How to Weather a Recession: The Case for Preserving Destination Marketing Funding

A380_ek_designAs millions of ordinary Americans rethink their priorities, neighborhoods and local communities find themselves on the front line of preserving their local way of life.

The Los Angeles Times reports the bad news that international travel is going down. Air India plans to eliminate its six flights a week between LAX and Frankfurt, with connecting flights to New Delhi and Mumbai. In late October, Thai Airways will no longer offer nonstop flights to Bangkok and Cathay Pacific Airways Ltd.said it was suspending one of three daily flights between Hong Kong and LAX. In all, at least 11% of international flights at LAX will disappear in November compared with the same time last year, wiping out nearly a decade's worth of traffic gains.

Everyone is affected by fuel costs and the state of the economy. But too often, domestic airports are held up by 655 radical groups who are trying to stop international flights like the A380 (pictured above, right) from their community.

As I've blogged before, airports are a key indicator of a city's health. You can only recirculate the combined income of your citizens so many times: a vibrant community needs a regular influx of dollars, people and commerce from elsewhere. To attract outside resources, you need a concerted community effort, which is where destination marketing comes in.

Lawmakers regularly take destination marketing for granted as their memories of successes fade. Today, 85% of travel funding comes through the destination occupancy tax, which some people know as the hotel tax. In a weak economy, there are many that covet those monies for traditional purposes that are unrelated to tourism.

As is the case with internet taxation, municipalities are reaching their breaking point in budgeting for police, fire, schools, and other critical infrastructure. People need to think harder about what it really takes to fund the places where they want to live.

Luxury 2.0 - How eBay Could Have Used OpenSocial To Save $61M


A French court on Monday ordered the online auction giant eBay to pay 38.6 million euros, or $61 million, in damages to the French luxury goods company LVMH, owner of the prestigious Louis Vuitton brand. LVMH estimated that 90% of the sales of Louis Vuitton goods on eBay were for fakes.

Fashionphile estimates that eBay was making $3.8 million in fees a year from the Louis Vuitton brand alone (see the Fashionphile analysis), not including other brands owned or managed by LV such as Christian Dior.

eBay's initial defense? It published guides (like this) that would help educate consumers on how to tell authentic Louis Vuitton goods from the knockoffs. That flimsy protection justified countless abuses like one-day auctions of LV goods; continuing to protect eBay sellers who had zero feedback but 50 listings for LVMH products; fake second chance offers; and worse yet, $75 bins for $1000 bags.

After the first cease-and-desist judgment, eBay appeared to clean up. My impression today is that the promise of eBay - " provide a global trading platform where practically anyone can trade practically anything" - is going to continue to lose ground so long as they rely on internal automation instead of vendor certification.

This is where I think applications like OpenSocial have tremendous promise. Instead of relying on internal authentication schemes, eBay should ask LVMH and other luxury brands to create and manage their own social networks. In this case, the Louis Vuitton social network would be composed solely of merchants specifically authorized to sell and resell Louis Vuitton goods. Building this network eliminates the argument that it would be "prohibitively expensive" for similar online marketplaces to comply with LVMH's requests...if you can handle simple constructs such as FOAF or OPML an online marketplace can determine if a retailer is legit.

DNC Announces Bloggers for Denver Convention

Dncc_logo_dnc2008_1_500The Democratic National Convention Committee announced the blogs selected to participate in the DemConvention State Blogger Corps during the four-day event in August. There were over 400 applicants.

We're working with a growing number of housing providers, local restaurants, companies and transportation providers to support DNC press and bloggers. We'll provide a live concierge through the 5STRZ short code and ongoing updates on events via a Twitter backchannel. Our goal is to provide the blogosphere and mainstream media with the 24x7 support they need to provide continuous coverage of the convention with minimum hassles. This includes getting housing and transportation to and from the convention.

If you're a blogger or member of the press attending the DNC in Denver shoot me an email at dnc (at) and we'll get you on the list. 

The selected bloggers are:

