Falling Apart?

This just in:  Vancouver has been ranked fourth on the world’s list of least affordable cities.  This is well ahead of cities like Manhattan, San Francisco, London, Paris, and Hong Kong.  As most rational people know, the city’s thundering real estate market has been bolstered by rampant speculation and constant construction of new condominiums.. but salaries, and the city’s economic development, have not kept pace.

The survey quoted in the article cites research indicating that the cost of housing in Vancouver is massively disproportionate to median salaries earned by its residents, specifically when compared to other cities around the world.  The median house price in Vancouver as of the time of the survey is 8.4 times the median income — 8.4 years’ average income to purchase a house, compared to the average median in Canada: 3.5.

What this tells you is that the fundamentals that support high real-estate prices are simply not there in Vancouver.  People just don’t earn enough income to sustain this market at such lofty prices whereas in cities like New York and San Francisco, where real estate prices are indeed higher, median incomes are substantially higher and thus can support high prices.

Vancouver is plagued by a number of problems that keep the salaries of its citizens low:

1. Affordable commerical real estate is hard to come by in the city — leading in some cases to a perverse reverse-commute where urbanites must schlep out to the suburbs to their workplaces — but more importantly this discourages companies from locating here.
2. Most large cities with expensive downtown cores operate as financial centres — the aforementioned London, Hong Kong, and New York spring to mind.  Vancouver does not, except for our storied love affair with ponzi schemes.  Without the sustaining flow of capital through our city there is highly limited opportunity for local investment.
3. We’re still a bunch of tree-cutting, pickaxe-wielding hicks.  And BC’s resource industries, the bread and butter of Vancouver for more than 150 years, are weak thanks to everything from the US softwood lumber tarriffs to Kyoto to a number of key mining company collapses.  Our province has failed to diversify its economic base substantially away from resource businesses.
4. The advanced industries like software and aerospace that keep California sizzlin’ have failed to grow in scale in this city.  Investment in this area is weak, with very little private investment and weak government support (nearly all of the Venture Capital in Vancouver is government-derived).  We did however blow >$500 million on a handful of useless fast ferries, though.  Two notable exceptions are alternative energy and biotech.  For now, at least, they are humming along.
5. The film industry, which we in BC have courted for decades, is a fickle bride.  Since productions are built for each project and torn down when completed with little long-term planning, unfavourable economic winds mean that producers can pull up stakes and shoot in South Carolina, Mexico, or wherever they can cost-optimize.  In any case, the profits are retained in New York and LA… like a Mumbai call centre, we’re just an outsourcer.
6. Drugs, and by “drugs” I mean the cultivation and distribution of marijuana, constitutes probably the largest industry in BC and it flies completely under the regulatory / taxation radar.  Conservative estimates peg this at between $5Bn and $7Bn per year.  These people have a hard time getting mortgages.  They also tend to be undesireable tenants, since they tend to get arrested/shot at/sent into hiding — that is if they don’t blow up their penthouse with a meth lab.
7. Our transportation infrastructure is pathetic, particularly when compared with major metropolitan areas (of which Vancouver is now one) such as Boston, Montreal, Toronto, New York, London, Tokyo, and others.  If we wish to become a center of commerce then we need to be able to move people around better.  Skytrain is a laughing stock and the West Coast Express, which goes to a handful of proximate suburbs from the downtown core twice a day each way, doesn’t even merit comparison with the British Urban Railway system.  Our highways (such as they are) subject people to multi-hour commutes to travel 20km.  We have failed, failed, FAILED to build infrastructure and it will continue to haunt the city for decades to come.

For those of us in the technology industry, certainly during this housing price spike, Vancouver seems an illogical place to locate our startups or ply our trades in information technology.  While the average condo price can be as high as 2x-2.5x the price of a comparable condo in Toronto or Montreal, our salary variance is just 103.5% the national average, versus 104.2% for Toronto and 103.9% for Montreal (this according to the 2009 Robert Half Salary Guide for Technology Professionals).  While we spend more to live here in Lotus Land, we sure don’t make up for it in income.

Comparing Income to Housing Prices

So how high is too high?  Right now we are finding out.

If you were blindsided by the Vancouver Real Estate crash then you were clearly in a profound state of self-delusion.  Evidently that list of deluded fools includes our civic leaders who played russian roulette with the city’s finances, underwriting the now disastrous Olympic Village project in which the taxpayers stand to lose as much as $750 Million.  Still, even amid the free-falling values, Realtors and Developers are outright lying to you… inviting you to join in their deathmatch with catch phrases like “don’t wait too long” and “strong fundamentals“.  Where have we heard that before?  Oh right, it was John McCain, about the US Economy in September – days before it collapsed.  Oops.

UPDATE: In a passionate article, former mayor Sam Sullivan says the Olympic Village is not a clusterf*ck.

Speculators and developers will beg to differ (they’re invested in fostering positive vibes) but remember:  they’re betting with your money, not their own.  Condos down the street from ours were forced into liquidation at 40% off, and there have been stories of other developers dumping their inventory at similar price cuts.  This is the beginning of a trend, not a sign of the bottom, so if you’re foolishly lining up to jump in at this point, you get what you deserve.

Not until a software engineer making $60K-$70K per year can buy a 1-Bedroom apartment in the city will the fundamentals be aligned and the market be stabilized.  This means mortgage + maintenance of less than $1500 per month using the 30% rule.  On a 25-year mortgage that probably means this 1BR apartment has to be less than $200K.  If the research that started this article can be believed, we should expect an adjustment of as much as 60% across the board to bring Vancouver back to the Canadian mean.

So in other words, wait ’til the bottom really drops out, Vancouverites..

