrived.
As the hordes of bodies make their way from the air-
port to the convention center, the line begins to form at
the center’s entrance, and no one is surprised or rest-
less. Tens of thousands of Nintendo DS systems, the
preferred way of passing time at the show, come out,
and groups form up around specific games. Those at-
tending dressed up as game or anime characters, espe-
cially the attractive women, are asked for pictures and
are very nearly mobbed.
A few hours later Ken Levine delivers the keynote
for the show, and, remarkably, he doesn’t mention his
signature achievement, Bioshock, once. In fact, Levine’s
story ends with his first job at Looking Glass. Instead
of talking about his latest game, he talks about growing
up young and nerdy, of being ashamed of his enthu-
siasm for comic books and games like Dungeons and
Dragons. He talks about how the issues dealt with in
favorite comics like Spiderman may have made him feel
more grown-up than his peers, while noting that he was
mocked for his choice of reading material.
He describes his first Dungeons and Dragons source
book, read under the sheets in the dead of night, as
if it was pornography that he was afraid to be caught
with. He describes how the gift of an Atari system
one Hanukkah changed his life. ”This was my Nerd
Siberia,” he tells the packed auditorium, as they nod
in understanding. No friends. Picked on at school.
Ashamed of a growing comic book collection.
He shows a picture of Farrah Fawcett. ”Believe
me, this was the shit back in the ’70s,” he says, be-
fore changing the slide to a scantily clad illustration.
”Me? I wanted to fuck the Scarlet Witch.” The room
erupts.
He describes meeting his first friends and joining
an ongoing Dungeons and Dragons campaign, who he
refers to as his ”tribe,” and how girls somewhat broke
that group up. He then goes on to speak about his
failed script for a vampire movie, as well as a rejected
script for a romantic comedy. Years of nothing followed,
until he found himself working at Looking Glass, a
place where employees watched Blade Runner on VHS,
played games in between making games, and generally
were at peace with being geeky.
”After many years running from things I love, it’s
amazing to come here and see what Gabe and Tycho
and so many others have built together,” he said. ”We
are united by a common element, but it’s not the color
of our skin or our ideology or politics,” he went on, his
voice rising. ”What brings us together at PAX is that
we are a giant bunch of fucking nerds.” The kids sitting
to the right of me, wearing Magic: The Gathering shirts
and suffering through what looked like hard bouts of
acne, almost bowl me over as they rush to stand up,
applaud, and cheer. I believe one of them is crying.
The part of PAX that most resembles a classical
gaming show, the part that makes people claim PAX is
the new E3, is the show floor itself. Filled with themed
booths, flashing screens, things to buy, and, of course,
long lines, this is the section of the floor where the
hardcore go to find out what they’ll be playing in the
4
future.
The problem is that the number of people this year
has skyrocketed; it has now been confirmed that over
58,000 people showed up for PAX this year, and while
the Convention Center can easily handle that amount
of people, the individual things people have come to see
can’t. For the entirety of the show, it took most of the
afternoon spent waiting in line to play Fallout 3, and
StarCraft 2 also required dedication if you wanted to
put your hands on a mouse and keyboard. This is a
big show for Bethesda, as the company promised some
new, never-before-seen content for Fallout 3 in the main
theater. Unfortunately, the theater could only handle
around 5,000 people, and masses of gamers were turned
away without being able to see anything. After the
interminable wait for the game, this is more than many
can bear, and it was there that we saw the first signs
of bitterness at the vastness of the show.
”I got in line for the Fallout 3 preview in the main
theater, as it was supposed to start. The main theater
filled up after 20 minutes and the preview began while
there were still hundreds of people waiting in line. Ev-
ery panel seemed to be packed; if you didn’t line up a
half-hour or an hour early, you weren’t getting in,” one
reader angrily commented.
The best lines were the ones that turned into a
party, and of course those lines belonged to Guitar
Hero: World Tour and Rock Band 2. ”It’s pretty mind-
blowing. I was at PAX last year when we were debuting
Rock Band and it was... amazing to see everyone who
couldn’t play drums and no one could sing and they
were performing on stage. This year it’s so surreal to
see players come up, play on expert, and nail everything
on expert,” Dan Teasdale, the Lead Designer on Rock
Band 2, told us. ”It’s very rewarding.” It seems like it.
The Rock Band 2 booth was hopping throughout the
entire show, and the line was even treated to an early
look at Jonathan Coulton’s ”Skullcrusher Mountain,”
which will have been released as downloadable content
by the time you read this.
Teasdale told us he thinks there is room for a wide
variety of music games when I grill him on Guitar Hero:
World Tour, and claims he hasn’t had a chance to play
the new guitar yet. I did brave the line for the new
guitar and drums, and the new features on the World
Tour guitar-including the button for star power located
near the heel of your hand and the touch panel on the
neck-seem to work well, and the drums are solid and
attractive. My main complaints would be how floppy
the cymbals felt; they bend down when you slam them,
in a way that feels less satisfying than either a harder
surface or an actual cymbal. It’s also hard to get over
being used to Rock Band’s four-pad layout.
The people having the most fun on the show floor
seemed to be those happy to just walk around and take
the scene in, playing games as they became available.
It’s an odd mixture of old-school E3 and fan events,
while being somehow better than both. There was even
the odd surprise to be had, such as finding The Conduit
somewhat hidden at Nintendo’s booth, or finding that
many gamers just wanted to sit down and play Castle
Crashers, a game that had been available for a few days
at that point. For many, the lines and the crush of
greasy gamers was more than worth it; I witnessed one
teenager who finally got a chance to play StarCraft 2,
his face breaking into a wide grin, his arms shaking
with anticipation.
”Back then, a year ago, before ’Still Alive’ had come
out, it was a huge bump up in that feeling of being fa-
mous,” Jonathan Coulton told me. We were sitting
in an interview room, and he seemed happy to have
a chance to sit down and relax a few hours before his
show. He contentedly ate candy and answered my ques-
tions.
We discussed his now-legendary show at PAX last
year. ”Everyone was singing along, and cheering, and
the zombie thing... I had done it before, but never
with such a huge crowd... It’s the greatest feeling in
the world.”
”I’ve always felt like I don’t want to be a super-
famous person who gets recognized all the time. That
doesn’t sound so nice to me,” he explained. ”I’m sort
of glad it’s a niche thing. I get to come to a place like
this and be a rock star, and then I go home and the
rest of my life is still normal.”
That night he played to a packed house, and ev-
eryone greets every song like it’s the biggest hit in the
world. As a surprise he brings Felicia Day onstage to
handle vocals on ”Still Alive,” the song that capped
off the end of Portal. The crowd here, filled with fans
of The Guild, which Felicia Day writes and stars in,
and of Dr. Horrible’s Sing-Along blog, Joss Whedon’s
web-series, absolutely adores Day, and the duet brings
cheers.
Felicia Day with The Guild co-star Sandeep Parikh
at PAX08.
The idea of the ”stars” of PAX is an odd one, and we
adored an odd mixture of people at the show. Jonathan
Coulton is something of a rock star here after his show
last year, and of course the success of ”Still Alive.”
Later in the show I saw him being whisked to some se-
cret location, flanked by a PAX enforcer, batting away
adoring geeks.
Felicia Day also had to contend with the same level
of hyper-fame at PAX. ”You know, I don’t really get
creepy fans,” she tells me. ”What I see more often is
people who start to sweat and shake when they meet
me.” She pantomimes a nervous person, her arms out.
”Only people who come back like eight or nine times
a day to take my picture, from like, afar, that gets a
little creepy.”
