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Thursday, December 15, 2016

Gambling: a matter of risk versus reward

    When you hear the word "gambling" you start thinking about casinos, and roulette wheels or maybe hands of poker. But, in real life, gambling is a matter of risk and reward. Crossing the street involves risk and the reward is getting to your destination across the street. Asking someone out for a date involves risk (emotional and, occasionally, physical) in the hopes of rewards of reciprocity of affection or friendship.
    However, gambling still is usually classified internally depending on whether one considers the risk to be voluntary or involuntary -- and reasonable depending on whether the chance of reward is sufficient to justify the amount of risk. If we think it is a high risk and does not require to be done then, and only then, do we usually call it gambling. So, games of chance are considered to be gambling but crossing the street is not.
    This isn't true of everyone. Jack Nicholson, in "As Good As It Gets", portrays someone who is all-too-aware of the everyday risks of life. He continually strives to eliminate risk by isolating himself and entering into rigid routines and being hyper-careful of hygiene and exposure. The rewards of everyday life are not enough for him to take these risks. He is "fortunate" to be able to cater to these attempted avoidances of risk because he has a lucrative occupation that allows him to do this. It is only when he sees a reward that is large enough that he increases his willingness to take more risk.
    Nicholson' s character is seen as abnormal because his awareness of risks is much greater than his recognition of potential rewards. The risks exist -- but so do the rewards that he cannot grasp. There is not a single, appropriate, balance even though there are certainly, within a given society, an expectation of being able to make "reasonable" judgements on such.
    For someone living in a war zone, the risks of doing anything rise and the potential rewards narrow. For someone with a dependable environment and financial basis, the risks seem smaller because the downside of failure is much less even if they don't achieve the hoped-for rewards.
    There are various phobias -- more specialized than those that Nicholson's character revealed -- that are still an out-of-balance reflection of the risk versus the reward. To Chicken Little, the sky may fall upon him if he goes out -- or to the agoraphobic. One person may be willing to work in high construction, balancing themselves on girders while another person may have difficulty getting onto a balcony.
    Life is a gamble. Being able to weigh the risks and rewards are more computable with games of chance than they are within everyday activities. But the risks must be taken to get to the rewards. It is part of life's journey to learn to make those decisions based on known risks and benefits.
    What risks do you see that outweigh the possible benefits?

Saturday, October 29, 2016

The Luddite effect -- when the new does not transition the old

    In the eighteenth and nineteenth centuries in London, as part of the "Industrial Revolution", a group of workers in the textile industry started gathering together to fight against technical replacements for their labor. Their fear was based in reality. The textile industry in England was a large one within which a considerable portion of the workers earned their living. A mechanized loom might replace the manual efforts of dozens of women and men.
    Similar to the situations that often exist today, these people were hard-working and had developed their skills over their lifetimes and, sometimes literally overnight, there was no longer any market for those skills. The response -- a losing battle -- was to destroy machines, make threats to those who were instigating the changes, and disrupt the ability for the new factories to produce. Some historical accounts indicate that the leaders of the workers recognized that there was no way to defeat the change but wanted better leverage to provide retraining and support of the unemployed.
    Government response was primarily organized around protecting the new factories, their owners, and products. Severe laws were passed and a number of "show trials" were held with death or penal transportation/exile as potential penalties. These laws, in effect, did succeed in breaking the movement.
    Other areas of skilled labor were also displaced within the context of the Industrial Revolution. Although history books usually focus on the improved ability to manufacture goods (and decrease of prices for the average consumer), they do not often indicate the huge labor displacement which was a direct effect of the change.
    The Luddites provide a practical history lesson. Change is difficult for societies to adopt and it is particularly hard on those who have invested much time and effort on the old. If change is to happen (and it is difficult to avoid it) then the process of moving away from the old must be kept in mind.
    There are a number of changes currently going on in current times. One is semi-involuntary, one is semi-voluntary, and another is fully voluntary.
    Climate change is semi-involuntary. This is because it was probably avoidable but made difficult to avoid because of inertia of old methods of business. Although there is still the chance to make the change less severe, it has already made significant changes to the world. The Great Barrier Reef is close-to-death largely because of the increase in global water temperature. The glaciers continue to shrink around the world -- this is especially important in the Asian subcontinent where winter storage of water in snowpacks and glaciers provide water to billions of people. "100-year-floods" and "100-year-storms" are occurring more often as the water temperature rises.
    A semi-voluntary area of change is the shift from non-renewable energy sources. Since the change has to be encouraged, and pushed for, it falls into the voluntary category. It is reaching the tipping point where it is almost easier to use new, renewable, energy sources than to keep using the old ones. However, just as happened in the textile industry, it is very important to recognize, and assist, the people and families dedicated to the old energy systems. Solar panel factories located at old coal mines to allow easier transitions?
    A full voluntary area of change is the strong push towards greater and greater independent automation. Phones get smaller and more powerful. Robots can take over more manual labor in a programmable fashion (as opposed to dedicated design such as in the textile mills). Innovation and extensive education becomes more and more necessary for general job positions.
    Whether voluntary, involuntary, or a mixture of such, change requires preparation and assistance in moving from the old. The is a necessity for the change and, when it is forgotten, much suffering can occur as well as rebellion (isolated or global).
    What happens to the old when the new comes? This is an age old question but, with more rapid change comes the need to actively address the needs for migration, retraining, and restructuring.

