Marketplace - American Public Media

How the White House calculates infrastructure jobs

Wed, 2014-05-14 06:42

President Obama heads to New York's Tappan Zee bridge today. The crumbling, sixty year old span across the Hudson will be the backdrop for a speech on the nation's infrastructure.

Barring action from Congress, a federal fund for building and repairing roads, bridges and transit systems is expected to run dry in August, something the White House says could cost a lot of jobs.

As Transportation Secretary Anthony Foxx told a White House briefing on Monday, “Unless Congress acts, up to 700,000 Americans will lose their jobs over the next year and road work, bridge building, transit maintenance – all of these types of projects – may be delayed or shut down completely,”

How did he come up with that 700,000 number?

A Department of Transportation spokesperson directed me to an explanation on the DOT website, which breaks down the calculations a bit. According to the explanation there, the tally includes the number of “direct, indirect and induced jobs” that come from highway infrastructure investment. 

A “direct” job would be the kind of work you see crews with hard hats doing, from laborers to engineers—the folks involved in the construction project itself. Paychecks for those jobs actually come out of federal coffers. 

As for the “indirect” jobs, those involve manufacturing the materials-- the steel, concrete or paint, for example, which are used in an infrastructure project. The “cost of materials” line in the budget for a federal highway project would indirectly fund these sorts of indirect jobs.

And then there are those “induced” jobs—jobs created “elsewhere in the economy as increases in income from the direct government spending lead to additional increases in spending by workers and firms,” according to the DOT. 

I asked Robert Puentes, director of the Metropolitan Infrastructure Initiative at the Brookings Institution, to help translate this one. These jobs, he says could be “everything from the food truck that's getting lunch” for the construction workers themselves, “to the guy that’s cutting their hair.” 

A spokesperson for the DOT would not elaborate on how exactly it estimates the number of induced jobs created, but says that all the numbers are based on research from the White House's Council of Economic Advisers. 

When the Council added up all these jobs-- induced, indirect, and direct—it found that about 13,000 jobs are supported for every $1 billion in federal highway and transit investment.  Recently, the highway trust fund has spent about $50.9 billion dollars annually on infrastructure projects. So, multiply 50.9 by 13,000 and you get a little under 700,000 jobs.

But that may actually be a low estimate, according to research done by Standard and Poor's U.S. Chief Economist Beth Ann Bovino. She recently released a report that found a $1.3 billion investment in infrastructure would likely add 29,000 jobs to the construction sector alone.  Meaning the $50.9 billion annual in federal highway trust fund spending would amount to more than 1 million jobs.

Construction jobs which are, by the way, the kind of “good” jobs that have been largely absent from the economic recovery so far, Bovino points out. 

As her report puts it: “The American middle class, which suffered disproportionately during the recent economic slump, would benefit most from investing in transportation infrastructure because it creates what are traditionally middle-class jobs.” 

Often dressed in cheese, it never goes out of style

Wed, 2014-05-14 06:18

From the Marketplace Datebook, here's a look at what's coming up Thursday, May 15:

In Washington, the Federal Reserve releases its April industrial production report.

Are consumers experiencing inflation in their day-to-day living expenses? The Labor Department releases its monthly Consumer Price Index.

The Senate Health, Education, Labor & Pensions Committee discusses the state of tobacco use in the U.S.

The first woman to be appointed as Secretary of State, Madeleine Albright, turns 77.

And let's build something. How about a big, juicy, burger? May is National Hamburger Month. Now, doesn't that feel productive?

Cisco tries to navigate "The Internet of Things"

Wed, 2014-05-14 02:38

Cisco Systems is viewed as a sort of barometer for the tech industry, and when it announces its profits on Wednesday, Silicon Valley will be paying attention to the company's latest push into the "Internet of Things," aiming to link cars, machines, devices and everything in between.

"It's pretty much this notion of connecting anything that has an on-off switch," says Jacob Morgan, co-founder of Chess Media Group, a consulting firm that helps organizations understand the future of work.

For now, the "Internet of Things" is a long-term strategy for the company.

"In terms of selling cars to people, it may be a little bit trickier because its such a a really big vision, it may be hard to make the benefits obvious to all customers," says Michael Endler, an associate editor with Information Week.

But Cisco says this sector of technology could be worth $19 trillion.

