The new year brought a treat for those who like to follow aging media moguls, with the launch of official Twitter accounts belonging to both News Corp. chairman Rupert Murdoch and his wife Wendi Deng, including some awkward banter around a tweet that Murdoch later deleted. The only problem with the voyeuristic appeal of this exchange, however, is that Deng wasn’t the real thing — although the account was marked as “verified,” with Twitter’s blue check mark, it was revealed to be a fake on Tuesday. A simple slip-up? Perhaps, but one that reinforces how little we know about Twitter’s verification process, something that is becoming more and more important as the service grows.

When Murdoch showed up on Twitter on December 31, there was widespread skepticism about whether it was the real News Corp. billionaire or not, despite the fact that the account was marked as verified. But a tweet from Twitter co-founder and chief product officer Jack Dorsey confirmed that it was the real Murdoch — and the “verified” check-mark, combined with the apparent back-and-forth between the Wendi Deng account and Murdoch’s, convinced many that it was also real (although some, including publishing industry veteran Michael Wolff, continued to doubt this).

How was the account verified? We don’t know

On Tuesday, however, it emerged that the Wendi Deng account had been set up as a prank by a British man, who said he “set up the account for a laugh” during the holidays, when he saw how much attention the Murdoch account was getting. The account’s creator said that he was as surprised as anyone when his account showed up with a blue check-mark, and that he hadn’t been contacted by anyone at Twitter about who he was or whether the account was for real, telling the Guardian:

I just couldn’t believe they would have verified such a high profile account without checking it out, but I absolutely received no communication from Twitter to the email address I used to register.

Twitter has refused to speak publicly about what happened with the Deng account, or to explain why it was verified and then suddenly un-verified — and the company has also repeatedly refused to talk on the record about how the verification process as a whole works, and why some accounts are chosen for verification and others aren’t. Even if the Deng verification was a simple screw-up due to reduced staffing levels over the holidays, Twitter’s radio silence on the issue makes it even harder to trust the entire process, and that could have ramifications that go beyond just the Murdoch case.

The “verified” program started with the blue check mark as a beta in 2009, primarily because a number of celebrities had complained about fake accounts pretending to be them, and the company said it wanted to help users figure out which were real. For a time, anyone could apply to have their account verified by using a form on the Twitter website, but this was later phased out and verification is now done on what the company calls a “case by case” basis, including advertisers and partners.

Twitter needs to be more transparent about the process

Given the rapid growth in Twitter’s user base, it’s not surprising that Twitter would have problems scaling a widespread verification program — and in some ways, doing this runs against the grain for the network, which has made a point of not requiring real names from users the way that Facebook and Google+ have. But even worse than having an arbitrary verification process is having one that doesn’t work properly, and one that the company is so opaque about. It’s not clear why Twitter doesn’t talk about it, but this vacuum of information is hardly conducive to gaining the trust of users.

And trust is something that Twitter needs in spades, especially as it grows and becomes a crucial part of the way that news and other information spreads in a social-media age. The network is already in a delicate situation when it comes to issues like free speech, with the State Department pressuring it to shut down accounts that belong (or appear to belong) to terrorist organizations, and other lobby groups launching legal claims against the company because it allegedly supports entities like Hezbollah by giving them a platform.

The company’s refusal to provide more details about how the verification process functions may stem in part from its desire to protect the users it is verifying, or to prevent the system from being gamed somehow. But if it is going to continue to ask for the trust of its users, it is going to have to be more transparent about how it manages the network, or risk losing the faith that it has spent so much time building up.

Post and thumbnail photos courtesy of Flickr users Hans Gerwitz and See-ming Lee

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Everywhere around us we see evidence of chaos and upheaval in the media industry — newspapers laying off staff and even closing, advertising revenues continuing to decline, and so on. What can be done about this state of affairs? Media analyst and journalism professor Clay Shirky says not only is there nothing that can be done about it, but it may actually be a good thing, because it will help spur innovation. Let’s hope he is right, because there is plenty of chaos to go around.