Sunday, October 9, 2016

Jazz and Laughter: participation makes the difference

    Have you ever been in a room, talking with someone in a quiet corner, when a sudden noise comes from another section of the room? There is another group of people over there and they are very animated and the noise bursts out again. It is someone laughing -- and others in the group are joining them and obviously having an enjoyable time. Yet that noise, even once it is recognized as someone laughing, may not sound that pleasant. Some laughs are called "lilting" or other pleasant references but others are sometimes compared to sounds of other animals or objects in collision.

    Whether the sound, at a distance, is pleasant or unpleasant, it can still be considered very appropriate within a group who are all participating in the interaction together. It is this participation that lowers the guards, and criteria, and allows everyone to relax into a mutual experience. If you hear it from a distance -- not as part of the group -- it is a noise. If you are part of the experience it melds into the overall situation.

    It is not always necessary to be with the group in order to participate. In the above case, you are unlikely to be able to hear and see what is going on without being among the others. In the case of music, it is often a degree of intensity. In order to immerse in the music, it is necessary to be able to hear it properly. That may mean being in a quiet room, with other quiet people, so that all of the sound can be noticed, listened to, examined, and felt.

    On the other hand, it is just as valid of an experience of music to be in the midst of an explosion of sound and people and participate in the emotions of the fellow concertgoers and the movements of the band -- in spite of the fact that it may be so loud that the notes can no longer be distinguished from each other. In the one case, it is the music that is experienced and, in the other, it is the experience that is set to music.

    Jazz is an interesting juxtaposition of music and experience. A jazz piece, even when played by the same group of musicians, is not expected to sound the same twice in a row. The variation expands further when it is played by a different gathering. Although a spectator may not be directly singing or playing an instrument they have to be an active participant to fully take part. There are factors of anticipation -- what will happen next -- and surprise -- not expecting what did happen. The music will flex according to the weather and the internal needs of the players and the audience.

    There has been much speculation about whether robots could ever "replace" a human. Alan Turing presented what is called the "Turing Test" which says that if you are separated from a computer that can give responses -- so you have no direct knowledge of whether it is a computer or not -- and a human cannot tell whether or not it is a computer giving responses then it "passes". It is truly Artificial Intelligence.

    I would submit that an even better test would require the AI to be able to participate within a set of people and know when to laugh.

    What activities come to mind when you think of a need to be an active participant?