Ruling on Google search highlights privacy rift

Wed, 2014-05-14 02:18

The U.S. and EU have disagreed on everything from the regulation of genetically-modified foods to the appropriateness of violence in the movies.

"In the European Union, they're very heavy on violence being what they consider offensive," says Cameron Camp, a security researcher with ESET. "In the U.S., you can shoot anything."

So perhaps it comes as no surprise that they'd diverge on big data as well.

"The European Union has taken a very strong stance, and strong leaning, on privacy," says Camp.

 

In the U.S., what's stronger is "a commitment to free speech, free communication, free content, which very often has deleterious effects for individuals' privacy," says Ken Bamberger, a professor of law at UC Berkeley, says much of the disagreement is rooted in tradition.

A possible solution? Companies could great a global code of conduct that attemps to comply with everyone's laws.

U.S. manufacturing has an image problem

Wed, 2014-05-14 02:07

American manufacturing has an image problem. Many potential workers don’t want to go near it because they think it’s dirty work. They also worry about job security, remembering outsourcing and plant closures. Now that manufacturing is having something of a comeback in this country, its bad image threatens to block it from getting the talented workers it needs to grow.

Industry efforts to change that image were on display in Hartford recently, where the Mfg4 convention took place. The scene is largely polo and khaki-wearing dudes networking and checking out machines. But those who gazed lower, noticed a sizable contingent of much smaller conference-goers.

Young students were there on a field trip. Among them was sixth grader Isabella Galm. Asked what she thought manufacturing was, she gave an answer that won’t thrill the industry: “Um, boring stuff, like making clothes and stuff,” she ventured.

She’s in a magnet school engineering class, the kind of brain the industry needs. So manufacturers are starting young, hoping tech-savvy students who get an early close-up look might consider it as a career, and take the math and science classes they’ll need to get started in it.

“We encourage manufacturers to open up their doors,” says Debbie Holton, managing director of SME, the manufacturing group that puts on this convention.

The students get access to the whole convention floor and are wowed by the whirring robots, lasers and 3D printers. Their day includes a visit to TRUMPF, an industrial laser plant not far from the convention site. Students get a kick out of the light show as a superfast machine sears a pattern into metal.

The industry says it just needs to get people inside its facilities so it can show them that modern American factories are clean and safe, not the grimy assembly lines of the past.

“A lot of people, it seems to me, still have pictures out of history books in their minds when it comes to manufacturing,” says TRUMPF machine assembly manager Annette Doyle.

The tour seems to be a hit, with students pushing past each other to get a closer look at all the high-tech equipment. They also ask questions, without prodding from their teachers.

Manufacturing also has another image problem. It was among the topics on the table at a recent strategy meeting of the Alliance for American Manufacturing. The group, a collaboration between industry and labor, is headquartered in Washington, where office managers work to ensure furniture is American made. The group’s thinking is that the image of manufacturing as dirty or dangerous isn’t the biggest problem. Its polling shows a more pressing image issue is job insecurity.

“The kids I talk to are not dumb,” says AAM president Scott Paul. “They have seen waves of manufacturing layoffs including, in many circumstances, some of their parents.”

Some 6 million U.S. manufacturing jobs disappeared between 2000 and 2010. Only half a million new ones have come back since. Robot laser show-and-tells won’t work if folks don’t believe those jobs will stay and more are coming.

As for the young student Isabella Galm, a full day of high-tech has clearly changed her view of manufacturing.

“I think it’s basically the future,” Galm says as she prepares to board her school bus.

That’s one young mind changed. But if manufacturers expect to have a future workforce, they’ll need a lot more converts.

Mark Garrison: The Mfg4 convention in Hartford is mostly dudes in polos and khakis, networking, checking out machines.

But gaze lower and you’ll notice smaller conference-goers.

Young students are here on a field trip. Here’s sixth grader Isabella Galm’s (GAHLMS) idea of manufacturing.

Isabella Galm: Um, boring stuff, like making clothes and stuff.

She’s in a magnet school engineering class. Debbie Holton, of the manufacturing group SME, wants tech-savvy young people like her to get a different view.

Holton: We encourage manufacturers to open up their doors.

The students’ day includes a visit to TRUMPF, a nearby industrial laser plant. They get a kick out of the light show as a superfast machine sears a pattern into metal.