I interviewed Felicia with Sandeep Parikh, who plays
Zaboo in The Guild and has his own web show in ”The
Legend of Neil.” It’s a surreal experience, even though
5
the pair are incredibly nice and outgoing. They smiled
and greeted fans warmly during the signings, and a
screening of The Guild and Legend of Neil at PAX
proved to be draws. At other times you could catch
a glimpse of Felicia being whisked somewhere, looking
slightly hunted.
I was also able to greet Wil Wheaton at the start of
the show before the general public is let in, and he re-
mained one of the friendliest folks at the show. At PAX
his book signings draw large lines and his panels draw
standing room-only crowds. People absolutely adore
the once-Star-Trek-actor-now-writer at PAX, and it’s
no wonder: he drops inside jokes, playfully bats at his
own image as a professional geek, and is an honestly
talented public speaker.
These are the people who become pop stars at PAX,
although the ability to create your own fame certainly
exists. Cosplayers were numerous, dressing like as many
characters as you can imagine. Get a good idea, create
a good costume, and you can pose for pictures all week-
end. There was also a group of gentlemen who decided
to try to create a real-life ”rickroll” by dressing as the
bad horse singers, handing people a letter, and then
performing the song when it was opened, an homage to
Dr. Horrible. Felicia Day herself fell into this trap.
PAX can feel almost like its own world, with its own
rules and tropes. Wheaton’s law, which consists solely
of ”Don’t be a dick,” was vigorously enforced. The
great thing about creating a world from scratch is that
you get to choose who to make famous, and luckily, the
crowds got the celebrities they deserved.
Jerry ”Tycho” Holkins often held court at differ-
ent places around the show, swarmed by Penny Arcade
fans. One of them approached Holkins hesitantly. ”Can
I shake your hand?” he asked.
”Sure,” Tycho told him. ”This hand belongs to you
guys this weekend. Do whatever you want with it.”
Luckily for him, the gentleman gave it two brisk pumps,
and simply walked away smiling.
We pass the Serpent Theater, which houses the table-
top role-playing crew. We walk in and take a deep
breath, check out the giant Beholder... this is the very
essence of geek. The tables are filled with games, cards,
and all manners of dice. There is much concentration,
a lot of frowns, and some slammed hands on tables as
games of Magic don’t go as planned. They may look
miserable, but don’t believe the faces. These guys don’t
want to be doing anything else in the world. Here, the
only stops are for water out of the fountain and bath-
room breaks.
Few sights are as sobering as a room full of passion-
ate CCG players.
We pause for a while to watch a Jenga tournament
on the third floor of the Serpent Theater, and it is one of
the most nerve-wracking things we have ever witnessed.
The Omegathon is the on-going tournament of games,
both real and virtual, that runs throughout PAX. The
first prize is a trip to the Tokyo Game Show, 5,000, and
a set of Penny Arcade-themed consoles. Second prize
gets the consoles, and a ”lifetime supply of shame.”
One of the contestants prowls along the table, studying
each piece, looking for his way in. Each successful grab
results in polite applause, as if we’re watching golf. For
a little under an hour, no one breathes. Flash photog-
raphy is forbidden. When the tower of blocks finally
goes down, I imagine the gamers beneath us frowning
at the distraction.
Jenga felt more like a tight-rope walk than a party
game
This mirrors the first round, which was Peggle. ”Peg-
gle is a weird crossover game, it’s from PopCap, but it
has this odd crossover with hardcore gamers. [For the
Omegathon] we want it to be a fun game, but also...
Peggle is great contextualized, if you’re not just play-
ing it by yourself at home in the dark,” Jerry ”Tycho”
Holkins tells me while we watch the game together. ”If
it really matters where that ball goes, and you’re try-
ing to think about and really break down Peggle, my
guess is that it’s completely harrowing.” I agree. If
you’re lining up a shot in Peggle with that trip and
those thousands of dollars at stake, it must turn your
bowels to liquid. The Omegathon is brilliant in that
it adds insane stakes to common games, and reduces
gamers to piles of jelly.
I grab one of the Omeganauts, and ask him how
Peggle was. ”It was fine,” he tells me. Then he breathes
out. ”That’s just about the most scared I’ve ever been.”
After Jenga I try to grab one of the Omeganauts for
an interview, but he’s pacing the floor, wide-eyed, and
hyperventilating.
The final event of the Omegathon closes down the
show, and it occurs in the main theater. This, of course,
means another long line, which is something PAX08
gamers are getting used to. Luckily, in true geek style,
everyone finds something to do. Someone passes around
huge handfuls of pipe cleaners, and the geeks get to
work. One woman creates a large weighted companion
cube. Another creates a hand-held bat-signal. We see
logos for PAX, spiderwebs with real spiders; it’s amaz-
ing. And it’s happening up and down the line. We’re
finally let in, and then we begin to wait, thousands of
gamers strong, and then Gabe and Tycho get the bright
idea to pipe in easy listening.
Suddenly, a few rows up, a large group of promo-
tional Pip-Boy puppets from Fallout 3 begin to dance
over the heads of the crowd. They move in unison,
and switch their moves every few minutes, but almost
always perfectly instep. ”That’s a lot of puppets!” Ty-
cho exclaims when he takes the stage. ”Look some-
where else!” he tells them, sounding slightly creeped
out. Dutifully, they turn the other way.
The final game is played, Excitebike VS., a Famicom
disc game that never made it to the US. One Omega-
naut beats the other handily, and then Gabe and Tycho
6
take their expected turn. Gabe wins in the end, and
the expected thanks are given out to the crowd. It’s
all slightly anticlimactic, and no one seems to have a
graceful way to leave. The cosplayers, the gamers, the
table-top kids, the weekend Rock Band rock stars-no
one wants to go. The city is being broken down, and
the world we have created here is almost over. The Pip-
Boys begin their walk towards the exit, bobbing up and
down in unison, and soon they are lost in the crowd of
people heading into the night.
JP Morgan Cuts 2008 Outlook For
Online Display Ads
JP Morgan’s Imran Khan cut his 2008 and 2009
forecasts for online display ads in a research note today,
predicting increasingly conservative marketers will shift
dollars to search and performance-based advertising.
His new view: U.S. display ads will grow 14 in 2008
to 8.2 billion, down from his original forecast of 20
growth to 8.6 billion. Khan also dialed back predicted
2009 growth to 16 to 9.4 billion, down from 17 to 10
billion.
”As advertisers become more conservative with their
ad spend, we think that the long-tail advertisers will
shift toward performance-based advertising forms,” he
said. But even as dollars shift, search won’t grow as
fast as he once thought it might. Khan is calling for
27 growth in search advertising in 2008, down from an
earlier prediction of 32.
Khan joins a growing club of analysts that have
revisited their online advertising predictions, in some
cases multiple times, over the past year:
* August 27: Carat drops overall ad forecast, but
raises online advertising outlook to 23.7 growth in 2008
* August 13: eMarketer plans to drop ”a few per-
centage points” off its March estimate of 22.7 growth
* July 7: BMO Capital Markets cuts its 2008 U.S.
forecast to 1.8 from 3.6
* June 30: Zenith Optimedia cuts its U.S. ad fore-
cast for the second time in three months
* May 30: Lehman drops 2008 U.S. online ad fore-
cast from 24 growth to 23
* March 19: eMarketer cuts its 2008 online ad fore-
cast 6
* September 14: Oppenheimer cuts 2008 U.S. online
ad estimate 26 growth to 25
National Enquirer Web Traffic Spikes
On Edwards, Palin Scandals: Tabloid
Not Doomed?