Saturday, August 27, 2016

GIGO: Garbage In and Garbage Out

     In the world of computer science, where a lot of acronyms were created (and still are), there was a term GIGO. GIGO is an acronym for "Garbage In, Garbage Out". This is a shortened version of saying that if what goes into a system (a computer, as one example) is not legitimate then it cannot be processed into an appropriate output. For example, a cruise control system takes into account current gear ratio, axle speed, tachometer reading, and so forth. If the cruise control believes that the car is moving at 100 miles per hour (60 kph) then it will do inappropriate things to the brakes and accelerator if, in reality, the wheels are spinning freely on a patch of ice and the car is not making any forward progress.
     If a data entry person (who are almost always touch typists -- not looking at the keys) had their hands at the wrong point on the keyboard as they entered data into a system, then things are not going to go well. You may get a $1,000 refund or you may get a bill for $10,000. In the first example, there is an assumption -- that the speed of the axles is a reliable indication of the speed of the car. In the second example, there is a lack of verification that the correct data are being entered.
     Data can also be wrong if the input instrument fails. If your thermostat breaks, then it cannot give proper information back to the processor that controls the oven temperature. You find out when the turkey comes out raw from the oven or the bread starts burning and catching on fire.
     Unfortunately, we are not always able to know, or immediately be able to be certain, that a problem has occurred. We may come up with a result that is completely false -- but we do not know that. This is why it is so important to have secondary, or backup, systems and studies to make sure that results are consistent. In the case of scientific studies, one study may be interesting and have results that may entice OTHER researchers to try to duplicate the study or try a different approach, but the results of the one study cannot, and should not, be relied upon on their own.
    In the past decade, the term GIGO has expanded a bit. It now is sometimes used for a situation where any type of inappropriate incoming conditions results in bad outgoing conditions. Eating "junk foods" is an example of this in the area of nutrition. If you eat foods that do not supply the appropriate "building blocks" (see my earlier blogs on nutrition) then it is difficult to build, and maintain, a healthy body. Another situation might be a building that is created with bad materials (inferior steel, poorly mixed concrete, lack of specified reinforcements, ...) and it collapses when a problem (perhaps an earthquake for which it was SUPPOSED to have been adequate) occurs.
     Another situation is more human-directed. That is falsification of data. In other words, people can (and do) sometimes lie. This may be for many different reasons -- they want different results to be true or they think that other results will bring them more attention (and funding) or they trust that no one will bother to cross-check the results.Two instances (I'm sure there have been more) of this have happened in the past decade -- one dealing with autism and vaccines and the other having to do with climate change. While it is difficult to be certain of the motivations, the results were considerable -- a loss of trust in vaccinations (and a rise in preventable illnesses and deaths) and possible delays in addressing environmental problems.
      In the area of politics, of course, this happens all of the time. A politician will say something and reactions and decisions are made based on what they say. If what they say is truthful, then those reactions and decisions have a better chance to be good ones. If what they say is not truthful, then it is unlikely the results will be good ones. Unfortunately, the rules of scientific studies are rarely followed in politics -- the facts may be researched but the results of those fact-verifications are either not seen, ignored, or misbelieved based on what the recipients want to have happen.
     A situation that lies between the two is the matter of data gathering for political purposes. Polls are used to reflect, and to influence, people's attitudes. However, a poll may gather data that is not representative and, thus, the results are not accurate. For example, if a poll only calls people on "landline" phones then the people who have only cell (mobile) phones will be excluded. It turns out that certain groups of people are more likely to have only cell phones -- thus the poll will be skewed away from the cell phone group and not be accurate. Or the poll could call people only in the evening hours -- and certain groups not present during the evening hours will not be represented. Or some people will filter out calls based on incoming numbers and so only those who do NOT filter their calls are represented in the poll results. It is more difficult than ever to get an appropriate poll base.
     Finally, a situation that combines computer science, politics, polling data, and cross-checking -- voting. There are two types of fraud that can exist in elections. One is voting fraud -- where someone who is not entitled to vote (or who is entitled to vote once but votes more than once) is able to vote. This situation sounds scary but actually does not happen a lot. The other is election fraud. This is where people who should be able to vote are prevented from voting, or their vote is changed such that the person/cause for which they are voting does not get credit (possibly giving it to the opposing situation). This happens much more often than voter fraud and appears to be increasing in volume. Both voter fraud and election fraud are instances of GIGO in the political arena. They are addressed in the same ways -- simplification (fewer systems or people between the voter and the recording of the vote) and cross-checking (paper trails for electronic voting systems, receipts for voting records, duplication of systems and verifying that both results are the same, ...). Unfortunately, people often decide to make things "easy" and "fast" which tends to increase the opportunities for election fraud.
     In what areas of life do you see the principle of GIGO operating? How do you, or would you, make sure that the information, on which you make your decisions, is correct?