In his post (on a blog that is almost defiantly old-school, with a default WordPress theme from about 2003), Shirky says that his thinking on the topic has been accelerated by wondering what he is going to tell his undergraduate journalism students about the industry they are planning to join when he starts teaching at New York University in the fall. The realization he has come to, he says, is that “the news” — broadly speaking — needs to be subsidized, cheap and free.

But how can it be all these things at once? And by subsidized, does Shirky mean government subsidies as some have recommended? As it turns out, he doesn’t. In many cases, he says, those subsidies may come from other lines of business (conferences, etc.), from donations — as with ProPublica and some other models such as The Guardian, which is supported by a trust fund — and from simple cost-cutting.

And what about the free part? Although Shirky doesn’t specifically deal with the idea of paywalls (an issue he has been skeptical about for some time), he makes the point that the news “needs to be free so that it will spread” — in other words, so that people will share it and distribute it in a variety of ways for nothing. And what about those media entities that decide to produce only what people will pay for directly, like Rupert Murdoch has done with the Times of London?

[C]reating a high-quality product for a group of loyal and passionate readers willing to pay for it certainly sounds like an interesting business to get into. It just doesn’t sound like the newspaper business.

As Shirky points out, the cost-cutting that makes the news cheap doesn’t just have to come from layoffs (of the kind that Guardian editor Alan Rusbridger referred to in his recent announcement of a “digital first” approach for the paper). Costs can also be reduced by using a variety of crowdsourcing tools and services to let readers and other interested individuals share the burden of producing the news, whether it’s through blogs or photo galleries or “citizen journalism” tools such as Tackable (interestingly, Shirky never once mentions AOL’s Patch and its hyper-local efforts).

The bottom line, Shirky seems to be saying, is that this environment of chaos isn’t just obvious or understandable but actually necessary, so that the industry can evolve — whether it wants to or not. In that sense, Shirky’s post strikes a similar note as one he wrote back in 2009, called “Newspapers and Thinking the Unthinkable,” in which he argued that everyone looking for a solution to the media industry’s problems is searching in vain, because there isn’t one. In other words, not only is there no single solution but most of the likely solutions are simply unknown.

That is what real revolutions are like. The old stuff gets broken faster than the new stuff is put in its place. The importance of any given experiment isn’t apparent at the moment it appears; big changes stall, small changes spread. Even the revolutionaries can’t predict what will happen.

The problem, as many including Shirky have described it, is that readers have never paid for the news content in newspapers — at best, they have “helped pay for the things that paid for the news.” And now advertisers are going elsewhere, including targeted websites and social networks, because they can reach the people they want directly and more cheaply. The access that newspapers used to control to those desirable readers is gone. And digital advertising may ultimately never fill the gap between the price that advertisers will pay for a print reader and what they will pay for an online one.

The ‘analog dollars to digital dimes’ problem doesn’t actually seem to be a problem. It seems to be a feature of reality. Digital revenue per head is not replacing lost print revenue and, barring some astonishment in the advertising market, it never will.

In general, Shirky’s point seems to be that innovation and experimentation needs to happen before anything becomes clear, and he is undoubtedly right on that score. Unfortunately, as I wrote recently, that kind of startup-style impulse is sorely lacking in most mainstream media entities, who are content to incrementally dip their toes into new media tools and projects without really trying too hard. Why do something radical when you can just put out an app and throw up a paywall?

It takes some guts for a media analyst and pundit to admit that he doesn’t have all the answers or solutions for the industry, but Shirky has always been better at that than some others of his ilk. And he does at least provide some hints about what he thinks will help while we figure out the answers — things like cost-cutting and crowdsourcing, for example, and just all-around experimentation. What’s really required, of course, is a rethinking of what being a news organization means in an age when real-time publishing is available to anyone, but unfortunately there is still far too little of that happening.