The struggling National Enquirer may want to re-
think its strategy of spurning the web to protect its
dwindling print business. Ever since the John Edwards-
Reille Hunter affair, traffic has spiked to NationalEn-
quirer.com, and new allegations of a Sarah Palin affair
will no doubt keep American Media’s servers busy.
In keeping with the tabloid’s practice, it’s keeping
its reporting about an alleged Palin affair off the Web
to drive print sales, one reason it still not in same league
as other celebrity/gossip sites.
Here’s how NationalEnquirer.com compared in July
unique visitors, according to Quantcast. Note that
massive Edwards’ spike.
NationalEnquirer.com: 906,000
TMZ.com: 3.9 million
PerezHilton.com: 3.5 million
People.com: 11 million
CNBC’s New Online Strategy: Partner
With LinkedIn
We’ve seen TV news networks make quite a few for-
ays into social networking. Conspicuously left out have
been CNBC and LinkedIn, but today they’re announc-
ing a partnership that actually makes some sense.
LinkedIn is the social network for careerists: every-
one’s resume on the Web. Presumably a larger per-
centage of LinkedIn’s 27 million users are interested in
business news than, say, Facebook, MySpace or Bebo
users, and the two share higher-income demographics.
Under the terms of the deal, CNBC will provide news
to the network, and tap the LinkedIn community to
develop content for TV such as polls, surveys, etc.
In addition, CNBC will integrate LinkedIn function-
ality into its Web site. That’s probably a bigger deal
for CNBC than LinkedIn, given the site reaches just 3.2
million people a month, according to Quantcast, but
the availablility of business information, stock quotes
and headlines on LinkedIn can’t hurt, either. CNBC
will add another source of news for LinkedIn users; the
network added headlines from the NY Times in July.
eMusic: UK P2P warning letter pact
”smells very funny to us”
The UK detente between ISPs and the music indus-
try hasn’t attracted the same vociferous criticism that
has followed other recent music industry actions; who
could be opposed to ISPs merely sending out friendly
letters to alleged file-swappers? But indie music store
eMusic has some olfactory concerns about the deal. It
”smells very funny to us,” CEO David Pakman tells
Ars.
eMusic has made a name for itself in the US as one
of the largest music download stores, a hub for inexpen-
sive indie music. The company expanded into Europe
7
in 2006, and European sales now count for 15 percent
of its total revenues. Pakman sees the UK, in partic-
ular, as one of the largest underserved music markets
outside the US; that’s why he’s concerned about the
new arrangement between ISPs and the British music
business.
The fear is that Britain’s BPI, which represents ma-
jor labels, may have offered a ”quid pro quo” to en-
courage ISP cooperation in its scheme. US ISPs have
been exceptionally reluctant to get involved in fingering
subscribers for the content industries without a court
order, but several major British ISPs have agreed to do
so, and two (Sky and BT) have gone on to announce
licensing agreements with the music business. Those
agreements could give ISPs the right to launch their
own music stores.
And that’s the issue. Should ISPs choose to launch
their own music services, would independent companies
like eMusic still receive a fair shake? It’s not a new
worry, and we’ve seen it in Canada when Bell Canada
started throttling P2P traffic (too much bandwidth!)
and then opened a bandwidth-intensive movie down-
load store of its own. Similar concerns were voiced in
the US when Comcast began interrupting some P2P
uploads even as it had a huge financial interest in hav-
ing people watch video through its cable system, not
an Internet connection.
BPI boss Geoff Taylor made the ISP music strat-
egy explicit in a column for the BBC this summer.
”We believe that ISPs, far from being a simple pipe,
can become significant distributors of digital media,” he
wrote, ”and share in the tremendous value that would
be unleashed if more music were accessed legally on-
line.” He then made a brief reference to ”ISP partner-
ships,” which are the ”next logical step in our maturing
digital music business.”
Pakman’s concern isn’t so much about crude prac-
tices like throttling traffic to eMuisc or cutting off ac-
cess to the site. That’s not going to happen. But what
worries him is the possibility for other arrangements-an
ISP’s own music offering being exempt from bandwidth
caps, for instance.
While Pakman’s not a fan of bandwidth caps in gen-
eral, it’s the link between caps and music licenses that
makes him uneasy. ISPs suddenly have an ”economic
interest to favor their own services,” a fear that ISPs
will have to address in ever case in which they attempt
to enter a content-delivery market.
Instead of sending letter to file-swappers, which Pak-
man doesn’t think ”is going to do anything,” he wants
to see ”hundreds of legitimate, well-priced alternatives.
Instead, he says, there are two or three, in part be-
cause music labels are stingy in handing out licenses to
startups.
He admits that the concerns about UK ISPs are hy-
pothetical at the moment and that he’s thinking ”three
steps ahead of where we are today.” Still, he’s adamant
that the scenarios he sketches aren’t ”some fairy-tale
situation that could never happen.”
Pakman’s worries, floated in media interviews over
the last few days (see his similar comments to the Fi-
nancial Times), are themselves a form of action, even
though Pakman says that the company has nothing to
announce in the way of legal complaints at the moment.
But even as he rightfully looks ahead to competitive
threats to his business, there’s also the possibility that
this will all work out well for music download services.
Previous UK surveys have shown that sending out sim-
ple ”I see you’ve been file-sharing” notices strip away
the feeling of anonymity that pervades such activity,
and has the potential to lead to significant reductions
in illicit P2P downloading. As that happens, music-
loving consumers may turn increasingly to legitimate
sources, and that’s an opportunity that eMusic and the
six people working out of its London UK headquarters
would do well to capitalize on.
Selfish driving causes everyone to pay
the Price of Anarchy
Traffic jams are something nearly everyone can re-
late to. While driving is ideally a communal activity,
where people pay attention to each other and follow
the rules of the road, most people seem to follow their
whims, only occasionally within the confines of common
sense. This urge to do what is best for the individual
leads to headaches for the group, increasing the total
amount of time everyone has to spend on the road.
In a paper set to be published in an upcoming issue
of Physical Review Letters, physicists Hyejin Youn and
Hawoong Jeong, along with computer scientist Micheal
Gastner, look at the result of self-interested drivers
traveling on both hypothetical and real-world networks.
The abstract describes what happens very clearly:
Uncoordinated individuals in human society pursu-
ing their personally optimal strategies do not always
achieve the social optimum, the most beneficial state
to the society as a whole. Instead, strategies form Nash
equilibria which are often socially suboptimal. Society,
therefore, has to pay a price of anarchy for the lack of
coordination among its members.
To illustrate this principle, the authors discuss a
trivial example: two points A and B are connected by
both a short bridge and a long freeway. Here, the total
number of travelers going from A to B is constant, but
the bridge is narrow and prone to congestion, while the
freeway is wide and is less susceptible to traffic jams.
In this setup, the ideal situation for everyone is for half
the traffic to take each path. Even in this trivial ex-
ample, however, what is best for everyone is not best
to each person. Using their example numbers, a driver
taking the freeway under ideal conditions would reduce
8
his or her individual delay by 40 percent over taking
the bridge.
But as more and more people move away from the
global optimum and take the bridge, the total time in-
volved in traveling from A to B increases and a Nash
equilibrium is reached. This is the point where ”no sin-
gle user can make any individual gain by changing his
own strategy unilaterally.” In other words, no matter
what route you take, you’re going to be stuck in traffic.
