Intermediation Platforms, political challenges

Dice - Frénot & Grumbach 1
Intermediation platforms
political & geopolitical challenges
Stéphane Frénot Stéphane Grumbach
INRIA
Wednesday 9 April 14

Dice - Frénot & Grumbach 2http://www.csc.com/insights/ﬂxwd/78931-big_data_universe_beginning_to_explode 1
DATA
An exponential growth
Eric Schmidt:
Every 2 Days We Create As Much Information As We Did Up To 2003

Dice - Frénot & Grumbach 3http://www.csc.com/insights/ﬂxwd/78931-big_data_universe_beginning_to_explode 1

Big Data, Big Promises?
Google Flu trends

Big Data, Big Promises?
Open Data
Government transparency
Increased democracy
Business potential
European Directive PSI
2013/37

Data a resource?
http://www.ibmbigdatahub.com/infographic/big-data-new-natural-resource 1

Data vs crude oil
Institut des sciences de la communication, CNRS 1
Largest market
capitalization
2008 2013

Towards a complete digitalization
Large variety of data

Harvesting of personal data
Mostly performed through
Intermediation platforms
Intermediation
• between users with common interests
• between users and services
• between services

Facebook? a new world!
A social gatekeeper
1 billion users
130 billions friend links
2.45 billion piece of content shared daily
350 millions pictures uploaded daily
An ecosystem for the industry
storage, authentication, communication
millions of Apps developers on the API
9 million Apps active

Intermediation Platforms
Efﬁcient association
between producers/consumers
of data and services
Activity monetization
Knowledge extraction
from users activity
All 30
top sites
worldwide
#1 site
trafﬁc
10 times #15

Virtual Empires
International Challenges
Efficient association
from users activity
All 30
top sites
worldwide
#1 site
traffic
10 times #15
#64
Top European site:
BBC
ID
Identity management
TERMS OF USE
money law
virtual territories fiscal employment
defense
12 3
USA, absolute world leader
China, Emerging global power
Europe, Periphery of the network
Biface
Systems
FREE ACCESS
BUSINESS
Organic behavior
Profiled behavior
Web
ranking
Users'
profile
New
Economic Models
professionals algorithms users

Biface
Organic Systems
FREE ACCESS
BUSINESS
Organic behavior
Proﬁled behavior
Web
ranking
Users'
proﬁle

Biface Systems
Two types of users with different pricing policies
• Credit card (merchants, clients)
• Mobile telecom (callers, receivers)
Online systems
• Free rider users
• Customers (advertising, ...)
Multi-face systems: various types of users

Secondary data: user activity
Secondary activity: User profiling
Primary data: Web pages
Primary activity: Web ranking
FREE ACCESS
BUSINESS
The case of the Search Engine

Secondary data: user activity
Secondary activity: User profiling
Primary data: Web pages
Primary activity: Web ranking
FREE ACCESS
BUSINESS
Tertiary data: system monitoring
Tertiary activity: test, influence

From primary to derived data
Primary data:
Produced by users and their services
Open with tunable restrictions
Secondary data:
Derived from traces, activity
Exclusivity of the platform (current business model)
Tertiary data:
Activity of the system
Organic behavior of the system

Dice - Frénot & Grumbach
The challenges of the industry
18
First challenge:
capture users and data
scale up as much as possible
Second challenge:
capture developers and Apps
stay as open and adaptive as possible
Third challenge:
generate (undisclosed) secondary data
capture added value (business model)

Size matters
exponentially
19Thanks to François Bourdoncle
number of users of a search engine
=> traffic ➚
=> interest of advertisers ➚
=> word auction prices ➚
=> relevance (because of price) ➚
=> probability of successful click ➚
=> word covering ➚
=> monetization covering ➚
http://www.wordstream.com/blog/ws/2011/07/18/most-expensive-google-adwords-keywords

Relying on a few mobile operating systems
iOS,
Android
Library of Apps
very knowledgeable
personal assistant
location based
banking, ...
Mobile services
http://techcubeconsulting.com/5-great-free-mobile-apps-for-businesses/

A world of agility
Built to adapt permanently vs. built to last for ever
4

A world of agility
Based on Japanese concepts from toyotism
4
• Kaizen (改善): Continuous improvement
• Genchi Genbustu (現地現物): Go and See
• Nemawashi (根回し): Keep all options
• Hansei (反省): Learning organization
• heijunka (平準化): Create continuous process
ﬂow to bring problems to the surface
• Kanban (看板) Use visual control so no
problems are hidden

Virtual Empires
from users activity
All 30
top sites
worldwide
#1 site
traffic
10 times #15
#64
Top European site:
BBC
ID
Identity management
TERMS OF USE
money law
defense
12 3
Biface
Systems
FREE ACCESS
BUSINESS
Organic behavior
Proﬁled behavior
Web
ranking
Users'
proﬁle
New
Economic Models

New
Economic Models

Professionals
offering
places to stay
Users
seeking
places to stay

Users
offering
places to stay
Users
seeking
places to stay

1) between users and services
2) between users/services
Intermediation platforms are new utilities
“Facebook is not cool”
Mark Zuckerberg
A utility much like electricity, ...
Intermediation

