This is really starting to bug me. Nearly a week after Facebook’s IPO and the papers are still saying that it was a failure. It wasn’t, or at least, whether or not is was depends on who you are. And I suspect you prefer the winner to the so-called losers.

Let’s start with the basics. What is an IPO? It’s simple: a company sells a part of itself in exchange for cash. In the physical world, that’s the same as me making something and selling it to you. For the sake of this example, let’s say that I sell it to you for £1.

And what’s the share price? Well, once the IPO has completed, someone else can buy a share from you. The share price is basically just the price that you can agree on. Maybe you could sell it for £1.20. In this scenario, you just made 20%. Well done you.

And what about me? Well, I’ve made nothing more.

Let’s apply that back to Facebook. The initial price was $38. That’s the amount that Facebook got for each share. Let’s say that, as many expected, the share price rocketed to $50. Who benefits? From my example above, it should be clear that it would mostly be the people who bought the shares. The banks, the speculators. In short: not Facebook.

It doesn’t take a lot of thought to realise why the share price would rise so rapidly on the first day. Is it because the value of the stock increases rapidly in only a few hours? Or is it because the stock was originally underpriced? Contrary to what you read in a lot of papers, a rapid rise on the day of the IPO really means that the banks did a poor job of pricing the shares and that the company made far less money than they should have.

(To be clear, Facebook benefits from having a higher share price over time. I’m just talking here about the price rocketing on day one.)

Facebook wanted to get the most money possible out of the shares that they were offering. It turns out that the did an excellent job. They sold them for $38 and by the end of the day the market pretty much agreed. They left very little money on the table.

So unless you feel sorry for the banks or the speculators who failed to make a quick buck, the Facebook IPO was actually pretty successful.

• The Myth of Japan’s Failure – "Japan has succeeded in delivering an increasingly affluent lifestyle to its people despite the financial crash. In the fullness of time, it is likely that this era will be viewed as an outstanding success story."
• Man Embraces Useless Machines, and Absurdity Ensues – Technology: making life simpler.
• Merry – Sat here with my newborn son and wife, with all my family staying nearby, this post rang bells. It's sometimes important to realise what you have.

• Broadcast television is 75 years old today – "On 2 November 1936, the BBC began filling the airwaves, broadcasting from its Alexandra Palace facility in North London."
• Broadcast television is 75 years old today – "On 2 November 1936, the BBC began filling the airwaves, broadcasting from its Alexandra Palace facility in North London."
• A Sister’s Eulogy for Steve Jobs – Worth reading even if you've read all the other Jobs obituaries.

• Lytro — light field sensor photography – This "light field sensor" sounds amazing but I am a little skeptical. I'll believe its potential more when I hear about it being used by "real" people rather than in controlled situations.
• QuickLook Plugin For Mobile Provisioning Files – If you understand the title and develop iOS apps you need this plugin!
• C and Unix pioneer Dennis Ritchie reported dead – It's a sad week for the IT industry.

I’ve been playing around with Google+ more-or-less since it launched, but I’m not sold on it yet. After a bit of thought, I think it’s because there’s a fundamental disconnect between the kinds of behaviour that it encourages and the kinds of behaviour that it’s actually good at. Or maybe I’m just using it wrong. Either way, I’ll explain my reasoning here.

First, I should describe my frame of reference. I use both Twitter and Facebook, but I like the former much more.

In Twitter, a message (tweet) is, to risk stating the obvious, a message. It’s text-only; multi-media is managed entirely by links. (They have started to implement their own media services, such as for pictures, though these are still, currently at least, just links to servers hosted by Twitter and are not special in any other way.) Replies are tagged — in that you can see which message it was a reply to — but they’re basically the same as any other tweet. Shared tweets — retweets — works in the same way: they’re tagged but otherwise appear just as another message. Relationships are one way, that is I can follow you but there is no obligation for you to follow me.

Facebook differs in both of these respects. First, not all messages are alike. It natively manages multimedia such a photographs, videos and links. Replies — comments — are also a special type of message and are displayed differently. Relationships are always reciprocal, which means that if I see your updates, you see mine. You don’t see posts from other users that you’re not connected to but you do see comments from them.