By looking at the ratio of the cost at Nash equilibrium
to the equilibrium representing the global optimum, one
can calculate the price of anarchy (POA)-a measure of
inefficiency caused by the lack of coordination.
Imaginary bridges and freeways can only take us so
far, so the authors decided to apply the analysis to the
real world. They calculated the Price of Anarchy for
three real-world commutes: from Harvard Square to
Boston Common in Boston, from Washington Market
Park to the Queens Midtown Tunnel in New York, and
the trip from Borough underground station to Farring-
don station in London. Using a well-established func-
tion to model traffic delays, they find that at an average
traffic flow of 10,000 vehicles per hour in Boston-a typ-
ical number-the POA peaks at 1.3. This means that
drivers waste 30 percent more time because they are
driving with their own interests in mind rather than
a group concern (not a news flash for anyone who has
driven in Boston). New York and London had similar
peak POA values of about 1.27 and 1.22, respectively.
To gain a better theoretical understanding of the
nature of POA in networks, the team applied their
methodology to various types of idealized networks.
They came to the conclusion that, to improve the Price
of Anarchy, you must close off various roads-something
known as Braess’s paradox. In the network representing
Boston, the researchers find six possible road closures
that would reduce the delay in the suboptimal Nash
(selfish) equilibrium. A similar analysis of the London
and New York networks found that there were seven
and twelve roads, respectively, that could be closed to
improve the overall travel time.
While still theoretical, the work has the potential to
aid future urban planning. Since the obvious solution
of adding more roads may actually make the problem
worse, an analysis of this sort could prove invaluable in
determining real-world driving conditions.
PAX Technica: Ars goes inside the
gamer’s ”Burning Man”
Penny Arcade Expo (PAX) is one of the biggest
yearly events in gaming, and the draw is easy to explain.
The lineup of developers and publishers who hawk their
games at the show is much larger than even E3’s list this
year, and the games to be seen and played comprise a
list of the biggest-name titles coming out this year and
next. The best in geeky music, including video game
cover-bands like the OneUps, nerdcore rappers like MC
Frontalot, and troubadours like Jonathan Coulton, are
performed during the two nights of concerts. In short,
PAX has become the destination for gamers all around
the world who wish to connect with the community of
games, music, and all other kinds of Internet culture,
and this year was no different. Well, except for one
thing: it was much bigger.
The problem for how people perceive PAX is that
there is no precedent for this sort of thing. While things
like ComicCon may come close, even that wide-open,
varied show doesn’t have the type of intense focus and
community that PAX enjoys. Others argue that PAX
is the new E3, which any game writer will tell you is ab-
surd. While it’s wonderful that the public gets to play
all those great games at the very public PAX, there is
precious little news that comes out of the event. In-
terviews and hands-on posts are great, but many of
the booths are stocked with PR people, not develop-
ers. More than one prominent writer in the press room
complained about not knowing exactly how to cover the
show. Other writers complained that doing any kind of
job at PAX is nearly impossible; the show makes you
want to quit your job and join the mob of gamers as
everyone chases their own idea of what PAX should be.
Anyone who goes has an easy word for what PAX
is: magic. The best things, the things that people re-
member after they go home, are rarely planned events.
Rather, the impromptu and collaborative nature of the
events, mixed with a community that has a strong sense
of giving and friendliness that extends to every line,
game, and happening, means that the best way to ex-
perience PAX is to fall into it, and to let the event
create itself minute by minute around you.
Not everything is wine and roses, however, as a few
cracks have begun to show at PAX08. Let’s take a look
at the highs, and lows, of the show this year.
As we arrive at the gates in Seattle’s airport, every-
one at SEA-TAC knows something is up, but no one
can quite put their finger on what. The airport is fill-
ing up with a very specific crowd: almost completely
male, almost exclusively white, and mostly unshaven
and looking either malnourished or over-fed. The pre-
ferred uniform for the crowd milling about the termi-
nals is beat up jeans and T-shirts bearing arcane look-
ing symbols and images. For anyone with eyes to see,
the geeks have arrived.
As the hordes of bodies make their way from the air-
port to the convention center, the line begins to form at
the center’s entrance, and no one is surprised or rest-
less. Tens of thousands of Nintendo DS systems, the
preferred way of passing time at the show, come out,
and groups form up around specific games. Those at-
tending dressed up as game or anime characters, espe-
cially the attractive women, are asked for pictures and
9
are very nearly mobbed.
A few hours later Ken Levine delivers the keynote
for the show, and, remarkably, he doesn’t mention his
signature achievement, Bioshock, once. In fact, Levine’s
story ends with his first job at Looking Glass. Instead
of talking about his latest game, he talks about growing
up young and nerdy, of being ashamed of his enthu-
siasm for comic books and games like Dungeons and
Dragons. He talks about how the issues dealt with in
favorite comics like Spiderman may have made him feel
more grown-up than his peers, while noting that he was
mocked for his choice of reading material.
He describes his first Dungeons and Dragons source
book, read under the sheets in the dead of night, as
if it was pornography that he was afraid to be caught
with. He describes how the gift of an Atari system
one Hanukkah changed his life. ”This was my Nerd
Siberia,” he tells the packed auditorium, as they nod
in understanding. No friends. Picked on at school.
Ashamed of a growing comic book collection.
He shows a picture of Farrah Fawcett. ”Believe
me, this was the shit back in the ’70s,” he says, be-
fore changing the slide to a scantily clad illustration.
”Me? I wanted to fuck the Scarlet Witch.” The room
erupts.
He describes meeting his first friends and joining
an ongoing Dungeons and Dragons campaign, who he
refers to as his ”tribe,” and how girls somewhat broke
that group up. He then goes on to speak about his
failed script for a vampire movie, as well as a rejected
script for a romantic comedy. Years of nothing followed,
until he found himself working at Looking Glass, a
place where employees watched Blade Runner on VHS,
played games in between making games, and generally
were at peace with being geeky.
”After many years running from things I love, it’s
amazing to come here and see what Gabe and Tycho
and so many others have built together,” he said. ”We
are united by a common element, but it’s not the color
of our skin or our ideology or politics,” he went on, his
voice rising. ”What brings us together at PAX is that
we are a giant bunch of fucking nerds.” The kids sitting
to the right of me, wearing Magic: The Gathering shirts
and suffering through what looked like hard bouts of
acne, almost bowl me over as they rush to stand up,
applaud, and cheer. I believe one of them is crying.
The part of PAX that most resembles a classical
gaming show, the part that makes people claim PAX is
the new E3, is the show floor itself. Filled with themed
booths, flashing screens, things to buy, and, of course,
long lines, this is the section of the floor where the
hardcore go to find out what they’ll be playing in the
future.
The problem is that the number of people this year
has skyrocketed; it has now been confirmed that over
58,000 people showed up for PAX this year, and while
the Convention Center can easily handle that amount
of people, the individual things people have come to see
can’t. For the entirety of the show, it took most of the
afternoon spent waiting in line to play Fallout 3, and
StarCraft 2 also required dedication if you wanted to
put your hands on a mouse and keyboard. This is a
big show for Bethesda, as the company promised some
new, never-before-seen content for Fallout 3 in the main
theater. Unfortunately, the theater could only handle
around 5,000 people, and masses of gamers were turned
away without being able to see anything. After the
interminable wait for the game, this is more than many
can bear, and it was there that we saw the first signs
of bitterness at the vastness of the show.
”I got in line for the Fallout 3 preview in the main
theater, as it was supposed to start. The main theater
filled up after 20 minutes and the preview began while
there were still hundreds of people waiting in line. Ev-
ery panel seemed to be packed; if you didn’t line up a
half-hour or an hour early, you weren’t getting in,” one
reader angrily commented.