And then we can start figuring out why no one in this city (not even the property developers, after 2007) makes any real money.

> From: Jeffrey Kay
> Date: Tue Sep 23, 2003 7:20:55 AM US/Pacific
> To: FoRK
> Subject: Verisign’s Domain Redirects
>
> Seems like DNS is in trouble yet again. This is a pretty interesting
> issue.
> One could argue that managing a root gTLD server is a public trust and
> Verisign is violating that trust.
>
> — jeff
>
> VeriSign stands firm on domain redirect
> Last modified: September 22, 2003, 6:07 PM PDT
> By Declan McCullagh
> Staff Writer, CNET News.com
>       
>
> VeriSign said Monday that it would not abandon its decision to point
> unassigned domain names at its Web site, but representatives did say
> the
> company would form a technical committee later this week to look into
> the
> problems caused by the change.
>
> During the last week, criticism has steadily grown over VeriSign’s ”
> SiteFinder ” service, which has caused problems for network
> administrators
> and confused spam-blocking utilities. A number of Internet standards
> bodies
> and administrative groups have asked the Mountain View, Calif.-based
> company–which enjoys a government-granted monopoly over the .com and
> .net
> registry–to stop, and a second lawsuit seeking an injunction against
> the
> practice was filed Monday.
>
> On Monday, VeriSign spokesman Tom Galvin said SiteFinder would remain
> in
> place because “we think the technical review committee is the
> appropriate
> mechanism before making any long-term decisions about the service.” The
> committee members who will be chosen by VeriSign and will report to the
> company will be announced later this week, Galvin said.
>
> “All indications are that users, important members of the Internet
> community
> we all serve, are benefiting from the improved Web navigation offered
> by
> Site Finder,” VeriSign Vice President Russell Lewis said in a Sunday
> letter
> to the Internet Corporation for Assigned Names and Numbers (ICANN).
> “These
> results are consistent with the findings from the extensive research we
> performed.”
>
> ICANN is the nonprofit organization that oversees Internet domain
> names. On
> Friday, the group asked VeriSign to pull the plug on its “wildcard”
> redirection service.
>
> Since then, ICANN’s Security and Stability Advisory Committee has
> published
> a more-detailed critique of the technical problems caused by VeriSign’s
> move. The committee–which includes a VeriSign representative–said it
> would
> hold a public meeting in the Washington, D.C., area on Oct. 7 and has
> asked
> for feedback to be sent to secsac-comments [at] icann [dot] org.
>
> “VeriSign’s change appears to have considerably weakened the stability
> of
> the Internet, introduced ambiguous and inaccurate responses in the
> (Domain
> Name System), and has caused an escalating chain reaction of measures
> and
> countermeasures that contribute to further instability,” the
> committee’s
> critique said. “VeriSign’s change has substantially interfered with
> some
> number of existing services which depend on the accurate, stable, and
> reliable operation of the domain name system.”
>
> VeriSign’s new policy is intended to generate more advertising revenue
> from
> additional visitors to its network of Web sites. But the change has
> had the
> side effect of rewiring a portion of the Internet that software
> designers
> always had expected to behave a certain way. That can snarl antispam
> mechanisms that check to see if the sender’s domain exists, complicate
> the
> analysis of network problems and possibly even pollute search engine
> results. Because VeriSign will become a central destination for
> mistyped
> e-mail and Web traffic, its move also raises serious privacy questions.
>
> On Monday, domain name registrar Go Daddy Software filed a lawsuit in
> federal district court in Arizona seeking to halt the SiteFinder
> redirection. “VeriSign has hijacked this entire process,” Bob Parsons,
> president of Go Daddy, said in a statement. “When the user is sent to
> VeriSign’s advertising page, VeriSign gets paid by the advertiser when
> the
> user clicks a link to get off the page, to the tune of $150 million
> annually, as estimated by VeriSign.”
>
> It appears to be the second lawsuit filed in response to VeriSign’s
> move.
> Popular Enterprises, the parent company of search provider
> Netster.com, sued
> VeriSign over the SiteFinder redirection last week, alleging antitrust
> violations, unfair competition and violations of the Deceptive and
> Unfair
> Trade Practices Act.
>
> Also in response to VeriSign’s move, the well-respected Internet
> Architecture Board published on Saturday a document titled
> “Architectural
> Concerns on the use of DNS Wildcards,” referring to the domain name
> system.
> It says the danger of “wildcard records is that they interact poorly
> with
> any use of the DNS that depends on ‘no such name’ responses.”
>
> jeffrey kay
> weblog pgp key aim
> share files with me — get shinkuro —
>
> “first get your facts, then you can distort them at your leisure” —
> mark
> twain
> “if the person in the next lane at the stoplight rolls up the window
> and
> locks the door, support their view of life by snarling at them” — a
> biker’s
> guide to life
> “if A equals success, then the formula is A equals X plus Y plus Z. X
> is
> work. Y is play. Z is keep your mouth shut.” — albert einstein
>
>
>

September 21, 2003

Waiting For Spielberg By MATTHEW ROSE

Unlike most urban legends, the one about the Iranian exile stuck at the Paris airport for 15 years is true. Surrounded by a mountain of his possessions near the Paris Bye Bye lounge at Terminal 1 in Charles de Gaulle International Airport, Merhan Karimi Nasseri is still there after all these years — a celebrity homeless person.

