That spin on the old song, made famous by Dionne Warwick, might be the most important question facing the state’s transportation system. Because plans to bring trains and transit into the 21st century depend on transforming the Bay Area city of 1 million people into our state’s rail capital.

But, in dysfunctional California, can all these plans stay on track?

Transportation expectations for San Jose are a function of the economy—it’s the capital of Silicon Valley—and of geography. San Jose sits about halfway between California’s northern and southern borders. On the sound side of our richest region, the Bay Area, it boasts longstanding rail links to the Central Valley and the Central Coast.

Diridon Station serves as a major hub for Caltrain, Amtrak, BART, and San Jose’s VTA light rail system. Courtesy of Jim Maurer/Flickr.

It’s also home to Diridon Station, a Renaissance Revival rail hub where California’s transportation past, present, and future converge.

Most transportation dreams in the state now include Diridon. The high-speed rail plan envisions Diridon as perhaps its most crucial junction, where regional rail lines to San Francisco meet bullet trains going down to Fresno, Bakersfield, and one day, Los Angeles. Diridon is already the western terminus of the ACE train, which provides rail service to Stockton and is slated for expansion throughout the Central Valley.

Diridon is also a regional connector. It’s a major hub for Caltrain service that extends from San Francisco down the peninsula to Gilroy. It’s the southern terminus of Amtrak’s Capitol Corridor service to Sacramento. It’s a key stop on San Jose’s own VTA light rail system. And it’s a destination of the decades-long, multi-billion-dollar effort to bring Bay Area Rapid Transit (BART) to downtown San Jose.

Add on Google’s massive development plan for the area around Diridon—a downtown village of parks, thousands of housing units, millions of square feet of office space, and a community center—and the ambitions for the place are heavy.

One problem is that San Jose, and California transportation agencies, don’t seem able to carry the weight. With so many different interests and constituencies hanging hopes on Diridon, multiple failures of governance are converging there, too.

The high-speed rail plan is such a mess of delays, consultants, and overspending that state officials are focused only on a small segment of the project: Bakersfield to Merced. The most optimistic plans have high-speed rail reaching San Jose in 2031. It’s a better bet that the whole project will be mothballed by then.

There are reasons to worry about regional lines, too. Plans are proceeding for extension of the ACE trains into Sacramento and beyond Stockton into Modesto and Merced. But the BART extension to downtown San Jose keeps getting more time-consuming and expensive.

Originally approved by voters way back in 2000, this six-mile, four-station project is shaping up to be one of California’s largest and most difficult infrastructure efforts. Its main problem is local officials’ insistence using an expensive and less proven method to build one of the largest subway tunnels in the United States. What once was described as a $4 billion project to be completed by 2026, is now a $9 billion-plus project that won’t be finished until 2034.

Train platform at Diridon Station, which is at the center of a debate around integrating the Bay Area’s—and California’s—rail networks. Courtesy of Niall Kennedy/Flickr.

The debate over the troubled BART extension has become divisive, distracting San Jose from what should be a focus: integrating transit at Diridon. Various agencies involved in planning—from Caltrain, to the high-speed rail authority, to the city of San Jose—don’t seem to be on the same page in terms of how to remake the station to improve links. And beyond Google’s plan, there’s no clear vision for making Diridon and its surroundings a true destination. The station will need to be a beautiful and distinctive place in itself in order to help draw Californians there.

More disconcerting than the planning troubles is the current state of transportation in San Jose. Newer BART stations in San Jose are ghost towns, left empty because of pandemic shifts to remote work.

And San Jose’s light rail, which was shut down for months last year after a mass shooting, has been called “a colossally bad system” by the city’s own mayor, who has smartly suggested replacing it with electric buses.

When I rode the different VTA lines over the course of a recent weekday, the few passengers I saw appeared to be unhoused people living on the train. At several points, I was the only passenger on board. That made sense. The trains are so slow, and make so many stops, that driving is more than twice as fast as riding.

If it’s going to happen, the transformation of San Jose into a transportation capital can’t be that sluggish. All Californians have a stake in San Jose connecting us, especially by rail.

The state needs to step in, take charge, and remove regulatory barriers. The remaking of Diridon Station should get the same exemptions from environmental and other laws that the state granted to new sports stadiums. The state should establish a single governing authority to take over the San Jose transportation hub, and require high-speed rail and local agencies to defer to its decisions.

Timelines must be accelerated and plans simplified so that a new Diridon, with all connections humming, is in place before the end of this decade.

Let’s clear out the obstacles blocking our way to San Jose.

The post Is San Jose Destined to Be a Train Wreck for California Transportation? appeared first on Zócalo Public Square.

These two companies alone suck up an astounding 60 percent of all online advertising in the world (outside China). With Amazon taking another 9 percent, that leaves a mere 30 percent of global digital ad revenue to be split among tens of thousands of media outlets, many of them local publications. With digital online advertising now comprising more than half of all ad spending (and projected to grow further), this domination has greatly contributed to underfunded and failing news industries in country after country.

Australia’s situation is typical. Its Competition and Consumer Commission found that for every hundred Australian dollars spent by online advertisers, $47 goes to Google and $24 to Facebook.

Most Australians who access their news online don’t go to the original news source. Instead, they absorb the gist of the news from Facebook and Google’s headlines and preview blurbs. With fewer people clicking through these links, the digital media platforms effectively have turned thousands of publishers and broadcasters into little more than uncompensated ghostwriters of content.

That’s why Facebook and Google receive the lion’s share of revenue from digital ads, rather than the original news sources. Platforms could tweak their design and algorithms to purposefully drive users to the original news sources’ websites; but they don’t. They prefer to repackage and monetize product from the original producer without paying for it. In other industries, that’s called theft.

Australia decided to fight this thieving duopoly with some rules-setting of its own. A new law approved by the Australian Parliament requires large digital media companies to compensate Australian news outlets fairly for their proprietary content, and to submit to binding arbitration with news publishers if they can’t agree on terms. Media outlets around the world are watching to see how this plays out.

Google initially fought the proposal, but finally negotiated deals with Australian news publishers. But Facebook flexed its muscle by cutting off Australia entirely from its platform for several days. This prevented Aussie news publishers and everyday users—including important government agencies like health, fire and crisis services—from posting, viewing or sharing news content.

The result was jarring, the proverbial “shot heard ’round the world.” Facebook censored Australian users more effectively than the Chinese communist government ever could, prompting charges of “big tech authoritarianism.” Facebook finally relented to Australia’s requirement, in return for some vague and uncertain concessions. But the flexing of raw, naked platform power was unmistakably clear.

Now a similar battle is playing out in the state of Maryland. Over the last 10 years, U.S. newspapers’ advertising revenue decreased by 62 percent, and without that source of funding, newsroom employment dropped by nearly half. That decline coincided with a huge increase in digital media use and, according to Pew Research Center, today more than half of U.S. adults report often receiving their news from social media, search, or podcasts, and only a third from news websites or apps. Those numbers zoom off the charts for young people 29 and under.

