Virtual cartels, introduction

Among the most striking development of the 1990s has been the emergence of a global commercial media market utilizing new technologies and the global trend toward deregulation.
This global commercial media market is a result of aggressive maneuvering by the dominant firms, new technologies that make global systems cost-efficient, and neoliberal economic policies encouraged by the World Bank, IMF, WTO, and the US government to break down regulatory barriers to a global commercial media and telecommunication market.

A global oligopolistic market that covers the spectrum of media is now crystallizing the very high barriers to entry."

(Robert McChesney, author of "Rich Media, Poor Democracy")

The network structure of information and communication technologies means that even deregulated markets are not "free". The functional logic of global networks only tolerates a small number of large players. Mergers, strategic alliances, partnerships and cooperations are therefore the daily routine of the ICT business. They bypass competition and create "virtual cartels".

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PR Firms and their Mission

Looking at how public relations practitioners advertise their services, they do not primarily seem to be followers of the "social engineering" approach. Burson-Marsteller, the worlds leading PR agency, for example sells itself as a specialist in "... public affairs, government relations, crisis communication, investor relations, environmental issues and marketing communications ... experienced at orchestrating effective campaigns, which motivate the right behaviors.". Porter Novelli, third largest international PR company, somewhat more aggressive promises, that their marketing-based public relations "... penetrate the consumer psyche - where - your target audiences work, learn, play or shop, through everything they read, hear and see.". While Porter Novelli seems to be specialized in psychological warfare, Fleishman-Hillard highlights its know-how and experience in government relations programs. "We have handled some of the nation's most challenging public policy issues, including issues affecting the environment, from clean air to agricultural chemicals; aviation safety; regressive taxes; international trade; and human rights.". To handle those difficult tasks, Fleishman-Hillard maintains "... an effective, professional lobbying team that includes registered lobbyists recruited from the Senate and the House."

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Sponsorship Models

With new sponsorship models being developed, even further influence over content from the corporate side can be expected. Co-operating with Barnes & Nobel Booksellers, the bookish e-zine FEED for instance is in part relying on sponsoring. Whenever a specific title is mentioned in the editorial, a link is placed in the margin - under the heading "Commerce" - to an appropriate page on Barnes & Noble. Steve Johnson, editor of FEED, says "We do not take a cut of any merchandise sold through those links.", but admits that the e-zine does indirectly profit from putting those links there.

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Advertising and the Media System

Media systems (especially broadcasting) can be classified in two different types:

Public Media Systems: Government control over broadcasting through ownership, regulation, and partial funding of public broadcasting services.

Private Media System: Ownership and control lies in the hands of private companies and shareholders.

Both systems can exist in various forms, according to the degree of control by governments and private companies, with mixed systems (public and private) as the third main kind.

Whereas public media systems are usually at least partially funded by governments, private broadcasting solely relies on advertising revenue. Still also public media systems cannot exclude advertising as a source of revenue. Therefore both types are to a certain degree dependent on money coming in by advertisers.

And this implies consequences on the content provided by the media. As the attraction of advertisers becomes critically important, interests of the advertising industry frequently play a dominant role concerning the structure of content and the creation of environments favorable for advertising goods and services within the media becomes more and more common.

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The Advertising Industry

The advertising industry is dominated by three huge advertising networks, which offer their services throughout the world. Gross income of the three leading agencies is twice as much, as the one of places four to ten.

Table: World's Top 10 Advertising Organizations 1999

(figures in millions of U.S. dollars)

Rank 1999

Advertising Organization

Headquarters

World-Wide Gross Income 1999

1

Omnicom

New York, USA

$ 5,743.4

2

Interpublic Group of Cos.

New York, USA

$ 5,079.3

3

WPP Group

London, UK

$ 4,819.3

4

Havas Advertising

Levallois-Perret, France

$ 2,385.1

5

Dentsu

Tokyo, Japan

$ 2,106.8

6

B Com3 Group

Chicago, USA

$ 1,933.8

7

Young & Rubicam Inc.

New York, USA

$ 1,870.1

8

Grey Advertising

New York, USA

$ 1,577.9

9

True North

Chicago, USA

$ 1,489.2

10

Publicis SA

Paris, France

$ 1,434.6



Table: Top 10 Global Marketers 1998

(figures in millions of U.S. dollars)

Rank 1998

Advertiser

Headquarters

World-Wide Media Spending 1998

1

Procter & Gamble Co.

