Many artists have used pencils to create beautiful pieces of work but only one creates stunning masterpieces on the tip of one. Microscopic artist Dalton Ghetti spends up to two-and-a half years painstakingly crafting each handmade piece on the graphite of a pencil.

The New York Times reports

Mr. Ghetti, who owns about as many possessions as a monk, is aware how unusual his craft is. He started carving tree bark when he was a child and experimented with everything from soap to chalk before settling on graphite. It's second nature now, and for 90 percent of his work, all he needs is a sewing needle, a razor blade and a carpenter's or No. 2 pencil.

The pencil tip is great; it's like a pure, very homogenous material,' he said. It cuts in the same direction, not like wood, which has a grain. But when I tell people how long it takes, that's when they don't believe it. That's what amazes people more, the patience. Because everything nowadays has to be fast, fast, fast.'

It is really remarkable niche in the art world. There have been artists who use pencils as part of their craft, but none use the smallest and most fragile part: the pencil lead.

via & via

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The excellent blog Ephemeral New York has a post on Brooklyn Heights' perhaps most charmingly named thouroughfare. It quotes an 1894 New York Times article:

The oldest residents can remember a time when there was a cool and shady path leading down Lover's Lane, where plump, rosy-cheeked Dutch maidens, with their sweethearts, meandered on summer evenings out through the turnstile and down the grassy bank to the water's edge.

Wildnewyork, author of Ephemeral New York, adds:

I wonder if the name may have been reinforced by the presence of the Brooklyn Collegiate Institute for Young Ladies, an early 19th century finishing school located on what is now called College Place, a tiny lane that intersects Love Lane.

Perhaps eligible Brooklyn bachelors took romantic walks with some of the students here, making the Love Lane name really stick.

We know this month has basically been one long heat wave, but we had no idea what we were putting up with. A reader's travel plans led to a rather interesting discovery. He wrote to us, "Traveling to Kenya in about a week and was gearing up to have more of the same temperature. I checked a single day's weather, liked what I saw, then charted the whole month of July thus far. Someone please call Mr. Gore."

While New York has been baking in the 90s (and the occasional 100) for much of the month, Nairobi, Kenya, classified as having a mild "Subtropical Highland climate," has been chillin' in the 60s and 70s all month. It's actually Kenya's cool season right now, but our reader's discovery inspired us to see how New York's heat stacked up against that of other cities with sweatier reputations. And did you know that today will be the 17th day above 90 this yearthat's the average amount for an entire year.

As you can see, our temperatures exceeded those in Cairo, Egypt on several days, and overall, averaging out our city's relatively wild fluctuations in temperature, we seem more on par with Miami than anywhere else. So why didn't we get LeBron James?

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An anthology of writings on high weirdness & secret history? How did I not know of this before?

At the beginning of 1797, John Robison was a man with a solid and long-standing reputation in the British scientific establishment. He had been Professor of Natural Philosophy at Edinburgh University for over twenty years, an authority on mathematics and optics, and had recently been appointed senior scientific contributor on the third edition of the Encyclopaedia Britannica, to which he would eventually contribute over a thousand pages of articles. Yet by the end of the year, his professional reputation had been eclipsed by a sensational book that vastly outsold anything he had previously written, and whose shockwaves would continue to reverberate long after his scientific work had been forgotten. Its title was Proofs of a Conspiracy against all the Religions and Governments of Europe, and it launched on the English-speaking public the enduring theory that a vast conspiracy, masterminded by a covert Masonic cell known as the Illuminati, was in the process of subverting all the cherished institutions of the civilised world and co-opting them into instruments of its secret and godless plan: the tyranny of the masses under the invisible control of unknown superiors, and a new era of darkness over all'.

The first edition of Proofs of a Conspiracy sold out within days, and within a year it had been republished many times, not only in Edinburgh but in London, Dublin and New York. Robison had hit a nerve by offering an answer, plausible to many, to the great questions of the day: what had caused the French Revolution, and had there been any plan behind its bloody and tumultuous progress?

Many had located the roots of the revolution in the ideas of Enlightenment figures such as Voltaire, Diderot and D'Alembert, who had exalted reason and progress over authority and tradition; but none of these mostly aristocratic philosophes had advocated a revolution of the masses, and indeed several of them had ended their lives on the guillotine. In the early 1790s, it had been possible to believe that the power-hungry lawyers and journalists of the Jacobin Club had whipped up the Paris mob into their destructive frenzy as a means to their own ends, but by 1794 Danton, Robespierre and the rest of the Jacobin leaders had followed their victims to the guillotine: how could they have been the puppet-masters when they had had their own strings so brutally cut? What Robison was proposing in the densely-argued and meticulously documented pages of Proofs of a Conspiracy was that all these agents of revolution had been pawns in a much bigger game, whose ambitions were only just beginning to make themselves visible.

DarkLore Volume II (Amazon)

It's a beautiful thing to watch people tweet. Especially when you try to figure out what they're tweeting about, how they feel, and where they're tweeting from then put that all on a map and animate the changes over time.

Researchers from Northeastern University and Harvard College recently built a pretty and captivating visualization of U.S. Twitter users' moods, as determined by sentiment analysis. You can watch two days worth of tweeted moods in this video:

Watching the cartogram pulse as it indicates the proportional volume and sentiment of tweets is probably more interesting than the researchers' conclusions about their data: people are happier on weekends than weekdays; West Coast happiness trends are usually about three hours after East Coast happiness trends. Still, it's neat to learn that Thursday evening aka just about the time I'm posting this is the time of the week Twitter users tend to express the most negative sentiment.

Meanwhile, over at Betaworks, they've just posted a visualization of the record-setting sustained volume of tweets from around the world during the World Cup. There's no sentiment analysis here just counting of relevant hashtags but you can see the volume of tweets corresponding with the occurrence of games that people in a country are interested in.

People seem to tweet less about being frustrated than being triumphant; for the championship game, Betaworks noted an immediate lack of traffic in the Netherlands after losing while the attention in Spain persisted through the next morning. Or it could be that disappointed tweeters just left off the proper hashtag formulation when lamenting their team's loss.

These aren't the first Twitter geography-plus-time visualizations videos, of course. Here's one from last year that maps tweets with the words just landed and just arrived in:

Just Landed 36 Hours from blprnt on Vimeo.

Here's another of tweets from people who were pleased about Barack Obama's inauguration. And here's one from the New York Times depicting tweets during the Super Bowl. (Those two aren't embeddable, so you'll have to click through.)

Perhaps the data geeks who made these were too busy thinking about the visuals, but for some reason or another none of them include a soundtrack. So it's up to you to put some trippy music on, chill out, and watch the Twitter visualizations.

