Apparently Borders can’t pay its publishers. 

Borders has been delaying payments to book publishers in signs that it may be one of the first major victims of e-books. Early reports from Publishers Marketplace on Friday said it was putting off the payments to help refinance its debt but also wasn't certain that the plan would be effective. It might have to break its existing credit deals early into 2011 after facing a "liquidity shortfall," it said.

That doesn’t surprise me.  Seeing the number of Kindles received as holiday gifts by “Computer illiterate” friends and co-workers has convinced me the e-book revolution has started.  But something else about this article did surprise me…

Any financial collapse at Borders could have a ripple effect on the e-book business. It would cost Kobo one of its most important markets for e-readers and would close one of the few major online book stores. The shift could feed Amazon, Apple and other survivors with extra customers.

That may be true but I’m surprised it’s what he chose to focus on.  Rather than the much bigger ripple effect this would have on society.  That effect is something I’m becoming more and more passionate about because I think we need to realize a digital future requires fewer workers.

Borders is the perfect example of this…

Whether we’re talking about e-books or paper books the transaction is still the same.  An author writes a book, a publisher distributes that book and a consumer purchases and reads that book.  These facts don’t change.  But with the Paper Book that process also requires…

1. Various people who work to cut down trees and ship the lumber
2. Various people who work to create the paper from those trees
3. People to ship that paper to the printer
4. A person to operate the printer that prints the book
5. A person to examine the output of the printer to verify the product
6. A person to pack that book to be shipped to the publisher
7. A person to unpack the book at the publisher and verify the quantity is correct
8. A person to then repackaged the book and ship it to individual retailers
9. A shipping company (UPS, FedEx,etc…) with various agents (carriers, pilots, handlers, etc…) to carry the package to the retail store
10. A clerk at the retail store who both unpacks, stocks and sells the book

Compare those people to what is required for an e-book…

1. A person in the publisher’s IT department takes the digital copy of the book, converts it to the approved format and uploads it to a server

That’s really it.  Yes there are maintenance people for the servers and the content management systems.  But you can’t believe those few IT people are more than all the ones I left out of the paper book list.  Remember companies that deliver packages, print books, sell lumber and so on all require IT departments of their own.  So if anything the comparison favors the e-books.

My contention is there’s no way to compensate for that kind of job loss. Think about this for a second.  A couple servers could replace the jobs of every Borders sales clerk in the United States.

We always see these utopian societies in Science Fiction.  The “Star Trek Society” where people choose to work for their own betterment and not because they need to.  That’s a great ideal and I believe humanity will one day get there but in realizing that from our perspective you have to look at another less pleasant fact.

There will be a transition.

A period where some will still have skills that are needed by society while others don’t and society will have to deal with those who don’t. 

This is a very complex topic and one I’m sure I’ll revisit at various times throughout the coming year.  But if I could make one request of you I’d ask that you think about this and ask yourself what will happen if Borders does disappear at the hands of e-books.  Where will those 25,000 people go if there’s never a new job for them and how can we as a society keep them from destitution? 

You’ll have to excuse the bare bones nature of this post but I’m on vacation and “off the grid” for the most part.  But I saw this and had to point out the glaring flaw in it.  From WMPowerUser.com…

We continue to see rather odd stories not just suggesting, but openly saying “Windows Phone is performing poorly, because they do not have 300,000 applications” as if the other prominent mobile operating systems sprung full blown from the heads of their creators with hundreds of thousands of applications.

IDC analyst however has been pretty impressed with the rate at which the Windows Phone Marketplace has been adding applications.

“The Windows Phone 7 Marketplace reaching 4,000 apps two months after launch has to be one of the most rapid ramp-ups in recent times, reaching this milestone faster than Android, which took from Oct 2008 to March 2009 to reach about the same level,” Al Hilwa, an analyst with research firm IDC, wrote in a Dec. 19 research note.

Here is a graph of the numbers they refer to (iPhone is the red line and Android is the green)…

This story has been picked up by several other news sources.   Sadly not one of them questioned IDC’s conclusions.  Had they done so they’d realize there’s a serious flaw in this comparison.  From Wikipedia…

The Android Market was announced on 28 August 2008 and was made available to users on 22 October 2008. Priced application support was added for U.S. users and developers in the U.S. and UK in mid-February 2009. UK users gained the ability to purchase priced applications on 13 March 2009.