Cincinnati (US)

$ 4,747.6

2

Unilever

Rotterdam (NL)/London (UK)

$ 3,428.5

3

General Motors Corp.

Detroit (US)

$ 3,193.5

4

Ford Motor Co.

Darborn (US)

$ 2,229.5

5

Philip Morris Cos.

New York

$ 1,980.3

6

Daimler Chrysler

Stuttgart (GER)/Auburn Hills (US

$ 1,922.2

7

Nestle

Vevey (SUI)

$ 1,833.0

8

Toyota Motor Corp.

Toyota City (JP)

$ 1,692.4

9

Sony Corp.

Tokyo (JP)

$ 1,337.7

10

Coca-Cola Co.

Atlanta (US)

$ 1,327.3



On the other hand the three biggest advertisers only spend about US$ 2 millions less than places four to ten together. Whereas money spent on advertising in traditional media comes from very diverse categories, companies offering computer hard- and software, peripherals or Internet services mainly pay for on-line advertisements.

Table: Top 10 Internet Advertisers 1998

(figures in millions of U.S. dollars)

Rank 1998

Advertiser

Internet Spending 1998

1998 - 1997 % Change

1

Microsoft Corp.

$ 34.9

9.4

2

IBM Corp.

$ 28.5

58.6

3

Compaq Computer Corp.

$ 16.2

169.8

4

General Motors Corp.

$ 12.7

84.8

5

Excite

$ 12.4

1.5

6

Infoseek Corp.

$ 9.3

22.3

7

AT&T Corp.

$ 9.3

43.5

8

Ford Motor Co.

$ 8.6

46.7

9

Hewlett-Packard Co.

$ 8.1

102.9

10

Barnes & Noble

$ 7.6

280.2



Source: Advertising Age

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Burson-Marsteller

Burson-Marsteller, the worlds leading public relations firm employs over 2,000 professionals in over 30 countries, operating in multiple functional and industry practice specialties. Its focus is on adding value to its clients through the use of
Perception Management. The goal is to ensure that the perceptions which
surround their clients and influence their stakeholders are consistent with
reality and the clients' desired business objectives.

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File Transfer Protocol (FTP)

FTP enables the transfer of files (text, image, video, sound) to and from other remote computers connected to the Internet.

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Satellites

Communications satellites are relay stations for radio signals and provide reliable and distance-independent high-speed connections even at remote locations without high-bandwidth infrastructure.

On point-to-point transmission, the transmission method originally employed on, satellites face increasing competition from fiber optic cables, so point-to-multipoint transmission increasingly becomes the ruling satellite technology. Point-to-multipoint transmission enables the quick implementation of private networks consisting of very small aperture terminals (VSAT). Such networks are independent and make mobile access possible.

In the future, satellites will become stronger, cheaper and their orbits will be lower; their services might become as common as satellite TV is today.

For more information about satellites, see How Satellites Work (http://octopus.gma.org/surfing/satellites) and the Tech Museum's satellite site (http://www.thetech.org/hyper/satellite).

http://www.whatis.com/vsat.htm
http://octopus.gma.org/surfing/satellites
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Bulletin Board Systems

A BBS (bulletin board system) is a computer that can be reached by computer modem dialing (you need to know the phone number) or, in some cases, by Telnet for the purpose of sharing or exchanging messages or other files. Some BBSs are devoted to specific interests; others offer a more general service. The definitive BBS List says that there are 40,000 BBSs worldwide.

Bulletin board systems originated and generally operate independently of the Internet.

Source: Whatis.com

INDEXCARD, 4/21
 
Terrestrial antennas

Microwave transmission systems based on terrestrial antennas are similar to satellite transmission system. Providing reliable high-speed access, they are used for cellular phone networks.

The implementation of the Wide Application Protocol (WAP) makes the wireless access to Internet services as E-Mail and even the World Wide Web via cellular phones convenient. Therefore microwave transmission systems become increasingly important.

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Gopher

Gopher is a menu system with hierarchically structured list of files that predates the World Wide Web.

Today Gopher is of diminishing importance and mostly replaced by the World Wide Web.