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An interesting discussion of the role of "traditional media" in the wikileaks Afghanistan journal

That WikiLeaks went to the press with the Afghanistan war logs shows old-fashioned news organisations still have a role to play

Of all the questions raised by the Afghanistan war logs, perhaps the most intriguing is this: why would an organisation as independent-minded and disdainful of the traditional media as WikiLeaks seek out those very media as partners rather than going it alone?

My necessarily speculative answer is that WikiLeaks founder Julian Assange, who's made a speciality of revealing embarrassing governmental secrets, learned something important earlier this year. That's when he briefly caused a sensation by releasing video of a US Apache helicopter firing on Iraqi civilians, killing (among others) a Reuters photographer and his driver.

The lesson: shocking material and a flair for public relations may be enough to get you noticed. But if it's credibility you want, then old-fashioned news organisations still have something to offer.

WikiLeaks made some 92,000 documents about the war in Afghanistan available to the Guardian, the New York Times and Der Spiegel a month ago, giving professional journalists time to sort, vet and craft narratives from jargon-laden field reports compiled by US officials.

The documents add sickening details to the broad outlines of what we already knew: that major elements of Pakistan's intelligence forces are in bed with the Taliban; that chaos and confusion in Afghanistan has led to civilian casualties; and that among the burdens the Afghan people must bear is a corrupt and ineffective government.

The Obama administration has lambasted WikiLeaks for releasing the documents, arguing that the situation has improved since 2009, when the most recent of the official reports were compiled. But no one has questioned the authenticity of the documents themselves, even if the reliability of the information contained therein appears to be of variable quality.

In effect, Assange chose to act as Daniel Ellsberg, the insider who leaked the Pentagon Papers the US government's own secret history of the Vietnam war to the Washington Post and the New York Times. But it was just a few months ago that Assange tried out the role of Ben Bradlee, the Washington Post executive editor who published those papers.

In April, you may recall, WikiLeaks uploaded two versions of the Apache helicopter video. One was an edited, 18-minute version that it titled Collateral Murder, which begins with a quote from George Orwell: "Political language is designed to make lies sound truthful and murder respectable, and to give the appearance of solidity to pure wind." The other, 39 minutes long, was raw footage with no commentary.

The American secretary of defence, Robert Gates, denounced the video as having been taken out of context. No surprise there. But as Raffi Khatchadourian notes in a profile of Assange published in the New Yorker, the media turned Gates's way within days of the release. And in fact, when you watch the video and listen to the Americans on board the helicopter, you can see that the crew members believed, rightly or wrongly, that they were firing on a legitimate target.

Even the comedian Stephen Colbert, in an interview with Assange, dropped his rightwing-blowhard persona momentarily to make a serious point, calling the edited version "emotional manipulation" and telling his guest: "There are armed men in the group. They did find a rocket-propelled grenade among the group. The Reuters photographers who were regrettably killed were not identified as photographers. And you have edited this tape, and you have given it a title called Collateral Murder. That's not leaking. That's a pure editorial."

(An aside for British readers not familiar with Colbert and thus puzzled at my quoting a comedian: it is a sad but undeniable reality that the two most incisive American media critics today may well be Colbert and his fellow fake anchorman Jon Stewart.)

Around the time that the video was released, hubris among the WikiLeakers was thick. In the New Yorker piece, we hear from a friend and supporter of Assange's, a Dutch hacker named Rop Gonggrijp, who smugly says that "we are not the press" and "the source is no longer dependent on finding a journalist who may or may not do something good with his document".

Yet here we are, several months later, and Assange is acting very much like an old-fashioned source, seeking out journalists even as he uploads the raw source documents to the web.

In the felicitous phrase of New York University journalism professor Jay Rosen, WikiLeaks is "a stateless news organisation". But as the New Yorker piece makes clear, Assange and his fellow activists are less interested in news than in making a political impact. And it is an organisation only in the loosest sense of the term. Given those realities, it makes sense for them to work with journalists rather than to posit themselves in opposition to the media.

"WikiLeaks was soaking, drowning in data," Rosen's NYU colleague Clay Shirky tells David Carr of the New York Times. "What they needed was someone who could tell a story. They needed someone who could bring accuracy and political context to what was being revealed."

What I am suggesting is not that old media have triumphed over the new. Rather, I'm simply pointing out that each has its place in the media ecosystem.

WikiLeaks, with its singleminded focus on casting about for whistleblowers and protecting their identity through encryption and secrecy, can obtain material that eludes established news organisations. And professional journalists can vet, make sense of and impart credibility to that material in ways that not all new-media ventures (at least not WikiLeaks) can.

The result is a powerful indictment of the war in Afghanistan and a major challenge to Barack Obama.

Back in character, Colbert asked Assange: "What is the purpose of letting the public know? It's like you're saying it's better to know than not to know. Have you not heard ignorance is bliss?"

It's way too late for that now.

Working in the mobile advertising business, New York City-based Xtify has been building its platform for brands and other app developers, allowing for geo-targeted notifications most often, ads that are pushed to consumers when they are within a predefined area, say a one-mile radius from a department store. The company has announced it has raised $2.8 million in a first round of institutional funding, which it is using to beef up its product development and team, currently ten-people strong.

Xtify picked up the funding from Acadia Woods Partners, SeventySix Capital and an undisclosed, significant New York-based angel investor. CEO Josh Rochlin says Xtify is looking to raise another sum of money in the fall, due to major announcements and partnerships that are rolling out soon, although he declined to disclose those just yet.

Xtify's platform allows for brands, businesses and anyone building apps for iPhone, Android and Blackberry devices to create and manage push notification campaigns. When users who have downloaded an app for instance, an app for a clothes brand are within a certain distance from a retailer, they will get a notification of a sale or special offer, or a prompt for whatever action the app developer desires, on their cell phone, much like the ones users get now when there are software updates available. The trick is that the app doesn't have to be running in the foreground: Users will be notified even if the app is not currently in active use.

This only applies to the users who have downloaded the app that notifies them, nobody gets spammed, Rochlin explained. Xtify also keeps things anonymous, as no phone numbers or email addresses are collected. Instead, users in Xtify's database are identified with random user keys, which are then paired with information about the device, such as the make and model of it, and its location.

Xtify faces competition from other location-based ad companies, such as San Francisco, Calif.-based Placecast, which runs geo-targeted ad campaigns, for instance pinging users with text messages when they are near a shop. Xtify says that the very fact that they have a background-running notification system is what differentiates them from the competition. In addition, the service is not reliant on getting a phone's location from a carrier, nor is it using SMS, which makes the service cost-efficient, Xtify says.

Founded in 2009, Xtify launched at the Mobile World Congress in Barcelona last February, and the team is currently keeping its head down, building out the product. The major announcements that the company has in the pipeline in the following weeks will make for a big increase in traction for the platform, Rochlin says.