TRUMPF manager Annette Doyle says she just needs to get people inside and show them that modern American factories are clean and safe, not the grimy assembly lines of the past.

Annette Doyle: A lot of people, it seems to me, still have pictures out of history books in their minds when it comes to manufacturing.

But manufacturing has another image problem. Alliance for American Manufacturing president Scott Paul believes the more pressing image issue is job insecurity.

Scott Paul: The kids I talk to are not dumb. I mean, they have seen waves of manufacturing layoffs including, in many circumstances, some of their parents.

Some six million U.S. manufacturing jobs disappeared last decade. Only half a million new ones have come back since. Robot laser show-and-tells won’t work if folks don’t believe the comeback is real.

After a full day of high-tech, Isabella Galm boards her school bus with a new view of manufacturing.

Galm: (What do you think it is now?) I think it’s basically the future.

Ok, one down. But manufacturers will need a lot more converts. In Connecticut, I'm Mark Garrison, for Marketplace.

Only neutrality will keep net free, says Franken

Wed, 2014-05-14 01:00

One of the most vocal supporters of Network Neutrality, Sen. Al Franken of Minnesota recently spoke about the issue in even starker terms, calling the fight over net neutrality the "Free Speech Issue of Our Time."

Sen. Franken argues that if given the chance to monopolize access to higher speed, large corporations will dominate the internet, which up to this point has been an equal opportunity space. It's why he and fellow Net Neutrality believers argue that internet providers should be reclassified as "common carriers," subject to the same restrictions as other public utilities.

With FCC chair Tom Wheeler reportedly playing around with the idea of an internet "fast lane," Sen. Franken says he would most likely work on counter legislation if, in fact, the FCC moves forward with the idea. He believes that at the end of the day, the idea of providing faster service for those who can pay infringes on the constitutional rights of American citizens.

"You want someone’s individual blog to travel as fast as the New York Times. It’s a first amendment issue. That should be non-partisan."

 

China accuses GSK foreign executive of bribery

Wed, 2014-05-14 00:02

Chinese authorities have accused a foreign executive with British pharmaceutical company GlaxoSmithKline of ordering his subordinates to bribe Chinese doctors in order to boost the company’s drug sales in China.

China’s government will now prosecute Mark Reilly, the foreign executive for GSK for bribery. For the Chinese government to go after a non-ethnic Chinese foreign executive is unprecedented and in this case, the executive in question - Mark Reilly - returned to China from his home in the UK to assist with the police investigation.

According to Jim McGregor, author of "One Billion Customers," Chinese leader Xi Jinping is doing his best to show his country that the Party will root out corruption. Part of that strategy, says McGregor, is to go after foreign companies.

“When China has troubles and they want to clean up an industry or stop certain practices, they’ll usually go after the foreign companies because they’re not connected politically like a state-owned company who is connected to all kinds of people and it’s very complicated to go after them because you affect a whole network of people, so foreign companies are more of a free-fire zone,” says McGregor.

The move has long-time China hands like McGregor asking: If China's government plans to charge GSK with giving millions of dollars' worth of bribes in China, what does it plan to do about the Chinese officials and doctors who were allegedly on the other side of the bribes?

When a slow news week involves a plane crash...

Tue, 2014-05-13 23:00

Here's what I want to know: When did it become August and I missed it?

I mean, yes, there've been a few things happening business- and economy-wise since Monday, but honestly, it's been kind of slow. Sitting here early in May, you'd just think there'd be... more, you know?

So with that, a couple of themes and/or trends I've got my eye on:

  • I know I say this on the air all the time, but I'm constantly amazed by how enduring the effects of the financial crisis are. To wit, the announcement Tuesday by Mel Watt, the head of the FHFA, that he's going to make sure there's still plenty of liquidity – money – in the mortgage system. We'll see whether that's a smart idea or not, but it's yet another sign it ain't over yet. See also: Geithner, Tim and his new book, about which you heard... well... elsewhere on public radio.
  • Bigger really is better. The Wall Street Journal's been all over this, but apparently AT&T wants to buy DirecTV for $50 billion, in part to keep pace with the Comcast/Time Warner Cable deal. Roll that in with the still-burbling Pfizer/Astra Zeneca talks over in London – at $106 billion, if you can believe that – and I think it spells M&A boom.
  • Pay no attention to the stock market. That is all.