Planted on the 1970’s red plastic bench he calls home, and surrounded by stacks of newspapers and magazines, Nasseri, also known as Alfred or ”Sir, Alfred” (title and comma appropriated from a mistake in a letter from British immigration), has organized his life’s belongings into a half-dozen Lufthansa cargo boxes, various suitcases and unused carry-on luggage. On a nearby coffee table spotted with aluminum ashtrays, Nasseri’s universe includes a pair of alarm clocks, an electric shaver, a hand mirror and a collection of press clippings and photographs to establish his present and his recent past. He seems both settled — and ready to go.

To the pilots, airport staff, fast-food merchants and millions who have passed through the terminal on their way to somewhere else, the 58-year-old Nasseri has become a postmodern icon — a traveler whom no one will claim. Little do they know that he is on his way to becoming a Hollywood icon, too. Inspired by Nasseri’s intriguing tale of lost identity, bureaucratic limbo and persistence, Steven Spielberg has bought the rights to his life story as the basis for the new Tom Hanks vehicle, ”The Terminal.”

”I realize I am famous,” Nasseri says in his soft, almost giggly voice, a gravelly mix of his native Persian, the airport French he’s picked up from the loudspeakers and the cigarettes he’s always smoking. As if to prove his fame, he pats a briefcase stuffed with his press clippings. ”I wasn’t interesting until I came here.”

Nasseri’s story is difficult to piece together. Over the years, he has claimed many things about his origins. At one time his mother was Swedish, another time English. Nasseri’s effectively reinvented himself in the Charles de Gaulle airport and denies these days that he’s Iranian, deflecting any conversation about his childhood in Tehran. (”He pretends he doesn’t speak Persian,” his longtime lawyer, Christian Bourguet, says. ”He was interviewed by Iranian journalists and made believe he didn’t understand.”) When we first met two years ago, he insisted that the United Nations High Commissioner for Refugees was attempting to locate his parents in order to establish his identity. But a spokeswoman for the agency dismissed the assertion as ”pure folly.”

Early on in his saga, Nasseri maintained that he was expelled from his homeland for antigovernment activity in 1977. According to a number of reports, Nasseri protested against the regime of Shah Mohammed Reza Pahlevi while a student in England, and when he returned to Iran, found himself imprisoned, and shortly thereafter exiled.

He bounced around Europe for a few years with temporary refugee papers, alighting finally in Belgium, where he was awarded official refugee status in 1981. He traveled to Britain and France without difficulty until 1988, when he landed at Charles de Gaulle airport after being denied entry into Britain, because, he contends, his passport and refugee certificate were stolen in a mugging on a Paris subway. Nasseri could not prove who he was, nor offer proof of his refugee status. So he moved into the Zone d’attente, a holding area for travelers without papers.

He stayed for days, then weeks — then months, then years. As his bizarre odyssey stretched on, Bourguet, the noted French human rights lawyer, took on the case, and the news media piled on. Articles appeared around the world, and Nasseri became the subject of three documentary films. (Oddly, apparently none of his friends or relatives have attempted to contact him.)

ike any number of Samuel Beckett characters, Nasseri has redefined the concept of waiting. But he remains busy, and during office hours when he’s not meeting filmmakers or members of the press, he collects McDonald’s soda tops and endlessly considers his situation in a sprawling, 1,000-plus-page diary that chronicles his journey to nowhere. These rambling handwritten notes recount his encounters with just about everyone he’s met, reporting faithfully everything from the details of his paper chase to some of the witty things he’s said (”I’m not Henry Kissinger”). Nasseri also asks most visitors to sign his journal.

An effete, balding man, Nasseri is well groomed (he washes daily in the men’s room and sends his donated Marks & Spencer clothes to the dry cleaners) with finely manicured fingernails. He smokes compulsively and is forever reaching for his pouch of Pall Mall rolling tobacco. At one point during our interview he coughs, adding with his characteristic sly humor, ”Maybe I caught SARS here in the airport.”

In an eerily Warholian relationship, Nasseri’s closest neighbors at the airport are a photo booth and a photocopy machine. Unlike most movie types, Nasseri does not have a cell phone, and he eats regularly at the McDonald’s in the food court 100 feet away. (”I like the fish,” he says.) The only green in his immediate environment is, ironically, the Sortie (Exit) sign.

In the Spielberg film, which begins shooting this month, Hanks is transformed into a refugee whose country disappears in a diplomatic wink of an eye. As chaos ravages his homeland, Hanks is rendered stateless, his passport turned into an eBay collectible. He’s grounded: a stranger in a strange New York airport. But Hanks is cured of his airport disease and soars to new heights (and, who knows, perhaps another Oscar), thanks to the Hollywood bombshell Catherine Zeta-Jones, who plays Hanks’s love interest, a flight attendant. Nasseri has had no such luck with the ladies and complains that there are no nightclubs in his airport. ”There’s no pleasure,” he says.

While Bourguet confirms that Spielberg’s company, DreamWorks, has in fact bought the rights to his client’s life story, Spielberg himself would not discuss ”The Terminal,” its plot nor Nasseri’s contract. Marvin Levy, a DreamWorks spokesman, confirms that a financial agreement was signed. However, he cautions, ”Mr. Nasseri’s story was an inspiration for the original treatment for ‘The Terminal.’ The film is not his story.”

Rumors of a $275,000 fee for the rights to Nasseri’s life story and certain consulting duties have circulated. ”It’s less than $1 million,” Bourguet says, adding that the money hasn’t changed the predicament of his client. ”While he became a bit richer, Alfred is extremely paranoid and confused.”

Certainly, Nasseri may well be one of the only people on the planet not to have seen a Spielberg production. Asked what he thinks of Hanks, Nasseri replies straight-faced, ”Is he Japanese?”

Regardless of whether Hanks manages to capture the refugee’s deadpan delivery, the Hollywood retelling of Nasseri’s odyssey will undoubtedly include a first-class ticket to the American dream.

