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ok, so this isn’t quite what you might expect, but what a great tangent….
as i was wandering, i ran into barry ritholtz – and he points to an interesting example of how transparency is working for at least one company.
i’d like to find a couple law school student volunteers/interns to come work with me on a contingent basis. if any of you happen to be in law school (or even pre-law), or know such a person… i’ve got plans to use up the rest of your “free time,” make a run at solving part of a really ugly problem, and maybe make a few pennies along the way.
come and get me.
someone who occasionally drops into this blog (and someone on whom i’ve commented both in agreement and disagreement, which is a good thing) – left me a little teaser (see comments) in one of my posts on sunncomm.
sunncomm, you might recall was defeated by a shift key and got a bit indignant about being exposed in the light.
normally, i wouldn’t get too involved in such things, but the implications – legal, ethical, and business practice – seem to me to make a wonderful set of object lessons in how dangerous it is to depend on darkness in the modern world. these lesson i pretty much left unspoken in my previous comments on sunncomm, so i’ll spell them out for you now.
lesson, the first
banking on stupidity and ignorance is a bad idea. sunncomm’s business model (at least as far as mediamax cd3 audio cd copy protection is concerned) was obviously to bank on the stupidity of the music listening public. since the music listening public isn’t sunncomm’s customer (directly), i can’t legitimately get on my soapbox and scream “don’t count on a stupid customer!” but wait….
the record labels were sunncomm’s customers. as reported earlier, there was a bit of spin at the beginning of this fiasco from at least one label (bmg) – one of those “oh yeah. we knew that.” statements that just screams for a rebuttal. well, anyway. sunncomm either sold bmg their widget based on its [easily defeated] capabilities, or bmg banked on the music listening public’s stupidity. so, that’s at least one strike, maybe two. let me say this again. banking on stupidity and ignorance is a bad idea.
lesson, the second
at this point, your widget is in deep trouble, quite probably unrecoverable trouble. even if you can still find stupid cd purchasers, the labels know that they were had, so it’s going to be very hard to get enough credibility back to keep any deal alive. you can let it fade into oblivion, or you can call the lawyers. lawyers are trained to solve problems. and you have a big problem. fortunately, there are laws for just this sort of situation, and while i may personally question the wisdom of these laws, the sad truth is that they exist. so a lawyer is going to suggest you use them.
our next object lesson, lawyers make bad policymakers (and this was a policy, not a legal decision point). i’ve hinted at this before, but the short version is that sunncomm picked the wrong tool for this problem.
so sunncomm’s next mistake was pouring gasoline on the fire with a knee-jerk “call the fbi! sue the bastard!” reaction. regardless of the merits of the case, a wise person might notice the potential repercussions here. all over the web, in a matter of hours, sprouted the posts and articles on “every keyboard violates the dmca” and such. now i’m sure it’s not this simple, and i don’t want to get too boring with this post, but the net result is that the world had turned its light onto sunncomm…
lesson, the third
one of those lights was barry ritholtz, who has an economic and market perspective that he shares with the world. armed with a company name and a buzzing story on the web, this kind of person does a little homework. sure. i commented on the drop in value of the stock – and i even included a chart, but analysis – not my bag.
i was ready to let sunncomm off the hook. they did a 180, decided lawsuits and lawyers were a bad idea in this situation, and i was done with them. i’d learned a few lessons and maybe made a point or two. and here’s an important lesson for modern business – it may not be my thing, but if you get enough people’s attention, it’s gonna be someone’s thing.
it’s on the record
barry dug a little deeper (and got prettier charts, too – you should check them out). and in that digging, he raised some interesting questions about the behavior of the stock, a major buyback, and some unexplained major moves in the price. i wouldn’t call this a conclusion, but, in barry’s own words:
If any purchases were made in anticipation of material non public information, than who ever did so has much bigger problems than some grad student’s paper . . .
so a few strange things happen in a microcap stock, and i still don’t care too much. interesting, sure, but having basically washed my hands of the whole sunncomm business with my own lessons learned… this is an issue for regulators and shareholders. besides, i’m busy 🙂
someone remembers
but the light is on, and an anonymous internet entity appears with a very long comment to barry’s post.
you can’t take such an anonymous post seriously. really, you can’t. this is like triple-hearsay, unadmissable and generally on the quality-of-information spectrum somewhere around the level of seeing “peter jacobs blows goats! i have proof!” scrawled on a bathroom wall. the problem is that this particular bit of graffiti has sources that someone could check out. and, unfortunately for sunncomm, you can’t get back a secret.
like i said, i’m busy. and i wouldn’t even know whom to call to prompt an investigation of such material. but what we seem to have here, ladies and gentlemen, is an itty-bitty corporate scandal. i don’t have a whole lot of faith in the current administration’s record for bringing white collar criminals to justice (after all, we’re busy hunting down the terrorists), but maybe something will happen. maybe.
and if i hear about it, you can bet i’ll have some snide comment.