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World Wide Web (WWW)

Probably the most significant Internet service, the World Wide Web is not the essence of the Internet, but a subset of it. It is constituted by documents that are linked together in a way you can switch from one document to another by simply clicking on the link connecting these documents. This is made possible by the Hypertext Mark-up Language (HTML), the authoring language used in creating World Wide Web-based documents. These so-called hypertexts can combine text documents, graphics, videos, sounds, and Java applets, so making multimedia content possible.

Especially on the World Wide Web, documents are often retrieved by entering keywords into so-called search engines, sets of programs that fetch documents from as many servers as possible and index the stored information. (For regularly updated lists of the 100 most popular words that people are entering into search engines, click here). No search engine can retrieve all information on the whole World Wide Web; every search engine covers just a small part of it.

Among other things that is the reason why the World Wide Web is not simply a very huge database, as is sometimes said, because it lacks consistency. There is virtually almost infinite storage capacity on the Internet, that is true, a capacity, which might become an almost everlasting too, a prospect, which is sometimes consoling, but threatening too.

According to the Internet domain survey of the Internet Software Consortium the number of Internet host computers is growing rapidly. In October 1969 the first two computers were connected; this number grows to 376.000 in January 1991 and 72,398.092 in January 2000.

World Wide Web History Project, http://www.webhistory.org/home.html

http://www.searchwords.com/
http://www.islandnet.com/deathnet/
http://www.salonmagazine.com/21st/feature/199...
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Edward L. Bernays

Born 1891 in Vienna, Bernays was one of the founders of modern public relations. An enigmatic character, he was a master of mise en scène with far-reaching contacts in the world of business and politics. The nephew of Sigmund Freund and related with Heinrich Heine, he was also among the first to pursue PR for governments and to produce pseudo-events. Bernays considered the manipulation of public opinion as an important element of mass democracies and was of the opinion that only through PR a society's order can be kept.

INDEXCARD, 8/21
 
Fiber-optic cable networks

Fiber-optic cable networks may become the dominant method for high-speed Internet connections. Since the first fiber-optic cable was laid across the Atlantic in 1988, the demand for faster Internet connections is growing, fuelled by the growing network traffic, partly due to increasing implementation of corporate networks spanning the globe and to the use of graphics-heavy contents on the World Wide Web.

Fiber-optic cables have not much more in common with copper wires than the capacity to transmit information. As copper wires, they can be terrestrial and submarine connections, but they allow much higher transmission rates. Copper wires allow 32 telephone calls at the same time, but fiber-optic cable can carry 40,000 calls at the same time. A capacity, Alexander Graham Bell might have not envisioned when he transmitted the first words - "Mr. Watson, come here. I want you" - over a copper wire.

Copper wires will not come out of use in the foreseeable future because of technologies as DSL that speed up access drastically. But with the technology to transmit signals at more than one wavelength on fiber-optic cables, there bandwidth is increasing, too.

For technical information from the Encyclopaedia Britannica on telecommunication cables, click here. For technical information from the Encyclopaedia Britannica focusing on fiber-optic cables, click here.

An entertaining report of the laying of the FLAG submarine cable, up to now the longest fiber-optic cable on earth, including detailed background information on the cable industry and its history, Neal Stephenson has written for Wired: Mother Earth Mother Board. Click here for reading.

Susan Dumett has written a short history of undersea cables for Pretext magazine, Evolution of a Wired World. Click here for reading.

A timeline history of submarine cables and a detailed list of seemingly all submarine cables of the world, operational, planned and out of service, can be found on the Web site of the International Cable Protection Committee.

For maps of fiber-optic cable networks see the website of Kessler Marketing Intelligence, Inc.

http://www.britannica.com/bcom/eb/article/4/0...
http://www.britannica.com/bcom/eb/article/4/0...
http://www.wired.com/wired/archive/4.12/ffgla...
http://www.pretext.com/mar98/features/story3....
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Immanuel Wallerstein

Immanuel Wallerstein (* 1930) is director of the Fernand Braudel Center for the Study of Economies, Historical Systems, and Civilizations. He is one of the most famous sociologists in the Western World. With his book The Modern World-System: Capitalist Agriculture and the Origins of the European World-Economy in the Sixteenth Century (1976), which led to the expression World-System Theory about centers, peripheries and semi-peripheries in the capitalist world system, he did not only influence a whole generation of scientists, but this theory seems to get popular again, due to globalization.

