I had a chance encounter with Microsoft's software economist Lars Lindstedt at the MediaTech conference today, which seemed a good opportunity to ask him about a few points of debate.
Users trade data for benefits
Firstly, the Facebook privacy issue. Microsoft beat Google to a sliver of Facebook for a not insignificant £140m last month, and gets to extend its deal as the site's exclusive display ad provider until 2010. Given that ad targetting is increasingly important for online business models, what needs to be done to address users' concerns about how their data is used?
Lars began by saying that Microsoft has worked closely with the child protection agencies in the UK to make sure that younger web users are protected, but how about adults?
"With email for example one thing we are not doing is targetting adverts according to email content. As providers we have to be extremely sensitive as to what consumers are expecting," said Lindstedt, pointing to Google's occasionally controversial targetted ads within Gmail.
"There needs to be education and an awareness of the implications of being involved. But the trade off are the huge benefits that these sites offer, or we wouldn't have seen such big growth."
I should add that advertising is not Lindstedt's home turf; he leads Microsoft's emerging business programmes and is at the conference to support a few Microsoft-supported start-ups including RSS specialists ZebTab, the history-ish site Miomi and Viapost, the web-to snail mail service.
Competing for users' time
He pointed to Blyk, the ad-supported mobile service, to show how targetted advertising can be so useful to consumers that they don't recognise it as advertising at all. And in-game advertising also has huge potential, another vehicle to reach a clear demographic in a very immersive environment. It's these kind of environments that are competing with media publishers for users' time.
"There is a finite amount of user time. The challenge is the way people spend their time. Broadcasters are not up against 2 or 3 other channels but 3-4,000 channels. It's a lot more complex to figure out where those targetted audiences will be - will fragmentation continue or will there be backlash against that?"
"The thing that drives all this is technological change," he said. In ten years the UK has gone from pretty much zero to nearly 60% broadband penetration, and none of the big web phenomenon could have happened without that.
Lindstedt made the point that the growth of music festivals has been pushed, in part, by the decline in record sales. Record companies want to increase their revenues from live music and merchandise.
He quotes that Bill Gates line (not someone he often quotes, he reassures me) about change: "We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten."
It's good business to solve big problems
I put Lindstedt on the spot and asked him to pick out some key technologies that would be significant for the media industry. He said that screen technology will be one of the most significant; it is already hard to buy a TV that isn't a flat-screen and there are Nobel prize-winners working on screens that are more interactive. With a nod to Microsoft's 'Surface' project, a coffee table-sized touch screen being pitched to high-end corporate clients.
Much of Linstedt's interest, though, is with more socially beneficial projects (Not that an interactive coffee table isn't socially beneficial somehow, I'm sure). He talked about smart meters, which will be communicate directly with your electricity supplier and be able to cut power to your fridge for five minutes ahead of the infamous put-the-kettle-on ad break.
One thing the media industry probably wants to hear is that we are in a period of unusually accelerated change that will calm down fairly soon.
Not so.
"Technology and innovation are accelerating. But some of the biggest opportunities are to solve the biggest problems, like healthcare, energy and the environment. And there's a big business opportunity in solving those big issues."
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