Tags: geo-fencing, mobile ads

Companies: Acadia Woods Partners, Placecast, SeventySix Capital, Xtify

People: Josh Rochlin

It should be any entrepreneur's dream come true. But for some startups, a sudden, overnight explosion in growth can nearly bring the operation to its knees.

Such was the recent experience of Blank Label, a Web-based company that sells custom-made, user-designed dress shirts for men. After launching in October 2009, Blank Label enjoyed some modest initial success, selling a few hundred shirts in the first few months of business.

Sponsor

The online buzz generated by the startup's unique service was enough to capture the attention of The New York Times and other prominent media outlets, whose positive coverage in mid-May quickly sent a flood of new customers to their site. Immediately following the press coverage, Blank Label's Web traffic increased by about 4,000% overnight, and conversion rates nearly tripled.

For a brick-and-mortar store, a sudden influx of customers can result in long lines. Online, it can cause servers to go down.

The team knew there was a problem when they started receiving emails from would-be customers asking when their website was going to go back up, according to Tommy Wong, co-founder and lead evangelist for Blank Label.

"There were massive problems with the site," says Wong. "First images wouldn't load, then pages stopped loading."

They tried rebooting their web server, but found that the problems only accelerated. A few hours later, they moved their website to bigger, more capable server space.

The technical issues were only the beginning of the headaches.

Before long, it became apparent that the supplier they had hired to produce the shirts was unable to keep up with the sudden demand, despite assurances to the contrary. Orders started shipping late, sometimes with defects. Within a week of the initial influx, Blank Label switched suppliers.

A new payment processor was in order as well, because the one they had been working with was alarmed at the sudden and dramatic increase of orders and decided to end their relationship.

In addition to website stability and production issues, the company's owners found that customer service was becoming too much to handle. To keep up with the requests, the company had no choice but to hire three customer support staff members, as well as outsource some technical work via oDesk.

Another co-creation startup that experienced growing pains is a company specializing in custom-made chocolate bars called Chocri. For them, the scalability issues have been seasonal, as demand for co-created chocolate has typically peaked during the winter holiday season, causing Chocri to sell out of inventory two Christmases in a row. The overwhelming demand has required CEO Carmen Magar to make a number of changes, including expansion of staff, moving into a larger space and reassessing the company's production practices.

When they first started out, Chocri would produce the milk chocolate, dark chocolate and white chocolate candy bars separately and then recombine orders. "That's crazy when you make 50,000 bars a month," says Magar. "So now we make all types at the same time."

Today, things are mostly back on track at Blank Label and Chocri, although there is still a two-week delay on new orders at Blank Label.

"I always feel like there's more work to be done," says Wong, adding that his company is working on further streamlining the ordering process and hoping to speed up shipping times.

If he could offer any advice to budding entrepreneurs and small businesses, Wong says it would be to ensure upfront that technical infrastructure and production resources are prepared for potentially rapid growth.

When all was said and done, Wong's company had hired four new people, and switched suppliers, servers and payment processors in order to cope with their sudden success.

These days, all it takes is a mention in a few high-traffic news outlets or some social media buzz to bring tens of thousands of people to your company's door. As some entrepreneurs have learned the hard way, it quite literally pays to be prepared.

Disclosure: Tommy Wong of Blank Label has written guest posts for ReadWriteWeb in the past.

Filed under: App Review

Gallery: American Museum of Natural History Explorer app

TUAWThe American Museum of Natural History's Explorer app for the iPhone and iPod touch originally appeared on The Unofficial Apple Weblog (TUAW) on Fri, 30 Jul 2010 11:00:00 EST. Please see our terms for use of feeds.

Today at TechCrunch's Cruchup in Palo Alto, CA, Jeremy Stoppelman , Yelp's CEO and John Hanke , VP of Product Management at Google talked about the strain that is building up between Yelp and Google Places.

According to Stoppleman, Yelp now has 12 million reviews on Yelp, with 35 million uniques per month. 2.5 million uniques between Android and iPhone.

Asked if Yelp is like the yellow pages, Stoppleman said that, Yellow pages are boring, so I don't know if we want to be that. Google's Hanke said that, The Web [as a whole] is the yellow pages.

Henke believes that, The areas that Google can help [in local search] are data and monetization. Over 4 million business are feeding the Places API. The other part of the strategy is monetization. Henke said that there was a lot of local-focused startups that failed because there, wasn't an advertising platform for location startups, and Google aims to fix that.

We sell ads, we have 100 sales people on mobile we haven't done any monetization there we could just add in our search ads. Our most valuable data is our reviews. There longer than other site's reviews, said Stoppleman. He also noted that, check-ins have been awesome for Yelp.

Google Places vs Yelp

Our primary concern is what is best for the user. I think there is a real tension [between Google Places and Yelp]. I think Google has to be very careful that they don't block the best content, said Stoppleman. Later he said, That can be difficult for a company like Google to swallow.

If the best content on the web is Yelp or the New York Times, we're [Google] going to show it. The competition isn't between Google and Yelp or anyone else the real competition is getting local businesses to advertise in the first place, said Henke.

Original title and link for this post: Yelp CEO: There is real tension between Google Places and Yelp

It looks like News Corp (NSDQ: NWS). accelerating its plans for how best to make use of its last month's acquisition of the Skiff e-reading platform and the stake it took in the Steve Brill/Gordon Crovitz paid content start-up Journalism Online. The company is considering whether to create a dedicated news unit that would provide content specifically for tablets, the FT reports, citing unidentified sources and a report on CNBC.

A decision from News Corp. Chairman and CEO Rupert Murdoch on proceeding with the tablet initiative could come in the fall. The initial idea is to have a news organization that would create original content for a paid subscription app that tablet users would download. The plan calls for the hiring of additional reporters and editors, as well as making use of staffers at existing properties such as The New York Post and Dow Jones. The unit would not use stories slated for the other publications and there would be no other relation to existing print products, however.

In addition to figuring out what to do with the Skiff platform, which was owned by Hearst, News Corp. is also involved in digital storefront Next Issue Media, a joint venture of other major media companies including Hearst, Time (NYSE: TWX), Conde Nast and Meredith.

The subscription app is one of many concepts that News Corp. is pursuing in the digital paid content realm. Another one, the premium news aggregator product dubbed Project Alesia is expected to be unveiled sometime at the end of the year.

Related

• News Corp. Playing The Subscription Game With GustoBut, So Far, Alone
• News Corp. Acquires Skiff IP; Buys Stake In Brill And Crovitz Startup

Foster Kamer / Runnin' Scared:
Anatomy of an Error: Why Nobody Got Fired From the New York Post This Week We reported Wednesday on the turmoil an embarrassing New York Post correction caused in the newsroom, fueled by what we heard was rage called down from the top: News Corp owner Rupert Murdoch. Fun times.