Post and thumbnail photos courtesy of Flickr user Mark Strozier

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And the general consensus is that it has been knocked out by a combination of two interlinked factors: its progress was slowed by dealings with its corporate parent News Corporation, which led to it being outmaneuvered by a younger, hungrier, smarter rival in Facebook.

That’s the main thrust of this substantial and interesting profile of the company by Reuters reporter Yinka Adegoke. It’s a long read, coming in at a little more than 4,000 words, but is probably the best summary I’ve read of the ups and downs of a website once deemed hot property but now looked at with derision.

But the article also points out that it’s not as simple as News Corp clumsily handing Facebook the keys to the social networking kingdom. In fact, the piece suggests, perhaps it was actually Google rather than Facebook that unintentionally dealt the killer blow to MySpace.

Think back to 2006: that’s when they signed 0 million, three year advertising deal to turn Google into MySpace’s exclusive providers of text ads and search. It was a great cash prize for Murdoch’s purchase, but actually ended up being a weight around its neck. The deal’s targets required MySpace to crank up page views and increase already-heavy advertising space at precisely the same moment that Facebook was pushing forward with a clean and easily-understood design.

As Adegoke reports:

Around this time, the Google agreement, which had been hailed as a major coup by Chernin and Levinsohn as well as Wall Street, started to be viewed by Myspace executives as a double-edged sword. The Google deal required a certain number of Myspace user visits on a regular basis for Google to pay Myspace its guaranteed 0 million a year for three years. That reduced flexibility as Myspace couldn’t experiment with its own site without forfeiting revenue.

“It was a good deal in the short-term but in the long term it ended up not being so good,” said a third former Myspace executive close to advertising sales. “We were incentivized to keep page views very high and ended up having too many ads plus too many pages, making the site less easy to use than a site like Facebook.”

This moment is often overlooked, but it turned out to be absolutely crucial. And, of course, it’s kind of darkly amusing that Google — in trying to find a partner who could help it in the confusing world of social web — managed to give a huge boost to one of its nascent rivals.

It suffocated MySpace with love — perhaps something for Larry Page to think about as he reorganizes Google to try and retain its commanding position online.

Photograph used under CC license courtesy of Flickr user Mavadam

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In the media industry, Sir Martin Sorrell qualifies as a genuine titan — not only has he been knighted, but he founded and runs the global advertising colossus known as WPP Group, one of three conglomerates that control the bulk of the advertising, marketing and public relations industry worldwide. Sir Martin was recently asked by BusinessWeek what the media industry needs in order to survive in these difficult times, but unfortunately for anyone hoping to be enlightened, the advertising kingpin’s advice is almost completely wrong.

Sir Martin begins by damning fellow British media player Rupert Murdoch’s new iPad app The Daily with faint praise, saying that charging readers for content is “the way to go,” but suggesting that the app doesn’t really work for him (Sorrell is apparently a big fan of Flipboard on his iPad). And what about the New York Times and its new subscription plan? Sir Martin says that he hopes it will work, but admits that:

There are plenty of other newspapers around the world, and even in America, which have sites … which are equally good — or can be less good and still be effective.

That’s a fairly perceptive remark, because it recognizes a key economic concept that paywalls and other subscription plans fail to acknowledge: namely, that your real competition isn’t the content provider that is better than you, but the provider whose content is good enough. Sir Martin also notes that the problem with the Internet is that “there’s so much of it. It’s highly fragmented, and most of it’s for free.” And he correctly argues that an advertising-only model is not going to work over the longer term for most content companies, since “there isn’t enough advertising to go around. Period.”

After that, unfortunately, Sir Martin’s analysis goes off the rails fairly rapidly. When asked what media companies should do to combat these problems, he says that they should begin by charging for content — even though he just finished making a fairly compelling case for why most paywalls and subscription plans likely won’t work. He also says that media companies should merge or be shut down if they can’t adapt. And what if that still doesn’t do the trick? Sorrell’s solution: government subsidies.