Squeezed by these economics, Maryland approved America’s first tax on digital ad revenue earned inside its borders, targeting companies like Facebook, Google, and Amazon. The measure is projected to generate as much as $250 million annually, dedicated to schools. The tech giants are threatening lawsuits against Maryland, even as Connecticut and Indiana legislators have introduced similar measures.

But the real battle is just beginning. One of the most important, unsettled debates of the Internet Age is whether digital media platforms like Facebook, Google/YouTube, and Twitter are the new “public square,” a kind of global free-speech Agora, or just the latest techno variety of old-fashioned publishers and broadcasters. Or a hybrid of these.

With each crisis revealing the gap between the tech companies’ public-square pretentions and their very real publishing power, the debate has intensified. Following the U.S. Capitol ransacking, Facebook, Google, and Twitter all decided to discontinue “publishing” the president of the United States. Before that—as the platforms tried to contain their toxic pipeline of pandemic and election disinformation and racial tension—they slapped warning labels on posts and removed the content of certain users.

Now, in response to Australia’s law, Facebook pulled the plug on an entire country. That’s something only a giant monopoly publisher can do. In 2014, when Spain enacted legislation requiring Google to pay Spanish news outlets for the article snippets in its search results, Google bullied the government and ultimately closed its new service there.

Even before the past year’s seminal events, Facebook, Google, and Twitter acted as publishers by allowing their “engagement” algorithms to make critical decisions about which content is featured at the top of users’ news feeds, and what is promoted and amplified. Their sophisticated “long tail” publishing machines precisely target niche users, showing different content to different people, including political ads.

These are not passive online chat boards, and the Big Tech platforms are not merely managers of the digital public square. They are “robot publishers,” in which algorithms do the essential duties of an editor. From a liability or accountability standpoint, it should matter little that there is a supercomputer behind the curtain, instead of a human.

So it’s pretty difficult to argue credibly that these platforms are not in some sense publishers, deciding what content and sources should disappear or be amplified. These companies have more in common with the New York Times, CNN, and Rupert Murdoch’s News Corp than they do with an online Wikiboard or free speech corner in London’s Hyde Park.

Indeed, Facebook’s and Google/YouTube’s algorithmically curated machines, with 2.6 billion and 2 billion users, respectively, are the two largest publishers and broadcasters in human history. Yet existing law does not treat these companies as either, when it comes to being liable or answerable for their mistakes and abuses. The digital media platforms, seeking to avoid accountability and its costs, hide behind the fact they have billions of users generating content. But that should not obscure the centrality of their publisher role.

Critics of the Maryland and Australian approach claim that treating Facebook and Google as publishers threatens the principle of an open internet, which views the internet as an infinite free speech zone for information sharing, consumer choice, and global connection. It’s a beautiful but outdated dream, and it must be balanced by the “copyright principle,” which was established years before the internet was even invented. Copyright law mandates that any person or organization cannot swipe someone else’s content and monetize it without paying for it.

There is something inherently basic and fair about digital media giants paying for the original news content they use to drive traffic to their sites. But the open internet principle essentially demands that traditional news sources bear the financial burden of continuing to produce quality news without fair compensation, much as it demanded that Napster be allowed to distribute copyrighted music for free without compensating musical artists and record companies.

Taken to its logical conclusion, the open internet principle will cannibalize what’s left of the news media. With no credible news sources to steal from, Facebook and Google would be even more overrun by disinformation. They are eating their own seed.

Canada says it will adopt the Australian approach, possibly India, too. And France and Austria have passed similar laws. The U.S. is known for encouraging competition, so you would think regulators would jump into action. Yet the Biden administration has been silent on this subject. Will the United States, a longtime champion of the free press, step up?

The post The Real Battle Between Big Tech and the Free Press Is Just Beginning appeared first on Zócalo Public Square.

The short answer is that Section 230, part of the Communications Decency Act of 1996, is the legal underpinning for one of the largest and most consequential experiments in American history.

Since the birth of Big Tech Media 15 years ago—let’s drop the friendly-sounding misnomer “social” media—our nearly 250-year-old republic has become a test case. Can a nation’s news and information infrastructure, the lifeblood of any democracy, be dependent on digital media technologies that allow a global free speech zone of unlimited audience size, combined with algorithmic (non-human) curation of massive volumes of disinformation that can be spread with unprecedented ease?

This experiment has been possible because Section 230 grants Big Tech Media immunity from responsibility for the mass content that is published and broadcast across their platforms. A mere 26 words in the bipartisan law were originally intended to protect “interactive computer services” from being sued over what their users post, just like telephone companies can’t be sued over any gossip told by Aunt Mabel to every busybody in town.

But as Facebook, Google, Twitter, and other services scaled over time to an unimaginable size, the platforms’ lack of human editors has resulted in a gushing firehose of mis- and disinformation where scandals and conspiracies are prioritized over real news for mass distribution. Facebook alone sees more than 100 billion pieces of content posted each day, a deluge that its small corps of human monitors cannot realistically contain.

As the gripping videos and photos of a pro-Trump mob storming the Capitol make clear, this experiment has veered frighteningly off course. The protesters earnestly believed that they were trying to stop a stolen election, having been fed this false information by their political leaders for over two months since the November 3 election. Millions of people are now living inside their own “disinformation ghettos” where they do not hear contrary viewpoints. So, President Biden has called for ending Section 230 immunity in order to stop the Frankenstein’s monster this law helped create.

Facebook is no longer simply a “social networking” website—it is the largest media giant in the history of the world, a combination publisher and broadcaster, with approximately 2.6 billion regular users, and billions more on the Facebook-owned WhatsApp and Instagram. One study found that 104 pieces of COVID-19 misinformation on Facebook were shared 1.7 million times and had 117 million views. That’s far more than the number of daily viewers on the Wall Street Journal, New York Times, USA Today, ABC News, Fox News, CNN, and other major networks combined.

Traditional news organizations are subject to certain laws and regulations, including a degree of liability over what they broadcast. While there is much to criticize about mainstream media, at least they use humans to pick and choose what’s in and out of the newsstream. That results in a degree of accountability, including legal liability.

But Facebook-Google-Twitter’s robot algorithm curators are on automatic pilot, much like killer drones for which no human bears responsibility or liability. Non-human curation, when combined with unlimited audience size and frictionless amplification, has clearly failed as a foundation for our democracy’s media infrastructure.

So, it is time to hit reset in a major way, not only to save our republic, but also to provide the best chance to redesign these digital media technologies so that we can retain their promise and decrease their dangers.

Revoking Section 230 by an act of Congress would be a good start. That’s not a perfect solution, but it would make Big Tech Media more responsible, deliberative, and potentially liable for the worst of its toxic content, including illegal content (like child pornography), especially when their algorithms automatically amplify such content.

But there is also a great deal of reckless online content that would likely not be impacted by 230’s revocation. For example, Trump’s posts on Twitter and Facebook claiming the presidential election was stolen, and his inflammatory speech that YouTube broadcast the morning of the Capitol attack, were false and provocative—but it would be difficult to legally prove that any individuals or institutions were harmed or incited directly by the president’s many outrageous statements. Any number of traditional media outlets also have published untrue nonsense without the protections of Section 230, yet they were never held liable.