Several proven Russian entrepreneurs have formed what looks to be the first promising seed-stage venture capital firm in Russia, called Runa Capital.

This is a significant development for the country, even if the sums involved are relatively small: The firm announced this week it has already raised $30 million and plans to raise more. The news is encouraging because the fund will provide the advice traditional angel investors in Silicon Valley have provided over the years: like how to rent an office, who to hire, and how to pay them.

Last month, I wrote that if you're hoping to invest in Russia, you may want to hire a bodyguard and lay low. Russia's lack of a rule of law and scant experience with capitalism has tragically set it behind many other countries.

But I also wrote that things are changing for the good, albeit gradually: The Russian government is slowly tackling corruption and thuggery; it's investing in high-tech startups may start to diversify the economy away from its reliance on oil; and President Dmitry Medvedev is encouraging moves to bolster the legal system and business culture that could spark revival in all other parts of its economy and society.

Russia's size and wealth in both natural and human resources holds huge potential for investors. Right now, though, many sorts of businesses are vulnerable to shakedowns. While things have gotten more secure recently, hiring bodyguards to keep executives secure has been common in the past. But when angels wealthy, independent individuals with an enthusiasm for entrepreneurship start providing a different kind of protection, Russia could become very interesting very quickly.

Runa's launch comes amidst another important change. This week, Russia announced it would sell start selling off more state property, in what is reportedly the largest privatization program there since the post-Communist sell-off in the 1990s. The government will sell minority stakes in 11 companies, from its national oil company, to state banks, and a company controlling hydroelectric dams. It's not a tech boom by any means, but it will reverse the wave of nationalization over the past decade. More important, because new investors typically demand accountability in return for their investment, they'll bring more transparency to these companies. This, in turn, will reduce corruption something both U.S. and other investors have been lobbying for.

In my piece last month, I wrote it would take years for Russia to become interesting for outside investors. However, if they move carefully, laying down roots now may actually be smart for those with high tolerance for risk. Venture investments typically take years to nurture anyway. We're seeing that now in China, for example, where IDG's Patrick McGovern is reaping the benefits of that country's growth, after about three decades of patient investing.

There are other signs that Russians are starting to protest endemic corruption. Take the brave police officer Aleksei Dymovsky who stunned the country when he posted two videos on YouTube appealing to Russia's prime minister Putin about the rampant corruption in the police force, and begged him to explain what he was doing to stop it. The videos, uploaded in November, have been viewed millions of times. Of course, he was fired from his job, and thrown in jail, and continues to be harassed with relative impunity, the New York Times reported in a story this week about Dymovsky. Questions do remain about Dymovsky's character and motives, and there's clearly been no mass uprising against police. But he's since been joined by a handful of others calling for drastic reform, including a politician within Putin's party, Andrei Makarov.

What do these bigger trends have to do with small fry like Runa? There are a few early-stage venture funds in Russia, but most of them are run by investors with little experience. There's also Troika, a venture effort led mainly by one individual within a much larger investment banking operation. The emergence of firms like Runa is a crucial bolstering of Russia's move to an entrepreneur-oriented economy.

The fund is led by credible folks like Serguei Beloussov, founder and chairman of Parallels, the early virtualization company and one of only 10 or so homegrown Russian tech companies whose annual revenues have exceeded $100 million. He's joined by Alexander Galitsky, one of the earliest venture capitalists in Russia, and a founder of Almaz Capital, arguably the most credible early- to mid-stage venture firm there.

The fund will focus on software and Internet companies, and also focus on specific areas like cloud computing, machine learning, virtualization, and mobile. Runcap will limit its investments to $1.5 million into each company, and will invest mainly in pre-revenue companies or even ones that haven't formed their teams yet. It will invest in Russia and neighboring Ukraine.

I interviewed both Beloussov and Galitsky during my visit to Russia two months ago. They both seem to be in the business for the right reasons: They love entrepreneurship, and they're also realistic. While the overall return on investment in percentage terms can be high in early stage investing, it almost always yields smaller overall returns in absolute dollars than does later stage investing. Beloussov says he's ok with that, saying it is more fun. The later stage you invest in, the more money you make, but the less fun it is, he said.

Beloussov also says Russia is a much safer place than I depicted it in my original piece. High-tech, web-oriented businesses, the kind he invests in, are largely virtual. Without big physical infrastructure for corrupt fire departments to inspect, they can often escape the scrutiny of graft-minded officials. But another reason is because these businesses are puny compared to Russia's trillion-dollar oil and gas businesses. Hermitage Capital, an investor in the energy sector, now operates outside of Russia. In 2008, it claimed it was the victim of a $367 million fraud. The company continues to release new facts based in its own investigation. Despite the melodramatic tone of these recently released videos they're worth watching.

So yes, while you may need to hire a bodyguard to invest in some traditional, money-soaked sectors like oil and gas, you don't actually have to hire security to invest in technology startups. You do, however, need some lawyers. And that brings us to the real challenge for firms like Runa.

According to Runa's Beloussov, it's not corruption that stands in the way of Russian startup success as much as other Russian weaknesses. For example, his firm wants to help the Russian startups think globally early on, because Russians have tended to be slow on that front. Runa is seeking to work with other venture firms, including in the US, to join Runa in investments, to compensate for the relative lack of venture capital there. Investing in early-stage Russian companies has been extremely difficult for US firms. It entails several hundred thousand dollars in transaction costs, and that's on top of the already risky proposition of investing in a pre-revenue project. Traveling to Russia requires getting a visa. The legal and business framework in Russia can be daunting for foreign investors doing due diligence on companies, and hiring international lawyers is a must.

The firm is also seeking to build a business incubator called Runapark, where companies can grow, get mentorship and network all in the same place though Runa is still discussing ways to finance that project with its limited partners. Such an incubator is important because even basic things like renting office space are hard to do in Russia. And because Russian entrepreneurs are largely first-timers and have few role models in business in general, they need more help to sort through Russia's bureaucracy.

The fund is also considering investing in start-up efforts that get backing from Russian government's ambitious Skolkovo project, the multi-billion dollar plan to create a Silicon Valley-like high technology incubator city on the edge of Moscow.

Runa Capital's venture partners, who will help the firm source its deals, also include Andreas Gauger and Achim Weiss, co-founders of 1&1, a major hosting provider based in Germany, Ilya Zubarev, who was co-founder together with Beloussov of another company, Acronis, and Igor Borovikov, founder of the largest Russian software distributors Softline, which does about $400 million in revenue.