Really? The government should prop up media companies that fail to adapt to the online world? Apparently so. The global ad agency CEO says that more countries should take their cue from the BBC and other government-funded news outlets, and subsidize media companies such as newspapers. “The three things together: paywalls, consolidation, subsidy,” he says. “To keep you in business as a journalist, it’s probably necessary.”

And what about trying new models, or experimenting with new revenue sources, or looking for digital opportunities that go beyond just trying to recreate the scarcity that traditional media entities used to enjoy or putting up walls? What about looking to new services such as iPad apps that actually enhance the experience of reading, the way Zite does, instead of replicating an old model the way The Daily does? Nothing about that from Sir Martin — just a call for paywalls “because people should pay for content,” and for subsidies.

The reality is that for all his understanding of the advertising world, Sir Martin is just as much a part of the past as the newspapers and magazines and other content companies his agency is used to dealing with. And therefore he understands just as little about what they need to do to survive.

Post and thumbnail photos courtesy of Flickr users World Economic Forum and Giuseppe Bognanni

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People often talk about how the social web makes the Internet seem like a small town, and now former VentureBeat and Valleywag editor Owen Thomas says he wants to give the web “its own hometown newspaper” called The Daily Dot. The site — which is still under wraps, with just an email sign-up form — is a new startup founded by Nova Spivack, former newspaper executive Nicholas White and PR consultant Josh Jones-Dilworth, and with recently-added Thomas as founding editor. All the group will say about is that the site will do “open-source journalism” and that it will treat the web like a community.

In an email that has also been posted online, Thomas says the site’s writers will “forge links not between pages but between people, and if we do our jobs well, we will find an audience that wants to help connect the dots.” In an interview with me on Friday, the former VentureBeat executive editor — who admitted he got a kick out of announcing the new site on April Fools’ Day — said he was initially skeptical of the idea, but as he talked more with the founders, he came to see it as an opportunity to get back to one of his first passions: namely, online community.

An early staffer at Suck.com, the highly-thought-of satirical spinoff from Wired magazine, Thomas says one thing he admired about the site was that it was aimed at digital natives — not covering them from afar, like most traditional media, but as part of that community. Much of what passes for media, he says, is still “repurposing and shovelling crap online and trying to make the old models work,” much like the Daily Dot’s almost-namesake, Rupert Murdoch’s iPad newspaper The Daily.

In terms of what the site will actually do, Thomas was frustratingly vague. He said crowdsourcing stories will be one part of it, but there will be traditional staff writers as well. He said initially there will be a newsletter, because newsletters “are retro — newsletters are cool again,” and eventually, the site will become a community of communities. As for the road map to get to that point, he said “the road map hasn’t really been defined yet.” Then he added:

Do I sound just like one those ***hole startup founders who’s cagey about everything? I hope so — that’s what I’m striving for.

Thomas is probably best known as the editor of Valleywag, a satirical — and occasionally nasty — site run by Nick Denton’s Gawker Media. After working at VentureBeat for the past year, Thomas said recently that he had gotten the entrepreneurial itch and wanted to start something new (which venture investor Paul Kedrosky quickly added to his list of top 10 reasons why we are in another technology bubble).

Spivack, meanwhile, is a serial entrepreneur and startup advisor who founded the early ISP EarthWeb in 1994 and then moved on to work with Stanford Research International and the DARPA artificial-intelligence project known as CALO. He also started one of the first attempts at using semantic technology to build an information-sharing network — a site called Twine – and is an advisor to a number of companies including Klout (Spivack’s bio notes that he has flown to the edge of space as a space tourist, and was also once a production assistant on Star Trek: The Next Generation).

Nicholas White, the other co-founder, was, until recently, VP of audience development for Sandusky Newspapers, a private company founded in 1822 that has newspaper and radio holdings in major markets across the U.S. and roots in Sandusky, Ohio. White says he recently moved to Austin, Texas to start The Daily Dot.