Special bonus thing: Last week I was talking about going out in Jim Fallows' plane for another installment of the project we've got going with him – American Futures. He flies a Cirrus SR-22, for reasons that'll become clear in about three sentences. Anyway, Jim came and picked me up in Birmingham, Alabama, and flew us back over to Columbus, Mississippi. Nice easy flight, if a little bumpy. But that's not what I wanted to mention. Two days after I got back to Los Angeles, Jim posted this on his blog at the Atlantic. Crazy, huh?

The radio story – about Columbus, Mississippi, and what we found there (not about planes parachuting safely to earth) is set to air next week.

A history of telecom mergers, charted

Tue, 2014-05-13 20:17

AT&T is reportedly close to making an offer to buy DirecTV in a deal that would value the satellite dish TV operator at nearly $50 billion.

According to the Wall Street Journal: 

"A deal could boost the flow of cash that AT&T could use to pay its dividend and fund a build out of its broadband Internet infrastructure, analysts have said. It also comes as AT&T increasingly views video—whether via pay TV service or delivered over the Web or its wireless network—as central to its future.

Adding satellite TV capabilities also could allow AT&T to free up valuable bandwidth on its Internet connections to customer homes."

The possible merger has us thinking about the history of media consolidation:

Sorry, former Treasury Secretary Tim Geithner

Tue, 2014-05-13 14:29

Former Treasury secretary Timothy Geithner has a new book out, as you may have heard. 

As part of the publicity campaign, the website Charitybuzz auctioned off lunch with Mr. Geithner today, with proceeds to benefit the RFK Center for Justice and Human Rights.

$50,000 was the winning bid.

Nice and all, but a good deal shy of the 2013 record holder... a $610,000 lunch with Apple CEO Tim Cook.

 

 

The high-tech shop teacher of the future

Tue, 2014-05-13 12:28

Now that much of the grunt work in American manufacturing is done by machines, we need skilled, high-paid workers to run those machines. Specifically, workers with more math and engineering knowledge than in the past. And the manufacturing industry worries that schools aren't teaching future workers what they'll need to know.

Educators are working with industry to change that; in some cases by combining cutting-edge technology with an old-school educational concept. Some of this thinking is in action in upstate New York, on the tech-focused campus of Hudson Valley Community College. A group of high school students is huddled around teacher Darrel Ackroyd, who is showing them a 3-D printer. As the machine whirs and slices out patterns, one student wants to know if it could print out a person.

"In a plastic form, yes," Ackroyd answers.

This cracks the students up and they immediately start joking about the possibilities of "3-D selfies." But they take their tech seriously, and they pepper the teacher with thoughtful questions about speed, cost and potential uses of the technology.

Ackroyd is young, with a hipster beard and man bun. Despite his techie image, he's also a kind of a throwback to a character these students' grandparents would recognize: the high school shop teacher.

Schools are bringing back this tradition of showing students how to work with their hands, this time with a high-tech twist. Now, instead of a crappy birdhouse and a mouthful of sawdust, students get hands-on technology experience that could help them land well-paying jobs.

"We're preparing our students for jobs that don't exist yet," says Laurel Logan-King, assistant superintendent at Ballston Spa Central School District.

Ballston Spa runs the program, but students in districts from around the region are eligible. They can get college credit studying here, which saves them (and their parents) money. But the big draw is the chance to get their hands on some of the latest technology, from nanotechnology to green energy.

The program, a partnership between high school, higher education and industry, is new, so educators often have to explain the benefits of working with technology that some find strange, maybe even scary.

"It's really about creating that awareness, not only for the students, but also for the parents, so that they can have an understanding about what are these new opportunities that are going to be available for my children," Logan-King explains.

Bringing students from around the region to a well-equipped college campus gives them the chance to have experiences like the realization student Morgan Pakatar had when she first suited up to enter a nanotech lab.

"I'm just, like, I feel cool, this is awesome, this is what I wanna do," she remembers.

That's what educators and tech companies hope for from programs like this: a new generation of workers excited about the jobs of the future, with marketable skills that only hands-on learning can provide.