ALASKA - Celtic Diva's Blue Oasis -

ALABAMA- Doc's Political Parlor -

ARKANSAS- Under The -

ARIZONA - Ted Prezelski - Rum, Romanism and Rebellion -

CALIFORNIA - Calitics-


CONNECTICUT -My Left Nutmeg -


DELAWARE – TommyWonk -

DEMOCRATS Abroad - Democrats Abroad Argentina -

FLORIDA - Florida Progressive Coalition -

GEORGIA- Tondee's Tavern -

GUAM - No Rest for the Awake - Minagahet Chamorro -

HAWAII - Ian Lind Online -

IOWA - The Iowa Independent -


ILLINOIS- Prairie State Blue -

INDIANA- Blue Indiana -


KENTUCKY – BlueGrassRoots -

LOUISIANA - Daily Kingfish -

MASSACHUSETTS - Blue Mass. Group -

MARYLAND - The Center for Emerging Media -

MAINE - Turn Maine Blue -

MICHIGAN - Blogging For Michigan -

MINNESOTA - Minnesota Monitor -

MISSISSIPPI - The Natchez Blog -

MISSOURI - Fired Up! LLC -

MONTANA - Left in the West  -



NEBRASKA - New Nebraska Network -

NEW HAMPSHIRE - Blue Hampshire -


NEW MEXICO - Democracy for New Mexico -

NEVADA - Las Vegas Gleaner -

NEW YORK - Room 8 -

OHIO - Ohio Daily Blog -

OKLAHOMA - DemoOkie -

OREGON - BlueOregon (blog) -

PENNSYLVANIA - Keystone Politics -

PUERTO RICO - Jusiper -

RHODE ISLAND - Rhode Island's Future -


SOUTH DAKOTA - Badlands Blue -

TENNESSEE - KnoxViews/TennViews -

TEXAS - Burnt Orange Report -

UTAH - The Utah Amicus -

VIRGINIA - Raising Kaine -

VIRGIN ISLANDS - Democratic Party of the US Virgin Islands -

VERMONT - Green Mountain Daily -


WISCONSIN - Uppity Wisconsin -

WEST VIRGINIA - West Virginia Blue -

WYOMING - Hummingbirdminds blog -

MySpace Opens Up: Introducing Data Availability


Marc Canter of Broadband Mechanics fame alerted me to the news that MySpace is allowing third parties -- among them eBay, Twitter, and Yahoo -- to access their information.

This would allow people to do things like find friends from MySpace on Twitter, switch effortlessly from Twitter to Yahoo! Instant Messenger and transfer Flickr photos easily to eBay. Dating services would change, and people may even be able to access profiles from the corresponding MySpace page.

MySpace also joins the DataPortability Group. As a member of the policy workgroup, I see comments where Flickr users have gone nuts over third parties creating photobooks out of their photos without asking first, or Seesmic users complaining when their videos are suddenly made available on Google search.

What a terrible surprise for those users!!

It will be interesting to see how MySpace handles giving people control about where their data can go, and to what extent they communicate the various ways uploaded data is, can, and may be used.

To see how something like this might work, CommonCraft did a great video on how social networks work in general. It's useful for thinking how networks that are today totally unrelated -- like, Gmail and LinkedIn users -- might use something like Data Availability to make connections with MySpace users and each other.

Google Goes To Washington: "Local" Has a New Spin

Google_politicsGoogle has hired PodestaMattoon to help manage its far-flung interests in privacy, employee compensation issues and China, according to documents filed with the U.S. Senate. This development is getting coverage in today's San Francisco Chronicle and New York Times (registration required).

"It's sad," lamented Esther Dyson, editor of the technology newsletter Release 1.0 and former chairwoman of Icann, a nonprofit group that plays a role in Internet administration. "The kids are growing up. They've lost youth and innocence. Now they have to start being grown-ups and playing at least to some extent by grown-up rules."

As municipal wi-fi heats up, look for Google's efforts to ramp up slowly to encompass state and municipal politics, historic strengths of telcos and cable operators. As was the case with newspapers, Google's lobbying efforts will collide with the interests of real estate owners and property managers, who are just beginning to explore the intellectual property potential inherent in their portfolios.

NYC "Worst City" for Online Fraud

Nyc_1New York City, Miami and Los Angeles are the "highest risk" cities for eCommerce fraud, according to a CyberSource press release.

  1. New York City: 18% (down from 26% last year)
  2. Miami: 7%
  3. Los Angeles: 7%
  4. Chicago: 2%
  5. Detroit: 2%
  6. Nigeria: 31%
  7. China: 7%
  8. Indonesia: 5%
  9. Afghanistan, Mexico, Russia, U.K, Vietnam: 4% (each)

To combat fraud, the report indicates most retailers seeking to adopt Card association payer authentication services (e.g. Verified by Visa, MasterCard SecureCode) and automated order screening.

To assist in this process, MasterCard is promoting a free network vulnerability scan for retailers that act before June 30, 2006, from one of five different providers: AmbironTrustwave, Cybertrust, One-Sec, Qualys, and SecurityMetrics, Inc.

Link: CyberSource Fraud Report (free, registration and Adobe Acrobat required)

What Cities Must Learn From Hurricane Katrina

KatrinaThe level of personal responsibility taken by politicians in the wake of Hurricane Katrina has been dismal. There is a long list of specific things state governor Kathleen Blanco and New Orleans Mayor Ray Nagin failed to do before and during the crisis. (Check out the Google news search for "Louisiana Governor" for a broad, non partisan view.)