[Photo credit: Downtown Pictures, Flickr]

Tags: incubators, russia, Venture Capital

Companies: Parallels, Runa Capital

People: Serguei Beloussov

In its attempts to find a buyer for Newsweek, The Washington Post Company (NYSE: WPO) has been said to have hardly given a thought to bids from entities considered too conservative or too tawdry, but it looks like an offer to buy the magazine from an audio equipment impresario appears to be striking the right chords, the NYT reports, citing unidentified sources.

So far, WaPo has reportedly rejected bids for Newsweek from the right-leaning Newsmax Mediatoo ideologicaland from Avenue Capital Grouptoo entwined with The National Enquirer. But there are three candidates that are being taken seriously: Fred Drasner, previously a partial owner of the Washington Redskins and a publisher of The New York Daily News; hedge fund owner Marc Lasry; and 91-year-old hi-fi pioneer Sidney Harman.

According to the NYT, Harman, the husband of Democratic Congresswoman Jane Harman, has the most appealing offer to WaPo Chairman Donald Graham because he has stated his willingness to keep 250 of the 325 Newsweek employees on staff. As for the bid, Harman is offering $1 and the acceptance of Newsweek's liabilities, which are estimated to be about $70 million.

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Amazon.com's Kindle may have the highest profile of any e-reader, but Barnes & Noble seems to be pretty darn serious about its Nook. The New York Times reports that the company is planning to make space for Nook boutiques in its superstores, dedicating a thousand feet of floor space near their cafs to Nooks, Nook accessories, and in-person and video demonstrations.

B&N plans to free up room for Nooks in part by shrinking space devoted to CDs; in this era, you gotta think that it probably would be deemphasizing sales of music on shiny discs no matter what. It says it's not going to carry fewer dead-tree books.

The move presumably means that B&N is in the hardware business for the long haul and already has future generations of Nooks in the works. The first-generation Nook got off to a somewhat bumpy startits software was slow and buggy, and some promised features weren't immediately availablebut the company has improved it through multiple software updates. It's also knocked the price down to $199 and introduced a $149 model with Wi-Fi but no 3G connection.

Barnes & Noble also offers e-reader software for the iPhone, iPad, Android, BlackBerry, PC, and Mac, and it powers the e-book stores for devices from Nook competitors such as Pandigital. The Times doesn't say whether the new boutiques will spotlight any of these other ways to read digital books.

OK, this has been an interesting two weeks on th e-book front.

If your life is like mine, everyone is asking you, the librarian, for your personal and professional opinion on e-books and e-readers.

So, to prepare you for the family, neighbourhood and friends' BBQ's this weekend, here's some interesting tidbits to throw about in conversation:

First read the full post for this one:

Top 10 Myths about our e-Book Future

Here's the highlight list:
1. Due to an avalanche of self-published and poorly edited e-books, readers will be submerged in a big pile of suck.
2. Publishers are going to disappear.
3. Paper books will disappear.
4. E-books are going to destroy libraries.
5. All authors will have an equal shot.
6. The book world will be divided into a few megabestsellers and everyone else selling only two copies. It will be impossible for authors without platforms to get anyone to pay attention to them.
7. We're all going to drop our e-readers into our bathtubs amid a massive, world-wide power outage and multi-government e-book deletion conspiracy that causes us to permanently lose every book the world has ever published.
8. The reading world will be divided between those who can afford an e-reader and those who can't.
9. Bookstores will disappear.
10. E-books will evolve into all-knowing robots that will implant carnivorous baby e-books inside our brains and devour our heads from within.

Of course the big news was Amazon's anouncement:

Amazon: Paper Books Are Dead, Or Something

Over the past three months, for every 100 hardcover books Amazon.com has sold, it has sold 143 Kindle books. Over the past month, for every 100 hardcover books Amazon.com has sold, it has sold 180 Kindle books. Peace. Out. Trees.

KINDLE DEVICE UNIT SALES ACCELERATE EACH MONTH IN SECOND QUARTER;
NEW $189 PRICE RESULTS IN TIPPING POINT FOR GROWTH
Amazon.com now selling more Kindle books than hardcover books

SEATTLE-July 19, 2010-(NASDAQ: AMZN)-Millions of people are already reading on Kindles and Kindle is the #1 bestselling item on Amazon.com for two years running. It's also the most-wished-for, most-gifted, and has the most 5-star reviews of any product on Amazon.com. Today, Amazon.com announced that Kindle device unit sales accelerated each month in the second quarter-both on a sequential month-over-month basis and on a year-over-year basis.

We've reached a tipping point with the new price of Kindle-the growth rate of Kindle device unit sales has tripled since we lowered the price from $259 to $189, said Jeff Bezos, Founder and CEO of Amazon.com. In addition, even while our hardcover sales continue to grow, the Kindle format has now overtaken the hardcover format. Amazon.com customers now purchase more Kindle books than hardcover books-astonishing when you consider that we've been selling hardcover books for 15 years, and Kindle books for 33 months.

Kindle offers the largest selection of the most popular books people want to read. The U.S. Kindle Store now has more than 630,000 books, including New Releases and 106 of 110 New York Times Best Sellers. Over 510,000 of these books are $9.99 or less, including 75 New York Times Best Sellers. Over 1.8 million free, out-of-copyright, pre-1923 books are also available to read on Kindle.

Recent milestones for Kindle books include:

Over the past three months, for every 100 hardcover books Amazon.com has sold, it has sold 143 Kindle books. Over the past month, for every 100 hardcover books Amazon.com has sold, it has sold 180 Kindle books. This is across Amazon.com's entire U.S. book business and includes sales of hardcover books where there is no Kindle edition. Free Kindle books are excluded and if included would make the number even higher.

Amazon sold more than 3x as many Kindle books in the first half of 2010 as in the first half of 2009.
The Association of American Publishers' latest data reports that e-book sales grew 163 percent in the month of May and 207 percent year-to-date through May. Kindle book sales in May and year-to-date through May exceeded those growth rates.

On July 6, Hachette announced that James Patterson had sold 1.14 million e-books to date. Of those, 867,881 were Kindle books.

Five authors-Charlaine Harris, Stieg Larsson, Stephenie Meyer, James Patterson, and Nora Roberts-have each sold more than 500,000 Kindle books.

Readers are responding to Kindle's uncompromising approach to the reading experience. Weighing 10.2 ounces, Kindle can be held comfortably in one hand for hours, has an e-ink display that is easy on the eyes even in bright daylight, has two weeks of battery life, lets you buy your books once and read them everywhere-on your Kindle, Kindle DX, iPad, iPod touch, iPhone, Mac, PC, BlackBerry, and Android-based devices-and has free 3G wireless with no monthly fees or annual contracts-all at a $189 price.

To reiterate, those stats don't include free Kindle books. A tipping point indeed.