Facebook also has the concept of pages, which I’m going to ignore for the moment since it’s not how I normally use Facebook¹. The gist is that while Twitter has one message type for everything, Facebook feels much more complicated.

Google+ tries to straddle the two with one-way relationships (like Twitter) and multi-media messages and comments (like Facebook).

To be clear, I don’t think that the Facebook or Twitter approach to relationships or messages is superior to the other. I think they’re geared towards different things.

I think it’s fair to say that the Twitter method encourages you to follow more people. The obvious reason for this is that relationships are only one way. I can follow a celebrity or a company that I am interested in but they don’t have to clutter their timeline with my comments about iPhone development or my life in London.

More subtle is that all the messages are about the same size. The advantage of this is that you can quickly skim large numbers of messages, only looking at the pictures and videos that promise to be the most interesting.

Google+ tries to straddle both, but I think that’s where it fails. Like Twitter, they encourage you to follow a lot of people but even following a fairly small number of users I find the flow of messages hard to keep up with. Since the whole message is displayed I, in some way, feel compelled to read posts that on Twitter I’d probably skip.

The screenshots below, from the Twitter and Google+ iPhone apps, illustrate what I mean.

This is the Google+ view. I see a single post and two out of nearly fifty comments. Of the people that I follow on Google+, this, I would say, is pretty typical.

And this is Twitter, where I see four tweets. This arrangement is not uncommon, though I often see more tweets than this.

And then after the posts there’s the comments. On Twitter I only see replies by people I already know. If I see a post by, say, Robert Scoble, do I really need to see a hundred comments by people I don’t know? Chances are good that I might want to see comments from people I know but probably not complete strangers.

Facebook solves the problem by reducing the probability that you’re going to have a few hundred comments on a post. If you “only” have a couple of hundred friends, it’s pretty unlikely that every one of them will comment! If you have a hundred thousand followers that does change the dynamics.

(A counter-argument would be that this is a good way to find new users to follow. However, I think the clever thing about Twitter is that these other comments are still public and can be viewed, it’s just that by default your message stream is not cluttered with them.)

In short, the simplicity of Twitter is often seen as a disadvantage but I think it works remarkably well. Facebook has a different goal — closer relationships with smaller numbers of users — but also seems to do pretty well on that front.

Google+, by trying to facilitate both uses cases, seems to do neither quite as well.

1. Though you’re welcome to visit the pages for my apps, Yummy and www.cut. [↩]

• Don Norman: Google doesn’t get people, it sells them – “But in fact the advertisers are the users and you are the product.”
• The Problem With Online Ads – This is why I tend to buy apps I like, even those with free versions. I prefer being a customer to being a target for advertisers.

• Open Finder folder in Terminal – Ooh, neat. Almost worth upgrading to Lion for this alone. (Warning: not in the least bit true for most people.)
• Losing the HP Way – "In today’s world of MBA-managed companies, R&D is perceived as not being a good use of money." And HP used to be a great engineering company. Sad.

This weeks PhotoFriday theme is “Enormous,” which is kind of a difficult word to get across. A lot of people have just gone for big things or small things at high magnifications. I thought I’d go for a 3.5″ floppy disk, as I remember 1.44Mb being enormous, way more than anyone could reasonably use — and far more than the 100K per side that my BBC Micro managed on its 5.25″ disks. Of course, a single raw image from my 50D would need fourteen of them…

There’s no need to rush to vote for my entry in last weeks challenge as I didn’t post an entry.

Rumour has it that Yahoo! are looking for a new CEO. Some people have been putting their name forward for the role, or at least offering suggestions for Carol Bartz’s successor. This post is in response to Joe Stumps list of ideas.

To be clear, I know that list is not completely serious. I know that he’s not really angling for the CEO role and I understand that many of the options would not be achievable even if they were the best thing for Yahoo! That’s not the point I’m trying to make.

The point, in summary, is that buying a bunch of companies to get smart people is not going to fix Yahoo!s problems.

Let’s look at some of the suggestions and, more importantly, how they inter-relate.