Nasseri’s real-life ending, however, is still up in the air.

”Alfred himself will have trouble leaving the airport,” says Glen Luchford, a fashion photographer cum director whose 2001 mockumentary, ”Here to Where,” attempted just such a scenario, with the director, played by Paul Berczeller, failing to tempt Nasseri beyond the concrete gardens of Charles de Gaulle.

”Alfred has to accept that he’s free,” Luchford says sadly. ”But with freedom comes responsibility. He represents people’s worst fears — the idea they might be procrastinating all their lives and end up being rooted to the spot.”

asseri cannot be forcibly moved or repatriated. He is protected by a number of international refugee statutes. According to Bourguet, he is legally free to leave the airport. All Nasseri has to do is sign the identity papers the French provided him in 1999. But the papers identify him as Iranian and don’t recognize his adopted name of Sir, Alfred. And so he can’t — or won’t- sign them: a testament to either patience, or madness.

Nasseri is doubtful about attending the premiere of ”The Terminal,” although his face lights up at the prospect. ”I would probably have technical problems with my papers in Los Angeles,” he says, before adding that he’ll likely leave the airport ”in September or October.”

If he does decide to finally exit the departure lounge, Nasseri could go to any number of places in the world. He says Florida has invited him, and, yes, why not New York, when ”I take over DreamWorks”? (The company is based in California.) And what of the plastic red bench, which has served as his de facto home for the last 15 years and must by now be a collector’s item?

”I’ll take it to DreamWorks,” he says with a smile. ”And send it by FedEx .”

Matthew Rose is a writer and artist living in Paris.

—- http://www.tuscaloosanews.com/apps/pbcs.dll/article?AID=/20030916/ZNYT01/309160363

SBC Won’t Name Names in File-Sharing Cases*

By SETH SCHIESEL New York Times September 16, 2003

* • Discuss this story <to turn over the names of their customers who are otherwise known only by the murky screen names and numeric Internet Protocol addresses used in cyberspace.

Give people choice and freedom and they’ll pay. Try to sue your own frickin’ customers into oblivion and we’ll see you in bankruptcy.

-Ian.

—— http://story.news.yahoo.com/news?tmpl=story2&u=/washpost/20030909/ tc_washpost/a47297_2003sep9&e=1 RIAA vs. the People Tue Sep 9,11:06 AM ET

By Cynthia L. Webb, washingtonpost.com Staff Writer

The Recording Industry Association of America ( news -web sites )made good on its promise to prosecute Americans who engage in the illegal downloading and trading of pirated music, filing 261 copyright violation suits yesterday.

“Legal actions have been taken on a sporadic basis against operators of pirate servers or sites, but ordinary computer users have never before been at serious risk of liability for widespread behavior. The RIAA said that’s the point it’s underlining with the unprecedented legal action,” CNET’s News.com reported.

But in an editorial today, the San Jose Mercury News said the RIAA’s legal campaign is bad policy: “Suing your customers, as a long-term strategy, is dumb — even if they bring misfortune upon themselves. … The suits are the unfortunate, but predictable response of an industry that failed to see the Internet until it stared it in the face. Since Napster ( news -web sites ) first appeared four years ago and declared the death of the compact disc, music CD sales have fallen more than 25 percent. A generation of music fans don’t think twice about copyrights, which they associate with overpriced CDs and parasitic studio execs.”

According to the Mercury News editorial board, the music labels “won’t win back many of those customers until they make their full catalog of tunes easily accessible over the Internet, in formats that people want, at prices they’re willing to pay. That’s starting to happen — Apple Computer ‘s iTunes Music Store and BuyMusic.com are offering songs from 49 cents to $1 — but the offerings are limited. The music studios are still dragging their feet. For now, the big labels hope to scare people straight, particularly parents, since copyright owners can sue children for theft.”

The New York Times pointed out an even larger implication of the RIAA suits: “With the club of lawsuits and the olive branch of an amnesty program, the music industry is waging a campaign against online piracy that relies on both public relations and economics to attack the idea that everything in cyberspace can be free,” the article said. “That will not be easy. The Internet sprang from a research culture where information of all kinds was freely shared. That mentality still resonates with the millions of Internet users who routinely download music onto their computers. But the emphatic message of the music industry’s two-step program announced yesterday is that the days of plucking copyrighted songs off the Internet without paying for them are numbered.”

An Escalating Fight Against Ordinary People

Thousands more lawsuits against fileswappers are expected in the coming months as the RIAA looks to make examples of the worst digital pirates: People accused of downloading and sharing on average more than 1,000 illegally downloaded songs, thanks to Gnutella ( news -web sites ),Kazaa ,Grokster and other popular file-trading services.

The Washington Post said the “legal offensive aims to stem the tide of online song sharing launched by Napster in the late 1990s, and it is likely to strike fear into the hearts of parents who have not closely monitored their teenagers’ computer habits. That’s because the lawsuits were filed against the holders of Internet service accounts, regardless of who in the household was responsible for swapping the songs.”

The Los Angeles Times said the “cases — the first of thousands the labels expect to file in federal courts — mark a turning point in the music industry’s four-year battle against rampant piracy on the Internet. For the first time, the recording industry is training its considerable legal firepower on individuals, not the companies profiting from the public’s hunger for free music,” The Los Angeles Times said. “One quirk in the process, though, is that the defendants named aren’t necessarily the people using file-sharing networks. That’s because the Recording Industry Assn. of America’s investigation identified only the people whose Internet access accounts were being used to share files. They might be the parents, roommates or spouses of the alleged pirates.”