so the new problem for sunncomm is that a couple years ago, a few people probably got screwed on the stock. and they remember. and now there’s blood in the water, and the lawyers are circling.
update: i rushed through this, and totally screwed up the section breaks. they make more sense now, and i fixed a few redundancies.
according to a little article i just read (and at least one other), it seems that sunncomm has realized that the only winners in the dmca/civil lawsuit battle over the power of the shift key would be… the lawyers.
i doubt sunncomm ceo peter jacobs read my little blog, but… i’m glad he got smart anyway. at least a little smart.
this is inevitable after issuing bombastic sue the bastard! drag him to jail by his toenails! statements, there has to be a bit of spin. but that’s ok. i think this is decent and righteous spin. it seems like the parties sat down and talked. they both compliment each other’s stance, the lawyers don’t get to spend 2 years dragging this through the courts, and we can all get back to picking on some other Evil Empire. and yes, you’re right, mr. jacobs, you do not want to be one of “those people.”
none of this has hit the sunncomm “newsroom” yet, but it might be worth dropping by anyway.
update: fixed an html error that broke the first two links.
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a short while ago, i mentioned something about someone who said something about a feature in software that lots of people use to make computers useful, that might do something that someone else was trying to keep them from doing.
it turns out that the repercussions of this feature may end up making a few lawyers rich.
you see, it seems that there was a company that used this feature of this operating system to build a system to keep evil people from doing evil things with cds. and part of the feature set of this feature is that it can be disabled. so the company that was banking on this concept took a bit of a hit. the ceo thinks his company is worth something like $10 million less because he was defeated by a shift (key). heh. so it’s time to call in the lawyers. i’ll let you interpret the chart yourself. thanks, yahoo.
someone’s gonna make money on this deal, and it won’t be sunncomm, and it won’t be the record industry.
He [peter jacobs, ceo] said the company was also exploring a civil suit based on damage to the company’s reputation, since Halderman concluded that the technology was ineffective without knowing about future enhancements
you are hereby put on notice. if it doesn’t work today, you’re not allowed to say so until the company can make it work in the future. i suppose sunncomm has plans to track down everyone who has a mediamax-cd3-protected audio cd and get them to upgrade to the new version when it works? wait’ll the shareholders get an idea of how much that is going to cost.
i was feeling a bit down about all the crummy corporate behavior i’ve posted today, and, happily, just stumbled into something of a positive note.
in a letter (full text included) recently posted on their corporate site, the forrester research ceo takes the high ground.
unlike some other companies that trademark “trust” and try to work around it, it seems that forrester recognizes that trust is not just a slogan or something nice to put on the letterhead.
Research integrity is the core value of our company and is fundamental to Forrester’s value proposition.
effective immediately, forrester “will no longer accept projects that involve paid-for, publicized product comparisons.”
on the surface, it seems that a good deal of the trouble has its roots in the acquisition of giga. so, kudos to forrester and to george colony, for owning up to the problem and swallowing the (perhaps bitter) devaluation of their acquisition.
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(via joi ito).
dan gillmor comments on the ongoing denial over at verisign about their sitefinder redirection scheme.
VeriSign insists it’s done nothing wrong, that critics are getting it all wrong.
verisign is the company with the (trademarked) slogan “the value of trust.” they also have service marks on “security intelligence and control” and “security sets you free.” this illustrates the dangers of language and lawyers when it comes to corporations.
gillmor notes (and many others have observed) that verisign is “a company that has such a record of crummy behavior.”
from here it’s all spin and language. site finder is not a service. it’s a profit-driven gimmick that only verisign could implement, and they did so without any regard for the implications. i’m not deep enough into this one to sort out the contractual arrangements, but after all my personal experiences with network solutions/verisign, and all the history of “crummy behavior” – it’s time to find another option.
the light has shown verisign is not trustworthy, trademarks and slogans notwithstanding.
icann – find another contractor. this one doesn’t play nice and doesn’t accept responsibility for its mistakes.
a piece [registration] in the new york times [text included below] describes an experiment google is conducting “to understand what the effects of it would be.”
the experiment places a cookie-based counter on the google page for some small faction of google power searchers.
i guess the most sinister spin i can put on this is that if google maintains logs (or starts to maintain logs), then those logs are, presumably, subject to secret-warrant provisions of the usa patriot act. but, really. there’s nothing to worry about. after all, google’s spokesperson has explained…
More than anything, this is just something fun
this finally got my attention today, and i don’t really have a lot to add, except my personal disappointment if this doesn’t “self correct” in short order.
some relevant stories at: the register, boingboing, kottke.org
i am personally familiar with lawyers treading into the realm of evil with “best intentions,” and despite the principles of the organizations they are hired to represent. i also have some experience from the other side of the table at google (the adwords program) and arbitrary decisions (they wouldn’t let me pick on john ashcroft by name, even though ashcroft represents a certain political reality here in the united states, and not just a person).
i do hope this is an anomaly. sergey, you’ve let your baby get just a little bit evil.
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