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Weren't we just pointing out that everyone seems to want to blame Craigslist for things that it has no responsibility for? The latest is Connecticut's Attorney General, who has attacked Craigslist for allowing ads for prostitution. This is hardly a new charge. Last summer, the mayor of Atlanta lobbed similar charges at Craigslist. But, of course, just like that time, the blame is misplaced. Craigslist is the tool provider, not the content provider. To blame Craigslist isn't just wrong, when it comes to illegal acts like prostitution, it's downright backwards. Why? Because as some police have realized, Craigslist is actually a really useful tool for police to track down and arrest people breaking the law.

So not only is placing the blame on the wrong party, it's doing so in a way that would only drive the prostitution further underground, making it harder for the police (and the Attorney General's office) to do their job. How smart is that? But it sure does generate headlines... The Attorney General, Richard Blumenthal, had this to say in a letter to Craigslist:

"I am astonished and appalled by Craigslist's refusal to recognize the reality of prostitution on its Web site -- despite advertisements containing graphic photographs and hourly rates, and widespread public reports of prostitutes using the site."

To which I can only reply: I am astonished and appalled by Richard Blumenthal's refusal to recognize the reality of liability and section 230 safe harbors -- despite it being the law of the land and widely known and discussed in legal circles.

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Now, we all know that Rep. Howard Berman, who represents a district right next door to Hollywood is in favor of strengthening intellectual property laws. He's made absolutely no secret of that. It's quite questionable then, as to why he should be considered an impartial overseer of intellectual property laws. But, in a talk on Friday he made some very bizarre statements that make it clear he doesn't care at all what those who disagree with him think. First, he claims that there's not much controversy concerning the PRO IP bill, which is a huge understatement. However, the real kicker, is that when asked about the groups (like the EFF) opposing the bill, he brushes them off as follows:

"There are people who want to steal intellectual property. Their lobby is distributed, diffuse, but unfortunately very popular."

This, ladies and gentleman, is the guy who's in charge of determining our intellectual property laws. He simply assumes that anyone who disagrees with him "wants to steal intellectual property" (which, of course, isn't possible -- you can infringe, but not steal it). But, even more to the point, the folks he's talking about are most certainlynot even defending the infringement of copyrights. They're talking about trying to bring the laws more in line with what's reasonable. To paint them all with the brush of defending "stealing" isn't just wrong, it's rather obnoxious.

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Now, we all know that Rep. Howard Berman, who represents a district right next door to Hollywood is in favor of strengthening intellectual property laws. He's made absolutely no secret of that. It's quite questionable then, as to why he should be considered an impartial overseer of intellectual property laws. But, in a talk on Friday he made some very bizarre statements that make it clear he doesn't care at all what those who disagree with him think. First, he claims that there's not much controversy concerning the PRO IP bill, which is a huge understatement. However, the real kicker, is that when asked about the groups (like the EFF) opposing the bill, he brushes them off as follows:

"There are people who want to steal intellectual property. Their lobby is distributed, diffuse, but unfortunately very popular."

This, ladies and gentleman, is the guy who's in charge of determining our intellectual property laws. He simply assumes that anyone who disagrees with him "wants to steal intellectual property" (which, of course, isn't possible -- you can infringe, but not steal it). But, even more to the point, the folks he's talking about are most certainlynot even defending the infringement of copyrights. They're talking about trying to bring the laws more in line with what's reasonable. To paint them all with the brush of defending "stealing" isn't just wrong, it's rather obnoxious.

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The New York Times has a great write-up of the continued rapid growth of Red Hat. Despite the looming recession, Red Hat is predicting 30 percent revenue growth in the coming year, to more than half a billion dollars. For a few years, Mike has been talking about how to make money while giving away infinite goods, and Red Hat could probably be the poster child for his argument. Despite the fact that virtually all of its "products" are available for free on the Internet, Red Hat is still convincing companies to pay it hundreds of millions of dollars. Of course, the reason this works is that Red Hat's product isn't its operating system or other software. Red Hat's product is access to the time and expertise of its employees, and to Red Hat's extensive ecosystem of developers, hardware vendors, and others who have built atop the Red Hat platform. Because Red Hat stands at the center of this tight-knit web of relationships, their employees are better-positioned than anyone else to quickly solve customer problems. And it turns out that companies are willing to pay hundreds of millions of dollars for that assistance.