The RIAA suits hit the young and old and stretched across economic lines too. Among those sued is the Bassett family from Northern California. ” Scott Bassett said neither he nor his wife used the family PC in Redwood City, Calif., for music, but their teenagers and dozens of their friends do. Had he known what was going on, he said, ‘I would have pulled the plug,'” The Los Angeles Times reported, quoting the former junkyard operator who, like other targets of the suits, was confused about what to do. “Do I really need to hire a lawyer? Can I just call them up and say I’m sorry and give them back all the music that was downloaded? I’m just a little guy,” Bassett told the paper.

The Bassetts were darlings of the media yesterday, appearing in a number of articles, perhaps since they illustrated so nicely the ironic twist of the suits, which can target people who own the ISP accounts, not necessarily the file-swappers themselves. “I can’t believe this,” Vonnie Bassett , mother of a 17-year-old file-swapper, told The San Jose Mercury News. “To think I might actually have to pay money to these people. I think it’s the stupidest thing that the recording industry would do this.”

Lisa Schamis , a 26-year-old New Yorker, “said her Internet provider warned her two months ago that record industry lawyers had asked for her name and address, but she said she had no idea she might be sued. She acknowledged downloading ‘lots’ of music over file-sharing networks,” the Atlanta Journal-Constitution reported. “This is ridiculous,” Schamis said. “People like me who did this, I didn’t understand it was illegal.” Neither did Nancy Davis , a Sanol, Calif. schoolbus driver. “From what I understood — and I’m not the most computer-savvy person in the world — I thought it was becoming legal,” Davis told The San Francisco Chronicle. “I’m completely shocked by the whole thing,” Heather McGough , a single mom of two children from Santa Clarita, Calif., told The Los Angeles Times. She “figured that the music-sharing services that survived after Napster was shut down must be legal. She said she let a friend install a program for the Kazaa file-sharing network on her computer so that she could listen to music — songs she already owned on CDs — while she worked.”

Paying the Piper

So what’s in store for those snared in the RIAA lawsuits? “The RIAA suits seek an injunction to stop the defendants’ file sharing, as well as damages and court costs. Copyright law allows for damages of up to $150,000 per infringement — in other words, per swapped song,” The Washington Post noted. More from The Boston Globe: “Accusing the defendants of copyright infringement, the music association is requesting statutory damages of $750 to $150,000 for each song, bringing the potential liability of some file-sharers into the millions of dollars.”

“Individuals, I’m sure no matter who they are, simply don’t have that kind of money,” Atlanta attorney Doug Isenberg , who specializes in Internet law, told The Atlanta Journal-Constitution. “And there’s no way possible the RIAA can sue even a meaningful number of people, because there are tens of millions of potential defendants.”

Perhaps some good news for those being sued: The Philadelphia Inquirer reported that the “RIAA has been settling for less: Yesterday, it announced $3,000 agreements with fewer than 10 people whose Internet service providers had received subpoenas.”

RIAA President Cary Sherman told The Los Angeles Times “he would welcome cases going to trial because it would help establish for the public that file sharing is illegal. The proceeds from any trials or settlements will be kept by the RIAA to cover the cost of its anti-piracy campaigns, he said, rather than being used to compensate labels and artists. Several lawyers warned that the RIAA’s amnesty offer may be a bad deal. Those who apply for amnesty from the RIAA must confess their past transgressions, but that won’t protect them from being pursued by music publishers, independent labels or even federal prosecutors.” The RIAA is offering amnesty to those who admitted to file-swapping, erase their digital libraries of songs and sign a notarized promise not to do it again.

Criticism From the Usual Suspects

Critics of the RIAA’s move were vocal in their objections to yesterday’s developments. The Electronic Frontier Foundation clearly hates the idea of the lawsuits. “Does anyone think that suing 60 million American file-sharers is going to motivate them to buy more CDs?,” EFF Staff Attorney Wendy Seltzer asked in a statement . “File sharing networks represent the greatest library of music in history, and music fans would be happy to pay for access to it, if only the recording industry would let them.”

Bill Evans , founder of Boycott-RIAA.com , told The Baltimore Sun that the lawsuits amount to a witch hunt. “They are trying to intimidate people and to stop file-sharing because they can’t control it,” Evans said. “If that’s the case, we believe they should take over a portion of the market and make it more affordable to people.”

Elan Oren , chief executive of file-sharing site iMesh , told The New York Times that “rather than filing huge lawsuits, record labels should work with file-sharing services to devise a method of compensation in exchange for legally distributing their music over the peer-to-peer networks. But record companies say creating a compensation system for file sharing — for instance, imposing a tax that could be redistributed to copyright holders — would be extremely difficult.”

“Michael McGuire , research director at the GartnerG2 research firm, said the threat of legal action needs to be just one part of a more widespread effort by the recording industry to deal with illegal Internet music swapping,” The Chicago Tribune said. “Are hard-core traders going to see the light and see the error of their ways?” McGuire told the paper. “I don’t think so.”

RIAA Strategy Paying Off

The music industry’s tactics, while controversial, have made a dent to some file-swapping. “Still, there is little agreement about whether the industry’s tactics are having much impact on music piracy. The recording industry has cited data from research firm NPD Group that estimated the number of households downloading music from the Internet declined 28% to 10.4 million in June from 14.5 million in April, around the time music companies began publicizing a campaign to target individual file sharers. Music companies have also been trying to wean music fans off file-sharing programs by licensing their songs to commercial music sites like Apple Computer Inc.’s Music Store,” The Wall Street Journal reported. “But services like Morpheus, LimeWire and Grokster all report that usage of their services has grown, especially as students have returned from vacation.”