Taking the retail sales number too seriously

Tue, 2014-05-13 12:02

The Commerce Department released monthly sales data for the month of April. The number is $434 billion, which means sales are up one tenth of a percent from March. But what does 0.1 percent really represent?

Marlene Morris Towns, a professor of marketing at the McDonough School of Business at Georgetown University, says the uptick from the previous month's data -- sales for March were about three times as much -- could be explained by spring. Because who wants to shop in bad weather?  

But interpreting a tiny number like the April over March sales increase isn't so easy, or even useful.

“I don’t know that a small trend like that would really say anything major about consumers,” Morris Towns says. “I think it gets tricky when you start looking at small differences from month to month rather than bigger trends.”

Like, year over year. She says comparing monthly numbers can be like finding a picture of Elvis in our toast -- we could be searching for non-existent patterns. And then trying to explain them away with weather, job numbers or holidays. 

"So when you look from month to month," she says "we’re looking for patterns that a lot of times aren’t necessarily patterns, they’re just kind of blips, or small shifts, but don’t really represent a change in consumer attitudes or comfort level with their income or economic status."

Barbara Kahn, director of the Baker Retailing Center at the Wharton School, says that's why many retailers, like JCPenney and Macy's, have stopped reporting their own month-to -month same-store sales.

“It used to be, I don’t know, how many stores reported? Maybe 20 to 30? It’s down to very, very few stores report now, precisely for that reason, because it doesn’t give a clear picture.”

But Kahn notes, the month to month data can be useful. “One of the reasons it’s been looked at so much in the last three, four, five years was to see the signs of the economy. Because retail sales was a very good indicator of whether or not we’re fully out of the recession, and if the economy is rebounding.”

 Kahn says, if you look at April’s sales compared to last year – the numbers are better. The Commerce Department says they're up by 4 percent.

Fannie and Freddie are easing up. Carefully.

Tue, 2014-05-13 11:56

The new head of the government agency that oversees Fannie Mae and Freddie Mac laid out a new game plan Tuesday -- a change in direction, designed to get banks to lend more. The way it works now, Fannie and Freddie buy mortgages from banks and guarantee them. But Fannie and Freddie make banks buy them back if there’s a problem, even if it’s just a minor paperwork glitch. 

Now, Fannie and Freddie will ease up. Carefully.

“Since any stumbles along the way could have ripple effects in the $10 trillion housing finance market, there’s a lot at stake in getting this right," says Mel Watt, the new director of the Federal Housing Finance Agency.

If Watt gets it right, analysts say banks will be more willing to lend to first time or low-income homebuyers. That's because they won’t be so worried about having to buy their loans back. Will Watt’s plan be enough to rev up the housing market, which has been limping along in second gear?

“Well I think it’s going to stop us from going in reverse,” says Tim Rood, a former executive at Fannie Mae, now chairman of the Collingwood Group. 

But if the housing market speeds up too fast, will it overheat? Not a chance, says Guy Cecala, publisher of Inside Mortgage Finance. 

“We’re still nowhere near the speed limit," he says. "If the speed limit is 65, we’re still going along at 45, but it’s better than 30 or wherever we were at before." 

Cecala says, even with Watt’s changes, banks will still be cautious.

In North Dakota, making ribs for roughnecks

Tue, 2014-05-13 11:52

North Dakota's the land of opportunity for people looking for jobs in the oil and gas industry.

The fracking boom has transformed the western part of the state -- often overwhelming the small towns that dot the prairie. Todd Melby's been keeping track of the comings and goings of workers in the oil field.

Recently, he talked to a Razorback who moved there to make ribs for roughnecks, a guy named Oscar Everetts. You can take Oscar out of Arkansas, but you can't take Arkansas out of.... You know how it goes.

Todd Melby's series, "Black Gold Boom," is an initiative of Prairie Public and the Association for Independents in Radio.

Google vs. the 'Right to be Forgotten'

Tue, 2014-05-13 11:49

If you’ve ever Googled yourself and discovered some not-so-flattering photos from, say, the 2001 office Christmas party, or a break-up poem you published in the college online magazine, you’ll likely find this of interest: Today the European Union’s highest court ruled that individuals can ask Google, Bing, Yahoo, or any other major search engine to remove links that come up when their name is searched.

It's the so-called "right to be forgotten."

