Web 2.0 pay for play: payola, or transparency?

We live in a world propelled by “spin

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We live in a world propelled by “spin” and driven by opaque, financially motivated relationship webs.

From corporations motivated by profits, to not-for-profits with missions to “do good,” and from governments serving citizens, to universities at the service of research, activities occuring at organizations of all types, including Web 2.0 Social Web properties, often involve non-transparent methods to gain profits, garner influence or further agendas.

Here are some views on non-transparent influences:

CORPORATE WORLD

In “Halliburton's Hella Good Deal,” Charlie Cray, co-author of “The People's Business” discusses influences on government contracts at TomPaine.com:

Last week, the Army announced with much fanfare that it was canceling the…contract that Halliburton/KBR has used…The contract will be broken up and divided among at least three different companies, but it’s not clear that this will make much difference to taxpayers, or even that Halliburton will stop making a killing.

The new policy is, in effect, tacit recognition of the epidemic of waste, fraud and poor contract oversight..It vindicates key congressional critics, such as Sen. Byron Dorgan, D-N.D., and Rep. Henry Waxman, D-Calif., whose dogged persistence has exposed a cornucopia of corruption associated with contracts like Halliburton’s. Yet, if the history of the Iraq contracts so far is any indication, that’s about as much as can be read into the policy…

problem with outsourcing oversight is that all kinds of fraud can be hidden under layer after layer of subcontracts, especially when the subcontractors are incorporated in different countries all over the world. It may be difficult for anyone but the best forensic accountant to determine if the other contractors and their subcontractors have no connection to Halliburton.

NOT-FOR-PROFIT COMMUNITY

A “Integrity in Science Watch” report discusses influences on not-for-profit hospitals in “Hospital Execs Paid by Healthcare Suppliers for Advice on Products” at the Center for Science in the Public Interest:

Chief executives from top non-profit hospitals acted as paid consultants to hand-picked drug and device vendors who were developing products for use in their hospitals, according to the New York Times. The Healthcare Research and Development Institute, a for-profit company that organizes ritzy conferences where hospital executives can meet with suppliers like Eli Lilly and Johnson & Johnson, is currently being investigated by Connecticut attorney general Richard Blumenthal, who believes hospitals may not be getting a fair deal when vendors "buy access" to those who are in a position to influence what supplies or services their institutions purchase. The arrangements were also attacked by the device manufacturers' trade group, which claims they favor the largest firms in the industry. "These conflicts prevent innovative, cost-effective products from entering the market," said Mark Leahey, executive director of the Medical Device Manufacturers Association.

GOVERNMENT

In “’08 Presidential Conventions Are Big Bid-ness,” Neil Tambe discusses influences on the presidential nominating conventions at Capital Eye:

To have a chance at hosting a national party convention, a city must put together a plan of action that includes how much of the cost the city’s host committee is willing to bear. Restrictions on contributions to host committees were loosened over the last few decades, changing the dynamics of fundraising for conventions, according to research published by the Campaign Finance Institute. Private contributions have increased from $1.1 million in 1980, accounting for 6.7% of convention financing, to an estimated $103.5 million in 2004, totaling 60.8% of convention financing...

While contributions to presidential campaigns and the national parties are limited, unlimited private donations are allowed for conventions. The Federal Election Commission presumes that money contributed to host committees from private sponsors serves the interests of the city and is not politically motivated. A Campaign Finance Institute study concluded that this is an unreasonable assumption for all donors because “many of the firms also have strong federal interests as reflected by their political contributions and their chief executives’ fundraising activities.” A CFI task force found that the FEC’s current policy towards host committee contributions is “inconsistent with the spirit, if not the letter” of the Bipartisan Campaign Reform Act of 2002, which was intended to prohibit “soft money,” or unlimited contributions from corporations, labor unions and other interests to the national political parties.

ACADEMIA

Jennifer Washburn, author of “University, Inc.,” discusses influences on academic research in an interview at CorpWatch:

Q: Can you give some of the economic context for the shifts towards academic-industry partnerships?

A: U.S. universities have long had relationships with private industry. Many of the land grant institutions had, as part of their mandate, a mission to serve local industrial interests. That meant they should provide expert advice to industry and be thoughtful of the needs of industry, etc. During the industrial era you saw the rise of chemical engineering departments that rose up in tandem with these new industries. Professors consulted for industry, their graduate students would often go on to work in industry after they graduated, but there was a very clear line between what was academic and what was commercial.