The best lines were the ones that turned into a
party, and of course those lines belonged to Guitar
Hero: World Tour and Rock Band 2. ”It’s pretty mind-
blowing. I was at PAX last year when we were debuting
Rock Band and it was... amazing to see everyone who
couldn’t play drums and no one could sing and they
were performing on stage. This year it’s so surreal to
see players come up, play on expert, and nail everything
on expert,” Dan Teasdale, the Lead Designer on Rock
Band 2, told us. ”It’s very rewarding.” It seems like it.
The Rock Band 2 booth was hopping throughout the
entire show, and the line was even treated to an early
look at Jonathan Coulton’s ”Skullcrusher Mountain,”
which will have been released as downloadable content
by the time you read this.
Teasdale told us he thinks there is room for a wide
variety of music games when I grill him on Guitar Hero:
World Tour, and claims he hasn’t had a chance to play
the new guitar yet. I did brave the line for the new
guitar and drums, and the new features on the World
Tour guitar-including the button for star power located
near the heel of your hand and the touch panel on the
neck-seem to work well, and the drums are solid and
attractive. My main complaints would be how floppy
the cymbals felt; they bend down when you slam them,
in a way that feels less satisfying than either a harder
surface or an actual cymbal. It’s also hard to get over
being used to Rock Band’s four-pad layout.
The people having the most fun on the show floor
seemed to be those happy to just walk around and take
the scene in, playing games as they became available.
It’s an odd mixture of old-school E3 and fan events,
while being somehow better than both. There was even
the odd surprise to be had, such as finding The Conduit
somewhat hidden at Nintendo’s booth, or finding that
many gamers just wanted to sit down and play Castle
Crashers, a game that had been available for a few days
10
at that point. For many, the lines and the crush of
greasy gamers was more than worth it; I witnessed one
teenager who finally got a chance to play StarCraft 2,
his face breaking into a wide grin, his arms shaking
with anticipation.
”Back then, a year ago, before ’Still Alive’ had come
out, it was a huge bump up in that feeling of being fa-
mous,” Jonathan Coulton told me. We were sitting
in an interview room, and he seemed happy to have
a chance to sit down and relax a few hours before his
show. He contentedly ate candy and answered my ques-
tions.
We discussed his now-legendary show at PAX last
year. ”Everyone was singing along, and cheering, and
the zombie thing... I had done it before, but never
with such a huge crowd... It’s the greatest feeling in
the world.”
”I’ve always felt like I don’t want to be a super-
famous person who gets recognized all the time. That
doesn’t sound so nice to me,” he explained. ”I’m sort
of glad it’s a niche thing. I get to come to a place like
this and be a rock star, and then I go home and the
rest of my life is still normal.”
That night he played to a packed house, and ev-
eryone greets every song like it’s the biggest hit in the
world. As a surprise he brings Felicia Day onstage to
handle vocals on ”Still Alive,” the song that capped
off the end of Portal. The crowd here, filled with fans
of The Guild, which Felicia Day writes and stars in,
and of Dr. Horrible’s Sing-Along blog, Joss Whedon’s
web-series, absolutely adores Day, and the duet brings
cheers.
Felicia Day with The Guild co-star Sandeep Parikh
at PAX08.
The idea of the ”stars” of PAX is an odd one, and we
adored an odd mixture of people at the show. Jonathan
Coulton is something of a rock star here after his show
last year, and of course the success of ”Still Alive.”
Later in the show I saw him being whisked to some se-
cret location, flanked by a PAX enforcer, batting away
adoring geeks.
Felicia Day also had to contend with the same level
of hyper-fame at PAX. ”You know, I don’t really get
creepy fans,” she tells me. ”What I see more often is
people who start to sweat and shake when they meet
me.” She pantomimes a nervous person, her arms out.
”Only people who come back like eight or nine times
a day to take my picture, from like, afar, that gets a
little creepy.”
I interviewed Felicia with Sandeep Parikh, who plays
Zaboo in The Guild and has his own web show in ”The
Legend of Neil.” It’s a surreal experience, even though
the pair are incredibly nice and outgoing. They smiled
and greeted fans warmly during the signings, and a
screening of The Guild and Legend of Neil at PAX
proved to be draws. At other times you could catch
a glimpse of Felicia being whisked somewhere, looking
slightly hunted.
I was also able to greet Wil Wheaton at the start of
the show before the general public is let in, and he re-
mained one of the friendliest folks at the show. At PAX
his book signings draw large lines and his panels draw
standing room-only crowds. People absolutely adore
the once-Star-Trek-actor-now-writer at PAX, and it’s
no wonder: he drops inside jokes, playfully bats at his
own image as a professional geek, and is an honestly
talented public speaker.
These are the people who become pop stars at PAX,
although the ability to create your own fame certainly
exists. Cosplayers were numerous, dressing like as many
characters as you can imagine. Get a good idea, create
a good costume, and you can pose for pictures all week-
end. There was also a group of gentlemen who decided
to try to create a real-life ”rickroll” by dressing as the
bad horse singers, handing people a letter, and then
performing the song when it was opened, an homage to
Dr. Horrible. Felicia Day herself fell into this trap.
PAX can feel almost like its own world, with its own
rules and tropes. Wheaton’s law, which consists solely
of ”Don’t be a dick,” was vigorously enforced. The
great thing about creating a world from scratch is that
you get to choose who to make famous, and luckily, the
crowds got the celebrities they deserved.
Jerry ”Tycho” Holkins often held court at differ-
ent places around the show, swarmed by Penny Arcade
fans. One of them approached Holkins hesitantly. ”Can
I shake your hand?” he asked.
”Sure,” Tycho told him. ”This hand belongs to you
guys this weekend. Do whatever you want with it.”
Luckily for him, the gentleman gave it two brisk pumps,
and simply walked away smiling.
We pass the Serpent Theater, which houses the table-
top role-playing crew. We walk in and take a deep
breath, check out the giant Beholder... this is the very
essence of geek. The tables are filled with games, cards,
and all manners of dice. There is much concentration,
a lot of frowns, and some slammed hands on tables as
games of Magic don’t go as planned. They may look
miserable, but don’t believe the faces. These guys don’t
want to be doing anything else in the world. Here, the
only stops are for water out of the fountain and bath-
room breaks.
Few sights are as sobering as a room full of passion-
ate CCG players.
We pause for a while to watch a Jenga tournament
on the third floor of the Serpent Theater, and it is one of
the most nerve-wracking things we have ever witnessed.
The Omegathon is the on-going tournament of games,
both real and virtual, that runs throughout PAX. The
first prize is a trip to the Tokyo Game Show, 5,000, and
a set of Penny Arcade-themed consoles. Second prize
gets the consoles, and a ”lifetime supply of shame.”
One of the contestants prowls along the table, studying
each piece, looking for his way in. Each successful grab
11
results in polite applause, as if we’re watching golf. For
a little under an hour, no one breathes. Flash photog-
raphy is forbidden. When the tower of blocks finally
goes down, I imagine the gamers beneath us frowning
at the distraction.
Jenga felt more like a tight-rope walk than a party
game
This mirrors the first round, which was Peggle. ”Peg-
gle is a weird crossover game, it’s from PopCap, but it
has this odd crossover with hardcore gamers. [For the
Omegathon] we want it to be a fun game, but also...
