Viral Loop

by ADAM L PENENBERG

  Our online habits are prolific, diverse, and virtually instantaneous. Many of us are media consumers, creators, distributors, and critics, often simultaneously. But skimming blogs and news sites, downloading music and videos, cruising MySpace, creating and maintaining blogs, and participating in video-game virtual worlds take time. Posting videos to YouTube requires drive and determination. Getting to the next level of a favorite video game requires persistence. All the time we make choices. We sift, filter, and ignore. Even turning it all off is an option. Today marketers use words like “fractured” or “fragmented” to describe this new media landscape, where there are hundreds of channels, thousands of publications, websites, and blogs, and a million places to put ads. It is, in short, the niche-ification of our lives. Because we are almost constantly communicating with friends, family, and colleagues over a vast viral plain, our written self-expressions, whether they be forwarded emails, ideas, jokes, links, or memes, spread virally. Not just person to person, but social cluster to social cluster. As the Internet continues to go more mobile, becoming gradually untethered from the desktop, this viral plain is both breaking up and expanding. It will offer a far greater, more diffuse surface area for ideas to spread virally. About 30 million smartphones, which enable users to email, text, surf the Web, and perform other Webby functions on the run, were sold in 2005. By 2010, an estimated 260 million will be in circulation and they will outsell land-bound PCs.

  There are three primary technological innovations driving this surge in mobility: screens, microprocessors, and ubiquitous connectivity.

  [ SCREENS ]

  Display screens have been improving at breakneck speed, which is profound because they are a type of organizational innovation that can have a disruptive impact on existing industries. On a macro level, the Web is an organizational innovation because it stores and organizes information. So is the qwerty keyboard. It allows for the efficient production and organization of words. Google didn’t create the Internet. It simply enables you to search it. But it is the screen that allows people to interact with virality.

  As the cost of interactive displays plummets and the technology evolves, screens are becoming ubiquitous. A wide-screen flat-panel high-definition television set that cost $10,000 half a decade ago can be had for a twentieth of that price today. Multitouch screens as big as a wall and as small as the Apple iPhone are changing the entertainment landscape. Some will be as thin as a slice of wallpaper, yet durable enough to handle the most rambunctious user. They are built into walls and hung on buildings, in stores, in schools, on trains, in taxicabs, on handheld devices. One day soon you’ll walk down a street and be awash in a sea of moving images. This is already happening. In New York City’s Times Square there may be more moving billboards than still ones. Some subway entrances sport screens advertising television shows, and taxis have monitors in the backseat, transmitting TV news, traffic, and weather updates. You see them in department store windows, installed on airport walls, and towering over cities as mammoth moving billboards.

  These flickering images may fulfill a primordial urge. Along with the need for social interaction and spreading information, humans have an innate fixation with moving pictures. Former vice president Al Gore, in a speech he gave at the October 2005 We Media conference in New York, claimed the human brain is “hard-wired” to capture the slightest movement in our field of vision. We not only notice it, we are biologically compelled to look. “When our evolutionary predecessors gathered on the African savanna a million years ago and the leaves next to them moved, the ones who didn’t look are not our ancestors,” he said. Indeed, they ended up as lunch. Those that noticed sudden changes in their environment, no matter how subtle, passed on the genetic trait neuroscientists refer to as “the establishing reflex.” This, Gore said, is the brain syndrome activated by television and online video, “and why the industry phrase ‘glue eyeballs to the screen’ is actually more than a glib and idle boast.”

  [ CHIPS ]

  Designing a microprocessor like the Intel Atom—the company’s smallest chip ever—is like planning a city so tiny it could fit into a single bacterium. First, architects map out which routes go where so that millions of switches (the transistors) can direct traffic in the form of 1’s and 0’s that shoot from transmitters to transceivers across silicon expressways (called “buses”). Once schematics are plotted, designers create microscopic mock-ups of each layer, or “mask,” and test them on powerful workstations, mimicking the chip’s functions. Once built, the microprocessor’s 47 million transistors, which are so minute that 2 million of them could sit on the period at the end of this sentence, switch on and off up to 300 billion times per second. If just one of them malfunctions, the entire processor spits up a hairball.