But the music industry has a long way to go before it stamps out piracy. “From the rise of Napster until today, tens of millions of people have started trading songs, movies and software online through services such as Kazaa with little thought for the legality of their actions,” News.com noted. “Even as the threat of Monday’s lawsuits loomed, more than 2.8 million copies of the Kazaa software were downloaded last week, according to Download.com , a software aggregation site operated by CNET News.com publisher CNET Networks . Indeed, a recent study by the Pew Internet and American Life Project found that 67 percent of people downloading music said they did not care whether the music was copyrighted or not.”

The Future of E-Music?

Apple’s iTunes is being held up as a successful, legal alternative to secret file-swapping. The pay-for-play service has been a hit with music fans and everyone from Sony to Microsoft is looking for a comparable match to compete with the service. Apple’s service has sold 10 million songs since its launch in May. “Legally selling 10 million songs online in just four months is a historic milestone for the music industry, musicians and music lovers everywhere,” Apple head Steve Jobs ( news -web sites )said, according to BBC News Online, which noted (how ironic, in light of the complications of the RIAA’s legal suits) that the 10 millionth song sold on the service was “Complicated,” by Avril Lavigne .

Pablo… you’re Nigerian? Do you have an important business proposal for me concerning the deposit of 23 million dollars wired to my account to protect it from the corrupt Nigerian secret police? If so, please allow me to forward my banking details.

-Ian.

Online Music Broadcasters Sue RIAA 36 minutes ago

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By RON HARRIS, Associated Press Writer

SAN FRANCISCO – An alliance of online music broadcasters sued the recording industry in federal court Wednesday, alleging major record labels have unlawfully inflated webcasting royalty rates to keep independent operators out of the market.

Webcaster Alliance, an organization claiming some 400 members, filed the suit in U.S. District Court for the Northern District of California, claiming the major labels and the Recording Industry Association of America ( news -web sites ) have maintained a monopoly over their music.

The suit alleges the negotiations for arriving at royalty rates to broadcast songs over the Internet violated federal antitrust laws and seeks an injunction that would prevent the major labels from enforcing their intellectual property rights and collecting royalty payments.

The current royalty rate for broadcasting music over the Internet is 7 cents per performance for each listener accounted for, a rate that has kept small webcasters from entering the market, said Ann Gabriel, president of Webcaster Alliance.

Gabriel’s organization would like to see the per performance royalties eliminated. Instead, a flat percentage of commercial webcaster revenues, somewhere between 3 and 5 percent, would be a fair fee to pay, she said.

The RIAA called the suit a “publicity stunt that has no merit.”

“Record companies and artists have worked earnestly and diligently to negotiate a variety of agreements with a host of new types of radio services, including commercial and noncommercial webcasters,” the RIAA said in a statement.

The major labels have struck a variety of agreements for webcasting that go beyond the behemoths of the industry, such as AOL, and deal with smaller commercial and noncommercial operations.

SoundExchange, the organization that collects payments on behalf of the music industry and artists, recently struck licensing agreements with satellite radio stations, college Internet radio stations and background music services that send tunes to retail stores.

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By MICHAEL LIEDTKE, AP Business Writer

SAN FRANCISCO – Yahoo! Inc (NasdaqNM: YHOO -news ). on Monday snapped up Overture Services Inc. (NasdaqNM: OVER -news ), the pioneer of pay-for-placement online search results, in a $1.6 billion deal that fortifies the Internet powerhouse for a looming showdown with Google and Microsoft.

The cash-and-stock acquisition valued Overture at $24.82 per share — a 15 percent premium over the stock’s closing price last week. The price consists of $312 million in cash and 0.6108 Yahoo shares for each of Overture’s 65.7 million outstanding shares.

The deal’s value will fluctuate with Yahoo’s stock until its expected closing date in the fourth quarter.

Overture’s shares rose $2.54 to close at $24.05 Monday on the Nasdaq Stock Market, where Yahoo’s shares gained 1 cent to close at $32.20.

The acquisition continues a recent flurry of dealmaking in the lucrative business of online searching, a crucial axis on which much of the Internet’s utility depends.

By buying Pasadena, Calif.-based Overture, Yahoo gains control of one of its most important business partners and strikes a blow against Google and Microsoft.

A fierce rival of Google, which offers ad-based results distinct from its popularity-based search rankings, Overture now threatens to become more formidable by tapping into Yahoo’s greater resources, which included $1.1 billion in cash as of June 30.

Privately held Google, which provides some search results to Yahoo, declined to comment on Monday’s deal. Microsoft, whose MSN service, like Yahoo, has been collecting steady profits from Overture, was circumspect.

Lisa Gurry, MSN’s group product manager, said the software giant will make its next move after examining how Yahoo’s deal might affect its relationship with Overture.

Although Yahoo executives said they hope to maintain Overture’s existing alliances with partners such as MSN, it seems improbable that the rivals will want to subsidize each other, said Danny Sullivan, editor of the industry newsletter Search Engine Watch.

“This hurts MSN because Overture had been one of its best buddies,” Sullivan said.

MSN has been pouring more resources into online searching in an effort to become less reliant on services provided by outsiders. Besides relying on Overture for some of its search results, MSN also draws upon Inktomi, a search engine service that Yahoo acquired earlier this year for $279.5 million.

During the past 18 months, Overture has become increasingly valuable to Yahoo, prompting predictions that the two companies eventually would unite.

Overture has played a pivotal role in Yahoo’s recent financial revival, accounting for roughly 20 percent of Yahoo’s revenue of $604 million during the first half of this year.

Conceived by dot-com entrepreneur Bill Gross in 1997, Overture developed a search engine that sorts its results based on how much advertisers are willing to pay to be ranked under specific words.