Tuesday, August 16, 2016

Labels and marketing: what's in a name?

     This blog is about marketing -- and marketing is about politics (and politics is about marketing). Most people think of politics as about politicians and other elected officials. Most people think of marketing as being for/against commercial products and other types of physical objects that can be transferred. Yet, we talk about marketing a candidate and politics are basically a matter of forming/creating, and expressing, views on various subjects. They are inseparable.

     So, this is a warning. If you don't want to read a blog about politics then don't read this blog. Some examples will be about commercial products and other examples will be about current events and, admittedly subjective, aspects of current society.

     Sometimes marketing is used as a short term for marketing media which is about HOW the marketing materials are distributed -- television, pamphlets, advertising within other social media (movies, plays, ...), and so forth. This is different from the marketing content and I won't be talking about marketing media (at least, not in this blog). Marketing is also closely related to sales -- and I won't be talking directly about sales. This blog is about marketing and labels -- the words that contain the concepts that you want to have others absorb.

     As mentioned above, marketing is basically a matter of creating/forming views on various subjects. The person, or group, that is doing the marketing will have an object view -- what she, or he, wants you to have as the final thought about the item being marketed. Candidate X is the best. Product Y makes your clothes cleaner. Legislation G will make you safer.

     The following bullet items are concerned with categories of methods used to make labels more effective -- more likely to achieve the desires of the people creating the labels. It is meant to include the more important methods but certainly will not contain all of them. Please note that, although examples are taken from the U.S, examples abound from around the world -- in my research, I have found items from Canada, France, the U.K., and Germany.

  • Obfuscation -- this is a $20 word for making things less clear. Clarity is sometimes desired within marketing and, at other times, it is strongly not desired. In general, if there is one side then there is the opposite. Gas-conserving versus gas-guzzling. But "gas-guzzling" isn't appealing so that might get ignored and "powerful" would be used instead.

    For a controversial social/religious area, the sides should be "pro-choice" versus "anti-choice" or "anti-life" versus "pro-life". But, even though it is accurate, "anti-choice" isn't something that is marketable. The people opposing the "pro-life" people are strongly supportive of all phases of life, including the post-birth lives of the woman and fully-developed child -- so "anti-life" is not at all accurate.

    In most cases, obfuscation can only occur when the media allow it to happen. Many times, the media will actually assign the labels and they often do so based on "catchiness" rather than attempted accuracy.
  • Conciseness versus Self-explanatory and perspective. Shorter descriptions are more easily remembered. "Jingles" are short phrases that are easy to remember (and, often, sung) and get associated with a product. Hashtags are now used to give a short, compact, indication of the subject matter. A difference of perspective can mean that a concise term does not have sufficient information to be self-explanatory.

    The term #BlackLivesMatter was created based on the reality that, currently, the lives of black people, poor people, Hispanic people, and First Nation ("Indian", Native, indigenous, ...) people do not matter very much to the U.S. justice system. Their deaths are under-investigated and legal matters are not treated with equal importance. They are also profiled and subjected to laws that are directed specifically towards their communities. They are over-represented in the for-profit prison system.

    (What do for-profit systems try to do? Increase demand -- which, in this case, means to increase the numbers of people imprisoned and it is much easier to do that with less-powerful segments of the population.)