Uninterruptible systems
Amazon / eBay / Walmart
• 1 click
• 1 hour delivery
28
Twitter Firehose:
• 300 k QPS
• 22 MB/s tweets that generates 57 TB / month
• Users get tweets in less than 5s (10s in 2011)
• Continuity, Immutability, Incoherency

Uninterruptible systems

Instantaneous Interactions
• 1/10th sec for Amazon leads to 1% drop in sales
• Google 0,5s latency brings down the trafﬁc1/5th
• 10 links per page is the best size for google
responses to queries

A/B Testing(Dan Siroker)
34

A/B Testing(Dan Siroker)
35

http://androidcommunity.com/google-posts-10-6-billion-in-revenue-for-q1-2012-20120412/
http://video.cnbc.com/gallery/?video=3000118210
$50 billion in 2012
“Google is
aVacuum cleaner for revenue”
Barry Diller

Facebook revenue forecast
http://www.wired.com/business/2012/10/facebook-case-for-optimism/?utm_source=twitter&utm_medium=socialmedia&utm_campaign=twitterclickthru

Virtual Empires
from users activity
All 30
top sites
worldwide
#1 site
traffic
10 times #15
#64
Top European site:
BBC
ID
Identity management
TERMS OF USE
money law
defense
12 3
Biface
Systems
FREE ACCESS
BUSINESS
Organic behavior
Proﬁled behavior
Web
ranking
Users'
proﬁle
New
Economic Models

#64
Top European
site: BBC
12 3

39

Online Population

Web content language
http://en.wikipedia.org/wiki/Languages_used_on_the_Internet

The Top 50 websites worldwide
• USA: 72 %
• China: 22 %
Baidu: 5; QQ: 7;
Taobao: 9; Sina:13;
hao123:16; weibo:17;
tmall:23; Sohu:27;
360.cn:28; 163.com: 34;
Soso:37;
• Russia: 6 %
Yandex: 20; kontakte:21;
Mail: 39;
6 %
22 %
72 %
USA China Russia

Top 10 websites in the USA
Global traffic combination of average daily visitors and page views over the past month in million
www.alexa.com & www.trafficestimate.com

Global tracking
Proportion of trackers in different countries
Joint work with Claude Castellucia & Lukasz Olejnik

Percentage of national web corporations
among Top 25 by country
Data produced by users everywhere in the world
but accumulated by corporations most often abroad
• USA: 100%
• China: 92% (only Google makes it in the top 25)
• France: 36% (but mostly marginal sites, not data intensive)
leboncoin, Orange, Free, commentcamarche, lemonde, lequipe, leﬁgaro, pagesjaunes, sfr
Alexa.com

Top 20 websites in France

Data balance for selected countries
for Top 10 sites

Trafﬁc Top 10 sites in selected countries

Diversity of search engines
• USA: Google: 65 % ; Bing: 15% ;Yahoo: 15%
• China: Baidu 63% ; Qihoo 22%; Sogou: 11%
• Russia: Yandex: 60% ; Google: 25%
• UK: Google: 91 % ; Bing: 5%
• France: Google: 92 % ; Bing: 3%
In France,
• Google has a de facto monopoly
• Google knows more about France than INSEE

Dice - Frénot & Grumbach 50http://www.techinasia.com/how-baidu-qihoo-google-performed-in-china-in-2013/
The dynamism of China

Dice - Frénot & Grumbach 51http://www.techinasia.com/how-baidu-qihoo-google-performed-in-china-in-2013/
Rapid evolution of the landscape

Data as an economic indicator?
OECD Key economic indicators
• International Trade
• Balance of Payments
• Monetary Aggregates
• Interest Rates
• International Finance
• National Accounts
Data exchange ???

Virtual Empires
from users activity
All 30
top sites
worldwide
#1 site
traffic
10 times #15
#64
Top European site:
BBC
ID
Identity management
TERMS OF USE
money law
defense
12 3
Biface
Systems
FREE ACCESS
BUSINESS
Organic behavior
Proﬁled behavior
Web
ranking
Users'
proﬁle
New
Economic Models

Virtual Empires
ID
Identity management
TERMS OF USE
money law
defense

Facebook’s territory

Identity management
Id given to any person
Real name systems
Authentication to services
private & public
Unique Id for all services

Legal system
The same principles everywhere in the world
contracts users/corporations
Local adaptation to speciﬁc regulation

Virtual monetary system
56
Money independent of Central Banks
Taxation at stake with non monetized transactions
Bitcoin:
virtual currency with no centralized control
http://www.nytimes.com/2013/04/08/business/media/bubble-or-no-virtual-
bitcoins-show-real-worth.html?nl=technology&emc=edit_tu_20130408

Global governance
Public Open Data
Made accessible by public administration
Open by default (G8)
Managed on large platforms (Github?)

Virtual Empires
from users activity
All 30
top sites
worldwide
#1 site
traffic
10 times #15
#64
Top European site:
BBC
ID
Identity management
TERMS OF USE
money law
defense
12 3
Biface
Systems
FREE ACCESS
BUSINESS
Organic behavior
Proﬁled behavior
Web
ranking
Users'
proﬁle
New
Economic Models
Thanks to Sophie Barbier for graphical design

Intermediation Platforms, political challenges

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