So IDC compares the Android Market’s growth from when it first opened in October 2008 but you couldn’t actually SELL apps in the Android Market until nearly 4 months after that date.  Up to that point it was all freebies which could certainly account for the slow growth. 

For those who don’t follow these things Windows Phone 7 offered developers the ability to charge right out of the gate.

To me this is a big enough flaw in the comparison to make it irrelevant.  You can’t compare hobbyists writing apps for free to people who actually plan to make money.  Doing so creates a false impression and when looking at the WP7 numbers from the perspective of free app developers vs paid app developers the numbers still seem pretty bleak. 

(given how harsh that sounds I’d like to point out I still don’t think numbers matter when talking about Windows Phone 7)

Addendum: In fairness Engadget did point out yet another flaw in this analysis that deserves mentioning...

There are several things to consider here. Android launched on the T-Mobile G1 alone, which means that for most of the period IDC mentions, the Android Market was really more of the "G1 Market" than anything else: one device, one carrier, one country. It wasn't until the first half of 2009 that additional markets and devices came online, and even then it was slow going -- typically one device on one carrier per market. Windows Phone 7's had a moderately more well-supported and well-rounded launch with devices from HTC, LG, Dell, and Samsung reaching multiple carriers in multiple countries across North America and Europe within a few days of each other. Sure, you could use the iPhone as the counterexample here; Apple saw explosive App Store growth with just two devices (the original and the 3G) on a handful of carriers around the world, but by the time third-party apps were enabled, the company had already assembled a big installed base of users hungry for more functionality.

On FriendFeed Paul Buchheit has called Google out on ChromeOS…

This is relevant not only because he is an ex-Google employee but also because he’s the creator of Gmail (arguably the web app Google built its app initiative on top of).  So his opinion carries a lot of weight.

But I don’t agree with it and I’ll explain why.

If ChromeOS is to succeed it will do so for one reason and that’s purity.  It is all web based.  You can destroy your Chrome Notebook and then walk to another and pick up where you left off. That’s not true of Android and, by design, IT NEVER WILL BE. 

Because Android will always allow individual applications to save things locally and as long as that’s true you’ll never have the same “transcendent” experience on Android as you will on an entirely cloud based system like ChromeOS. 

That’s where the “warning“ comes in.  I guarantee you the first thing that will happen once ChromeOS hits the market is a bunch of reviewers will start pushing Google for more native features (You can already see that in Danny Sullivan’s review of the CR-48 beta notebook).  They absolutely can’t give in to that.  If they do than Paul Buchheit is right and there is no reason for ChromeOS to exist. 

Purity of design is what will make ChromeOS a computing experience that transcends the individual machine and is the unique feature that will differentiate it from all other Operating Systems. 

One Side Point… Though unrelated to the technical issue I did want to make one additional point.  Google needs to see these comments as a sign of how others view their commitment to ChromeOS.  Though Mr. Buchheit is a high profile commenter these sentiments have been all over Hacker News in the last few days.  Google needs to set  money aside and commit to ChromeOS for a period of 5 years if it has any chance of survival.  Otherwise very few are going to trust them enough to invest in the platform.

Pew Research recently did a survey to find how many adults use Twitter.  The conclusion was that 8% of Internet using adults use it at all while only 2% use it daily.  But what interested me more was their “notable conclusions”…

• Young adults – Internet users ages 18-29 are significantly more likely to use Twitter than older adults.
• African-Americans and Latinos – Minority internet users are more than twice as likely to use Twitter as are white internet users.
• Urbanites – Urban residents are roughly twice as likely to use Twitter as rural dwellers.

One of the responding blog posts listed on Techmeme was from a 16 year old named Michael Moore-Jones.  He came to a conclusion that got me to thinking.  He says…

Teens' lives are entirely built around their actual friends. Quite simply, why would teenagers bother using Twitter when Facebook exists, and offers so much more? Teens want a platform that allows easy, fully-functional communication to an exclusive social circle. That is, solely to their friends and peers. Twitter is a platform built for inclusive broadcast (to everyone), and to teenagers it offers no obvious value.