  Then things get really complicated. The chip’s fabrication phase is a logistical nightmare, with some three hundred steps involving chemicals, gas, and light. It begins with a land grab in the form of purified beach sand: silicon. This is melted and grown into cylinders and forged into thin wafers the size of LP records, which are shined until their surfaces are “perfect mirrors.” With photolithographic “printing,” the transistors and electrical passages are layered onto the wafers. To ready the chip for mass production, the wafer is blasted with heat and coated with silicon dioxide and light-sensitive photographic film. The masks are overlaid, with more layers ladled on top, and the whole thing etched, bombarded with chemicals, and covered with layers of metal. Each and every gate on each and every transistor is fed a positive- or negative-charged ion that will determine whether its job is to open or close. The wafers are then cut into chip-size bits using a precision saw.

  Building transistors only slightly larger than the silicon atom itself is a dazzling display of design and engineering, made more so by the sheer pace of technological innovation over the past six decades. An early transistor, created by Bell Labs, was about an eighth of an inch in diameter; today, two thousand transistors placed side by side equal the width of a human hair, and the cost has fallen to about one-millionth of what it was in 1968. If Ford had innovated at the same rate as Intel, a car could go half the speed of light, and if you were driving to New York for a week, it would be more cost-effective to throw it out and buy a new one than feed quarters into the parking meter.

  Over the years, Intel and its rabid rivals engaged in a game of one-upmanship over who could produce faster, more powerful chips, but they didn’t pay much heed to battery drain or heat—both natural side effects of increased processing power. But most BlackBerry users don’t need a chip powerful enough to edit video, create Pixar-like effects, or deconstruct the human genome. They just want a smartphone that lets them send and receive email, open attachments, surf the Web, take and store photos, and perform other basics without burning through the battery.

  To fill this need, Intel and others have been churning out chips like the Atom, which was specially designed for the mobile market. These microprocessors represent a tectonic shift in thinking, because they are not faster than previous processors nor do they do more. In fact, they do less. But they drain a fraction of the battery power, yet offer mobile users the entire Internet experience, unlike pre-2008 smartphones, which can’t digest Flash, an Internet staple. Along the way Intel stumbled onto a whole new category of hardware called “netbooks”—mini PCs that are lightweight, cheap, and capable of running basic PC functions such as word processing, email, and Web surfing. Intel views the netbook as a disruptive technology that could create whole new markets. China and India offer tremendous opportunity as the Internet becomes a staple of life there. What’s more, this new generation of chips will be driving everything from handheld gaming machines to GPS gizmos, e-book readers, Internet tablets, and pocket video and music devices, all juiced with mobile Internet capability. It makes possible social networking at your desk or on the run.

  [ THE DARK SIDE OF VIRALITY ]

  All of this interconnectedness carries risks. The stronger our connection
s, the more vulnerable we become because the viral dissemination of information can be used as a weapon. Virus makers concoct mischievous applications that can auto-replicate and damage thousands of computers at a time, with each penetrated host a potential virus transmitter. Zombie bots unleash billions of spam, breaching Internet gateways and clogging in-boxes. Hackers spark denial-of-service attacks to block websites and slow down corporate networks, while another favorite strategy involves a buffer overflow attack, which floods a software program with too much data. The perpetrator can then track and manipulate the overflow and trick the system into following his instructions as if he were the system administrator. There’s even a Swiss-based eBay-like auction site, WabiSabiLabi, for black-market hacker code that can penetrate the software run by governments, corporations, and private citizens. The biggest buyer? The United States, which one government source claims is less interested in using black-market code for espionage than in stockpiling munitions in the event of cyberwar. “These things are powerful,” seconds Charlie Miller, a security researcher and former National Security Agency employee who once hacked a MacBook Air in less than two minutes at a competition. “And compared with the price of a jet fighter, they’re very cheap.” More to the point for a viral loop business, infinitely replicable information can even be used to hijack a company.