Of core,you'll want to remmeber that: Amazon isn't only place peole buy books and e-books, the Kindle isn't the only reader, some people borrow books (grin), paperback books are by far the biggest part of the market and Internet buyers and brodband users represent a different demographic than the average or general population at this time.

See this post:

How Many Kindle Books Has Amazon Sold? About 22 Million This Year By Jay Yarow (Silicon Valley Insider)

Yesterday Amazon announced a big milestone: In the last month, Amazon's e-book sales outpaced its hardcover sales on Amazon.com nearly two to one.

It's a nice stat, but what does it actually mean? How big are hardcover sales, anyway?
According to Nielsen Bookscan, only 23% of total dead-tree book sales this year come from hardcover books.
The rest are from paperback books. In other words, assuming Amazon's book business reflects the overall industry, Amazon is still probably selling twice as many paperback books as Kindle books.

Amazon is estimated to have 19% of the book market, which implies the company sold 15.6 million hardcover books so far this year.

In its announcement yesterday, Amazon said it sold 143 Kindle books for each 100 hardcover books last quarter. (Last month alone, it sold 180 e-books sold for every 100 hardcover books sold.)

If we use the ratio from the last quarter, it implies Amazon has sold around 22 million Kindle books so far this year. That's just the equivalent of 6% of the total print book market, which remains tiny.

Another factor that Amazon doesn't mention is that it makes less money per e-book than it does on print books, and in some cases is losing money on e-books. It's good for Amazon to attack the e-book market and try to own it, even if costs a little early on, but let's not forget that e-books don't generate the same income or sales.

Five Reasons Amazon E-Books are Outselling HardcoversBy Steven

PC Worlds Are you still holding out to see what happens with this whole ebooks fad before deciding whether to embrace it for your business? Well, the times they are a changin' and there are a variety of reasons that ebooks are outpacing printed books. Amazon reports that ebook sales are three times higher than last year, and that Kindle versions of books have outsold their hardcover equivalents by 43 percent over the last quarter. The traditional written word printed on paper will not be fading to oblivion any time soon, but here are five factors contributing to the success of the ebook

1. Cost.
2. Portability.
3. Accessibility.
4. Cross-Platform. (A device like the iPad provides access to various e-reader platforms.)
5. Conservation.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/07/20/urnidgns002570F3005978D800257766005BA5CF.DTL#ixzz0v6aeSFx4

Lastly, we have your first million seller (downloads) this month with Steig Larson.
It's a shame he didn't live this milestone.

Stieg Larsson is the first author to reach one million books sold on Amazon

So there's some interesting soundbites to throw about over hot dogs. Hey, you're the book professional so you're in the know!

Stephen

I dashed off a piece for CNET today on the Copyright Office's cell phone jailbreaking rulemaking earlier this week. Though there has already been extensive coverage (including solid pieces in The Washington Post, a New York Times editorial, CNET, and Techdirt), there were a few interesting aspects to the decision I thought were worth highlighting.

Most notably, I was interested that no one had discussed the possibility and process by which Apple or other service providers could appeal the rulemaking. Ordinarily, parties who object to rules enrolled by administrative agencies can file suit in federal district court under the Administrative Procedures Act. Such suits are difficult to win, as courts give deference to administrative determinations and review them only for errors of law. But a win for the agency is by no means guaranteed.

The Appeals Process

What I found in interviewing several leading high tech law scholars and practitioners is that no one was really clear how or even if that process applied to the Copyright Office. In the twelve years that the Register of Copyrights has been reviewing requests for exemptions, there are no reported cases of efforts to challenge those rules and have them overturned.

With the help of Fred von Lohmann, I was able to obtain copies of briefs in a 2006 lawsuit filed by TracFone Wireless that challenged an exemption (modified and extended in Monday's rulemaking) allowing cell phone users to unlock their phones from an authorized network in hopes of moving to a different network. TracFone sued the Register in a Florida federal district court, claiming that both the process and substance of the exemption violated the APA and TracFone's due process rights under the Fifth Amendment.

But the Justice Department, in defending the Copyright Office, made some interesting arguments. They claimed, for example, that until TracFone suffered a particular injury as a result of the rulemaking, the company had no standing to sue. Moreover, the government argued that the Copyright Office is not subject to the APA at all, since it is an organ of Congress and not a regulatory agency. The briefs hinted at the prospect that rulemakings from the Copyright Office are not subject to judicial review of any kind, even one subject to the highly limited standard of arbitrary and capricious.

There was, however, no published opinion in the TracFone case, and EFF's Jennifer Granick told me yesterday she believes the company simply abandoned the suit. No opinion means the judge never ruled on any of these arguments, and so there is still no precedent for how a challenge to a DMCA rulemaking would proceed and under what legal standards and jurisdictional requirements.

Should Apple decide to pursue an appeal (an Apple spokesperson declined to comment on whether the company was considering such an action, and read me the brief statement the company has given to all journalists this week), it would be plowing virgin fields in federal jurisdiction. That, as we know, can often lead to surprising resultsincluding, just as an example, a challenge to the Copyright Office's institutional ability to perform rulemakings of any kind.

The Copyright Office Moves the Fair Use Needlea Little

A few thoughts on the substance of the rulemaking, especially as it shines light on growing problems in applying copyright law in the digital age.

Since the passage of the 1998 revisions to the Copyright Act known as the Digital Millennium Copyright Act, the Register of Copyrights is required every three years to review requests to create specific classes of exemptions to some of the key provisions of the law, notably the parts that prohibit circumvention of security technologies such as DRM or other forms of copy protection.

The authors of the DMCA with some foresight recognized that the anti-circumvention provisions rode on the delicate and sharp edge where static law meets rapidly-evolving technology and new business innovation. Congress wanted to make sure there was a process that ensured the anti-circumvention provisions did not lead to unintended consequences that hindered rather than encouraged technological innovation. So the Copyright Office reviews requests for exemptions with that goal in mind.

In the rulemaking completed on Monday, of course, one important exemption approved by the Register was one proposed by the Electronic Frontier Foundation, which asked for an exemption for jailbreaking cell phones, especially iPhones.

Jailbreaking allows the customer to override security features of the iPhone's firmware that limits which third party applications can be added to the phone. Apple strictly controls which third party apps can be downloaded to the phone through the App Store, and has used that control to ban apps with, for example, political or sexual content. Of course the review process also ensures that the apps work are technically compatible with the phone's other software, don't unduly harm performance, and aren't duplicative of other apps already approved.

Jailbreaking the phone allows the customer to add whatever apps they want, including those rejected by or simply never submitted to Apple in the first place, for whatever reason.