    People who are not in these groups assume that the groups of people are treated in a similar way to the way that they are treated -- thus they respond that #AllLivesMatter which, unfortunately, is not accurate. It is true that #AllLivesSHOULDMatter. If the original hashtag had been #BlackLivesAlsoMatter would that have headed off some of the arguments? A concise label may be accurate but, without appropriate history and perception, may not be sufficiently clear.
  • Inferences -- drawing on history and associations. The Patriot Act (and the Patriot missile) have no direct connection to anything "patriotic". By associating the name to the legislation and product, the associations that people have with the word can be connected, in people's thoughts, to the product. Local company names that have their local city, or neighborhood, as part of their name tend to attract more business.
  • Avoidance of "hot words" by redirection. Some words are associated with negative things by the majority of a population. In the U.S., such hot words include "socialism" and "welfare". So, if you are going to promote a new taxpayer-funded airport, you do NOT use the word "socialism" (which it is) -- instead you use the less direct "subsidized". If a new factory needs special utility lines (electricity) and water lines that are taxpayer-funded, they are "expanding infrastructure" even if it is specifically for use by the company which does not pay for it. "Welfare" is a bad word when used for helping individuals -- so the word is not used when corporations are subsidized.
  • Newspeak -- the way of using language for redirecting thoughts. This is closely related to obfuscation but is more deliberate. Newspeak was described in the book 1984 by George Orwell. A more complete list can be found in the Wikipedia article at

    "Right to Work" laws actually reduce the wages, and freedom, to work for a living. The phrase "Anti-Union" is much more accurate but not as easily sold. The "Internet Freedom" act moves the control of the Internet to large corporations -- thus actually reducing the freedoms of the consumers.

    Much of the transfer of wealth from the 99% to the 1% has been done under Newspeak titled Legislation labels. Who has time to read a 2,000 page bill when the extremely inaccurate and misleading title "Help out the Middle Class Act" (not the actual name of a bill, as far as I know) says it all?

    Newspeak also deals with the re-writing of history. Don't like what actually happened 50 years ago? Change the history books to indicate something different. Does a book written 100 years ago use language that is no longer acceptable? Rewrite the book to be currently acceptable. This is related to labeling as it is possible, with effective marketing, to change the current meaning of a word. For example, the word "gay" is no longer used in the U.S. to indicate happy and joyous. The label has changed because the underlying meaning has been diverted.
  • Irrelevant but popular associations. A carbonated beverage (soda, pop, soda pop, sparkling drink -- regional names) can be marketed as "gluten-free". Carbonated beverages almost never have gluten but, since many people now consider gluten to be bad, a marketing method can include saying what "bad" things are NOT included. "This soda is gluten-free, cyanide-free, lead-free, and contains all the vitamins that start with the letter B".

     Labels are a way of marketing products and ideas. As an aspect of language, they make use of -- and form -- the ways that we think about those subjects. If we are aware of what we are doing when we create labels, they can be more effective -- and, if we are aware of what others are doing when they create labels, we can make it less easy to be misled.

    Are you aware of other methods that labels can be used, or misused, within the world in which you live? How much do labels affect the way you think about things?

Sunday, August 7, 2016

Magic numbers: Society and what is "normal"

I was involved in a thread once upon a time and got trolled (expected if you talk about anything of significance -- and sometimes even if you are just talking about the weather). This was a thread talking about one of society's "magic numbers".

These are part of a group of numbers which we use based on statistical information. As Mark Twain once said (he said that the British Prime Minister Disraeli said it first): "There are three kinds of lies: lies, damned lies, and statistics."

For example, in current society a number called the Body Mass Index (BMI) is used to determine whether you are overweight, underweight, or in a "good range". This number is a ratio of height to weight and provides reasonable results for 80 to 85% of the population. For the other 15% to 20% of the population, the number just doesn't work well. If you are an athlete (or work out a lot and have more muscle) it doesn't work well. If you are a total couch potato with almost no muscle it will actually give you a better result than you "deserve". If you truly do have "thick bones" you will be at a disadvantage. This doesn't matter that much except if people are basing other things on that number -- insurance companies and computerized social services for example.

