Risk 2.0 – The week in links 9/24/2010

• What’s Facebook worth? Some valuations now put it ahead of big names like RIM, Starbucks, Dell, Yahoo, and others.

• Hadyn Shaughnessy discusses semantic clustering and illustrates how it can be used to form a high-level picture of Web 2.0 conversations. It looks like a case of ecosystems talking about ecosystems.

• Chris F. Masse, vigilant prediction market blogger, thinks that they may be not be that useful for solving real world problems.

• Rob Koplowitz talks about how social technologies can kickstart innovation and the trend toward Enterprise 2.0:

This shift toward increased collaboration is apparent, even as enterprises emerge from the economic downturn. In fact, 65% of organizations now support at least one Web 2.0 technology for internal or external collaboration and communication purposes.

• Riva Richmond of the WSJ lists three ways companies can use location-based social media. To date, I haven’t heard about any insurers, banks, or other regulated financial institutions using this type of social media. (If you have, let me know.)

• Varadharajan Krishnamoorthy lists some good information and links for insurers interested in social media.

• The perils of tweeting away from the nest continue to get attention. One UK insurer recently issued a warning to customers that they may be increasing their risks of being robbed if they announce their absence from home on social networks. Time will tell if these warning shots are followed by premium hikes.

James Surowiecki on social intelligence

If you have any interest at all in social networking and crowd intelligence I highly recommend reading The Wisdom of the Crowds by James Surowiecki. It’s a great book, and I think it will eventually be regarded as a seminal work in realm of social network intelligence.

Recently, I came across a TED talk that James gave in 2005 following the famous tsunami that hit near Sri Lanka:

What follows is an outline of the thoughts and questions this talk provoked in my mind.

The upside of the social web

• Blogs and social networks are filling an important role in telling the real story following a disasters.
• Can social networks be used to assess risk and forecast disaster?
• Blogs and social networks are accessing a previously untapped form of collective intelligence.
• Social networks are driven by the power of voluntary cooperation.
• A striking economic irrationality exists with blogging. Most do it for free. How can the internet do such a good job of distributing information resources without the aid of a conventional currency? Is this a new economic model?
• What is the value of reputational capital? Can it be priced? Traded? Borrowed against?
• Groups of people consistently make better guesses than individuals. How can groups be used in forecasting?
• How useful are blog comments as a crowd intelligence tool?
• What effect do networks have on the behavior of investors, policyholders, financial institutions?
• Can the stock market guide us in analyzing social network activity?

The downside to the social web

• The more tightly linked we become, the harder it is to maintain independence.
• The meme problem: Networks begin to shape your views by driving attention to things the network values. Memes can drive your personal decisions. Memes create dependence. Groups are only smart when members are highly independent.
• Don’t be like ants, who sometimes get stuck in a “follow the one in front of me” mode. Don’t march in a circle. Don’t stop diversifying out of your existing network.

Feel free to share your own thoughts and questions in the comments.

Risk 2.0 – The week in links 9/17/2010

• If you view all social media users as the same, you may want to rethink that. Terri Goveia discusses the concept of “connectors.” These are highly influential individuals whose actions shape the decisions of nearly three quarters of the consumer population. Finding them in social networks is probably a good idea.

• It can be hard to sell anything new to the C-suite. Social media author and expert Erik Qualman lists 3 reasons CEOs hate social media, but he also provides 3 reasons they can learn to love it.

• Nicholas D. Evans of Computerworld provides a thorough explanation of social computing’s evolution in the enterprise.

• John Hagel III and John Seely Brown outline six fundamental shifts in the way we work. I think social media and collaborative technologies will provide the foundation for significant changes in the workplace in the coming decades.

The collaboration curve helps explain the rise of network-centric efforts ranging from open source software development to “crowdsourcing” to “creation spaces.” In nearly all of these group efforts, rapid leaps in performance improvement arise as participants get better faster by working with others.

• Mashable reports that:

A new study from Pew Internet found that between April 2009 and May 2010, social networking site usage grew 88% among Internet users aged 55-64, and the 65 and older group’s social networking presence grew 100% in the same time frame.

• Ted Schadler wrote a very interesting piece on IT in the age of the empowered employee. I think IT is now faced with an immense challenge in the typical enterprise. They have to take on the role of security guard, mechanic, and increasingly they have to identify when it’s in the company’s best interests to stay hands off.  In my view, the world of IT is becoming more complex because technology is no longer just another “department” or “tool” in the business. It’s everything, and it’s everywhere. It’s work; it’s play; it’s communication. All these things are blurring into one thing: life.

• In a must-read piece over at The Institute for the Future, Bradley Kreit talks about (and lists many examples of) how social network activity can be used to gauge mood. The marketing and insurance implications are surely vast.

It’s enough to imagine the sort of future where a pharmaceutical company’s algorithms can read through your Outlook calendar, notice no one accepts your meetings, sees your Facebook status updates seem to indicate a level of frustration, and sends you an offer for a free sample of the latest anti-depressant.

• It’s official. Announcing that you’re not home on Facebook will get you robbed – at least in the state of New Hampshire.

• Mashable: Web users now spend more time on Facebook than Google.

• Still think Twitter is a fad? Check out the latest growth chart. 90 million tweets per day. It’s getting loud out there. Are you listening?

Risk 2.0

Beginning today, Risk + 2.0 becomes more succinctly Risk 2.0.

What role will actuaries and risk analysts play in virtual economies?

In August, Google acquired a social currency company called Jambool.

“Social currency,” you ask? Here’s a little bit from the press release:

Social Gold has grown by leaps and bounds since it went live in 2008. In the first half of 2010, we’ve processed more than double the entire payment volume we processed in all of 2009. And we’ve welcomed hundreds of developers to our platform. The fact that our highest revenue day was in the last week attests to the continued growth of online gaming.

Our vision is to build world-class products that help developers manage and monetize their virtual economies across the globe. When the opportunity arose to join forces with Google to execute against this vision, we couldn’t pass it up. We are thrilled to bring the Social Gold platform to Google’s global users. And we invite you – our customers, partners, and friends – to continue on the journey with us.

The fact that Google acquired Jambool could be a telling indicator. It likely means that Google—one of the biggest tech powerhouses on the planet and arguably the controler of the largest information hub in the world—believes that social currencies have promise.

As online gaming, virtual worlds, and other virtual experiences become increasingly popular, it makes sense that companies like Jambool would step in to help create mediums of exchange in these new worlds.

It’s impossible to say where all this is headed, but just imagine for a moment that large-scale virtual economies emerge, and virtual goods and services are traded in high-volume, complex markets.

Who will analyze the risks in these new economies?

The skill set of actuaries and other risk professionals should extend well in these new virtual spaces.

Some would argue that our own, “real” currency is already virtual.  And in many ways it is. So don’t be too quick to write off these “realities.” Instead, think about how you can play a role.

Please share your thoughts on virtual economies in the comments.