Peggle is great contextualized, if you’re not just play-
ing it by yourself at home in the dark,” Jerry ”Tycho”
Holkins tells me while we watch the game together. ”If
it really matters where that ball goes, and you’re try-
ing to think about and really break down Peggle, my
guess is that it’s completely harrowing.” I agree. If
you’re lining up a shot in Peggle with that trip and
those thousands of dollars at stake, it must turn your
bowels to liquid. The Omegathon is brilliant in that
it adds insane stakes to common games, and reduces
gamers to piles of jelly.
I grab one of the Omeganauts, and ask him how
Peggle was. ”It was fine,” he tells me. Then he breathes
out. ”That’s just about the most scared I’ve ever been.”
After Jenga I try to grab one of the Omeganauts for
an interview, but he’s pacing the floor, wide-eyed, and
hyperventilating.
The final event of the Omegathon closes down the
show, and it occurs in the main theater. This, of course,
means another long line, which is something PAX08
gamers are getting used to. Luckily, in true geek style,
everyone finds something to do. Someone passes around
huge handfuls of pipe cleaners, and the geeks get to
work. One woman creates a large weighted companion
cube. Another creates a hand-held bat-signal. We see
logos for PAX, spiderwebs with real spiders; it’s amaz-
ing. And it’s happening up and down the line. We’re
finally let in, and then we begin to wait, thousands of
gamers strong, and then Gabe and Tycho get the bright
idea to pipe in easy listening.
Suddenly, a few rows up, a large group of promo-
tional Pip-Boy puppets from Fallout 3 begin to dance
over the heads of the crowd. They move in unison,
and switch their moves every few minutes, but almost
always perfectly instep. ”That’s a lot of puppets!” Ty-
cho exclaims when he takes the stage. ”Look some-
where else!” he tells them, sounding slightly creeped
out. Dutifully, they turn the other way.
The final game is played, Excitebike VS., a Famicom
disc game that never made it to the US. One Omega-
naut beats the other handily, and then Gabe and Tycho
take their expected turn. Gabe wins in the end, and
the expected thanks are given out to the crowd. It’s
all slightly anticlimactic, and no one seems to have a
graceful way to leave. The cosplayers, the gamers, the
table-top kids, the weekend Rock Band rock stars-no
one wants to go. The city is being broken down, and
the world we have created here is almost over. The Pip-
Boys begin their walk towards the exit, bobbing up and
down in unison, and soon they are lost in the crowd of
people heading into the night.
Samsung agrees to sell Symbian stake to
Nokia
Samsung Electronics has agreed to sell its invest-
ment stake in Symbian to mobile phone maker Nokia,
according to a Reuters report.
In June, Nokia announced plans to acquire the re-
maining stake in smartphone software developer Sym-
bian that it didn’t already own. Nokia, by having full
ownership of Symbian, wants to beat back the compe-
tition from Apple’s iPhone and other competitors by
accelerating its product development and serve as an
open-source operating system platform for other hand-
set makers, wireless carriers, and software developers.
Nokia, according to the Reuters report on Tuesday,
will pay 410 million for its Symbian stake.
Nvidia, AMD gaming graphics buck
green-PC trend
There is an ungreen revolution taking place in en-
thusiast game PC circles.
The eye-opening graphics possible on today’s game
PCs come at a cost: light-dimming power consumption.
The trend, rooted in the perennial quest for more speed,
bucks the overall greening of the PC industry.
Green PC designs have become more than just prac-
tical; they’re cool. Power-sipping Netbooks are in, as
are small desktops like the Dell Studio Hybrid and
Hewlett-Packard Pavilion Slimline.
This is not the case for high-end gaming PCs, where
bigger is better. How far this trend can go isn’t clear,
but a seminal event in Apple’s history may offer a les-
son. In 2001, Apple unveiled one of the first dual-
processor consumer systems, based on the overheating-
prone IBM PowerPC G4 processor. The original Apple
tower design had a Rube Goldberg feel to it, with a host
of fans straining to rid the system of heat. A noise like
that emitted by a wind tunnel, generated by the power
supply and fans, forced Apple to redesign the system.
This symbolized why Apple eventually abandoned
PowerPC: The platform wasn’t efficient with power.
Fast-forward to 2008. Game rig makers are cram-
ming as many as four graphics chips into high-end boxes
that are notable not only for performance but also for
the power they consume. As a consequence, big power
12
supply units are in vogue. Today, bragging rights ex-
tend to the units themselves: some systems boasting
boutique brand names such as Cooler Master and Sil-
verStone draw 1,200 watts–roughly three times the power
requirements of game systems a few years ago.
It’s an ominous trend, according to box makers. ”If
this trend does continue, then, yes, it will give us prob-
lems,” said George Yang, an engineer at Los Angeles-
based game rig maker IBuyPower. ”A regular home
user would have to have an electrician come in, get the
outlet out, and plug in a higher breaker,” Yang said.
Today, some of the higher-end systems with big power
supplies require a special wall power socket, according
to Yang.
Other game rig makers are equally concerned. ”I
swore that I’d never break 1,000 (watts),” said Kelt
Reeves, president of game PC maker Falcon Northwest.
”Unfortunately, that’s been the solution for the past
several years. Bigger, bigger, bigger power supplies.”
Reeves says that 1,200 watts is now essential for
gaming systems based on multiple boards from Nvidia
or AMD’s ATI graphics unit. ”With three GTX 280s
or two of the R700 cards, we’re recommending they go
with a 1,200-watt power supply,” Reeves said, referring
to the newest graphics chips from Nvidia and ATI re-
spectively.
This is just about the limit, he said. ”We can’t go
too much more over that before–if you actually pull
that (power)–you start tripping the client’s household
circuit breaker.”
Neither Nvidia nor ATI show any signs of slowing
down, according to Reeves. ”Eventually these chips
get so hot that their own heat becomes a barrier to
performance,” he said.
Nvidia admits that its chips are drawing more power
than before. ”If we go back about three years, our
graphics card power was in the 120- to 130-watt range,”
said Jason Paul, product manager in charge of enthusi-
ast GPUs (graphics processing units) at Nvidia. ”The
GTX 280 which we launched a couple of months back,
it’s around 230 watts (of) graphics card power,” he said.
But Paul claims the performance per watt is the key
yardstick, not raw power. ”Where you see a little under
2X increase in maximum power, you’ve seen probably
3-times or 4-times (the) increase in the level of perfor-
mance. So, overall we see a substantial improvement in
performance per watt. This is the big metric we track
to ensure we’re delivering efficient architectures. ”
Paul says Nvidia has implemented power savings
techniques on its GTX 280 that keep the power down
when it’s not running at top performance loads. ”With
the GTX 280 at idle, that card runs at about 25 watts,
which is one-tenth of its absolute worst-case power,” he
said. Nvidia also offers hybrid graphics technology that
turns off all the power-sucking boards when they’re not
in use.
Moreover, Paul says that the multiboard systems
are limited to a small niche at the very top of the mar-
ket. ”There’s definitely a segment of the market that
wants more and more performance. Remember, how-
ever, that this is the ultimate performance (segment).”
But game box makers ship many–if not most–of
their systems to the very niche that Paul is describ-
ing. ”We’re all about the high end. The higher-end the
graphics card is, and the more expensive, the more we
sell,” said Reeves.
And the trend in power supplies exemplifies how
this market has changed. ”The power supply used to be
just silver box, and nobody gave it a second thought,”
he said. ”(But) as graphics cards have evolved, they
have forced the power supply makers to keep providing
more and more power pipes–or cabling–to the graphics
cards”–increasing the unit’s complexity, he said.