The revocation of Section 230 also wouldn’t have stopped the use of Big Tech Media for disinformation campaigns that undermined elections in more than 70 countries, even helping to elect a quasi-dictator in the Philippines; or for widely amplifying and even livestreaming child abusers, pornographers and the Christchurch mass murderer of Muslims, who broadcast his carnage over Facebook (a video then seen on YouTube by millions). And losing Section 230 immunity wouldn’t impact the fact that a majority of YouTube climate change videos denies the science, and 70 percent of what YouTube’s 2 billion users watch comes from its recommendation algorithm.

So revoking Section 230 likely would not be as impactful as its proponents wish, or its critics fear. What needs to be done instead?

The federal government must intervene to change the way Big Tech Media operates. Facebook-Google-Twitter’s “engagement algorithms” recommend and amplify sensationalized, conspiracy-ridden user content for one reason—to maximize profits by increasing users’ screen time and exposure to more ads. In fact, the Wall Street Journal reported that Facebook executives scaled back a successful effort to make the site less divisive when they found that it was decreasing their audience share. Recently implemented warning labels are weak substitutes for actual curation. These greedy companies have purposely weaponized their platforms, and enabled the dividing, distracting, and outraging of people to the point where society is now plagued by a fractured basis for shared truths, sensemaking, and common ground.

In the face of such practices, our government must impose a whole new business model on these corporations—just as the United States did, in years past, with telephone, railroad, and power companies.

The government should treat these companies more like investor-owned utilities, which would be guided by a digital license. Just like traditional brick-and-mortar companies must apply for various licenses and permits, the digital license would define the rules and regulations of the business model (Mark Zuckerberg himself has suggested such an approach).

To begin with, such a license would require platforms to obtain users’ permission before collecting anyone’s personal data—i.e., opt-in rather than opt-out. When you signed up for a Facebook account, you probably didn’t imagine that 10 or 15 years on, you were unknowingly agreeing to allow the company to suck up your private data or track your physical locations, or mass collect every “like,” “share,” and “follow” into a psychographic profile that can be used by advertisers and political operatives to target you. Facebook and its fellow outlets started this data grab secretly, forging their destructive brand of “surveillance capitalism.” Now that we know, should society continue to allow this?

The new model also should encourage more competition by limiting the mega-scale audience size of these media machines; nearly 250 million Americans, about 80 percent of the population, have a profile on one of these platforms. Smaller user pools could be accomplished either through an anti-trust breakup of the companies, or through incentives to shift to a revenue model based more on monthly subscribers rather than on hyper-targeted advertising, which would cause a decline in users. The utility model also should restrain the use of specific engagement techniques, such as hyper-targeting of content, automated recommendations, and addictive behavioral nudges (like autoplay and pop-up screens).

We also should update existing laws to ensure they apply to the online world. Google’s YouTube/YouTube Kids have been violating the Children’s Television Act—which restricts violence and advertising—for many years, resulting in online lawlessness that the Federal Communications Commission should examine. Similarly, the Federal Elections Commission should rein in the quasi-lawless world of online political ads and donor reporting, which has far fewer rules and less transparency than ads in TV and radio broadcasting.

Like many other people, I have benefited from the internet and its revolution in communications. These businesses are creating the new infrastructure of the digital age, including search engines; global portals for news and networking; web-based movies, music, and live streaming; GPS-based navigation apps; online commercial marketplaces; and digital labor market platforms—services and technologies that are being interwoven into the very fabric of our societies.

I believe we can retain what is good about the internet without the toxicities. Like the promise of the internet itself, Facebook-Google-Twitter started out small, and then blew up into monopolistic giants that have established their own greedy and destructive rules that threaten our democracy. It is crucial that regulation evolves in order to shape this new digital infrastructure—and the future of our societies—in the right way.

The post Can We Tame the Wild West of Big Tech Media? appeared first on Zócalo Public Square.

A:
Test me all night, baby.

No, really. Sign me up to be the subject of A/B testing. I’d even be willing to sign a blanket consent form, right now, so that all of Silicon Valley’s biggest brains can test me for the purpose of improving the human future.

Everybody’s doing it. In fact, you’ve likely been A/B tested without your knowledge if you’ve ever used Google or Facebook.

With A/B testing, different users are given different variants of a website or an email or a purchasing button to test what small changes online make you more likely to click, or read, or buy, or spend more time in a particular online environment. (A/B typically suggests two variables but, in reality, we are in a multi-variable world.) If you’re reading this column online, you could be being A/B tested right now—it could be running in three different formats, with your reaction to each variable (different headlines, different layouts, maybe even different handsome photos of your columnist) being measured, recorded, and statistically analyzed.

The gold standard for California’s technology industry, A/B tests are also called bucket testing and split-run testing, and they neither can be detected or escaped. A/B tests are how we improve our designs, our interfaces, and even ourselves.

Conducted carefully and repeatedly, they allow for refinements to fit the needs of users and remove guess-work for those running sites and delivering more products.

This notion of tests is old—it’s often attributed to 1908 tests that were used to improve industrial processes at a Guinness brewery in Ireland. But Google has optimized its globe-dominating search business for such testing. Facebook is similarly devoted to A/B testing to continuously refine its site. On the other side is Snap, whose CEO Evan Spiegel doesn’t like to do such testing, preferring a more visceral approach. Is that why Snap is facing such challenges in keeping users?

A/B testing can feel more like a religion or a cult than a scientific procedure. It requires building unseen rituals into everything you put up online. But the disciplines of experimenting and testing help avoid the human preference for the status quo.

We should demand even more from A/B testing. The human race must redesign and improve all sorts of systems—energy, traffic, food and water supply, communications, and even governing systems —if we’re going to avoid self-inflicted disasters, from climate change to famines to wars. So why don’t we commit ourselves to a culture of continuous optimization in the real world, not just the virtual?

B:
I am not your test subject, baby.

And I have no desire to be Silicon Valley’s guinea pig. Oh, yes, I know the internet is full of fine print that lets me know that I’m being tested. But that doesn’t mean I’m being meaningfully asked for my consent. And I’m not really being compensated for all the data that’s being collected from experiments conducted on me.

My online time is now given over to companies experimenting upon me for the purpose of getting me to choose to see which variables will change my own behavior. In essence, I’m a dystopian lab rat forced to design the maze—and the reward—that will entrap me. Great.

And even the real world no longer provides an escape because the Internet of Things–with its web-connected air conditioning and appliances—tests me even when I’m relaxing in my own home, making a cup of coffee.

Facebook will tell you that all its services, provided to me free, are a form of compensation, but studies also tell me that spending more time on Facebook—which is the goal of many of their experiments—makes me less happy. Sadness is not a method of payment I accept.

Such testing has created an unacknowledged ethical crisis—and real public health concerns. The more we click, the more we’re being tested. And if experiments show the way to make us spend more time than is healthy for us in an online environment, or to spend more money than is good for our family’s finances, aren’t we being harmed by our own testimony? (Am I talking about my own behavior here, you ask? Can I plead the Fifth?)