I’d buy Instagram and put them in charge of both Instagram and Flickr. They would have 100% autonomy over the entire “Yahoo! Photo” division.

Fine. Instagram has done really well. But what makes it successful? (Assuming that it is successful. So far it has managed to attract a lot of users but there’s no revenue stream as far as I can see.)

Is it the photo part? Well, partially. It has filters that people like playing around with. Another key to its success is the sharing, social side. But…

I’d buy Path and With for the sole reason of bringing Dave and his team on to lead the new “Yahoo! Social” division.

What’s the direction of the company if “Yahoo! Photo” and “Yahoo! Social” are both doing social stuff? Who decides how to share photos or videos?

And how is social distinct from mobile?

I would buy Twitter and Square in order to bring Jack Dorsey on full-time to run a new division called “Yahoo! Mobile.” He would have 100% autonomy over the entire mobile strategy.

Part of the success of both Instagram and Path are the fact that they’re “mobile.”

Mobile and social are not divisions any more than a technology company should have an “internet” division; they are fundamentals that need to influence all modern web “properties.”

Buying companies is not a solution. They’ve bought plenty over the years, but that didn’t help. What happened to Flickr? How “Yahoo!” is it? What about Delicious?

What Yahoo! lacks is not smart people or good technology, it’s a coherent way of tying everything together. Unfortunately that can’t be fixed by maintaining existing fiefdoms or importing new ones.

I want to like ebooks, I really do.

I like that the Kindle is smaller than a real paperback but can store dozens, hundreds even, of novels. I like that you can lose the hardware device and just download the books again. I like that I can read the same book on my iPhone as well as my iPad. It doesn’t even bother me that there’s no physical product. I’m not going to re-read most of my books yet they continue to take up the limited space in my London flat.

So why have I only ever bought a single ebook?

Here is the pricing for a book that I recently wanted to buy.

Paperback: £6.73.
Kindle: £6.99.

Here’s another.

Paperback: £5.59.
Kindle: £5.03.

I’m quoting prices on Amazon as it’s one of the bigger ebook suppliers. I’ve also used Apple’s iBooks, but downloads there are similarly (often higher) priced. But the gist is that ebooks are often more expensive than the equivalent paperback, and when they’re cheaper it’s not by much.

The publishers or Amazon might argue that the ebook is subject to VAT (sales tax) whereas paperbacks do not.

I would counter that with: I don’t care.

What I care about is “value for money.” All else being equal, I might consider an ebook to be worth more than a real book as it takes up less space and I can download it again if I lose my reader.

Unfortunately, all else is not equal. I can’t lend an ebook¹. I can’t resell an ebook. I can’t donate a book I’ve read to the local library or to a charity shop. The fact that it’s worth pretty much nothing when I’ve finished it means that an ebook is worth considerably less to me than a real book.

Nevertheless, I think ebooks are almost certainly the future. Unlike audiobooks or TV versus radio, ebooks have exactly the same use-case as traditional books. The objections are almost entirely technical. The cost. The resolution or brightness of the screen. The battery life. These are all solvable. It’s the business model that needs work.

Steve Jobs famously said that people want to own their music and, to this date, Apple have only sold music; they’ve never rented it. On the other hand, you can rent movies and, if you live in the US, TV shows too. I think, broadly speaking, Jobs is correct². You might listen to your favourite music dozens, even hundreds, of times. You’ll watch a movie or read a book, even a favourite one, only a few times by comparison.

So following that logic, I wonder why no-one has tried ebook rentals? In libraries we can already see that there’s a market for rented reading material. The same kind of DRM used with movies could be used for books, though we might need a little more than 24 hours to read a complete novel. I’d suggest around a couple of weeks or something more along the lines of a Netflix/LoveFilm model where you borrow n books at a time for as long as you subscribe.

Is there any reason why this won’t work?

1. Lending Kindle books only works in the US. I like the idea of Lendle. iBooks doesn’t allow lending at all. [↩]
2. Spotify and Last.fm have the opposite problem to ebooks: they’re too cheap. Or at least too cheap to sustain the current system. Changing the system is a different, and entirely valid, conversation. [↩]