Reeves cites GPUs, not CPUs from Intel, as the
culprit. ”The latest CPUs use very little wattage. If
you overclock a 3GHz Intel CPU to 4GHz, you might
pull 40 more watts. Whereas a graphics card, you put
three of them in a system, they’ll pull 800 watts running
some of the higher-end games,” he said.
LinkedIn and CNBC team up
CNBC and social networking site LinkedIn announced
Thursday a strategic alliance.
Under the deal, CNBC will provide articles, blogs,
financial data and video across the LinkedIn network,
while CNBC will integrate the social networking site’s
functionality into its CNBC.com site to allow LinkedIn’s
user base to share comments about the news within
their network of friends and business contacts.
Users of both sites are expected to notice these changes
in the fourth quarter. And, as part of the deal, portions
of CNBC’s content will provide a revenue sharing ar-
rangement with LinkedIn.
Cake Financial Turns One And Pushes
A New Social Stock Index: The
Cakedex
One year after it launched at TechCrunch40, Cake
Financial is rolling out a new design today with a load
of new features. One of the most interesting is a new
stock index called the Cakedex that is based on the
top 100 holdings of the top performing investors on the
social investing site. Over the past five and half years,
the Cakedex would have outperformed the SP 500, the
Dow Jones, and the Nasdaq. Although, over the past
90 days, it has been underperforming the major stock
indexes. Next year, the company plans to launch an
exchange-traded fund based on the Cakedex so that
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people can actually invest in it. Can the top investors
on Cake do better than the market?
The Cakedex was actually introduced in May, but
is now integrated into Cake’s new design timed with its
first birthday. Cake members track the performance
of their actual brokerage accounts and share that data
with each other. Cake can now tap into 60 different
brokerage services, up from a dozen or so. And has
now tracked over one million transactions.
In addition to Cakedex, other new features include:
Cake Take: A stock rating system updated several
times a day, based on the real-time buying and selling
of stocks by Cake’s members.
Cake Scout: A stock recommendation system that
uses collaborative filtering to show you what other Cake
members with similar holdings and risk profiles are buy-
ing and selling. Each recommendation includes the
Cake Take stock rating.
By adding these social recommendation features,
Cake is becoming more like the Last.fm of investing.
But it adds a ranking element so you know which mem-
bers are worth following. Other social investing star-
tups creating similar ranking systems include Covestor
and Vestopia, and the race is on to create real financial
products based on the social investing data that these
startups are collecting.
Cake now has ”tens of thousands of members,” ac-
cording to CEO Steve Carpenter and is collectively
tracking about 1 billion worth of assets. But the Cakedex
is based only on the holdings of the top 10 percent of
members. So good is that top 10 percent? The aver-
age Cake member’s portfolio is down 9.84 percent over
the past 12 months, while that of the average top-ten-
percenter is up 7.41 percent. (YTD it is -12.39 percent
versus -5.59 percent, respectively).
DreamIt Incubator Holds Funding Day
To Commemorate First Graduating
Class
Today marks DreamIt Ventures’ first Funding Day,
during which the new startup incubator will introduce
a dozen new companies to a collection of founders and
venture capitalists. DreamIt is a program in the same
vein as Y Combinator and TechStars, offering startups
seed funding, guidance, and connections in exchange
for equity. We’ve written brief introductions to each of
the startups, which you can view below:
SCVNGR: SCVNGR is a promising startup that al-
lows users to create mobile games without any techni-
cal knowhow. The games are free to play from any cell
phone, and don’t require a download. SCVNGR games
are ideal for group activities, like school orientations,
corporate team building, and promotions.
 Vuzit: Vuzit offers an embeddable document viewer,
allowing users to include documents in their web pages
and blogposts. Very similar functionality by Scribd and
Docstoc, but Vuzit is aiming to become a tool for indi-
viduals and companies who are interested in managing
access to their content instead of a destination portal.
Phrazit: Phrazit condenses reviews down to 30 char-
acters or less by allowing users to create tag clouds for
just about anything. Users submit words or phrases
associated with each word, with the most popular re-
sults displayed in a large font. For example, the Phrazit
for Harry Potter describes the series as ”Bloody Awe-
some”. You can see our full review of Phrazit from last
month here.
DropCard: DropCard hopes to be a solution to the
problems that plague business cards (namely, you don’t
always have them with you, and they’re practically use-
less if you have too many of them). DropCard reme-
dies this issue by asking users to text their new ac-
quantince’s email address to a 41411, which will send
their contact information and ask them to repicrocate
by signing up and sending theirs. For a similar service,
see Rmbrme.
BeanStockd: BeanStockd is a news site and media
company hoping to further bring the green and env-
iornmental movements to the public’s attention. The
site currently features a blog, and also plans to release
a web-based game, which users can advance on by par-
ticipating in real-world green activities.
InterviewBest: InterviewBest helps users prepare
for their job interviews by generating printed presen-
tations that can be used during their interviews. The
site also helps users write their post-interview follow-up
letters. InterviewBest will offer a trial version, and will
generate revenue with a paid subscription plan.
Anthillz: Anthillz asks professionals to review their
colleagues, which can be used as a ”social pitch” for
future job applications. In order to request a review
from one of your colleagues, you have to write a review
about them first - a design that may help the site in-
crease its content, but may also lead to inaccurate or
careless reviews.
Sleep.fm: A self-described ”social alarm clock”, Sleep.FM
allows users to set their alarm and have their friends
leave messages which will wake them up in lieu of a
standard buzzer. The site also promises to allow users
to set up ”smart” alarms, such as a weather report or
a notification if a flight has been delayed.
SnackFeed: SnackFeed indexes premium video con-
tent on the web and tries to ascertain which shows will
interest you the most. The site also intends to offer an
activity feed for video, allowing you to see what videos
your friends have uploaded or watched.
TapInko: TapInko looks to simply the often time
consuming process of purchasing ad space in the real
world. The site plans to offer users a variety of ad place-
ment options, including newspapers, restaurant walls,
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vehicles, or even as a tattoo on someone else’s body
part (who had previously put a portion of their skin up
for sale).
Trendient: Trendient is positioning itself as a pro-
motions and sales intelligence solution for the long tail
of e-tailers, who may not have the time or resources to
track such data themselves. Details at this point are
slim, as the site is currently in alpha testing.
socialmedian Launches First Major
Upgrade
socialmedian, which has come under fire as of late
for trying to use Twitter as means of raising 500,000
in venture funding, announced Thursday that it has
launched its first major upgrade since the company
started and its improvements will finally address some
of the concerns its users have had since its inception.
First off, the new socialmedian will make it easier
for users to get content onto the site and enable blog-
gers to better promote their content. Dubbed ”News-
Streaming,” socialmedian’s latest foray into bringing
only certain content to its users is quite complex.
News-Streaming lets users filter out all the junk
from the social media that they broadcast through the
site. According to the company, if users want to share
their Twitter feed with the community, but only want
their tweets that are actually newsworthy to be col-
lected by socialmedian, they can first input their Twit-
ter feed and next to that, place certain keywords into
the field to help the service filter out the tweets that the
user doesn’t want posted. In other words, if you want
to only post your political tweets to socialmedian, add
your Twitter feed to the service and select keywords
that may have some relevance to politics. From there,
socialmedian will grab all tweets containing those key-
words and post it to the site. The same goes for Google
Reader feeds, Digg submissions, and Delicious book-
marks, to name a few.