The most interesting part of the article is where it talks about Oracle's effort to undercut Red Hat by offering the same software at a lower cost. Apparently, as we predicted, it hasn't been going too well. And it's not too hard to see why: Larry Ellison doesn't seem to understand Red Hat's business model. What Red Hat is selling isn't software, but support. And the value of a support contract is a function of the expertise of the company providing it. Not only does Red Hat have a number of key Red Hat developers on staff, but it also has a ton of strong working relationships with developers and vendors elsewhere in the Linux community. That means that if a customer encounters a bug in its Red Hat Enterprise Linux installation, Red Hat will either have an engineer on staff who can fix it, or it will have a strong relationship with the outside developer who developed that piece of software or the firm that manufactured the hardware. That makes it more likely that it will be able to address the issue quickly and incorporate the fix into the software for future releases.

Oracle has made comparatively little effort to either hire Linux developers or foster strong relationships with the broader free software community. As a result, Oracle isn't able to provide the same kind of value that Red Hat can. Yes, Oracle tech support can fix straightforward problems, but if they need to make changes to the code, they'll often need to go to a Red Hat engineer for help getting it fixed. And not surprisingly, most customers would rather cut out the middleman and go to Red Hat directly, even f it costs a little more.

Timothy Lee is an expert at the Techdirt Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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We had assumed that former Attorney General Alberto Gonzales' sudden facsination with "piracy" was as a way to avoid dealing with the controversy surrounding his office -- but it appears his successor is heading down that path as well. In a speech given today in Silicon Valley, Attorney General Michael Mukasey gave a fear mongering speech about how piracy and counterfeiting fosters terrorism. This is a line (literally) straight from the RIAA training manual, which it appears Mukasey has bought into. It should come as no surprise to hear that Mukasey flew up to Silicon Valley after spending a day in Hollywood at Warner Brothers.

Still, what's most interesting is that he doesn't seem to indicate much of a difference between merely copying content and "counterfeiting," which would be passing off a fake good as a legitimate one. Counterfeiting is more akin to "trademark" in that it's really about customer protection (making sure you're not buying Bob's Cola thinking that it's Coca Cola). It's understandable to be upset about counterfeiting -- but the problem is that two separate impartial government agencies have both found that counterfeiting isn't that big a problem, and it's regularly exaggerated by lobbyists.

Unfortunately, it doesn't appear that any of these nuances have made it to the AG's office. Instead, he's just lumped all piracy and counterfeiting issues into one single category and labeled it all a big problem and linked it to "terrorism" so that no one questions it. And rather than assigning more Justice Department officials to work on real problems and real crimes, he's been beefing up the "IP" group, increasing prosecutions 33% in the last couple of years. Is this really the best use of our taxpayer money?

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We had assumed that former Attorney General Alberto Gonzales' sudden facsination with "piracy" was as a way to avoid dealing with the controversy surrounding his office -- but it appears his successor is heading down that path as well. In a speech given today in Silicon Valley, Attorney General Michael Mukasey gave a fear mongering speech about how piracy and counterfeiting fosters terrorism. This is a line (literally) straight from the RIAA training manual, which it appears Mukasey has bought into. It should come as no surprise to hear that Mukasey flew up to Silicon Valley after spending a day in Hollywood at Warner Brothers.

Still, what's most interesting is that he doesn't seem to indicate much of a difference between merely copying content and "counterfeiting," which would be passing off a fake good as a legitimate one. Counterfeiting is more akin to "trademark" in that it's really about customer protection (making sure you're not buying Bob's Cola thinking that it's Coca Cola). It's understandable to be upset about counterfeiting -- but the problem is that two separate impartial government agencies have both found that counterfeiting isn't that big a problem, and it's regularly exaggerated by lobbyists.

Unfortunately, it doesn't appear that any of these nuances have made it to the AG's office. Instead, he's just lumped all piracy and counterfeiting issues into one single category and labeled it all a big problem and linked it to "terrorism" so that no one questions it. And rather than assigning more Justice Department officials to work on real problems and real crimes, he's been beefing up the "IP" group, increasing prosecutions 33% in the last couple of years. Is this really the best use of our taxpayer money?