The American Society of Civil Engineers has recently given America's infrastructure a 'D' grade and estimated that $1.6 trillion needs to be spent over the next five years to fix the most serious problems. 13,000 highway fatalities every year can be attributed to poor highway maintenance, and more than 3,500 dams maintained by states and local governments are deemed "unsafe" - and the number is rising.

Irresponsible politicians point fingers. Responsible politicians take action.

The issue is lack of local leadership, something I've blogged about here and here. New Orlean's beleaguered police force is doing a yeoman's job under tremendous pressure, but like other police forces nationwide, they need more. There will always be budget shortfalls. It is up to local governments, who know their own communities best, to exercise greater stewardship: over their tax base, educating their citizenry, and protecting the interests of their constituencies.

Link: New Orleans Emergency Preparedness Plan

Kristof: The Economics of Thievery

Nicholas Kristof writes how the introduction of the LoJack - a hidden radio transmitter that turns on if the vehicle is stolen - has reduced crime, not only for those who purchase the device, but for all automobile owners (registration required).

The invisible device turns automobile theft into a game of Roulette - you may get lucky a few times, but miss just once and you get caught. As a result, he writes, auto theft is down 50 percent in Boston.

In the meantime, companies like openly mock American laws, while other scofflaws like Borders create legal structures either domestically or in remote tax havens to escape tax consequences.

Cities must become more creative in how they set up incentives, not just to attract businesses, but also to stop the flight of tax revenue. Today, local tax collectors spend a disproportionate amount of time tracking small to medium sized businesses, and shrug their shoulders when confronting the real culprits.

Silicon Valley: Supreme Court "Doesn't Know Jack"

Editorial or news? I get mixed signals when I read's analysis of today's MGM vs Grokster decision. You'd think the author of that blog, John Paczkowski, had an interest in staying on the good side of the VC community or something.

Agreed, the study is decidedly non-alarmist in tone, and does conclude that the impact of file sharing on the music industry is unclear. However, it appears the Court ruled that just knowing about noninfringing uses of P2P wasn't enough to offset actively encouraging people to steal files. Lots of us - Grokster, Streamcast and Paczkowski included - knew what kind of reputation Napster had. So after Napster went down, why did some marketing genius at Grokster decided to promote the service as a Napster alternative?

The American way of life includes an approach to English law that provides incentives for entrepreneurs. Paczkowski and I have won the genetic lottery, living in a time and place of tremendous opportunity. Value is created by understanding how many forces, including regulatory ire, factor in. You may be upset that the guys who manufacture air bags for autos basically won a license to mint money when laws to mandate air bags went into effect. But to someone's credit, someone saw a need, took some risk, and the rest is history.

Maybe I'm looking at this the wrong way. Maybe I should be egging authors like Paczkowski on, in hopes that more people will come to the wrong conclusion. I'm sure that's exactly what Shawn Fanning, Jordan Mendelson and Ron Conway are doing at this red hot moment.

Congratulations, guys. You learned, and you're in a far better place for all that.

Link: FTC P2P Study (Adobe Acrobat required)

Supreme Court Rules 5-4 For Eminent Domain

Magic8ballIn a victory for city planners, the Supreme Court ruled 5-4 on Thursday to give local governments the discretion to take private property for economic development. They ruled that the transfer of land to private investors for projects promising to bring jobs or commerce was a public use, just like building a park or paving a road. This decision upholds an earlier 4-3 decision by the Connecticut Supreme Court. 

Most stories focus on the human interest side of the story - people like Susette Kelo and her neighbors, some of whom have lived in the tony New London for decades. It is tougher to accurately describe the looming challenges facing the city, which like other cities is facing the cumulative weight of decisions made over decades.

There are indications that not all is being handled fairly in New London: a notable exception to the plan to clear-cut the neighborhood is the Italian Dramatic Club, a politically connected "social club" of Connecticut's political establishment, which is located in the very same neighborhood as all the homes targeted for destruction.

There are an estimated 10,000 cases of condemnation or threatened condemnation for the benefit of private parties occurred between 1998 and 2003, according to a study for the libertarian Institute for Justice. Shopping center industry group ICSC has taken no side on this issue, noting that while it “ a strong advocate of private property owners' rights, (they) recognize that eminent domain is an important economic development tool. However, it should be used only when all standards and safeguards for property owners have been applied.”

In the medium term, expect to see a tough fight between telecoms and municipalities over the municipalities ability to override state and federal regulatory bodies like NARUC to overbuild local broadband networks. Cities may now have the authority to overbuild marginally useful networks that the local exchange carriers have neglected to maintain, in favor of deals with newer companies like ill-fated Richochet Networks, which promised to build 21st century broadband networks that were free of the mistakes of the past, only to fall under the weight of the empty promises of its executives.

In an era of shortages, there will be no easy answers.

Link: Kelo v. City of New London (Adobe Acrobat required)

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