A Chicken in Every Pot -- A Bank in Every Pocket

Herbert Hoover promised "continued prosperity" during his 1928 presidential campaign.  His handlers advertised "A chicken in every pot and a car in every garage".  The slogan quickly became a joke, but a painful one.  

In the latest presidential campaign, Obama promised "Change", but, so far, the changes are not the ones advertised.  Perhaps, Obama's slogan should have been, "A computer and a bank in every pocket."    

Every day, there are another dozen good reasons to put a computer in your pocket.  The battle for portable GPS navigation systems is a case in point.  One vendor has offered its software and service, including turn by turn directions, for $10 per month; another vendor played oneupmanship by offering software and service for a one time payment of $100 before the third vendor came to the party with a one time price of $70.  At $70, the cost/benefit ratio is compelling for hundreds of millions of people and the price will continue to fall!      

The music business is one of many other businesses traveling the same road.  Apple's iTune "store" now accounts for 25% of all music sold and Apple is building a 1 billion dollar server farm in Maiden, NC!  All the major music companies are switching to Internet 2.0 systems-- offering free software and low priced music through pocket computers.  

The "gales of creative destruction" have never produced such sustained wind speeds.  Every job and every life has been or will be changed in multiple ways by these winds.  The "ride" is like sailing in gale force winds; great fun for most but scary for others.    

Without spending time thinking or talking about it, we have all been life long participants in social networks.  Today, these relationships are being digitized.  For example, travel to a store to buy a video game is being replaced with the act of joining a social network where one can play against friends for a moment, an hour or a day.  There are specific digital social networks for almost every activity, from prayer groups to motorcycle clubs to praying motorcyclist.  Employers and college recruiters increasingly make decisions only after reviewing ones "social network body of work".  Historically, applications for jobs or school entrance have been quite detailed, but nothing like the total amount of information people are sharing via social networks.  Believe it or not, the sooner you start building your "social network portfolio", the better off you will be! Think bout it in terms of your digital resume.    

Many of these digital networks are independent from one another, however, the trend is for them to be linked.  Once a person signs in to his "home base network", Facebook, Tweeter, Picasa, Reader, Blogger or whatever, he is automatically signed into all his networks.  Under this process, the person who wants to switch from blogging to viewing friend and family photos does not need to log-in separately.        

In late May of 2008, when Obama was locking up the democratic nomination, the S and P 500 traded at 1425.  The market discounts future events by an average of 6 months and late May was 6 months before election of Obama, which implied massive increases in government taxing and spending activities.  On March 6, 2009, the day after Obama officially announced that health care reform would be his top, the index traded at 683.  Today,  August 24, 2009, the index trades at 1035.  There are many cross currents at work here but the "Obama market decline" of  52% is without precedent.  Furthermore, the market "knew" that the most onerous provisions of Obama's proposals would not pass the day they were announced.  The climb over the past 6 months has been spectacular.  The average dollar invested on March 6, 2009 has grown to $1.51!  Again, the market discounts many things but the numbers posted are for real.

During the years of Internet 1.0, "Online banking!" was the frequent response to: "What is the Internet going to do for me"?  Today, many people use ATM networks to withdraw funds from their accounts, but there seems to be as many bank branches as ever.  Internet 2.0 offers the opportunity for you to put your bank in your pocket, for deposits and withdrawals.  Invest with knowledge and care and you will put a lot of money in your pocket.  

Internet 2.0 has years to run.  Over the next several years, one institution after another is going to metamorphose from an "independent social network" to an "online connected social network".  To avoid the "out of sight, out of mind -- kiss of death", most plain vanilla web sites are going to become interactive.  One small example of why web sites and institutions must connect is the calendar.  If an institution wants its events to be automatically posted to its members calendars, it must be "socially connected".  Consumers will increasingly subscribe to calendar links.  A subscribing consumer will never have to enter the date and time of a meeting or event again.  If the meeting time is changed or postponed, the change will be made by one person for the benefit of many people.

You face a nice opportunity.  You can make use of Internet 2.0 to play video games, to connect socially, to reduce the strains of every day work and life or to laugh all the way to the bank.  Those who invested early and often in Internet 1.0 made multiple fortunes.  Internet 2.0 is going to be more pervasive and powerful than we can hardly imagine.