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When we discuss the basic economics having to do with infinite goods, sometimes the debates in the comments accuse me of promoting one "business model" over all others. The truth is quite different. The economics at work are fundamental. Price gets driven to marginal cost. The business models that then result, however, are numerous and varied. The key is simply recognizing that the infinite good works as a resource, increasing the value of all sorts of scarce goods. Thus, you release the infinite goods widely, and sell scarce goods that are made more valuable. How you do that can take all different concepts into account. Just in the music space alone we see so many varied models, from Radiohead's name your own price to Trent Reznor's tiered premium model to Jill Sobule's tiered support model to Maria Schneider's fan-supported production model all the way to things like The String Cheese Incident setting up their own travel agency to help fans follow them around for gigs. The key isn't a single business model. In fact, each of these individual business models might not work for any other artist. But all recognize the promotional power of the music in making something else much more valuable.

And we're seeing that show up in totally unexpected places as well. Take, for example, this recent post on Boing Boing about what's happened with a bunch of experimental video games, developed originally as part of a Carnegie Mellon project. Each game was developed in 7 days and many are given away for free. However, now a company has taken those games and made t-shirts (yes, t-shirts) using images from some of the games. Even better, though, is that with each t-shirt, you get a copy of the video game itself, and the shirts are now for sale at Target. In other words, these games are helping to make the t-shirts more valuable, even though the games themselves are free. It's yet another example of understanding the difference between infinite and scarce goods and how to use one to make money from the other.

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When we discuss the basic economics having to do with infinite goods, sometimes the debates in the comments accuse me of promoting one "business model" over all others. The truth is quite different. The economics at work are fundamental. Price gets driven to marginal cost. The business models that then result, however, are numerous and varied. The key is simply recognizing that the infinite good works as a resource, increasing the value of all sorts of scarce goods. Thus, you release the infinite goods widely, and sell scarce goods that are made more valuable. How you do that can take all different concepts into account. Just in the music space alone we see so many varied models, from Radiohead's name your own price to Trent Reznor's tiered premium model to Jill Sobule's tiered support model to Maria Schneider's fan-supported production model all the way to things like The String Cheese Incident setting up their own travel agency to help fans follow them around for gigs. The key isn't a single business model. In fact, each of these individual business models might not work for any other artist. But all recognize the promotional power of the music in making something else much more valuable.

And we're seeing that show up in totally unexpected places as well. Take, for example, this recent post on Boing Boing about what's happened with a bunch of experimental video games, developed originally as part of a Carnegie Mellon project. Each game was developed in 7 days and many are given away for free. However, now a company has taken those games and made t-shirts (yes, t-shirts) using images from some of the games. Even better, though, is that with each t-shirt, you get a copy of the video game itself, and the shirts are now for sale at Target. In other words, these games are helping to make the t-shirts more valuable, even though the games themselves are free. It's yet another example of understanding the difference between infinite and scarce goods and how to use one to make money from the other.

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The motion picture industry has a habit of overstating its victories against copyright infringement. It appears that one Chinese firm is so upset about this that it's going back to court. The MPA (the international version of the MPAA) had sued the Chinese site Jeboo for distributing Hollywood movies online last year. Earlier this year, the studios and Jeboo reached a settlement, at which point the MPA announced triumphantly that Jeboo had stopped "infringing activities," had apologized and paid a substantial sum. Jeboo, however, said that the terms of the deal were confidential and as a part of the deal, the company absolutely did not admit to any illegal activity. To Jeboo, the MPA's announcement suggests otherwise, and therefore Jeboo is now back in court suing the MPA for its portrayal of the settlement. The MPA folks must be stunned. They've all gotten away with exaggerating for so long the idea that someone would call them on it (in court, no less) must be a surprise.

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The motion picture industry has a habit of overstating its victories against copyright infringement. It appears that one Chinese firm is so upset about this that it's going back to court. The MPA (the international version of the MPAA) had sued the Chinese site Jeboo for distributing Hollywood movies online last year. Earlier this year, the studios and Jeboo reached a settlement, at which point the MPA announced triumphantly that Jeboo had stopped "infringing activities," had apologized and paid a substantial sum. Jeboo, however, said that the terms of the deal were confidential and as a part of the deal, the company absolutely did not admit to any illegal activity. To Jeboo, the MPA's announcement suggests otherwise, and therefore Jeboo is now back in court suing the MPA for its portrayal of the settlement. The MPA folks must be stunned. They've all gotten away with exaggerating for so long the idea that someone would call them on it (in court, no less) must be a surprise.

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