Why do we use this "magic number"? It is quick. It is easy. It is cheap compared to other, more accurate methods of body fat percentage calculations. However, even if one used a more accurate measure than that of the BMI, it would STILL not be accurate for everyone because there is no "one body shape fits all". For some, to hit that "ideal", one part of their body would have to be UNDER-weight in order for the average to be correct.

There are other "magic numbers" used. The "age of consent" is a magic number which, in more technical society, indicates that a child has become an adult. They are able to sign contracts, do things without permission from parents or guardians, get married and so forth. This magic number ranges from 13 in Japan to 21 in Bahrain. In some non-technical societies, it depends on the age when menarche sets in for women and "rites of passage" for men.

Many people get the direction of "age of consent" backwards -- thinking that a higher age of consent protects the child more from society. In reality, the family, church, or government usually have many options to do what they want with children at the age they think is right. The "age of consent" is what gives people the right to control, for themselves, decisions that affect their lives.

These numbers are set for two principal reasons. One is to prevent abuse of others by pushing them into activities (such as marriage or other things) before they can really make good decisions for themselves. The other is to determine an "age of emotional and mental maturity" which is taken to be an indication that they can make good decisions.

This type of magic number is determined almost solely by societal norms. It is usually lower in agricultural societies and higher in societies that require a longer period of education and social adjustment. It is also higher in societies where familial, and religious, control of women is greater. But, as is true with the BMI, it is (at best) a statistical reflection. Some will not be ready at age 30 to properly make decisions for themselves. Some might be ready at a very young age. There have been no psychological studies and are unlikely to be such.

Even the "age of consent" is not for everything. There are separate "magic numbers" for voting, being drafted for war, being able to drive, being able to work full-time, for purchasing and using legal drugs, and so forth. In many instances, the society would like to prohibit the activity but do not have sufficient backing from the populace to do such. Therefore, they set an age which most of society agrees is appropriate.

In all of these areas (and more), the "magic number" is sometimes determined by a statistical averaging and sometimes determined by societal norms. It is rare that the number is backed up by thorough, and consistent, studies -- which is why it is "magic".

What other "magic numbers" are you aware of within society? Do you know of any that have a researched background reason? Others that do not have such a background?