To make sure all that information isn’t annoying
other users, socialmedian is adding a filter feature that
will let other users ”turn the volume up or down” on the
amount of tweets and stories making their way across
the pages. Those users can choose to see all updates or
only those ”relevant updates” that they preset.
Part two of socialmedian’s new initiative will make
it easier for bloggers to promote their material. In or-
der to do that, socialmedian will launch a ”reverse-blog
widget,” which after users place their blog feed into
their updates, will be featured in the clips section to
the right of the socialmedian page and display the lat-
est stories from the blog.
Taking a page out of the Digg handbook, socialme-
dian is also offering a page displaying the most popular
stories of the day, week, and month. Instead of calling
newer stories ”Upcoming,” like Digg, socialmedian has
two new entries called ”Rising Fast” and ”Hot Discus-
sions.” Genius.
Finally, socialmedian opened up its site to make al-
most every page available to search engines and users
won’t need to register any longer to view different pages
on the site.
All in all, socialmedian’s updates seem rather logical
and don’t really break the mold in any way. The site
was in desperate need of improvement and it looks like
it has finally happened. Now we’ll need to wait and see
if its users embrace it.
Liberty Media to Make Its DirecTV
Stake Publicly Traded
TOKYO - Sony, the consumer electronics company,
said Thursday that it was recalling 440,000 units of Vaio
laptop computers worldwide because of faulty parts
that could trigger overheating.
The company said Thursday that the recalls in-
volved 19 models of Vaio TZ laptop series manufactured
between May 2007 and July 2008, including three ex-
port models.
The company said a faulty wiring connecting the
main body of the laptop and its display could cause
overheating near a power plug or the rim of the screen,
sometimes distorting the shape of the computer.
Sony Recalls Vaio Laptops Because of
Overheating
The ongoing struggles of Ford, General Motors and
Chrysler aren’t making Mel Karmazin’s job any easier.
As head of the newly merged Sirius XM Radio, Mr.
Karmazin faces the task of integrating two companies
and finding hundreds of millions of dollars in cost cuts.
And as DealBook recently noted, sales of new cars -
where many of the company’s radios get installed - are
in a free fall. So, too, is Sirius XM’s stock, which closed
Wednesday just a few pennies above its 52-week low of
1.26 per share.
A marketing professor from Wharton has a few radi-
cal suggestions for Mr. Karmazin about what he should
do next.
The professor, Peter Fader, said in the latest edi-
tion of Knowledge@Wharton that Sirius should get rid
of its current name - or, rather both of them - move
away from cars and try to bill itself as a music and
entertainment service.
Here’s how he put it to Knowledge@Wharton:
Come up with a proposition that can compete with
the iPod [...] I’m calling for a marketing makeover.
15
Dump both names because both are tightly linked to
satellite radio. The company should be saying, ’Here’s
a music and entertainment service that’s available on
every platform every place. And it’s commercial free.’
These days, the air is full of unsolicited suggestions
for Mr. Karmazin, who once ran CBS. Last month,
he exuded confidence as he told DealBook that he was
encouraged by the fact that more than half of new-car
buyers are choosing to install Sirius.
But many people think that cars will not be enough.
A few weeks ago, an analyst at Citigroup suggested
that some kind of collaboration with Apple could make
sense, possibly allowing iPhone users to get Sirius XM
content on their phones.
It’s not clear whether Mr. Karmazin will take any of
these suggestions to heart. But Sirius XM has billions
of dollars of debt that may need to be refinanced next
year, so whatever he does, he may need to do it soon.
DealBook: Does Sirius XM Need a
Total Makeover?
New Orleans Residents Can Return, Mayor Says
NEW ORLEANS Mayor C. Ray Nagin announced
on Wednesday that all residents of New Orleans would
be allowed to return to their homes immediately, re-
versing a decision that prevented them from returning
until Thursday following the evacuation of the city in
advance of Hurricane Gustav.
Mayor Nagin said in a televised interview that all
checkpoints into the city have been lifted. He was ap-
parently swayed by mounting pressure from the thou-
sands of evacuees who have lingered at the city’s edges,
many of them without food or gas and desperate to
return home.
As of Wednesday morning, tens of thousands of
homes in New Orleans were still without power, but
many of those waiting to get into the city said a house
without power was better than another night of sleep-
ing in a car in a hot parking lot.
Mr. Nagin said only residents with identification
proving that they live in the city, or a neighboring
parish, would be allowed in, and those with out-of-town
ID’s would be turned away, at least until Thursday. His
surprise reversal, which went into effect shortly after 9
a.m. Central time, eased some of the gridlock that for
two days has clogged many of the highways leading into
the city.
”This is going to be a continued challenge going
forward,” Mr. Nagin said. ”Some people are going to
come to their homes, they’re going to find trees in the
middle of their kitchens and all that good stuff. Just
let us know and we’ll try and accommodate you.”
Despite dire predictions, New Orleans was mostly
spared by Hurricane Gustav, which knocked out power
and downed trees and limbs but otherwise left buildings years ago. Still, Mr. Jindal said Hurricane Gustav
intact, the sewer system largely functioning and hospi- was ”a very, very serious storm that has caused major
tal emergency rooms open. The storm did not bring damage in our state.”
any serious flooding.
On Tuesday, power remained off at nearly 80,000
homes in New Orleans and tree limbs littered the streets.
City officials listed these and other factors as reasons
that they were not ready for the return of hundreds of
thousands of residents who heeded the mayor’s manda-
tory evacuation call over the weekend.
Thursday seemed unthinkably distant for those who
disregarded the official warning not to return and tried
unsuccessfully to make it through the barriers at the
entrances to the city. Mr. Nagin said in the interview
on Wednesday that his goal in setting the Thursday
return-date had been to get generators in grocery stores
and other businesses up and running before letting peo-
ple back into their neighborhoods. But with nowhere
else to go, evacuees gathered on New Orleans’ outskirts
some sleeping in their cars, others in parking lots and
in the streets clamoring to be let back in.
”What are they going to do about people that get
stuck out on the side of the road without money or
gas?” asked Raymond Taylor, a taxi driver from the
Gentilly neighborhood, sitting in his cab.
Merlene Demourelle, a Mid-City resident, dismissed
the inconveniences that awaited her at home.
”We’re tired, we’re hungry, we’re out of money, and
we want to take a bath,” she said. ”Sleeping in darkness
we’re used to that in New Orleans. Our lights always
go off.”
Ms. Demourelle and three traveling companions
from the city told of the hostility they encountered up-
state and of being turned away from shelters in towns
like Alexandria, Bunkie and Livonia.
”We slept in the parking lot during the hurricane,”
she said of a church in Alexandria.
Her husband, Ronald, added, ”We told them we was
from New Orleans, and they wouldn’t take us.”
New Orleans remained mostly deserted on Tuesday,
with the occasional resident who ignored the evacuation
order sweeping up outside. There was scant evidence
of the cleanup promised by officials, with a carpeting of
tree limbs, fallen magnolias and fractured crepe myrtles
on the streets.
In Baton Rouge, Gov. Bobby Jindal highlighted
the state’s successes in the Hurricane Gustav opera-
tion in a news briefing on Tuesday, quoting numer-
ous statistics: 1,800 National Guard troops working on
debris removal; 92 crews from the State Department
of Transportation clearing Interstate highways; genera-
tors dispatched to nursing homes; and the ”predeploy-
ment” of commodities in hard-hit southeastern towns
like Houma, Morgan City and New Iberia.
Only 10 deaths have been attributed to the storm
so far, six of them occurring during the evacuation far
lower than the 1,600 killed in Hurricane Katrina three

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