The European court said because search results have such a major impact on people’s lives, people should have the right to have certain material removed.

"You talked about your credit report, this is your Google report," says Danny Sullivan, founding editor of Search Engine Land. "On a personal basis, that’s a big impact for some people. There are cases where many people would be sympathetic to the idea that there’s something unflattering about them that’s also old or perhaps outdated."

One of the plaintiffs in the EU case is a surgeon, who requested the removal of a 1991 article, about an operation he’d performed that had gone badly. "There are a number of gray areas here that pit the right of the individuals to control his or her reputation against the public’s right to know," says Greg Sterling, an analyst with Opus Research in San Francisco.

What about this country? Can Americans expect to request the removal of bad haircuts and DUIs?

"No, not at all," says Sterling. "In the U.S., the First Amendment would prevent such an outcome. They [the EU] see any data associated with an individual as personal, private information and the view in the U.S. is more skewed toward making that information not the property of an individual, but something that can be utilized by other parties."

Search engine companies would not have to comply with every request, and it's so far unclear how exactly the ruling will play out.

Google told Marketplace that it was disappointed in the decision, but needed time to analyze the implications.

How Sega broke Nintendo's monopoly on video games

Tue, 2014-05-13 10:34

Chances are, if you've ever played a video game in your life, you've heard of Sonic the Hedgehog, Super Mario, or both.

Before they started appearing in video games together, though, their parent companies were a whole lot less friendly, sparking what is now widely known as the "console wars."

In the early '90s, Nintendo was a video game giant, holding 90 percent of the market. Sega, meanwhile, was fighting other companies for the other 10 percent. 

"And they got absolutely whooped," says Blake Harris, author of the book "Console Wars: Sega, Nintendo, and the Battle That Defined a Generation". "Things weren't going well until [then-CEO of Sega] Tom Kalinske* took over, and a certain blue hedgehog began to change their fortunes."

That certain blue hedgehog was part of Sega's strategy to knock Nintendo down a peg or two.

"To take down Nintendo, they really wanted to create a Mario-killer," Harris said. "So they held an internal mascot contest, and the selection that won was this hedgehog that was called Mr. Needlemouse originally."

And, for a few years, it worked. Sega went from holding just five percent of the domestic video game market to 55 percent at one point. Mr. Needlemouse, later rechristened as Sonic the Hedgehog, is still as pervasive as ever. Sega, on the other hand, not so much.

"As much as we remember Sega as successful on this big battle against Nintendo in America, Sega in Japan never surpassed 25 percent," he said. "I think there was enmity, jealousy, and spite at times, which led to Sega cutting off the nose to spite the face. And that spite really led to Sega's downfall."

*CORRECTION: In a previous version of this story, Tom Kalinske's last name was misspelled. The text has been corrected

A week to make you miss manners

Tue, 2014-05-13 09:46

From the Marketplace Datebook, here's a look at what's coming up Wednesday, May 14:

In Washington, the Labor Department releases the Producer Price Index for April.

Macy's is scheduled to report quarterly earnings.

Hold that door, dude. National Etiquette Week continues.

On May 14, 1973, America's first space station was launched into orbit. Skylab was a home away from home for three crews.

And she recently won an Oscar for her work in "Blue Jasmine." Cate Blanchett turns 45.

Do Quora, Jelly and Ask.com answer things correctly?

Tue, 2014-05-13 07:47

There is a TV screen in Kartik Ramakrishnan's office that displays an endless loop of questions. He is the COO of Ask.com, which you may remember from the early '90s as the search engine Ask Jeeves. One question scrolling over his screen reads, “What causes hiccups?”

That, Ramakrishnan says, is a question everyone has either wondered about or been asked. Ask.com is hoping it can be the go-to place for the answer. We'll give you the answer about hiccups later. First though, some history.

In the early days of the web, Google crushed competitors in the search engine market and established itself as the entry point for the internet. Ramakrishnan talks ruefully about scars from Google's thorough lashing. After some soul-searching, Ask.com decided to refocus.

“We are the granddaddy of going to ask the world how to answer questions,” Ramakrishnan says. So the company decided it should re-brand itself as a question-and-answer site. Ask.com may be the granddaddy, but there are plenty of upstarts.