In other fields, like medicine, society developed standards and review boards for governing the testing of human subjects. But these standards aren’t being applied to all the A/B testing to which we’re constantly subjected online.

There are questions here for our faltering democracy, too. California has hundreds of companies that will help an interest group or a politician test to determine the best ways to manipulate our emotions and online behavior for their purposes. Is such human testing a factor in the rise of polarization and fake information that is weakening our bonds to our fellow citizens?

If so, this world of testing needs real regulation—by the same authorities, and under the same laws, that allow for regulation of business practices in the name of protecting people from health and financial threats. One way to start might be to add regulation of A/B testing and other online experiments to the privacy regulations that some jurisdictions impose on tech companies.

And there are other, more prosaic problems. All these A/B tests can be wasteful, producing data that can become quickly outdated. That data creates its own gravity and a bias in favor of the status quo. That’s dangerous because the past doesn’t always predict the future, especially online.

A/B testing and multivariable varieties of it are also impersonal. Such testing doesn’t capture who the users are, and the needs of people can be as diverse and different as individuals themselves.

Of course, smart people in Silicon Valley know this, which is why they are moving beyond A/B testing to the realm of machine learning: a world of algorithms that learn about each individual user. The promise, as yet unrealized, is that the algorithms will continuously improve in giving each user customized products and answers.

Such machine learning blurs the line between human, interface, and machine. In testing their way into this future, California’s brightest brains are simultaneously hiding behind their screens and intruding into their fellow citizens’ lives and minds in a way that they would never dare in person.

Yes, their goal may improve the human experience in many fields. But constant testing and ever greater refinement can be deeply disrespectful to humans, our privacy, and our rights. Yes, we have the right to choose, A or B. But how much choice does continuous testing really leave us test subjects about the nature of our collective future?

The post Is A/B Product Testing Turning Us into Silicon Valley’s Lab Rats? appeared first on Zócalo Public Square.

I bet having your picture taken by someone with a bulky film camera is not on your list. Yet it might have been, if you lived 100 years ago. For back then “Kodak Fiends” prowled the land and—hold onto your bonnets and bowlers—took pictures of us without our awareness or permission! At the time this was considered a major intrusion into one’s privacy, so much so that they even tried to write laws to prevent such violations.

It may seem strange that merely having your picture taken in public—and we aren’t talking about anything so salacious as upskirt photos—could evoke such psychological distress and paranoia. But is it really that puzzling? How do you feel if someone hacks into your email or social media accounts? It evokes the same unsettling sense of intrusion as Kodak Fiends did a century ago. Perhaps in the near-distant future hacking could become so commonplace that being hacked is just taken for granted, and 100 years from now readers of this column will be mildly amused at our naiveté.

We tend to throw the word “paranoid” around rather loosely, like we do the term “depressed.” Just to be clear, paranoia is a clinical (pathological) condition characterized by excessive undue suspiciousness and the belief in the mal-intent of others. So when you receive an offer from a complete stranger somewhere in Africa who wants to share with you the $350 million they just inherited, and you are suspicious of the offer, you are not paranoid. Just as there is a difference between being “suspicious” and being “paranoid,” so too is there a difference between being “just paranoid” and having “paranoid delusions.” Delusions are those beliefs that we generally feel are improbable or highly fantastic. But the line between reality and delusion can be thin indeed.

Take, for example, Raul Murillo Diaz. According to police, he was fed up with Google’s surveillance and decided to fight back—allegedly by shooting out a window of the company’s building and torching one of the Google camera cars. Ads popped up that seemed to know exactly which websites he had just visited. Ironically, Google denied he was the subject of surveillance, yet it had video footage of his SUV. Don’t those activities constitute surveillance? If you believe that some person(s), government, or other organization is watching you, monitoring you, and digging into your personal life and they actually are, then are you paranoid?

Interestingly, each generations’ paranoid fears appear to be coming true. The fear that Kodak Fiends would steal our privacy has become a reality. There are few places you can go these days without being photographed or caught on security camera. The fear of being watched from on high has also become true, as has the fear that computer chips would be implanted in our brains.

Over the years I’ve had the opportunity to review records of mentally ill patients from different eras. Almost every new scientific discovery or technological advancement has become the stuff of paranoia. The discovery of gasses in the late 18th century became the paranoid delusion of one James Tilly Matthews, who believed that “pneumaticians” operated an air loom beneath the streets of London, influencing those above.

Dirigibles evoked that feeling of being spied on from above, which is exactly what they were doing, only occasionally lobbing an explosive devise of some sort. Blimps were quickly replaced by airplanes, and then jets as paranoid individuals continued to look skyward to see their tormentors. Then satellites were launched. Now paranoid individuals could no longer see their surveillers, but they knew that they were up there, silently spying on them from the recesses of space.

Although it is unlikely that many individuals went through the expense of buying an aircraft to spy on others, the same can’t be said for inexpensive drones. Now you can spy on just about anybody with what amounts to a toy. As the saying goes, even paranoids have enemies (and those enemies probably have drones).

Similarly, the discovery of X-rays led paranoids to fear that others could see through them, which was of course quite literally true. The telegraph gave way to telephones, which stepped aside for cellphones. Each factored into the paranoid’s suspicions. And then there is the now venerable computer chip. Paranoid individuals have long fretted that such chips could be implanted in their brains in order to control them. Ironically, biomedical research is making great strides today in doing just that in order to help a broken brain function adequately.

And then there are “targeted individuals,” aka TIs. As the New York Times recently documented, these folks, and there appears to be quite a number of them, believe that they are being stalked by gangs and monitored electronically, often using satellites. They have created a platform to share their plight, but ironically, that platform is electronic. A Google search—which was probably monitored—for “targeted individuals” reveals numerous websites where TIs from around the world post testimonials, support, videos, and advice. At the same time they are warned that just about anyone can be a “handler” (the surveiller or stalker) engaged in electronic stalking and mind control, which they abbreviate to ESMC. If you believe yourself the victim of ESMC, you can buy devices designed to block all sorts of malicious attacks including “psychotronic” attacks. (Sorry folks, couldn’t find a good definition for this one in all of my psychology textbooks and journals. Your imagination will have to suffice). But even TIs are encouraged not to be suspicious of everyone lest psychiatrists label them as paranoid.

So what paranoid horrors lay ahead? Well, self-driving cars are becoming a reality. While I may not have to worry whether the person driving toward me is drunk, now I do have to worry—or be suspicious about—whether that car is going to be hijacked (or perhaps a better term would be hihacked) and driven right at me. The TIs may fear that their cars will be remotely operated by their stalkers. Whatever the new technology, it will become the preoccupation of a new generation of paranoid individuals—and they just might be on to something.

The post Paranoids in the Age of Digital Surveillance appeared first on Zócalo Public Square.

So while companies such as Google have built significant value as result of a well-considered mergers and acquisitions strategy, Yahoo seemed to squander its value. What role did merger-and-acquisition missteps play in Yahoo’s slow death?

There are three major reasons for M&A failure—flawed strategy, misguided valuation, and ineffective integration. And Yahoo is a classic case study in how these three factors can destroy company value.