  In the summer of 2000, a few months before Hot or Not entered the dot-com lexicon, two Harvard physics students, Greg Tseng and Johann Schleir-Smith, decided to create an online dating business. From the day he had arrived on campus three years earlier, Tseng, in particular, had found the social scene at Harvard difficult to navigate. He had grown up in a middle-class northern Virginia suburb, but in Cambridge there were scads of rich blue bloods, people with vastly different approaches to life and money. The ritual of courtship was fraught with potential embarrassment—something he would just as soon avoid.

  Wouldn’t it be great, he thought, if you could short-circuit the dating process? The only way to do that, he figured, would be if you knew for sure that someone secretly liked you. But to accomplish that he would need to get everyone on campus into a database that listed every single person each person had a crush on. Then he came across an article by venture capitalist Steve Jurvetson about the rise of Hotmail and how its viral growth had killed Juno, which dropped millions of dollars on marketing while Hotmail spent virtually nothing. Tseng realized therein lay the answer.

  When the fall semester started, they launched CrushLink, a combination Web and email scheme. “It was,” Tseng says, “a very tight viral loop.” A user would register on the site and list his crushes and their email addresses. The site would alert each recipient via email that someone had a crush on her. She would register, list her crushes, and the loop continued. Tseng seeded it by anonymously posting on message boards: Wow! I just found this new site and met the love of my life. It’s called CrushLink. It got them fifty users a day. After about a week, they calculated their viral coefficient at about .3. There was a multiplier effect to be sure, but it was far from viral. So they experimented.

  Tseng quickly learned that fewer registration steps meant higher conversion rates, and that had an impact on the coefficient. That’s because multiplying all the conversion rates in a viral loop gives you overall virality. If you increase conversion rates, even by a fraction, you increase virality, which in turn encourages the overall spread. He also found that bland colors worked better than garish backgrounds, and speeding up the service so that pages downloaded faster also helped. That’s because humans can perceive anything over 150 milliseconds—half the time it takes for the human eye to blink. Adding a smiley emoticon in email subject boxes raised their viral coefficient a full 10 percent. “No kidding,” he says.

  But the big adjustment came when they began emailing hints to prospective crushees, things like, “Your secret admirer’s last name has six letters in it,” “Your secret admirer’s first name starts between A and F,” or “Your secret admirer’s email address is different from your domain.” This attracted more people to the site, and for every ten of them, at least a few added more crushes to the database. In three months, they registered tens of thousands of users and broke one hundred thousand users on October 27. By February, CrushLink had gone viral, and a month later it registered its millionth user. It crossed 1.5 million on March 2 and 2 million on March 22.

  The two college seniors made money by having users fill out advertising offers, which were basic sign-ups for other sites. They simply treated hints as a form of currency, giving away the first few, then requiring users to fill out questionnaires to get more. Enough did that Tseng and Schleir-Smith generated $2 million in revenue. Not that they actually saw that much. First, some advertisers claimed they had tricked users into filling out forms, so the traffic wasn’t authentic. Tseng sued, and in the end the two were able to recover about half the money they believed they were due.

  After graduating, the two enrolled at Stanford to study physics. They tried to sell CrushLink, but the dot-com bust prevented them from getting their price. They created a tech incubator called JumpStart Technologies with the money they were earning from CrushLink to fund other businesses and hired a barebones staff to keep the site going. But their viral schemes began to unravel when spammers began mimicking CrushLink emails, blasting out millions of them all over the Internet. CrushLink went from being a cute concept to, as a writer from Salon described it, “the latest excrescence of an Internet marketing machine grown unfathomably sleazy.”