In approving the exemption, the Copyright Office noted that jailbreaking probably does involve copyright infringement. The firmware must be altered as part of the process, and that alteration violates Apple's legal monopoly on derivative or adapted works. But the Register found that such alteration was de minimis and approved the exemption based on the concept of fair use.

Fair use, codified in Section 107 of the Copyright Act, holds that certain uses of a copyrighted work that would otherwise be reserved to the rights holder are not considered infringement. These include uses that have positive social benefits but which the rights holder as a monopolist might be averse to permitting under any terms, such as quotations in a potentially-negative review.

EFF had argued initially that jailbreaking was not infringement at all, but the Register rejected that argument. Fair use is a much weaker rationale, as it begins by acknowledging a violation, though one excused by law. The law of fair use, as I note in the piece, has also been in considerable disarray since the 1980's, when courts began to focus almost exclusively on whether the use (technically, fair use is an affirmative defense to a claim of infringement) harmed the potential commercial prospects for the work.

Courts are notoriously bad at evaluating product markets, let alone future markets. So copyright holders now simply argue that future markets, thanks to changing technology, could include anything, and that therefore any use has the potential to harm the commercial prospects of their work. So even noncommercial uses by people who have no intention of competing with the market for the work are found to have infringed, fair use notwithstanding.

But in granting the jailbreaking exemption, the Copyright Office made the interesting and important distinction between the market for the work and the market for the product or service in which the work is embedded.

Jailbreaking, of course, has the potential to seriously undermine the business strategy Apple has carefully designed for the iPhone and, indeed, for all of its products, which is to tightly control the ecosystem of uses for that product.

This ensures product quality, on the one hand, but it also means Apple is there to extract fees and tolls from pretty much any third party they want to, on technical and economic terms they can dictate. Despite its hip reputation, Apple's technical environment is more closed than Microsoft's. (The open source world of Linux being on the other end of the spectrum.)

In granting the exemption, the Copyright Office rejected Apple's claim that jailbreaking harmed the market for the iPhone. The fair use analysis, the Register said, focuses on the market for the protected work, which in this case is the iPhone's firmware. Since the modifications needed to jailbreak the firmware don't harm the market for the firmware itself, the infringing use is fair and legally excused. It doesn't matter, in other words, that jailbreaking has a potentially big commercial impact on the iPhone service.

That distinction is the notable feature of this decision in terms of copyright law. Courts, and now the Copyright Office, are well aware that technology companies try to leverage the monopoly rights granted by copyright to create legal monopolies on uses of their products or services. In essence, they build technical controls into the copyrighted work that limits who and how the product or service can be used, than claim their intentional incompatibilities are protected by law.

A line of cases involving video game consoles, printer cartridges and software applications generally has been understandably skeptical of efforts to use copyright in this manner, which quickly begins to smell of antitrust. Copyright is a monopolythat is, a trust. So it's not surprising that its application can leak into concerns over antitrust. The law strives to balance the need for the undesirable monopoly (incentives for authors) with the risks to related markets (restraint of trade).

As Anthony Falzone put it in a blog post at the Stanford Center for Internet and Society, The Library went on to conclude there is no basis for Apple to use copyright law to protect[] its restrictive business model' and the concerns Apple articulated about the integrity of the iPhone's ecosystem' are simply not harms that would tilt the fair use analysis Apple's way.

The exemption granted this week follows the theory that protecting the work itself is what matters, not the controlled market that ownership of the work allows the rights holder to create.

The bottom line here: messing with the firmware is a fair use because it doesn't damage the market for the firmware, regardless of (or perhaps especially because of) its impact on the market for the iPhone service as Apple has designed it. That decision is largely consistent with case law evaluating other forms of technical lockout devices.

The net result is that it becomes harder for companies to use copyright as a legal mechanism to fend off third parties who offer replacement parts, add-ons, or other features that require jailbreaking to ensure compatibility.

Which is not to say that Apple or anyone else trying to control the environment around copyright-protected software is out of luck. As I note in the CNET piece, the DMCA is just one, and perhaps the weakest arrow in Apple's quiver here. Just because jailbreaking has now been deemed a fair use does not mean Apple is forced to accommodate any third party app. Not by a long shot.

Jailbreaking the iPhone remains a breach of the user agreement for both the device and the service. It still voids the warranty and still exposes the customer to action, including cancelling the service or early termination penalties, that Apple can legally take to enforce the agreement. Apple can also still take technical measures, such as refusing to update or upgrade jailbroken phones, to keep out unapproved apps.

Contrary to what many comments have said in some of the articles noted above, the DMCA exemption does not constitute a get out of jail free card for users.

It's true that Apple can no longer rely on the DMCA (and the possibility of criminal enforcement by the government) to protect the closed environment of the iPhone. But consumers can still waive legal rightsincluding the right to fair usein agreeing to a contract, license agreement, or service agreement. (In some sense that's what a contract is, after allagreement by two parties to waive various rights in the interest of a mutual bargain.)

Ownership Rights to Software Remain a Mystery

A third interesting aspect to the Copyright Office's rulemaking has to do with the highly-confused question of software ownership. For largely technical reasons, software has moved from intangible programs that must of necessity be copied to physical media (tapes, disks, cartridges) in order to be distributed to intangible programs distributed electronically (software as a service, cloud computing, etc.). That technical evolution has made the tricky problem of ownership has gotten even trickier.

Under copyright law, the owner of a copy of a work has certain rights, including the right to resell their copy. The so-called first sale doctrine makes legal the secondary market for copies, including used book and record stores, and much of what gets interesting on Antiques Roadshow.

But the right to resell a copy of the work does not affect the rights holders' ability to limit the creation of new copies, or of derivative or adapted works based on the original. For example, I own several pages of original artwork used in 1960's comic books drawn by Jack Kirby, Steve Ditko, and Gene Colan.

While Marvel still owns the copyright to the pages, I own the artifactsthe pages themselves. I can resell the pages or otherwise display the artifact, but I have no right until copyright expires to use the art to produce and sell copies or adaptations, any more than the owner of a licensed Mickey Mouse t-shirt can make Mickey Mouse cartoons.

(Mike Masnick the other day had an interesting post about a man who claims to have found unpublished lost negatives made by famed photographer Ansel Adams. Assuming the negatives are authentic and there's no evidence they were stolen at some point, the owner has the right to sell the negatives. But copyright may still prohibit him from using the negatives to make or sell prints of any kind.)

Software manufacturers and distributors are increasingly trying to make the case that their customers no longer receive copies of software but rather licenses to use software owned by the companies. A license is a limited right to make use of someone else's property, such as a seat in a movie theater or permission to drive a car.

As software is increasingly disconnected from embodiment in physical media, the legal argument for license versus sale gets stronger, and it may be over time that this debate will be settled in favor of the license model, which comes with different and more limited rights for the licensee than the sale of a copy. (There is no first sale doctrine for licenses. They can be canceled under terms agreed to in advance by the parties.)