The first reason for failure is flawed or unclear strategy. The strategic rationale for acquisitions must be soundly based on a company’s clear core competency. Growth opportunities should be centered in areas where a firm has distinct advantages, not on areas of overt weaknesses. Betting that a merger or acquisition will solve a company’s problems is like expecting a marriage to resolve the individual difficulties of two troubled people.

For instance, if a product is unable to obtain distribution by clearly providing value at its core, acquiring distribution will not be a solution. In 1987, during the early days of personal computing, Atari was struggling to convince retailers to sell its PCs. In an attempt to boost distribution, Jack Tramiel, then chairman of Atari, bought the Federated chain of consumer electronics stores. Tramiel reasoned that 65 Federated stores in California, Arizona, Texas, and Kansas would successfully hawk his computers. Using its newly obtained captive distribution, Atari could grant its computer line prime shelf space at Federated. But the Atari/Federated deal soon faltered as customers simply did not want Atari computers. As an old adage goes, “You won’t improve buoyancy by strapping together two leaky canoes.”

How effectively did Yahoo tie M&A activities to a core competency? Unfortunately, over the years of Yahoo’s existence, the company was tentative, if not schizophrenic, about what its core competency actually was. This not only made it difficult to define a clear M&A strategy throughout the company’s history, but also led to disastrous valuation judgments.

Yahoo began as a portal to organize the internet, using hundreds of employees to categorize requests for websites to be added to its directory. Other services such as news, sports, and email were added around the directory. But the sprawling web eventually defied complete classification, and Yahoo’s core started to collapse.

In 1999, Yahoo decided it would focus on becoming a digital media company and purchased Broadcast.com in a $5.7 billion acquisition. While the deal made Broadcast.com founder Mark Cuban wealthy, Yahoo was years too early in moving to digital media and had radically overvalued the transaction.

In 2002, Yahoo decided it would become a search company and attempted to buy an upstart company named Google on the cheap. The companies could not agree on valuation, and the deal collapsed. This time Yahoo was too timid and had dramatically undervalued Google by billions of dollars.

Yahoo was determined to move ahead with search and spent a more modest $2 billion to acquire targets that included Inktomi and Overture. But Yahoo found it tough to compete with Google search algorithms. By 2007, Google’s revenues had easily lapped Yahoo’s.

Not to worry—the second coming of co-founder Jerry Yang was on the horizon. In 2005 Yang had orchestrated a brilliant deal for Yahoo to acquire 40 percent of Alibaba, now regarded by many as the best investment ever made by an American company in China. As Yang returned in 2007, perhaps he could discover a new core for Yahoo.

Although Yang did not make any multi-billion dollar acquisitions, he did turn one down. In 2008, Yang rejected a bid from Microsoft to buy Yahoo for about $45 billion even though the offer reflected a 60 percent premium. Yahoo investors, dismayed at Yang’s reluctance to part with the assets of Yahoo at Microsoft’s offer price, pressured him to step down as CEO.

When Marissa Mayer assumed control of Yahoo in 2012, she decided the company should pursue an aggressive M&A program patterned after what Mayer had learned during her long career at Google.

During Mayer’s tenure at Yahoo, the company spent more than $2 billion acquiring over 50 early-stage ventures. The goal was to achieve what I’ve dubbed “semi-organic growth,” which involves the creative blending of talent and technology of acquired firms with existing acquirer capabilities. While at Google, Mayer had seen the benefits of such a program and was determined to replicate the process at Yahoo.

However, the M&A playbook that worked so well for Google was not destined to thrive at Yahoo. Whereas Google’s hugely profitable digital advertising core provided an ample cushion for acquisitions to be successfully integrated, Yahoo was under turnaround pressure. The company lacked the time and management style necessary for creativity to flourish and new services to thrive. Layoffs were much more common than bonuses. And write-downs of acquisitions became a regular occurrence when Yahoo’s quarterly earnings were reported.

During its 22-year existence as an independent company, Yahoo had not been able to base M&A activities on a core identity, and that cast a pall on many of its major deals. It’s perhaps why there was no Yahoo analog to other companies’ highly successful deals—such as eBay’s purchase of PayPal, Facebook’s acquisition of Instagram, or Google’s purchase of YouTube. Rather, due to unclear acquisition strategy, valuation miscues, and an inability to foster healthy integration, Yahoo will now become just another piece of Verizon’s effort to join Google and Facebook as a digital advertising powerhouse.

Yahoo’s long history as a tech industry pioneer has ended in the graveyard of independent companies.

The post How Yahoo Destroyed Its Value appeared first on Zócalo Public Square.

You can’t talk to people in Silicon Valley anymore. They don’t even speak our language.

By that, I’m not referencing Mark Zuckerberg’s mediocre Mandarin or the software code underlying so much of the Valley’s endeavors. I’m talking, literally, about the words Valley denizens use when they speak, in sentences like: “Yeah, that start-up has some cool gamification, but it’s an X for Y model, they don’t even have a minimum viable product, and that space is already in Hype Cycle. Their only hope is to pull off an acqui-hire. And even then, I don’t know if they have a total addressable market.”

In other words (rough translation of above sentence: that start-up is a cool place to work but needs to buy another company or it’ll die), our technological masters no longer speak the same language that most Californians do. And that is just one sign of a growing divide between tech and non-tech that isn’t good for the state.

The Valley’s growing cadres of wealthy and powerful technocrats have turned the Bay Area into an island, cut off from the rest of struggling California. Their outlook and lives are global, while the rest of us exist locally. There are chasms between their technological sophistication and ours, between their venture-backed business methods and our adherence to more established principles of accounting, and between our ethnic and gender diversity and their lack of it.

Yes, they welcome our dollars, app downloads, and posts of baby pictures, but they don’t really invite us in to talk. Instead, they’ve built a wall—of jargon—that keeps us at a distance.

As a frequently bewildered visitor to Silicon Valley, I have felt this firsthand. But I didn’t undertsand the full extent of this language barrier until reading Rochelle Kopp and Steven Ganz’s new book, Valley Speak: Deciphering the Jargon of Silicon Valley.

Kopp and Ganz, both longtime Silicon Valley residents, told me by phone that they wrote the book to help people who want to work in or do business with Silicon Valley but bump up against its jargon, which they call “mind-numbing” and “impenetrable at best, and at worst downright ridiculous.”

HBO’s Silicon Valley.

The best evidence of the problem is that the book has 100 chapters, covering hundreds of terms, from “Agile Development” to “Unicorpse.” Kopp and Ganz say that Silicon Valley’s jargon does tend to exclude people, though they believe it isn’t intentional. Instead they suggest Silicon Valley dialect is in part the by-product of Bay Area crowding, with people living and working in cramped quarters that bind them together while sometimes shutting out the rest of the world.

“There are so many great things happening here—it would be great if the conversation were more open,” Kopp says. With jargon, “there’s a big element of ‘this is a private club, and you either know what people are talking about or you don’t,’ and that really marks you. I was at brunch where one of the people was a twenty-something engineer from the Midwest, and he asked at one point, ‘What’s a unicorn?’ And I told him don’t ever say that out loud again.” (A unicorn is a start-up whose valuation exceeds $1 billion).