Even the Massachusetts Institute for Technology (MIT), which has had some of the closest relationship with industry, was wary of anything that smacked of commercialism. For instance, all of the patenting and licensing they did up until the 1970s was contracted out to an independent, third party. So, if a professor felt that he needed to patent his research in order to commercialize it, it would be handled outside of the university. Now, instead, all of these universities have set up very expensive patenting and licensing operations on campus and they are trolling the different labs looking for commercially lucrative inventions.

WEB 2.0 SOCIAL WEB PROPERTIES

In “Social Web: microcosm of 'real world' social, and anti-social, behavior” and “Calacanis new 'Robin Hood' of the Web?” I discuss the AOL and Netscape.com exec Jason Calacanis’ public “recruitment” of “volunteer” Web 2.0 contributors:

Calacanis’ public, commercial challenge to the Social Web community has sparked debate about the “purity” of "volunteer" Social Web contributors.

Calacanis’ reaction to others’ reactions:

Of course, the Web 2.0 elite want to make the decision for social bookmarkers--and for me and my company Netscape. How dare we offer people money for their work?!?!!? How dare these people get paid for their time!??!?!

Upfront payment for content generated at Web 2.0 Social Web properties such as Digg or Wikipedia may, in fact, make the information presented at the sites more transparent and trustworthy.

As it stands now, both Digg and Wikipedia fall short of the idealistic notion of a Web 2.0 “collective wisdom.”

I note in “Digg contributor: Social Web can be a 'very cruel place':

While self-centered and spiteful behavior manifested at Web sites relying solely on user contributions may merely reflect similar undesirable behavior transpiring offline, the Social Web often presents its user-driven sites as civilizing, democratizing community endeavors which harness a “collective wisdom.

Digg founder, Kevin Rose, wrote at the Digg blog:

Digging Fraud…it was brought to our attention that several users have created accounts to mass digg and promote stories.

Rather than the Web's “newspaper,” Digg is feeling more and more like the Web’s self-promotional tool.

I quote a commenter at Calacanis.com in: “Social Web: microcosm of 'real world' social, and anti-social, behavior”:

What a lot of people out there want is traffic. And a lot of people are submitting their own content to places like digg, reddit, netscape, etc. Perhaps you could capitalize on this need for people have to get traffic. Some people out there complain or get annoyed when a story is submitted and it doesn't go to the original source. I say who cares. If I find a good story and put a better spin on it, then screw it…I get the traffic.

What I want is traffic. Well really..I want money.

Digg “stories” are often self-submitted by authors and then actively “voted on” by collaborative self-promoting teams.

Additionally, such collaborative efforts may include “sabotage” against “competing” stories legitimately posted by Digg contributors without agendas. Sabotage tactics include “bury” and negative comment campaigns.

I note the dangers of misinformation and vandalism at Wikipedia in “Social freeloaders: Is there a collective wisdom and can the Web obtain it?:

the proliferation of "nonsense pages,” "revert wars" and “vandalism” at “The Free Encyclopedia” has led to a qualification of the site’s seemingly universal open editing claim.

In last month’s “Growing Wikipedia Refines Its 'Anyone Can Edit' Policy," The New York Times discusses “vandalism” at the site:

early this year, amid heightened publicity about false information on the site, the community decided to introduce semi-protection of some articles. The four-day waiting period is meant to function something like the one imposed on gun buyers.

Once the assaults have died down, the semi-protected page is often reset to "anyone can edit" mode. An entry on Bill Gates was semi-protected for just a few days in January, but some entries, like the article on President Bush, stay that way indefinitely… Full protection often results from a "revert war," in which users madly change the wording back and forth…

Intentional mischief can go undetected for long periods. In the article about John Seigenthaler Sr., who served in the Kennedy administration, a suggestion that he was involved in the assassinations of both John F. and Robert Kennedy was on the site for more than four months before Mr. Seigenthaler discovered it. He wrote an op-ed article in USA Today about the incident, calling Wikipedia "a flawed and irresponsible research tool.

Perhaps upfront, fully disclosed payments to Web 2.0 contributors would dampen subterfuge currently transpiring at popular Web 2.0 properties.

As Web 2.0 properties generally offer their infrastructures to the public for free, however, the model is not conducive to cash payouts.

In Web 2.0 'no money down' model: heady, not bubbly I note:

In lieu of revenue models, Social Web start-ups talk of unleashing cool applications for free. The first wave of the commercial Internet may have been based on shaky business models, but at least the Web was viewed as a place to make money.

MORE ON WEB 2.0

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