For now, however, debate rages as to whether and under what conditions the use of software constitutes the sale of a copy versus a license to use. That issue was raised in this week's rulemaking several times, notably in a second exemption dealing with unlocking phones from a particular network.

Under Section 117 of the Copyright Act, the owner of a copy of a computer program has certain special rights, including the right to make a copy of the software (e.g. for backup purposes, or to move it from inert media to RAM) or modify it when doing so is essential to make use of the copy.

Unlocking a phone to move it to another network, particularly a used phone being recycled, necessarily requires at least minor modification, and the question becomes whether the recycler or anyone lawfully in possession of a cell phone owns a copy of the firmware.

Though this issue gave the Copyright Office great pause and lots of pages of analysis, ultimately they sensibly hedged on the question of copy versus license. The Register did note, however, that Apple's license agreement was not a model of clarity.

In the interests of time, let me just say here that this is an issue that will continue to plague the software industry for some time to come. It is a great example of how innovation continues to outpace law, with unhappy and unintended consequences. For more on that subject, see Law Seven (copyright) and Law Nine (software) of The Laws of Disruption.

WikiLeaks founder Julian Assange

WikiLeaks, the crusading anti-secrecy organization that just published 90,000 pages of secret government documents about the war in Afghanistan, has gotten a lot of attention for its campaign to become the world's repository of whistle-blowing and embargo-busting information, and leader Julian Assange has become the star of the political talk show circuit. But the most interesting thing about WikiLeaks and the release of the secret Afghan documents isn't the details of the U.S. campaign it's what the incident says about the evolution of a truly distributed and dis-aggregated new media ecosystem.

Shadowy sources have been disclosing secret information of all kinds to newspapers and magazines for decades, ever since Watergate made it seem like a public service to do so. But in this case, there was a middleman in the process, and one with a considerable amount of power far more than any other source in a similar situation. WikiLeaks didn't get the documents directly, but was given them by another unnamed source (possibly Bradley Manning, who was the source of an earlier secret video of a U.S. military attack on civilians in Iraq). The site then proceeded to broker a deal with the New York Times, The Guardian and Germany's Der Spiegel, whereby the media outlets could have access to the documents and publish stories based on them simultaneously. Columbia Journalism Review has a detailed step-by-step account of how it happened.

Not everyone thinks WikiLeaks represents a fundamental transformation of journalism in the Internet age, mind you. Doug Saunders, the European bureau chief for the Globe and Mail newspaper, said on Twitter that Wikileaks gave us the War Logs scoop in same way the brown-envelope industry gave us Pentagon Papers or parking garages uncovered Watergate (although he later conceded that WikiLeaks was a useful vehicle). But comparing WikiLeaks and what it was able to accomplish to a source with a brown envelope in a parking garage as Deep Throat was for the Washington Post reporters who broke the Watergate scandal in the 1970s misses the larger point.

As New York University journalism professor Jay Rosen has noted, even after it provided the documents to the media outlets, WikiLeaks still maintained the ultimate control over them including the ability to publish all 90,000 of them at the same time that the stories based on them appeared in the NYT, Guardian and Der Spiegel. This, Rosen says, provided an almost unprecedented check on the traditional media, since any gaps or omissions from their stories would become obvious. Typically, sources cut exclusive deals with a single outlet, and that entity has the final say over what appears but WikiLeaks has altered that traditional balance of power.

You can get a sense of how shaken up this new arrangement has made some traditional journalists, by looking at the response from the NYT reporter who worked with WikiLeaks on the documents, and from NYT editor Bill Keller. The latter defended the newspaper's decision not to link to the full storehouse of WikiLeaks documents, and also said that he felt compelled to pass on to the group the government's displeasure at the publication of U.S. government informants' names and other information, which Keller said he did at the request of the White House. Meanwhile, reporter Eric Schmitt seemed to recoil at the idea that the incident was any kind of partnership between the newspaper of record and the shadowy info-hacker organization:

I've seen Julian Assange in the last couple of days kind of flouncing around talking about this collaboration like the four of us were working all this together but we were not in any kind of partnership or collaboration with him. This was a source relationship. He's making it sound like this was some sort of journalistic enterprise between WikiLeaks, The New York Times, The Guardian, and Der Spiegel, and that's not what it was.

Regardless of whether Schmitt or Keller are comfortable with the existence of what Rosen has called the world's first stateless news organization, however, the fact remains that the Internet not only allows an entity such as WikiLeaks to exist, but gives it far more power than any previous non-journalistic organization when it comes to affecting the news cycle. The fact that sources with secret data can now go to an entity that doesn't have to answer to any state or even international authority gives WikiLeaks a leg up on even the New York Times, which has made questionable decisions about significant news stories in the past (such as the lead-up to the war in Iraq, for example) for a variety of reasons. As Steve Myers at the Poynter Institute put it:

In inserting itself between source and publisher, WikiLeaks has shifted power away from the monoliths that once determined what is news and toward the people who, before the Web, would have been stopped in the newspaper lobby before they could see a reporter.

Media writer David Carr of the New York Times called the WikiLeaks case an example of asymmetric journalism, in which the source of information is also a publisher, but also works together with traditional media to make secret data public for society's benefit. C.W. Anderson at the Nieman Journalism Lab called it a classic case study of the new ecosystem of news diffusion:

from new fact-gatherers, to news organizations in a different position in the informational chain, all the way to the Twittersphere in which conversation about the story was occurring in real-time, back to the bloggers, the opinion makers, the partisans, the politicians, and the hacks. This is how news works in 2010.

British journalism professor George Brock calls what happened with WikiLeaks and the two newspapers and magazine a mutualisation of journalism a term that has also been used by The Guardian to describe the newspaper's approach to modern media, which includes an open platform that allows developers to re-use its content, and blog plug-ins that allow bloggers and The Guardian to share content. And WikiLeaks has in mind its own kind of plug-in: an embeddable disclosure and upload form that would allow newspapers to solicit secret documents and then hand them over to WikiLeaks for safe-keeping.

The New York Times and other traditional media entities may not like it, but it isn't just the business model of journalism and the media that is changing; it's the fundamental structure of the industry and how it functions. And they had better get used to it. Yes, WikiLeaks needed the Times and The Guardian and Der Spiegel to draw attention to and filter some of the information deluge it had on its hands, but the balance of power between source and publication has clearly been altered, and journalism will likely never be the same.

Related content from GigaOM Pro (sub req'd): What We Can Learn From the Guardian's Open Platform

Post and thumbnail photos courtesy of Flickr users New Media Days, Menage a Moi and Yan Arief