The authors report that the language barrier can be a real problem for Silicon Valley’s globally oriented enterprises; Kopp says she decided to write the book in part because she worked with Asian entrepreneurs who couldn’t understand what potential Valley partners were saying. And given Silicon Valley’s importance to California’s economic future, it’s important to break those barriers down.

But does Silicon Valley want them down? As a journalist who receives dozens of pitches a week from Valley companies looking for publicity, I’m struck by how reflexively Silicon Valley enterprises use jargon to obscure what their companies actually do. The most absurd such Silicon Valley pitch of the spring came from a “serial entrepreneur” touting a “revolution” for tech workers — which turned out to be an overnight bus service from San Francisco to L.A. for $65 that offers the supposed innovation of saving you time by replacing the hassle of an hour-long airplane flight with a seven-hour bus ride. (You can do the same trip for $22 on Greyhound, which has free Wifi).

I also wonder if jargon isn’t a cover for old-fashioned hype and even con-artistry. Stupid money, from places like New York and Hollywood, is still flowing into a Silicon Valley that seems ripe for a crash. And it can be hard to spot scammers in Silicon Valley’s sea of start-up failures.

At root, though, the language barrier is a monument to Silicon Valley’s sense of self-importance. Powerful people, especially those who create new products and companies and services, tend to put their names on things. Silicon Valley’s fondness for inventing new language tracks with its self-image as a place that is changing the world.

The downside to that is a loss of perspective (not everything is revolutionary or disruptive). And that loss of perspective shows itself in the decline in the Valley’s sense of humor. A UCLA economist who writes about the Valley recently mentioned to me that Google never says or does anything remotely funny. (I checked—he’s right). It’s telling that the HBO comedy Silicon Valley derives most of its humor from how ridiculously seriously tech people take themselves.

When I recently asked aloud on Twitter whether the Valley had lost its sense of humor, no one disputed the premise. Elliot Loh, a designer and an incubator co-founder, replied, “Like any of the products we build, our jokes will launch next quarter.”

Of course, Silicon Valley is very powerful, and it’s easier to be funny when you’re the underdog. The most powerful companies in the Valley also face pressure to project neutrality; note the criticism Facebook has faced over whether its trending stories choices are infected by political bias.

It’s true that executives like Zuckerberg or Apple’s Tim Cook are more outspoken than the average corporate titan, especially when it comes to supporting liberal cultural values that are broadly shared in the Valley. And the tech investor Sean Parker has become one of California’s top political donors.

But these men attract attention because they are exceptions. Valley types are far more likely to engage internationally—on privacy or climate change issues—than they do here at home in California. The Valley doesn’t often raise its voice on the fundamentals of state governance—school funding, health care, prisons, and public universities. And that lack of engagement is one reason why a California with so much private wealth has such weak and undernourished public services.

Of course, engagement is difficult these days. Our political and civic worlds are nasty and angry places, in no small part because of Facebook, Twitter, and other platforms that the Valley has created. So it’s no surprise that people in Silicon Valley, like so many of us, are turning inward and talking mostly to themselves.

The post Why It’s So Hard to Speak Silicon Valley appeared first on Zócalo Public Square.

Microsoft’s batting average, especially for larger deals, does not qualify it for a spot on the All-Star M&A team. The company has written off multiple billions of dollars in failed acquisitions that include Nokia (smartphones) and aQuantive (digital marketing).

This deal would be the largest in the history of Redmond, Washington-based Microsoft, and skeptics quickly pronounced that large tech deals don’t work, citing such hall-of-shame transactions as AOL/Time Warner and Hewlett-Packard/Compaq, both disasters for the acquiring companies. Given Microsoft’s also-ran M&A record, how could this acquisition of LinkedIn avoid turning into “goodwill garbage?” (Companies take “goodwill” write-downs, i.e. losses, when an M&A transaction fails.)

I teach mergers and acquisitions at UCLA Anderson. And in evaluating this deal, I think it’s important to analyze what it would take for Microsoft to realize more than $26.2 billion of value from LinkedIn.

First, there needs to be a compelling strategic rationale, such as seizing on an opportunity, responding to a market shock, or even attempting to create a new market. Microsoft CEO Satya Nadella articulated the strategic rationale for Microsoft/LinkedIn by stating that work today is split between tools to get jobs done (think Microsoft Office) and professional networks (think LinkedIn). The deal would weave these two pieces together. “It’s really the coming together of the professional cloud and the professional network,” said Nadella in an interview with The Wall Street Journal.

Microsoft CEO Satya Nadella in 2013.

An ideal acquisition has synergies, those magical effects that occur when the new whole is greater than the sum of the individual parts. Nadella is suggesting LinkedIn will trigger productivity/network synergies across a wide range of products, such as Outlook calendar meetings having access to LinkedIn professional data. Or Excel spreadsheet users becoming more adept when informed by LinkedIn/Lynda technical instruction videos. Or Dynamics (Microsoft’s customer relationship software) being enriched by background data on 400 million professionals found in LinkedIn.

Then there are potential synergies on the LinkedIn side. LinkedIn CEO Jeff Weiner said the deal provides “a meaningful acceleration of the scale at which we operate.” Apart from Microsoft’s financial resources, Office alone has a vast reach of some 1.2 billion users, and the prospect of pouring Redmond rocket fuel on LinkedIn’s slowing growth rate is alluring.

So place a checkmark by compelling deal rationale. But more is needed to make a deal succeed.

Secondly, the economics of the deal have to make sense. Will the standalone value of LinkedIn plus the value of all synergies exceed the purchase price of $26.2 billion?

In order to answer this question we need to analyze whether the deal offers opportunities to cut costs, increase revenues, develop and sell new products, and compete in a changing market. These must be evaluated in light of the company’s expected cash flows, and the opportunity costs of tying up the funds for purchase at this time.

With the LinkedIn deal, potential revenue synergy dominates, since little cost cutting is anticipated. Weiner stated in an online post that little is expected to change for LinkedIn employees. Only those whose jobs are entirely focused on maintaining LinkedIn’s status as a publicly traded company were likely to be impacted.

But Wall Street typically considers revenue synergies as more speculative, even if they are as compelling as those described above. They are far less under the control of an acquiring company than cost synergies. And this leads us to a third dimension for acquisition success—where the rubber really hits the road in realizing M&A value.

LinkedIn CEO Jeff Weiner in 2012.

Thirdly, unless the two companies integrate successfully, the premium or even the basic consideration paid for a target can evaporate. Some executives feel that this implies integration efforts must be concluded rapidly, certainly within a year. After all, cash flows associated with an acquisition have time value, so the sooner positive flows are realized, the more valuable they will be.

Academics debate the tradeoffs in the speed of integration. On the one hand, speed is an important consideration, given that more rapid receipt of cash-flow benefits yields higher present value for the acquirer and is likely to yield better stock market performance. In addition, the faster the integration, the more likely the target will be willing to accept changes. But if the integration moves too fast, before the acquiring company really understands the target, mistakes will be made that cost money, not to mention siphon the morale of key talent. All of that drains value from the target company.