Social networks, search engines, and new apps are trying various strategies to answer your questions. At the same time, all of them have one big question to answer for themselves. If someone wants to know something, why shouldn't they just Google it? Ramakrishnan is quick to point out, “there is not one way in which you can actually come up with answers to peoples' questions.”

Google's search engine framework has limitations that are being exploited by a new wave of companies. For instance, with Google you can't use your phone to pose a question with a picture. You also can't ask for responses from experts or friends.

Venture capitalists think these approaches have the potential to make some money. The website Quora is a good example. It operates kind of like a social network. Users can post questions, write answers, and vote up responses they like. Venture capitalists recently poured an additional $80 million of investment into the site.

Quora has found an essentially free way to generate content. Like Wikipedia, it is all written by users, like Alon Amit. He says, “I can't stand seeing an answer or someone needing an answer that I have and not responding.” Quora encourages users to produce answers by acknowledging top writers and fostering social interactions.

Quora currently has no revenue stream, and it relies on the social network for its content. If that network falls apart, so does the site. Venture capitalist Josh Elman says an investor might take the risk with a company like this because they believe there is a, "fundamental behavior that is happening in the product that someone will pay for.”

Plus, there is a fallback plan. Even if Quora's content, data, or interactions cannot be leveraged somehow in the future, the company could always just put up advertising on the site.

Elman is putting his money where his mouth is—not in Quora, but in the company called Jelly. His firm, Greylock Partners, has invested in the new mobile question-and-answer app.

Jelly allows people to take a picture on their phone and use it to ask a question. Imagine, Elman says, someone has an emergency with a leaky pipe. The person snaps a picture of it, and asks what's wrong. A nearby plumber replies with a solution. Elman believes this kind of connection could one day generate revenue.“I think that there are just so many questions that aren't just easily answered by a three or four word search, because the answer isn't always on a website,” he says, “the answer might be in somebody's head.”

Quora and Jelly are taking two different approaches to answering questions, and in the end, they yield different results. Quora provides opinion and community, while on the other hand, Jelly provides solutions to local problems. While they both deal with questions, their users are seeking fundamentally different results. Ramakrishnan thinks that's the key to this whole business: understanding what users are really asking for. And that's no easy task.

Ramakrishna says over the years we have all become so “Googlized,” that we expect to prod the Internet with a few keywords and get results. He thinks of these keywords as under-formed questions that need to be fleshed out. Does the user want concise information? Opinion and community? Maybe all the person needs is a good local plumber. He says “our angle on this is, 'Lets do a better job at helping the user craft and formulate what those questions themselves might be.'”

Ask.com throws a wide net for answers. They give search results, peer-written responses, even content they pay to produce. But not everyone is pleased.Computer scientist Jerry Feldman is a particularly harsh critic. "The notion that either an automated system or some social networking system will be a reliable source of information about everything you want to know is very unlikely," he says. People aren't even that good at figuring out what other people want, Feldman argues, so it's an extremely difficult task for a computer.

But there is money to be made even without all the answers. Companies just need to figure out what it is their users want, and find some way to reliably deliver it.

By the way, Ask.com can tell you what causes hiccups. It's a lot of things: carbonated beverages, an irritated diaphragm, alcohol.

As for why we get them? Well, some things we still don't have a good answer for.

Is there a better way to find answers than 'Googling'?

Tue, 2014-05-13 07:47

There is a TV screen in Kartik Ramakrishnan's office that displays an endless loop of questions. He is the COO of Ask.com, which you may remember from the early '90s as the search engine Ask Jeeves. One question scrolling over his screen reads, “What causes hiccups?”

That, Ramakrishnan says, is a question everyone has either wondered about or been asked. Ask.com is hoping it can be the go-to place for the answer. We'll give you the answer about hiccups later. First though, some history.

In the early days of the web, Google crushed competitors in the search engine market and established itself as the entry point for the internet. Ramakrishnan talks ruefully about scars from Google's thorough lashing. After some soul-searching, Ask.com decided to refocus.

“We are the granddaddy of going to ask the world how to answer questions,” Ramakrishnan says. So the company decided it should re-brand itself as a question-and-answer site. Ask.com may be the granddaddy, but there are plenty of upstarts.

Social networks, search engines, and new apps are trying various strategies to answer your questions. At the same time, all of them have one big question to answer for themselves. If someone wants to know something, why shouldn't they just Google it? Ramakrishnan is quick to point out, “there is not one way in which you can actually come up with answers to peoples' questions.”

