HFT - Robot Wars

Robot Wars

This animated GIF created by the Nanex pictures the rise of high-frequency trading (or HFT) volumes across all US stock exchanges between 2007 and 2012. The initial murmur, the brewing storm, the final detonation: not just unsettling, it’s terrifying.

HFT trading volumes across all U.S. stock exchanges between 2007 and 2012
credit: Nanex Research, hosted by imgur.com

This is what high frequency trading looks like, when specially programmed computers make massive bets at lightning speed.

We don’t know is what the long term consequences are of all this hyper-volume as depicted by the Nanex GIF and the kind of systemic risks created from the market’s ongoing evolution from human traders to rapidfire AI. Sometimes things go wrong, a software glitch, an algorithm gone rogue and the music stops, like a couple weeks ago when Knight Capital lost $10 million a minute when it’s trading platform went haywire or during the infamous Flash Crash when the Dow dropped 1000 points in mere minutes.

Read the excellent full Mother Board article here.

The new mayor? A Computer.

Your Next Mayor? A Computer.

Our planet is becoming smarter, and this isn’t just a metaphor.

Three years ago, 100 Parisians volunteered to wear a wristband with a sensor in it. The sensors measured air and noise pollution as the wearers made their way around the city, transmitting that data back to an online platform that created a virtual map of the city’s pollution levels, which anyone with an Internet connection could take a look at.

This was a peek at an urban future when “smart cities” will collect data of all kinds (in all kinds of ways) and use it to make themselves better places to live. With the market projected to be worth $16 billion by the end of the decade, big companies like IBM and Cisco have much grander — and more profitable — ambitions: they’re going all-in on smart cities, with designs that supposedly do everything from end traffic jams to prevent disease outbreaks to eliminate litter.

As IBM Chairman Samuel J. Palmisano said at the 2010 SmarterCities forum in Shanghai:

Computational power is being put into things we wouldn’t recognize as computers. Indeed, almost anything—any person, any object, any process or any service, for any organization, large or small—can become digitally aware and networked.

Think about the prospect of a trillion connected and instrumented things—cars, appliances, cameras, roadways, pipelines… even pharmaceuticals and livestock.

And then think about the amount of information produced by the interaction of all those things. It will be unprecedented.


U.I.O. – Uniquely Identifiable Objects

Over the next 10 years, the physical world will become ever more overlaid with devices for sending and receiving information […] With the continuing exponential increase in the power of the planetary computer, one has to wonder whether we stand at the beginning of what Isaac Asimov’s “Foundation” series, more than 60 years ago, called “psychohistory.” His visionary genius Hari Seldon believed that statistical forecasting of human society’s actions would be possible with data from enough people throughout the galaxy.
In the next several decades, we will have a glimpse of whether something similar can emerge on planet Earth.

Larry Smarr: An Evolution Toward a Programmable Universe

Business Insider predicts that in 2012 we will see a lot of hype around The Internet Of Things. True or not, as a matter of fact, the also called Industrial Internet is already here. Across many industries, products and practices are being transformed by communicating sensors and computing intelligence. Low-cost sensors, clever software and advancing computer firepower are opening the door to new uses in energy conservation, transportation, health care and food distribution. The role of sensors — once costly and clunky, now inexpensive and tiny — was described this month in the NYT in the essay quoted at the beginning of this post (Larry Smarr is the founding director of the California Institute for Telecommunications and Information Technology).

Technology Roadmap The Internet of Things

Technology Roadmap: The Internet of Things (source: Wikipedia)

That may sound like blue-sky futurism, but evidence shows that the vision is beginning to be realized on the ground, in recent investments, products and services, coming from large industrial and technology corporations and some ambitious start-ups. One of the hot new ventures in Silicon Valley is Nest Labs, founded by Tony Fadell, a former Apple executive, which has hired more than 100 engineers from Apple, Google, Microsoft and other high-tech companies. Its product, introduced in late October, is a digital thermostat, combining sensors, machine learning and Web technology. It senses not just air temperature, but the movements of people in a house, their comings and goings, and adjusts room temperatures accordingly to save energy.

From this perspective, the consumer Internet (the one we are already accustomed to) can be seen as the warm-up act for these technologies. Think about software techniques like pattern recognition and machine learning used in Internet searches, online advertising and smartphone apps that are also ingredients in making smart devices to manage energy consumption, health care and traffic. Take Google’s driverless car, for example.

The automated cars, each with a human along for the ride, have deftly navigated thousands of miles on California highways and city streets. The project — a research effort so far — uses a bundle of artificial intelligence technologies, as does Google’s Search and AdWords/AdSense business.

In such a smart world, the real dilemma will rather be finding the right trade-off between society’s efficiency, innovation and (guess what?) control. We can only hope that politicians will be capable of dealing with such problems.

Media Megatrends 2012-2018

Media Megatrends 2012–2018

Charles Darwin once said:

In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed.

In an era of unprecedented change in the communications, entertainment, and information technology sectors, it is about Digital Darwinism and our ability to thrive. Our future rests on how well we anticipate, adapt, and capitalize on the exciting changes that lie ahead.

According to the  FutureMedia Outlook 2012, a downloadable annual report by Georgia Institute of Technology (see link below) on the future of media and its impact on people, business and society, in the next five to seven years the media landscape will be full of increased personalization, innovation, and flexibility.