For Microsoft’s acquisition of LinkedIn to be successful, the integration strategy must not only establish an appropriate starting point, but—even more important—determine the path to the desired synergy objectives (achieving revenue growth by enabling professionals to work and network in new ways) and the speed on that integration path.

Although rapid assimilation is the correct path for some deals, one size doesn’t fit all. In fact, there are numerous styles for successful integration, some of which require that targets be left alone for a considerable period of time after deal close. This preservation model, which is what Microsoft appears to be adopting for LinkedIn, is building a strong track record, including Google’s acquisition of YouTube or Facebook’s deal with Instagram. Both companies were allowed to maintain independence for a considerable time.

For example, in 2006 when Google acquired YouTube the company retained its brand and all employees, including co-founders Chad Hurley and Steve Chen. Eric Schmidt (Google CEO at the time) personally and proactively defended YouTube’s autonomy. To that end, YouTube maintained its San Bruno, California office location rather than moving to Google company headquarters. There was no significant Google branding visible at YouTube’s offices.

But Microsoft/LinkedIn must go beyond preservation and autonomy. If revenue synergies are to be realized, a symbiotic blend involving a meaningful reciprocal exchange of technology, talent, and capability must occur. And this bidirectional, alchemic form of integration is the most challenging kind of integration to pull off.

The post Does Microsoft’s LinkedIn Deal Have a Shot at Success? appeared first on Zócalo Public Square.

Apple has famously opted, for the most part, to grow organically. When Steve Jobs took the momentous decision to wade into the smartphone business, for instance, he didn’t acquire an existing phone manufacturer the way Google and Microsoft did—he built the operation from within. Other tech companies, such as Cisco and Facebook in more recent years, have been voracious acquirers of innovative companies, either because they’ve coveted the targeted company’s technology, or feared it as a competitive threat. People raised their eyebrows at the billions Facebook spent to acquire Instagram and WhatsApp, but those deals seem to make more sense in retrospect than they did at the time.

Similarly, there was a lot of scoffing back in 2006 when Google spent $1.65 billion to acquire YouTube. Now, with YouTube becoming an increasingly desirable platform for advertisers to connect with young consumers, that deal looks farsighted.

I’ve spent a lot of time studying Google, and its approach to growth seems to bridge the two competing (but in fact overlapping) theories of growth in Silicon Valley. The company hasn’t been shy about making bold bets to acquire outside businesses to bring into the fold, as in the case of YouTube or Nest Labs, but it is also, more so than any other U.S. company, consciously designed to be an incubator for homegrown businesses and technologies.

Overall, dealmaking is surging in corporate America this year. According to Dealogic, the global volume of mergers and acquisitions (M&A) reached $3 trillion in August and is poised to challenge the record-setting year of 2007. Healthcare deals led all sectors with transactions worth $487 billion, with technology acquisitions in second place at $392 billion.

Google, though, has been remarkably quiet. So far in 2015, Google has acquired a mere nine small companies, with none of these targets reaching a valuation so high that Google felt obliged to disclose specific deal terms. According to the company’s required disclosures to shareholders, Google spent a mere $149 million in total consideration for its acquisitions during the first six months of 2015.

Compare that to 2014, when Google acquired at least 35 companies, closing major deals that included Nest Labs (smart-home devices), DeepMind (artificial intelligence), Skybox (nano-satellites), and Dropcam (home monitoring). The Nest deal alone amounted to $2.6 billion.

What’s going on? Overall M&A activity is racing, but Google’s appetite is waning. Is the company merely pre-occupied with its recently announced restructuring and the integration of companies it acquired during last year’s bumper crop of deals? Has Ruth Porat, Google’s new chief financial officer, hired away from Morgan Stanley in May, put her on foot on the M&A brakes? Or is there more of a philosophical shift at hand?

As I argued in my book, Semi-Organic Growth, M&A made an imprint on Google very early in its corporate history. Even before the company went public, acquisitions played a particularly important role in the strategic development of this iconic company. Over the years Google has become an experimental lab, not only for products and services but also in utilizing M&A to further its purposes. Of particular experimental importance has been learning how to integrate a wide range of talent and technologies with the goal of keeping Google “small.”

Search may be the company’s core business, but it at times also appears to be its guiding strategic initiative. By the end of 2014, Google had acquired some 200 companies. But there’s more to the story than numbers. Google has developed a playbook for M&A activity built around what I call semi-organic growth. This refers to the growth and revenues generated when a company blends the technology-related assets and talent of an acquired company with its own existing capabilities to create products and services.

Consider an example that is not as well known as its YouTube acquisition, but in some ways more important. In 2003, Google acquired Applied Semantics (ASI), a developer of technology called AdSense. AdSense contextually analyzed the content on a website and recommended ads that would perform best on the site. Google had been working on a similar initiative with the vision of moving beyond search-based advertising and making the entre web its advertising canvas.

In buying ASI, Google amalgamated ASI’s people, technology, and other assets with its own and achieved massive revenue acceleration in context-based advertising. By 2014, Google was generating over $10 billion in revenue from AdSense.

Acquisitions such as ASI imprinted on Google a way of growing revenue that became deeply ingrained within the company. M&A would become a core strategic capability, a major driver of growth.

So why did Google’s 2015 deal slowdown in a red-hot M&A market? I believe the cause is not the challenge of integrating a massive number of acquisitions completed during 2014. Nor is there a major strategic shift under the new CFO Porat that de-emphasizes the role of M&A within Google.

The answer lies in current valuations for privately held tech companies. In other words, the price is no longer right. The age of the unicorn has dawned, with valuations surpassing $1 billion as cash from private equity, hedge funds, mutual funds, and corporate venture capital flow into new ventures. These $1 billion-plus unicorn companies have become a herd, with over 100 such creatures now roaming the business landscape. Some unicorns are household names—Uber, Airbnb, Snapchat, and Pinterest. But most are obscure.

The unicorn phenomenon is part of the technology sector’s boom-and-bust cycle. When times are good, overall valuations soar. Too much, Google apparently believes.

I would expect Google to start filling up its deal-shopping cart again starting in 2016 (or even later this year) at less fanciful valuations if the next funding rounds for ventures become considerably more challenging.

M&A is far from out at Google. But financial discipline is most definitely in.

The post Why Has Google Stopped Buying ‘Unicorns’? appeared first on Zócalo Public Square.

Is there ever an optimal time to visit North Korea? It is true, however, that in recent months Pyongyang has been particularly belligerent. Last month, North Korea detained Kenneth Bae, a naturalized American citizen who was born in Seoul, for unspecified “hostile acts against the republic.” Further complicating matters is North Korea’s launch of a long-range rocket, which the United States viewed as an attempt to develop a ballistic missile.

But if the timing is bad for traditional diplomacy, then what about digital diplomacy? Digital diplomacy entails leveraging new connection technologies to shape international relations. The beauty of this concept is that it doesn’t have to be strictly between one government and another. It can be conducted by technology companies, NGOs, or even ordinary citizens. A visit to North Korea by the chairman of Google, even in his “private” capacity, seems to fall into this category. The trip might even indirectly further one of the State Department’s key goals, which is to promote the “freedom to connect.”