Can you think of some reasons as to why your average Twitter user keeps tweeting? Self-promotion and the ability to follow interests immediately come to mind. For example, Robert Scoble uses Twitter to share his insights and knowledge on the tech scene, as well as to receive instant information on those areas of his interest.

I would have agreed with him before today.  But the Pew research got me thinking.  Do urbanites really self-promote more than rural dwellers?  Do minorities really self promote twice as much as white internet users?  I really don’t think so.

(As someone whose of half Irish descent and half Latino descent I can tell you the White guys are way more self promoting)

Given that conclusion I tried looking at the numbers without my preordained prejudices and I came to an interesting conclusion: I think Twitter is more about people with very little time trying to connect than it is about self-promoting. 

This is something many Twitter users have been saying for quite some time but I don’t think I believed it until now.  Follow the evidence.

18-29 year olds use Twitter more: As someone who recently left the 18-29 age group the thing I remember most about it was being pulled between the friends I was making in my adult life while trying to maintain a connection to the friends I’d had as  a child.  That desire left me desperate to find new, better ways to stay in contact with friends.  That’s a problem that’s unique to that age group.

(This is where the teenager point comes in as teenagers also want to connect but they have tons of time on their hands so they can use a time sinkhole like Facebook)

Minorities are twice as likely to use Twitter as Whites: As someone who has interacted with both a Latino community and a White one I can tell you community interaction is more important to minorities.  I could give you several unsubstantiated theories as to why that is but trust me it’s true.  That’s why you see racially focused Churches for African Americans and Latinos but hardly ever for Whites.  Whites generally aren’t as community oriented.

Urbanites are more likely to use Twitter than rural users: I’ve lived in Los Angeles, CA and Rock Springs, WY which are as far apart as you could imagine on the population scale and with that experience I can tell you EVERYTHING takes longer in the city.  It takes longer to get anywhere in your car and when you do there are lines everywhere.  People from Wyoming can not conceive of having to wait at a stop light through 3 greens because there wasn’t enough time for all the cars to get through.  That loss of time makes it harder to keep in contact with friends. 

Each point in the Pew poll leads to the same conclusion: The people most likely to use Twitter are the ones trying to connect.  Not those trying to self promote. 

So I think my opinion of Twitter is shifting.  There’s definitely a very vocal group of self-promoters on Twitter but I’m beginning to think they’re the exception and not the rule.

Today the Wall Street Journal’s Walt Mossberg interviewed Microsoft’s Joe Belfiore on the state of Windows Phone 7.  Owen Thomas of Venture Beat sums up what most people are thinking about the interview.

I could write a long post about all the things that Microsoft executive Joe Belfiore, director of the Windows Phone program at the software giant, said at the D: Dive Into Mobile conference in San Francisco.

But it’s mostly stuff you’ve heard before. Far more important was what he didn’t say: How many phones Microsoft has sold since Windows Phone 7’s splashy launch last month.

Without sales figures, Microsoft’s mobile hype is all talk. The company never hesitates to brag about how many Windows operating systems licenses it’s sold, after all.

In most cases I’d agree with this sentiment but I think Microsoft is an exception.  The way I see it numbers matter for two reasons. 

1.  They’re an indication of the number of apps that will be built for the platform

2.  They’re an indication of whether the platform will survive at all (since no one wants to be stuck with a phone built on a defunct platform).

But neither of those concerns really apply to Microsoft.  On the issue of Apps they’re clearly willing to spread money around to get the best apps ported to Windows Phone 7.  So even if they sell very few Windows Phones they’ll have the hottest apps.

On the platform’s survival I think any strategic read of the situation indicates Microsoft CAN NOT lose this battle.  They need a presence in the consumer market and they know it.  Right now the only successful consumer product they have is the XBox line and that’s just not enough to fuel future growth.  Yet they’ve already failed at just about every other consumer Endeavour.  Tablets, the digital living room, automobiles (remember AutoPC) and so on.   

Microsoft needs a smartphone win.

At the same time they can’t start over again on their phone platform without completely compromising their credibility.  Windows Phone 7 IS their “start over” and no one’s going to allow them to do it again. 

So while poor sales aren’t great they don’t mean the same thing for Microsoft as they would for a company like pre-HP Palm.  Microsoft’s deep pockets make a difference and will keep them in the smartphone market to the bitter end.