The details of what the site is going to actually do may be unclear, but one thing is for sure: Putting together Thomas — best known for his sharp-edged, gossip-style commentary about the Valley and some high-profile slap-fests with a few of its prominent citizens — with someone like Nova Spivack, whose ventures tend to be at the brainy end of the spectrum, should be an interesting mix.

Post and thumbnail photos courtesy of Flickr user Arvind Grover

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In the case, heard by Rome’s ninth circuit, the makers of the award-winning Iranian film drama About Elly sued Yahoo. The movie’s Italian distributor, PFA, claimed that pirated clips and links to illegal film downloads were appearing in Yahoo Video searches and demanded that the company remove the videos from the search results. When Yahoo didn’t respond, the case was taken up by Open Gate, a regulatory lobby group run by Tullio Camiglieri, a former journalist and executive in Rupert Murdoch’s Sky Italia.

According to this report in Reppublica, one of Italy’s leading newspapers, the complaint centered on the argument that PFA’s right to profit from About Elly was undermined, since Yahoo search results were prioritizing bootlegs over the legitimate version of the film. “The film’s official website was not even in the top positions,” argued attorneys, who also pointed out that “it was ranked lower than links to pages that allowed users to illegally download the movie.”

The judge agreed with PFA and, in his ruling, ordered Yahoo to do more to “inhibit” copyright infringement. If his ruling holds, it could put search engines on notice that they are responsible for links to illegal downloads.

It’s a move that not only holds Yahoo liable, but could spark further action: Camiglieri, the president of Open Gate, said that this “opened the way” for his company to lead action against Google and YouTube in Italy over similar claims. (Whether it will work is unclear: Google already uses digital fingerprinting techniques to filter out some pirated material, even though a U.S. court ruled in its favor after a billion lawsuit by Viacom, brought amid similar claims).

It’s far from the first time that the Italian courts have taken a search service to task for what it sees as an invasion of rights. Google has been involved in a number of lawsuits there — most notably when three executives were found guilty of violating privacy laws after YouTube failed to prevent a gang of teenage bullies from uploading a video. Meanwhile the Pirate Bay has been locked in a long-running dispute over its legality, and is subject to an on-again, off-again, on-again block on its service. These cases are all different, but the search engines have countered in similar ways: that they can’t be held responsible for monitoring the legality of search results and that doing so would be prohibitively expensive.

It’s worth pointing out that the ruling in this case doesn’t force Yahoo, or other search services, to police material themselves. In fact, the court specifically recognized that content policing of this sort would be impossible. Where Yahoo went wrong, according to the Italian court, was in failing to act on the alleged infringement after it was notified of it. The court ruling, then, requires Yahoo to act once it’s given evidence of infringement, regardless of whether actual infringement has occurred.

This is a particularly important decision since, right now, Italy is undertaking a a public consultation to decide whether it needs an equivalent to the U.S.’s notorious Digital Millenium Copyright Act. There’s currently nothing of the sort in Italy, aside from isolated cases, but judgments such as this might make such a system more likely.

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Steve Jobs called it magical. Fast-forward to today, and I (and about 15 million others) agree. Wednesday, Jobs announced the newer version of the iPad. It’s lighter, thinner, has more curves, and it’s definitely beefier. What’s more, it has many new capabilities: cameras and gyroscope for example. In other words, it’s more magical.

However, if iPad, the device, is more magical, the applications (apps) for the device are anything but. For nearly a year, I’ve been waiting (and waiting) for experiences befitting the device and its hardware capabilities. Sure, there’s Flipboard, but as the saying goes, one swallow don’t make a summer. And same goes for the iPhone and other smart platforms.

Let me explain. On an iPad, you have four elements — big screen, touch, connectivity and location — that make it unique. The iPad 2 has added two cameras and a gyroscope to the mix, making the device even more potent. And yet, we’ve seen application after application come to market as just an incremental improvement of the web or desktop versions of the same (or similar) application.