  Then the Federal Trade Commission fined the viral duo $900,000 for violating the CAN-SPAM Act. In the complaint, the FTC alleged that JumpStart offered consumers free movie tickets if they provided the names and email addresses of five friends. JumpStart then spoofed the person’s email address so that the message looked as if it had come from the friend when in fact it hadn’t. The subject box added to the illusion, containing a personalized message like “Hey,” “Happy Valentine’s Day,” or “Movie time. Let’s go.” “In this way,” the complaint claimed, “JumpStart’s commercial emails circumvented certain spam filters and were opened by consumers who thought they contained personal correspondence.”

  Of the fine, Tseng says, “We were definitely unlucky to get targeted (many others were doing similar or worse things) and should’ve had better legal representation but we were twenty-four and didn’t know better. And suffice it to say, since then we have never sent any emails that could possibly be construed as misleading.” He also claims that CrushLink never spammed or sold email addresses to spammers. Neither has JumpStart.

  If true, CrushLink is the story of a viral loop company that was sabotaged by an even greater informational force: spam. If false, CrushLink simply went amok, using its architected virality for malevolent gain. Either way it is a cautionary tale, the kind of event we will be seeing more of in the future. In fact, we already have—and with the same players. In July 2009, New York State attorney general, Andrew Cuomo, accused Tagged, a social network that Tseng and Schleir-Smith founded in 2004, of stealing “the address books and identities” of more than sixty million users, alerting recipients to view a photo that in reality did not exist. Instead, the recipient “was forced to become a new member of Tagged,” Cuomo said. Tseng blamed a “confusing new registration process,” which Tagged immediately discontinued, for the problem.

  As technology marches on, it’s important to consider that the ability to stop is as important as accelerating. It wasn’t until George Westinghouse invented the air brake in 1868 that trains could run faster and pull hundreds of cars. Before then, train wrecks were common even as trains moved slowly across the land. We require an equivalent innovation to protect us from being crushed in the viral melee.

  If history is any guide, we’ll get it. Whenever companies have resorted to coercive viral hooks—by, say, hijacking your email address book when you try to sign up—any short-term viral growth has been offset by customer alienation, which is itself broadcast virally,
user to user, across social networks and the blogosphere.

  Nowadays virality works both ways. It’s the world we live in.

  [ UBIQUITOUS INTERNET ]

  Whether Wi-Fi, cellular networks with broadband capability, satellite connections or other measures, smartphone users have many ways of getting online. But the wireless Internet means more than being able to check email at Starbucks. Imagine if your town was transformed into one gigantic wireless hot spot overnight. You could feed parking meters with your MasterCard instead of hunting for quarters. Utility companies might read meters in real time and pass the savings on to customers. The next time you saw a pothole, you could instantly email a camera phone photo to city hall. Municipal wireless wouldn’t just make life easier for citizens. It would have the potential to save lives. Firefighters would be able to turn traffic lights green as they raced to put out a blaze. Police could tap into a bank’s surveillance cameras to get a head start on cracking a heist. Emergency responders would be able to communicate during a natural disaster or terrorist attack.

  The ubiquitous Internet means that anyone, anywhere, can tap into this mobile informational grid, with millions of memes spreading from screen to screen to screen. Entertainment, news, email, texting, and phone conversations will be held at 60 miles per hour. What you do at home—watching TV, viewing movies, listening to the radio or your iPod, downloading music, accessing MapQuest or global positioning systems, surfing blogs and posting updates to your Facebook profile—you’ll be able to do on a bus, in your car, or walking down the street. Odds are, you’ll do it on a smartphone or other small mobile device, and this yields almost limitless levels of virality. It took only a few years for social networking to comprise more than 25 percent of all Internet traffic, and these connections are sprouting ever more connections. It creates a three-headed viral hydra: the user base is viral, the content is viral, and it all sits atop a vast viral plain.