Saturday, June 18, 2016

Social Media: Still no such thing as a free lunch

    I recently had a friend, who also uses one of the same Social Media sources that I do, complain about the way their contacts list was being used to send out advertisements to her friends under their name. For them, this was an item that made them consider dropping use of that Social Media source (I am deliberately not naming it because the problem is not really specific to that particular source -- call it YYY.) I responded to their message with a brief note about how all of the Social Media sources had to find ways to fund themselves and that if they chose to drop usage that was certainly their right but to recognize that the source had to be able to fund themselves.
    During the past 50 years, we have had a true technical revolution -- meaning that the ways that things interact have dramatically shifted. All change causes discomfort and the need to adapt new methods to work with them. However, as I have talked about in some earlier blogs, money -- which is the representation of labor and other resources -- still needs to be able to be moved around so that people can pay for their needs to live.
     It may be difficult for many people to remember so far back but, once upon a time, everything was paid for in cash of the local economy -- or, possibly, private representations of cash such as personal checks or money orders/traveller's checks. My younger children have never written a check -- and it is quite possible they never will (they also may not learn cursive handwriting to be able to sign a check or contracts -- but that is a different story). The first credit card (or what we would call a credit card) was invented around 1950. For the first couple of decades, a credit card was used more as a guarantee against payment with the card's numbers (sometimes imprinted from a raised surface) associated with an account which was then printed with the purchase/fee amount and sent to the local bank or credit repository. The money was then authorized to be given to the merchant and a bill was later created for the person using the credit card. It was not until the 1980s that the landline phone system began to be used to connect directly to the credit card issuer's accounting system -- an "electronic" credit card. Of late, it is becoming popular to embed "smart chips" to increase security.
     With use of electronic credit cards, the user, the merchants, and the credit system became part of the "big data" pool of information. Privacy was greatly diminished -- laws were created to help protect privacy but certain information could now be accessed unless directly forbidden. If you buy a specific product at a specific store, you may get (in the mail -- or via email) a coupon for a competing product at a competing store (or the same product but at a different store). They know WHAT you get and WHERE get it -- and the purchase is specifically connected to YOU. The advent of even more abstract methods to transfer money such as Paypal means that all info within the capital stream can be matched against each other.
     So, with that general background, here comes the Internet. Others are better qualified to talk about how it evolved than I am -- but it basically started as a network interconnected by the Defense Department to help its contractors better communicate with each other. That expanded into a general connection of universities, colleges, and scientists which then expanded into connections between businesses as well as all the former connections and then the leap occurred for virtually everyone to connect with everyone else. This global interconnection used to be via voice phone, or physical letters and telegrams, or long personal trips.
    The old, physical, methods had a set of costs to provide services and a set of fees and charges to make sure all the people involved could continue to provide the services. The old pre-Internet was paid for by the Defense Department, and then divided between the Defense Department and the various businesses and then private companies started to be formed which helped with interconnection for a fee -- with transmission fees to the private companies paid directly by the end user. That is the way that the fee structure is largely set up now. People pay for connection (cable, DSL, analog phone, broadband ethernet, whatever) and usually have an Internet Service Provider (ISP) -- many times these are now provided by the same company. In some manner, the full amount of fees/charges must pay for the needs of all the people/resources needed to provide the service.
    We (finally, you say) now get to the Social Media. Social Media is a destination -- just like going online to shop is a destination -- or online to get information is a destination. Each destination has an interest in having you go there. But every destination has its own costs needed to provide the services that are attracting you to go there. Online shopping sites are a straight-forward equivalent of a "brick and mortar" store. Their costs are paid for via the profits on items that they sell. Online information access is usually paid for by the people who want you to have the information -- tourist destinations or government entities (taxpayer funded) or whatever. Private information destinations may be paid for by advertisements which exist to redirect you to businesses which have use an online shop finance model.
     But what about the Social Media? Every destination has to get you to decide to visit. Many of the major Social Media (and major "search" groups) decided that the services would be "free" to the user. In other words, people could work with the destination's services without paying any additional money directly. A "free" site can then entice people to come there by providing the services that they want to use without having to precisely decide on a fee structure for the services (which, if they give many types of services, could end up being very complicated). BUT, the Social Media still has people and other resources that are needed to provide the service -- and these people have their own needs to be able to live. So, every destination -- including Social Media -- must eventually bring in money to pay for those services.
     Once a service is provided as "free" it is very difficult to start charging up-front fees without having a mass departure of people from using the service. So, the fees must be charged in a manner that is "optional" -- you are not required to pay/use them in order to get the general services -- but enough people are expected to want to use them such that the money brought in is enough to pay for costs. The first, easiest, avenue is advertisements -- this has a long-time association with use of services and people expect it (even if the service initially starts with no advertisement). It is even a way to get initially "free" services changed to a fee-service without getting rid of users -- ("free" with advertisements but, if you don't want ads, you can pay a fee to get rid of them). The next step is to provide access to other services which, once again, may be "free" but have added inclusions that do cost money (for example games that allow you to purchase "extras"). A following step is to "sell the client list" to other fee-based advertisers (such as my friend complained about).
     There are various methods used to bring in the revenue needed to provide the services and resources -- some are very ingenious. The goal is to make you WANT to pay -- something that you have been persuaded that you NEED -- without ever making you doubt the reasons for which you initially went to the destination. It is a "tightrope" for some companies and they often sway back and forth between not making enough money to starting to lose people because they are unhappy.
     What other methods of bringing in money do you encounter? How do you feel about them?