Google's search engine framework has limitations that are being exploited by a new wave of companies. For instance, with Google you can't use your phone to pose a question with a picture. You also can't ask for responses from experts or friends.

Venture capitalists think these approaches have the potential to make some money. The website Quora is a good example. It operates kind of like a social network. Users can post questions, write answers, and vote up responses they like. Venture capitalists recently poured an additional $80 million of investment into the site.

Quora has found an essentially free way to generate content. Like Wikipedia, it is all written by users, like Alon Amit. He says, “I can't stand seeing an answer or someone needing an answer that I have and not responding.” Quora encourages users to produce answers by acknowledging top writers and fostering social interactions.

Quora currently has no revenue stream, and it relies on the social network for its content. If that network falls apart, so does the site. Venture capitalist Josh Elman says an investor might take the risk with a company like this because they believe there is a, "fundamental behavior that is happening in the product that someone will pay for.”

Plus, there is a fallback plan. Even if Quora's content, data, or interactions cannot be leveraged somehow in the future, the company could always just put up advertising on the site.

Elman is putting his money where his mouth is—not in Quora, but in the company called Jelly. His firm, Greylock Partners, has invested in the new mobile question-and-answer app.

Jelly allows people to take a picture on their phone and use it to ask a question. Imagine, Elman says, someone has an emergency with a leaky pipe. The person snaps a picture of it, and asks what's wrong. A nearby plumber replies with a solution. Elman believes this kind of connection could one day generate revenue.“I think that there are just so many questions that aren't just easily answered by a three or four word search, because the answer isn't always on a website,” he says, “the answer might be in somebody's head.”

Quora and Jelly are taking two different approaches to answering questions, and in the end, they yield different results. Quora provides opinion and community, while on the other hand, Jelly provides solutions to local problems. While they both deal with questions, their users are seeking fundamentally different results. Ramakrishnan thinks that's the key to this whole business: understanding what users are really asking for. And that's no easy task.

Ramakrishna says over the years we have all become so “Googlized,” that we expect to prod the Internet with a few keywords and get results. He thinks of these keywords as under-formed questions that need to be fleshed out. Does the user want concise information? Opinion and community? Maybe all the person needs is a good local plumber. He says “our angle on this is, 'Lets do a better job at helping the user craft and formulate what those questions themselves might be.'”

Ask.com throws a wide net for answers. They give search results, peer-written responses, even content they pay to produce. But not everyone is pleased.Computer scientist Jerry Feldman is a particularly harsh critic. "The notion that either an automated system or some social networking system will be a reliable source of information about everything you want to know is very unlikely," he says. People aren't even that good at figuring out what other people want, Feldman argues, so it's an extremely difficult task for a computer.

But there is money to be made even without all the answers. Companies just need to figure out what it is their users want, and find some way to reliably deliver it.

By the way, Ask.com can tell you what causes hiccups. It's a lot of things: carbonated beverages, an irritated diaphragm, alcohol.

As for why we get them? Well, some things we still don't have a good answer for.

PODCAST: The shoppers who never showed

Tue, 2014-05-13 06:50

Forecasters were expecting a spike in retail sales during April. The government said there was nothing of the kind. Retail sales last month rose just a tenth of a percent, with consumers proceeding cautiously, despite warmer weather. Taking out volatile spending on cars, gasoline and food, so-called "core" retail sales fell slightly. Not exactly a boom in the making.

Meanwhile, economic data from China covering April suggested across the board weakness in economic activity there -- from output to investment to consumption -- all missing the expectations of experts. These are leading to renewed calls for Beijing to ease up on its efforts to rein in its bubbly credit markets.  Marketplace regular Christopher Low, the chief economist at FTN Financial in New York is traveling in Hong Kong and joins us to discuss.

Representatives from Vallejo, California are visiting the White House Tuesday to talk about "participatory budgeting," a unique democratic process where residents propose and choose city-funded projects. Residents in this small San Francisco Bay Area city voted-in participatory budgeting after the city went through a bankruptcy in 2008. A small portion of the city's overall budget is allocated to the process, made available through a sales tax. This year, residents have $2.4 million to work with.

 

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