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United Brands Company

American corporation formed in 1970 in the merger of United Fruit Company and AMK Corporation. United Fruit Company, the main company, was founded in 1899 producing and marketing bananas grown in the Caribbean islands, Central America, and Colombia. The principal founder was Minor C. Keith, who had begun to acquire banana plantations and to build a railroad in Costa Rica as early as 1872. In 1884 he contracted with the Costa Rican government to fund the national debt and to lay about 50 more miles of track. In return he received, for 99 years, full rights to these rail lines and 800,000 acres of virgin land, tax exempt for 20 years. By 1930 it had absorbed 20 rival firms and became the largest employer in Central America. As a foreign corporation of conspicuous size, United Fruit sometimes became the target of popular attacks. The Latin-American press often referred to it as el pulpo ("the octopus"), accusing it of exploiting labourers, bribing officials, and influencing governments during the period of Yankee "dollar diplomacy" in the first decades of the 20th century.

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Multiple User Dungeons

MUDs are virtual spaces, usually a kind of adventurous ones, you can log into, enabling you to chat with others, to explore and sometimes to create rooms. Each user takes on the identity of an avatar, a computerized character.

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Writing

Writing and calculating came into being at about the same time. The first pictographs carved into clay tablets are used for administrative purposes. As an instrument for the administrative bodies of early empires, who began to rely on the collection, storage, processing and transmission of data, the skill of writing was restricted to a few. Being more or less separated tasks, writing and calculating converge in today's computers.

Letters are invented so that we might be able to converse even with the absent, says Saint Augustine. The invention of writing made it possible to transmit and store information. No longer the ear predominates; face-to-face communication becomes more and more obsolete for administration and bureaucracy. Standardization and centralization become the constituents of high culture and vast empires as Sumer and China.

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Telnet

Telnet allows you to login remotely on a computer connected to the Internet.

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Electronic Messaging (E-Mail)

Electronic messages are transmitted and received by computers through a network. By E-Mail texts, images, sounds and videos can be sent to single users or simultaneously to a group of users. Now texts can be sent and read without having them printed.

E-Mail is one of the most popular and important services on the Internet.

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Porter Novelli

Porter Novelli is the third largest PR firm with 1998 net fees of US$ 183,050,000. The companies focus lies on building brands, enhancing reputation and crisis management. Porter Novelli is specialised in: Food and nutrition, health care, consumer goods, technology, public affairs and social marketing.

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Digital Subscriber Line (DSL)

DSL connections are high-speed data connections over copper wire telephone lines. As with cable connections, with DSL you can look up information on the Internet and make a phone call at the same time but you do not need to have a new or additional cable or line installed. One of the most prominent DSL services is ISDN (integrated services digital network, for more information click here ( http://www.britannica.com/bcom/eb/article/4/0,5716,129614+15,00.html )).

http://www.britannica.com/bcom/eb/article/4/0...
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America Online

Founded in 1985, America Online is the world's biggest Internet service provider serving almost every second user. Additionally, America Online operates CompuServe, the Netscape Netcenter and several AOL.com portals. As the owner of Netscape, Inc. America Online plays also an important role in the Web browser market. In January 2000 America Online merged with Time Warner, the worlds leading media conglomerate, in a US$ 243,3 billion deal, making America Online the senior partner with 55 percent in the new company.

http://www.aol.com

http://www.aol.com/
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Fleishman-Hillard

Fleishman-Hillard, headquartered in St. Louis, Missouri, is the world's fifth largest public relations agency, with offices throughout North America, Europe and Asia, and affiliates in Latin America. Its 1998 net fees accounted for US$ 160,692,000.

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Public Relations Consultants Association (PRCA)

The PRCA was formed in November 1969 as an association limited by guarantee of up to £5 per member and therefore has no share capital. The PRCA tries to encourage and promote the advancement of companies and firms engaged in public relations consultancy..

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Internet Exchanges

Internet exchanges are intersecting points between major networks.

List of the World's Public Internet exchanges (http://www.ep.net)

http://www.ep.net/
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