Six megatrends will have a pervasive impact:

fox-64Smart Data
In an increasingly noisy world, we’ll have to sift, filter and be smarter about what matters.

people-64People Platforms
Beyond “true personalization,” they will be socially driven platforms made of algorithms from personal and associated data that people design and tailor themselves.

strawberry-64Content Integrity
Pervasive mobile devices, sprawling networks, clouds ,and multi-layered platforms have made it more difficult to detect and address our digital vulnerabilities, drawing us to trusted content sources.

speedy-64Nimble Media
Media is evolving from a set of fixed commodities into an energetic, pervasive medium that allows people to navigate across platforms and through different content narratives.

supermario-646th Sense
Extraordinary innovations in mixed reality will change the way we see, hear, taste, touch, smell and make sense of the world — giving us a new and powerful 6th sense.

We will harness the power of many in an increasingly conversational and participatory world.

The report includes demonstration clips and video interviews with leading Georgia Tech researchers offering real-world examples of how the Institute is innovating in these areas. You can find it here.

Same old saying: KISS!

I was browsing across the ‘new’ Twitter layout features (oh, by the way: did you know that T’s creative director, Doug Bowman, worked for Google? Here is his gentle but tough goodbye message to Big G), when I came across this:

Simplicity meets serendipity

[link here]

Given the title of this blog, you would admit my curiosity on the subject… It was then that I remembered the video of an interview with Jack Dorsey (creator and executive chairman of Twitter) about the existence of a business model founded on serendipity. How would I define it? Well, in a few words online serendipity is a phenomenon where users encounter something they like that they were not expecting (read my previous blog post on the same subject).

As Dorsey himself admits, Google AdWords has been the first application of this groundbreaking online marketing model. As with fashion magazines, where ads are so well integrated with the content to be not only pleasant but also useful to the consumer, AdWords has made online advertising reputable and even desirable.

In the same way that people believe that Google ads make the search experience better, Dorsey says that Twitter’s ad products – promoted trends, promoted accounts, and promoted Tweets – get engagement rates between 1 percent and 5 percent. And this is done, in fact, in an unconventional sense:

I don’t necessarily think of it as advertising in the traditional sense. It’s, how do we introduce you to something new? How do we introduce you to something that would otherwise be difficult for you to find, but something that you probably have a deep interest in discovering? It’s really just another algorithm, or it’s just more curation, but it’s something that you would find delight in anyway. [..] The user experience is what matters. If the user experience is bad, then we fail.

Now the key question is: How do you engineer a system that, while not literally random, produces the feeling of serenidipitous discovery, meaning emerging from what seems like meaninglessness? AdWords also works because it’s a natural part of the system. You perform a search in order to get results — some of those results come in the form of advertising.

If Twitter wants to fully rely on this business model, it must be sure that the strategy feels like it is natural part of the network.

Google Plus… Plus What?

Google has announced its earnings for Q3 2011. Impressive numbers, as always: two-digit percentage growth almost everywhere, and a pile of more than 45$B in cash. Everything comes off of search revenue.
The same good ol’ story.

Everyone was expecting a few more insights on the Android business and on the Googlerola affair. Nope. Not a single word.

However, they did confirm that Google+ has over 40 million users. And a lot of surprises still to show. Larry Page has outlined the significant effect he foresees Google+ will have on the company’s business.

Our ultimate ambition is to transform the overall Google experience — making it beautifully simple, almost automagical, because we understand what you want and can deliver it instantly.

This means baking identity and sharing into all of our products so that we build a real relationship with our users. Sharing on the web will be like sharing in real life across all your stuff. You’ll have better, more relevant search results and ads. [ed.: see a previous post on the possible implications of Google’s +1]

Of course, now comes the hard part: developing Google+ in a manner that leads it to attain a critical mass of users and makes it a real contender to Facebook.

On this side, IMHO, success is far from certain:

  1. Google+ Has 40 Million Users, But How Many Use It?
  2. Google+ will never beat Zuckerberg on his own turf. There are plenty of reasons, all well summarized in this article on Gizmodo
  3. Data analytics company Chitika recently published results of a study that revealed that Google+ traffic has deflated, following a spike after the social networking service came out of a limited beta on Sept. 20, and fallen back to the usage level it had before becoming publicly available
  4. It also looks like there are some Googlers not sharing the optimism of their CEO. A couple of days ago, a Google engineer named Steve Yegge mistakenly published publicly a post in which he leveled some sharp criticism at Google+, calling it “a knee-jerk reaction, a study in short-term thinking” in large part because it lacks a strong developer platform.
  5. Until now, the approach of Google to social networks has been, to say the least, controversial. Orkut is used in Brazil only (but Facebook is growing at a light-speed pace), and they have just decided to shut down Buzz.

So, how is Google going to conquer the world with Google+? Is the Big G really going to put Google+ at the center of its existence and rebuild its other products around it? It’s sounds radical, but that’s precisely what Google seems to be willing to do. Page said

We shipped the ‘Plus’, and now we’re going to ship the Google part.

Recommendations are key tools in marketing, and +1 and Google Plus could really become the automated version of word of mouth that is supposed to sit atop search engines. Nonetheless, it’s a gamble to build your core business on a social network that’s a few months old and only has 40 million users. But it will be fascinating to see Google strive to make Google+ the formidable pivot of the ecosystem that Page envisions.

Meanwhile, sit down and relax: we still have to see what the outcomes of Facebook’s “curated search” patent will be…