Some of the magazine apps developed for the iPad are just simply horrible, turning out to be no more than bloated multi-media versions of the print publications. Even The Daily, the made-for-iPad publication from the house of Rupert Murdoch, is nowhere close to being able to leverage the iPad platform, despite all the help from Apple itself.

Why? Because apps, content and consumption experiences on iPads and other tablets need to be rethought and re-imagined by combining the hardware capabilities with software. As Steve Jobs said in his keynote yesterday:

Our competitors are looking at this like it’s the next PC market. That is not the right approach to this. These are post-PC devices that need to be easier to use than a PC, more intuitive. The hardware and software need to intertwine more than they do on a PC.

Since the iPad is connected and location-aware, I want my news (or news reader) application to serve me information with a local (or a regional context) as a starting point. Since news lives on an always-on connection, it should be near real-time. More importantly, since it’s again, news, on a touch-based device, it needs to be optimized for touch actions that are core to the iPad (or Android) platform so one can quickly consume the information.

It’s not just media apps; even games on these new platforms aren’t leveraging the capabilities of the platform. Earlier this week, Neil Young — co-founder of mobile games developer, ngmoco, now a division of DeNA — stopped by my office for a chat. I asked him if he’d seen games that leveraged the uniqueness of the smartphone and tablet platforms.

“I don’t think we are anywhere near to fulfilling the potential of the platform,” said Young. “The games that are popular today are either casual games and upgrades/variants of the games that have been hits on the web.” Like me, he’s looking for games that use touch, location and connectivity in a way that’s unique and entertaining. “On the tablets, I am finding it hard to find a great tablet experience.”

Like everyone else, Young too has been impressed with Flipboard, which has introduced a magazine-like user experience to iPad users. But that still doesn’t build on the uniqueness of tablet platforms.

Ronald Kuetemeier is one of my many super-smart readers. In an email, he pointed out the problem with the apps today is that many of the app developers are thinking with PC computer modality. What does he mean?

A spreadsheet may make perfect sense on a big screen device that takes its data input via a keyboard. Trying to retrofit it to a device with a smaller screen that uses touch for interaction is an exercise in futility. If I’ve used one of these apps — QuickOffice and Apple’s Numbers — it’s mostly as a way to read files attached to emails or shared via DropBox.

I’m hoping things will change in the near future. Yesterday, Apple showed off GarageBand for iPad 2, and to me, that was the highlight of the event (ahead of the smart-covers). Why? Because this is an app that was putting iPad 2′s capabilities to maximum use. This is an app made for the iPad.

Even from afar, it made sense: Touch is a better way of strumming guitars than using a mouse. Similarly, when hitting the drums, that the iPad’s accelerometer can detect the strength with which you’re hitting the screen could help translate into a better music. Apple could even take this app a step further.

Say, I’m in India (or Brazil). The app should surface some of the local musical instruments (and sounds) based on my location. Since iPad has a live connection, these add-ons should seamlessly download to the device in the background. Forget emailing the creations; the app should simply allow us to share the tunes via services like Sound Cloud.

Today, Stuck in Customs, the folks behind 100 Cameras and I, announced their app for the iPad 2, and boy, have they put the platform to good use. I saw the demo of it earlier, and I can’t wait to get my hands on this application, for it does leverage the hardware.

Another app you’ll find impressive is Shadow Cities, a real-world MMORPG developed by Finnish startup Grey Area, which recently scored over million in funding from Index Ventures. It’s currently the number-one game app on the Finnish iTunes app store, lapping global phenomenon Angry Birds in the process.

What makes it so unique? It uses your real-life locations (with maps like you’ve never seen before) and real people, and puts them in a game-like environment. It doesn’t need any typing; touch is what makes it fun. And since it’s connected, it uses your social graph to build a whole new immersive experience.

Though it’s made for an iPhone, I believe this is an app that foretells the future of applications that really put an iPad to work, and in process, create magic.

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