Overture’s commercial database feeds search engines at popular Web sites such as Yahoo and MSN, which display the advertising links along with results generated by objective, algorithmic formulas.

Ridiculed just a few years ago, the so-called “pay-for-performance” concept has turned into an online gold mine. Pay-for-performance search is expected to generate $2 billion in revenue this year and U.S. Bancorp Piper Jaffray expects the lucrative niche will reach $5 billion in 2006.

Overture has cashed in on pay-for-perfmorance’s popularity, attracting 88,000 advertisers while generating earnings of $114 million since it first became profitable in the summer of 2001.

But the company’s success attracted more competition, most notably from Mountain View, Calif.-based Google, which has lured away pivotal partners such as AOL and EarthLink and spurred pricing concessions that have lowered Overture’s profit margins.

Although it followed in Overture’s footsteps, Google now has a slight edge over its rival in the United States. Domestically, Google’s network generated about 54 percent of all paid search results compared to 45 percent for Overture, according to market research compiled by comScore qSearch.

The competitive pressures prompted Overture’s management to lower its profit projections earlier this year and contributed to a downturn in the company’s stock, opening the door for Yahoo’s offer.

The deal supplements Yahoo’s recent acquisition of Inktomi with two other search engine services, AltaVista and Alltheweb.com, that Overture bought earlier this year for a total of $207 million.

Putting all those search engine tools under one roof is likely to create overlap, Sullivan said.

Yahoo executives believe all the services will help further its quest to overtake Google as the Web’s most popular search engine.

“We now own all the crucial elements of an end-to-end search offering,” Yahoo CEO Terry Semel said during an analyst call Monday.

Google continues to provide some of Yahoo’s search results. Semel declined to comment how the Overture acquisition will affect Yahoo’s relationship with Google. “I didn’t lay awake last night wondering about that,” Semel said in an interview Monday.

As a counter-punch to Yahoo’s moves, Microsoft seems more likely to acquire a search engine company, Sullivan said.

Potential candidates include Ask Jeeves Inc., FindWhat.com Inc. and, perhaps even Google.

MSN’s Gurry declined to comment on the company’s possible interest in Google.

The New York Times June 29, 2003 Online Dating Sheds Its Stigma as Losers.com By AMY HARMON

Of the 120 men she traded messages with online in her first four months of Internet dating, Kristen Costello, 33, talked to 20 on the telephone at least once and met 11 in person. Of those, Ms. Costello dated four several times before realizing she had not found “the one.”

It is one of the first lessons learned by many in the swelling ranks of subscribers to Internet dating sites: soul mates are harder to come by than dinner and a movie. But like a growing number of single adults, Ms. Costello, a fourth-grade teacher in Florham Park, N.J., remains convinced that the chances of finding her life partner are better online than off.

“The difference is there’s a huge number of people to draw from,” said Ms. Costello, who is getting divorced and tried Kiss.com on the advice of a friend who met her current boyfriend through the site. “I just haven’t found the right one.”

Online dating, once viewed as a refuge for the socially inept and as a faintly disrespectable way to meet other people, is rapidly becoming a fixture of single life for adults of all ages, backgrounds and interests. More than 45 million Americans visited online dating sites last month, up from about 35 million at the end of 2002, according to comScore Media Metrix, a Web tracking service. Spending by subscribers on Web dating sites has soared, rising to a projected $100 million or more a quarter this year from under $10 million a quarter at the beginning of 2001, according to the Online Publishers Association.

And despite the Web’s reputation as a meeting ground for casual sex, a majority of the leading sites’ paying subscribers now say that what they are looking for is a relationship.

Stories of deception persist. Many online daters turn out to be married, and it is taken for granted that everybody lies a little. But they are more often trumped by a pervasive dissatisfaction with singles bars, dates set up by friends and other accepted ways of meeting prospective mates.

“My brother told me to join a canoeing club or something stupid like that,” said Dan Eddy, 28, who met his fiancée, Sherry Sivik, 27, of North Ridgeville, Ohio, on Match.com.

Ms. Sivik sent an e-mail message to Mr. Eddy when she saw a picture of him with a shaved head. She refused to meet him for weeks, afraid he would be “some kind of lunatic.” But after hearing that Mr. Eddy drove a Jeep, Ms. Sivik’s friends, who had a long-running joke about trying to find her a bald guy with a Jeep, knew it was all over.

As word spreads of successful matches, the stigma of advertising for a romantic partner online rather than waiting for friends and fate to conjure one is fading. “I really don’t think there’s anyone under 35 who would think twice about it,” said Sascha Segan, 29, who has persuaded several friends to try online dating since meeting his fiancée, Leontine Greenberg, on Nerve.com.

Not prepared to cede the potential of a better love life to youth, older singles are also logging on to dating sites in growing numbers.

“We’re at a time of life where nothing’s structured where you can mingle,” said Judith Carrington, a public relations executive who lists herself on Match.com as in her late-50’s. “And as you get older it’s hard to find a deep bond with people because you’ve had rich lives and you haven’t lived them together.”

After a few unremarkable dates, Ms. Carrington, whose husband died several years ago, said she recently had dinner with an investment adviser she met through the service and felt drawn to him because of a shared experience with a family member’s mental illness.

“Just to have someone in the running is nice,” she said.

As it did for book buying and auctioning used toys, the Internet reduces the transaction costs of meeting romantic prospects. With pictures, long essays, sometimes even videos — and a cut-to-the-chase etiquette that encourages pointed questions in e-mail messages — singles say they can learn far more about potential partners online than they can by sizing them up across a crowded room or wringing information from a friend.