The goals and details of Schmidt’s visit remain unclear. Richardson has said that the delegation plans to visit universities and meet with political, economic, and military leaders. Most likely the trip’s value will be largely symbolic—attempts to do business could violate U.S. sanctions. Nor is North Korea, a country in which many workers make less than $1 a month, the most alluring consumer market. What Google would bring to North Korea is the lure of information technology, which the Hermit Kingdom will find increasingly hard to reject. And there is no country more threatened by the Internet than North Korea.

North Korea is facing an extreme version of the dictator’s dilemma. On the one hand, its leaders are attracted to the knowledge, economic growth, and global connectivity that are facilitated by the Internet. At the same time, they know that the Internet would threaten their grip on power. Most regimes facing this quandary have chosen to embrace technology, even with the corresponding loss of control. North Korea is likely to do the same. The difference is that it might not survive the consequences.

North Korean leaders have long viewed technological prowess as a source of government legitimacy. The recent satellite launch, for example, can be pointed to as a symbol of regime “accomplishment.” “Technology is one of the bumper stickers for revolution, making progress,” says Scott Snyder, a North Korea expert at the Council on Foreign Relations. Even as much of the country remains hungry and reliant on foreign aid, the regime still strives for the gloss of modernity—as with the large digital screen in front of the Pyongyang train station. It would be just like the screen in Times Square, except the Pyongyang version shows North Korean propaganda. In his recent New Year’s greeting, the young North Korean leader Kim Jong-un extolled the benefits of technology, saying: “The industrial revolution in the new century is, in essence, a scientific and technological revolution, and breaking through the cutting edge is a shortcut to the building of an economic giant.”

Even Kim must realize that it’s pretty hard to be “cutting edge” if you have no access to the Internet. And yet, that is the case for nearly all of the 24 million people in his country. While it is hard to get accurate figures on most everything related to North Korea, Martyn Williams, who runs Northkoreatech.org, estimates that the number of North Koreas with Internet access is probably in the “low thousands.” Such access tends to be limited to people in elite or scientific circles. Others might be able to get on the domestic “Intranet,” which consists of government-approved content. And of course North Korea’s Web culture has the expected quirks. North Korean websites are apparently programmed so that whenever it is mentioned, Kim Jung-un’s name is automatically displayed to be ever-so-slightly larger than the text around it.

Yet despite the leadership’s best attempts to close off the country, according to a recent report by Intermedia, North Koreans are getting more information than ever before. Computers, USB drives, and MP3 players have found their way into North Korean hands, particularly among the elite. Foreign DVDs make it into the country from China via smugglers or cross-border traders. There are at least 1 million mobile phone subscribers in North Korea. Most people can’t call out of the country, but those near the border who can get their hands on a Chinese cellphone can sometimes pick up a Chinese signal. And while domestic televisions must be fixed to official channels, Intermedia found that North Koreans are increasingly gaining access to television sets that are capable of showing foreign broadcasts. Others will modify their televisions to dodge state controls.

This is hardly a new phenomenon. In Nothing to Envy: Real Lives in North Korea, Barbara Demick describes how in the 1990s a young North Korean named Jun-sang bought a Sony television that had been fixed to government stations and had its tuners disabled by a North Korean version of “crippleware,” ensuring that televisions wouldn’t receive foreign broadcasts. He registered the set with the Electric Wave Inspection Bureau, which put a paper seal over the television’s buttons to certify it had been preset on the politically correct station. Television inspectors would show up unexpectedly to make sure nobody tampered with the sets.

So Jun-sang, eager for news from outside North Korea, used a sewing needle to push the buttons without damaging the seal and also constructed his own antenna. Then, when everyone was asleep, he listened to South Korean television. What he learned turned his world upside down. He heard that the United States was supplying thousands of tons of rice in humanitarian aid. A U.S. congressional delegation said in a news conference that 2 million had died of starvation in North Korea. And for the first time Jun-sang heard the actual voice of his own leader, Kim Jong-il, whose words were usually read by reverent North Korean radio announcers. Kim’s voice was tinny, old, and utterly devoid of mystique. “Listening to South Korean television was like looking in the mirror for the first time in your life and realizing you were unattractive,” Demick wrote. In Jun-sang’s case, these realizations contributed to his crisis of faith in the regime and his ultimate decision to defect.

Examples like these illustrate how even the most basic access to information could be devastating to the North Korean regime. North Korea is built on a myth: that it is a great country to live in, that nothing is lacking, and that the outside world should be viewed with fear and distrust. When people discover that their homeland is built on lies, they lose faith in the regime.

The lies have been so pervasive that even the most apolitical information can corrode them. A North Korean watching a South Korean love story on a foreign Korean DVD would not fail to notice, for example, that the refrigerator in the background is full of food. Demick told me another story about a North Korean she met sometime around 2004, who had worked for the country’s fisheries division. He had access to foreign radio via a Chinese fishing boat that was confiscated for entering North Korean waters. The boat had a radio, and so he was able to listen to a South Korean radio drama. One such drama featured two women living in an apartment complex who are fighting over a parking space. Initially, the North Korean thought it was a parody: How could South Korea possibly have so many cars that people fight for parking spaces? He soon figured out that it was not a joke. A year later, he defected.

If a few snippets of South Korean radio or television can shatter North Koreans’ vision of the world, just imagine if they had access to the World Wide Web. Of course, any such access would be surveilled and censored to unimaginable extremes. North Korea’s leaders are likely watching China, which has shown great skill in employing both technology and human censors to keep its Internet in check. Yet even with these controls the Internet has transformed countless Chinese lives by granting previously unimaginable access to information and (virtual) assembly.

In North Korea, where the regime is far more brittle and shrouded in myth, the effect would be even more dramatic. No, the Internet would not automatically trigger a North Korean spring. Revolutions are sparked by economic and political crises, or other events that brings public discontent to a boiling point. But when such events occur, a networked and informed society is far more likely to rise to the occasion.

Victor Cha, a former U.S. official who handled North Korean issues for the White House, told me that for years the United States has been trying to de-nuclearize North Korea, and “we’ve been spectacularly unsuccessful. And maybe the truth is that we are not going to de-nuclearize them, we just need to get more information into the country.” This, of course, will not be easy to do. But if anyone could do it, it would be a company like Google.

I am not advocating that Google establish a permanent presence in North Korea, which in any event would be nearly impossible. Nor is Google, which in 2010 pulled out of mainland China citing censorship and security risks, naive about these kinds of entanglements. But the good news is that the company can add value without setting up servers in Pyongyang. The trip should be viewed as a powerful act of symbolism: A champion of connectivity lands in the world’s most reclusive nation. Schmidt’s very presence in North Korea will connote the flash and glamour of information technology, reminding North Korean leaders that a country cannot be truly modern without the Internet. And this could pose a temptation that no dictator can resist.

The post Mr. Schmidt Goes to Pyongyang appeared first on Zócalo Public Square.