Kevin Werbach: Search economy, don’t think most people who aren’t in that world don’t appreciate it.

Ellen Siminoff: Google has created a place to bring people together. The reason search works so effectively is because of the high intent of the people on the site. they have an intention to find something, and the search engines exist to get them to what they want as fast as possible. There is a whole economy, from search engines, to SEOs, to marketplaces that have developed on top of the search economy that allow companies and marketers to bid on groups of words, as an overly on the market. There’s an affiliate economy of companies that use these tools effectively to deliver users or buyers at a certain price point. What’s interesting is that a) it works and b) it’s democratised the ability for marketers to reach the users they want to reach.

Elliot Noss: What’s gone on in domain names has been monetisation over the last two or three years is to take that efficiency that Google has brought and combine it with the fact that whether we want to believe it or not there is still a huge portion of users who were simply use the browser bar to get to what they want to on the internet. Used to think that this problem was going to go away, but it hasn’t. We all appreciate the power if the net, the power of domain names, but a huge portion is directed through direct navigation via the browser bar.

We see the effects of that - the times when you type in a URL that’s not right, and you’re presented by a page of search results account for 10 - 12% of search engine revenue.

Internet purists see this as bad behaviour, but it’s taking users’ intention and turning it into a page of search results. That’s better than SEO. Th important thing to take away is that there’s now an economy that’s growing, that’s putting massive value against generic domain names. In last six months of 2007, the primary market for URL registration, and the huge amount available for resale, is going to change this industry.

Lots of people are thinking deeply about advertising in general, and on the internet, and there’s no better value than generic domain names.

Max Levchin: Your information costs $14 to buy, right now, such as your address, credit card numbers etc. The security code that is not supposed to be recorded anywhere is 99c. Used to chart the cost of information, because the cost of the data from companies good at protecting data cost more. Most Ebay account details are obtained by phishing - least talked about problem on the net.

That whole mean ’steal your money’ economy, is not what you think it is. These are not guys sitting in smelly basements, this is actually an industry, and there are tiered levels of information. People who steal data, who wash the data, middle men. That’s been around for a decade now. Lack of extradition and a vague notion of what’s legal and not makes it difficult to eradicate. These problems are not going away.

Andrea Matwyshyn: ‘Black collar crime’. Black hat with white collar clients. Estimated losses to US business is over $50 billion for 2005, but it varies in estimates. Calculation methodologies vary and the scope isn’t understood, certainly not by regulators.

Movement into data breach notification laws, dramatically different to reporting requirements, what’s the definition of a breach, what’s reportable, what’s exempt, and who is required to report. Most of these are targeting for-profit entities, but a lot of the most serious breaches aren’t from the private sector but the non-profits and government agencies. This problem is much bigger than north America. There will be national data breach legislation, although they probably won’t get it right. Point that’s interesting is encryption aspects. Encryption is not a panacea, and bad encryption is worse than none.

Regulation won’t fix this - it needs an international approach and regulators aren’t capable of that yet. Seeing cultural changes, people in organisations fighting internally for more resources to bring to bear. Lots of companies also trying to doubt the importance of this, e.g. email providers saying that phishing isn’t a problem for them.

KW: Is there anything that gives us faith in ecommerce?

Ellen: Yes, it works! Gov’t not going to do anything positive for the industry. The Mafia exists in the physical world too - it’s not like it exists only on the internet. In economic terms these are negative externalities, costs shared by buyer and seller, and usually free markets will prevail. If you are managing to ROI you can make business decisions about what you are going to do. You can’t control others, but if buying on the internet helps you and your business, do it in as sophisticated a way as possible.

Elliott: There is an informal network of providers, of people looking at this. There are some positives. They are taking user behaviour and riffiing off it and delivering stuff to you in an efficient way.

Andrea: The fact that Social Security numbers are used, that’s not an internet-only problem. That’ s cropped up elsewhere. It’s not a lack of trust in the internet economy.

Max: There are two enormous markets with little revenue: widgets, reach 177 million people every months, twice MySpace, there’s probably less than 0.5% of traffic is being monetised in any way at all. Ads in this space aren’t being explored. six months ago they thought they were a silly fad.

More interesting thing, flash widgets that play video or whatever, which can then turn into a shop checkout, so you can buy what you’re shown immediately. Very powerful but no one’s doing anything with it.

KW: if widgets are the new web, how does that affect search?

Ellen: It’s about APIs, get them out there and use it.

Elliott: Navigation. How long will DNS last? Street addresses have been around forever, meatspace address old and there is no talk of replacing it. Widgets have to reside somewhere, they need a web page somewhere.

The more sophisticated the user, the more insulted by direct page advertising they are.

Ellen: You always have other options, if you don’t like the page you’re on go to another page.

Elliot: Have to understand some of the dynamics, inefficient economic behaviour. Google segmented traffic between US and Canada, Yahoo did North America. So people would buy expensive US keywords in Canada, and then sell them back to Yahoo. Advertisers don’t pay for that - it’s publishers who pay for those inefficiencies. Not fraud, it’s inefficient. Google and Yahoo changed the way that they deal with these arbitrage websites, and the economies change.

Andrea; One thing that doesn’t always get calculated into the picture. If you’re sharing your database with another country with someone doing work for you, it’s your data and if it goes wrong that’s your hit. Thinking about how people are leveraging data, and how you deal with these dependencies, outsourcing things doesn’t stop every problem.

Q from floor: In ‘92, dropped off the net, and then when came back in ‘94 there was advertising everywhere. Net changes, and will always change, and what is normal today may not be the same tomorrow. Search engines are an arbitrage play, sitting between users’ intent and destination. Not sure that’s the most efficient way to find what you want.

Q from floor: Company dealing with spam got death threats from Russia. This isn’t just online. The Russian mob was behind the threats. Is this what we’re facing?

Elliot: Blue Security Case. There was an Israeli company using techniques against spammers, which was annoying the spammers who ‘declared war’ and decided they would take these guys out. They took Typepad down because the guy had an account there. He came in one morning to what looked like a network problem; supplier was using three biggest networks in Canada and had problems on two of them. Spammers blew out a big chunk of the network in Canada - scale was like nothing they had ever seen. It is nasty, nastier than you might expect, and the view of most is ‘don’t get in the way’.

Andrea; And the problem is that some of these things aren’t crimes in some countries. Need to have another legal system to deal with this.

Max: It’s a gov’t squared problem, it needs co-operation.

Elliot: Interesting stuff happening in ICANN, forum where a lot of gov’ts will talk. Russian gov’t participating.

Q from floor: But we see a bug-bite, and we swat it and suddenly attacked by a swarm. The severity of the attacks going on is huge. Phishing is just a small thing. How do we find this balance?

Elliot: The balance is there. If you have a good provider, you’ll see the same amount of spam as over the last 12 - 36 months, yet the amount of spam in the system is increasing exponentially. The filters are just much, much better. It doesn’t stop us using our email - opt-in email lists are a bigger problem.

KW: Seeing an explosion of activity that’s not about traditional economics. Open source stuff, not about money, about other motivations. How do we square the growth of that with all this other stuff. Do they collide? Does all this mean it’s naive to think that activities are going to be driven by socialness?

Elliot? The way you ask the question you equate personal interest for selfishness. It’s incredibly virtuous - if you help people you get things resonate back to you. If you look at the companies that achieve customer success, generally speaking, it’s in helping people do things.

Andrea: Should socially define which behaviours deserve a ‘tax on stupidity’ and what should be rewarded.