“The traditional institutionalized means for getting people together are not working as well as they did previously,” said Norval Glenn, a sociology professor at the University of Texas. “There’s a need for something new and the Internet is filling that need.”

Two or three decades ago, most American couples met in high school or college, Professor Glenn said. But as more people choose to marry later in life, few social institutions have arisen to replace the role that local communities, families and schools once played.

Internet dating may finally be stepping into that breach.

“The Internet gives the impression, and it may or may not be truthful, that you can find someone who is more specifically tailored to your desires,” said David M. Buss, author of “The Evolution of Desire: Strategies of Human Mating” (Revised edition, Basic Books, 2003). “So perhaps the sense that you don’t have to settle as much will bear out in more solid bonds.”

Along with large dating sites like Match.com, which boasts nearly 800,000 subscribers who pay $24.95 a month each, and 8 million separate profiles, numerous dating sites now exist for every imaginable group of people. Generally, there is no charge for posting a profile on a Web dating site, but to contact a prospective date, most sites require users to pay a subscription fee.

Lativish Gardner, 24, a Web designer in Valdosta, Ga., switched from Yahoo Personals to BlackPlanetLove.com last month, for instance, to better focus his search.

“I’m a black man and I’m using Black Planet to find a black queen,” said Mr. Gardner, who flew to Houston recently to meet a woman he found on the new site.

Web sites like TONY.com (Time Out New York), Nerve.com and Boston.com offer online dating services by pooling a collection of profiles submitted by their younger, more urban subscribers, through a template provided by their New York-based company, Spring Street Networks. In addition to the fundamentals, subscribers are asked to complete sentences like, “In my bedroom you’ll find,” and to cite their most humbling moment.

Greg Bush, 34, an emergency room doctor in Huntington Beach, Calif., swears by Eharmony, one of several sites that profess to take a more scientific approach to the matchmaking process. Prospective subscribers to Eharmony, founded by a psychologist, fill out a long questionnaire, and the service says they are rejected if it appears a match for them cannot be found.

“She’s gorgeous,” said Mr. Bush of the woman the service set him up with, a pharmaceutical representative he said he planned to propose to soon. “She’s the kind of girl I’d look at all night but never go up and talk to because I’d be too intimidated.”

The first trick to online dating is to narrow the search without inadvertently ruling out a perfect match. Helen Gaitanis, 35, of Los Angeles searches only for white men aged 33 to 43 who are at least 5-foot-9. She refrains from filtering out brown eyes, despite her strong preference for blue. Typically 600 profiles of men within 25 miles of her zip code show up in her Match results, Ms. Gaitanis said.

“You can kind of get a feel: Are they dorky, are they going to be a slick cheeseball party guy?” Ms. Gaitanis said. “I look at my profile and I think sometimes it’s more intense than others. It’s not as flirty or playful. But it says who I am.”

Indeed, for women, who have long been taught to search for a mate while scrupulously pretending not to, social historians say online dating may be making it more acceptable to openly signal what they are looking for.

But gender rules still apply. Men say women rarely send the first e-mail note. And like many women, Ms. Gaitanis found that when she did send an e-mail message to a man, he almost never responded. Instead, she is concentrating on refining her profile and updating it often enough that it does not get lost in search results, as profiles are generally ranked in order of the latest updated. She has also seized on Match’s new “wink” feature, which allows subscribers to indicate interest in someone’s profile simply by clicking a button, which sends them a prewritten message.

“It’s like saying, `Hey, look at me, what do you think?’ ” said Ms. Gaitanis, who received 6 winks back out of the first 10 she sent. “They can respond or not and at least you didn’t spend any time writing an e-mail.”

There are still plenty of holdouts. Ms. Gaitanis’s brother, John, 28, told her that online dating was “strictly for losers.”

And even those who embrace online dating acknowledge a major flaw: the frequent disconnect between who people say they are online and what they are really like. In one recent example, the Army said it was investigating accusations that a colonel, who is already married, duped dozens of women on tallpersonals.com into believing that he would be marrying them.

Most online dating deception is of the run-of-the-mill variety.

“It’s amazing how all women say they’re slender when a lot of them are overweight,” said one 79-year-old Manhattan man who lists himself as 69 on his Match.com profile.

A Culver City, Calif., woman who lists the adjacent, more upscale Santa Monica as her residence, said, “I swear every time they put 5-10 you have to deduct 3 inches.”

But what is most persistently frustrating, veteran online daters say, is not so much the obvious lies as the difficulty in judging physical chemistry through virtual communication.

“Certain things look really good on paper,” said Rebecca Hammond, a computer consultant in Manhattan who has met several boyfriends through Nerve.com. “Then in real life it’s a completely different story.”

After enough of such encounters, many online daters burn out.

Those who do find partners say they are often plagued by the insidious sense that they might find someone better — if only they paged through a few hundred more profiles.

“If you get unsolicited e-mails coming in it’s hard not to look,” said David Kleinbard, a researcher for a credit ratings agency in New York who has dated several women from JDate, a Jewish online dating service. “And if the person’s cute it’s hard not to give it some thought.”

But for Jonathan Gerstel, 40, a university fund-raiser who was looking for a Jewish woman in Durham, N.C., with a kind disposition and at least shoulder-length hair, JDate proved the perfect tool.

Amid the 20 matches he found Marta King, 38, an actress and teacher looking for a Jewish man who knew what he wanted in life, made at least as much money as she did, and liked to dance, or was at least willing to try. If the process lacked a certain romantic sweep that Ms. King once imagined, she said she had come to prefer reality.

“I just don’t think it matters how you meet,” Ms. King said.

Just this month, the two reached an online dating milestone: They removed their profiles from the JDate site.