Word on the streets is that the RIAA has finally sued the Russian Mediaservices that owns AllOfMP3.com in a New York court for $1.65 trillion. That’s right, a Russian company in a New York court for upwards of Russia’s entire GDP. Considering AllOfMP3 is in complete compliance with Russian copyright law (pay 15% royalties to the ROM – Russia’s RIAA – and you’re set), how the RIAA plans to make them pay by suing them in New York is beyond me. AllOfMP3 even left what’s effectively an O RLY? to the RIAA on their blog, calling the suit imprudent and saying that they plan to keep operating legally under Russian law.

If the RIAA somehow does manage to get $1.65 trillion [$150,000 per song downloaded over the past several months. As an aside, the maximum under US law is $150,000 per media - meaning CD or movie. Shock factor aside, the RIAA ought only be able to ask for about a twelfth of that, if any at all] from AllOfMP3.com, two things could happen. The first is that Russia will instantly implode as all the money in their coffers is wired to the RIAA. The dollar will tank because of the gigantic influx of money into the American economy, and Washington DC in particular will have to be abandoned because of the inevitable thousand dollar loaves of bread and million dollar canteloupes as the trillions make their rounds around the RIAA’s headquarters. Europe will sink into the ocean, China will be launched into space, and the US will get hit by ungodly gigantic tidal waves on both coasts as the greatest continental shift since Pangea’s dispersal occurs.

The second possibility is even more disturbing: The RIAA could offer to absolve the debt in exchange for Russia’s nuclear stockpile. You were worried about Osama getting hold of nukes? You haven’t seen anything yet: Download a song? BOOM!

The terror alert level will skyrocket into the ultraviolet spectrum as every home in America with an iPod is systematically obliterated in the pirate holocaust. Two nukes if you buy music from independent record labels, and a third if you have a Myspace. Say goodbye to China and most of South Asia because we all know that everyone there peddles pirated music and movies like a transsexual hooker peddles whatever organs (s)he happens to have that day. Africa will be gone because everyone there is too poor to pay royalties for copyrighted music that they’ve almost certainly heard at some point. Nevermind that they don’t have computers; they must have heard explorers whistling while they hacked through the jungle. They were impaled and then boiled alive because they deserved it, dirty whistle pirates.

Obviously it’s of utmost importance both geographically and security-wise that AllOfMP3.com not incur this ginormous debt to the RIAA. But unless the RIAA somehow forces them to incorporate in the US and then sues them, I think we’ll be safe from RIAA-induced apocalypse.

In a battle between Satan and the Great Harlot, who do you root for?

I’ve long said that Myspace is a blight upon the internet. I’ve also said that the record labels are driving us towards societal destruction. But for all the flack that Myspace takes for its chaotic and mind-bendingly vapid communities, it does provide another, far more respectable service to the internet’s ecosystem: a distribution channel for bands around the record labels.

Naturally the record labels want to preserve their own monopoly on distribution. They can’t touch unsigned or independently signed bands, but the growing number of mainstream bands on Myspace is worrying the labels. Kids can’t stream our music from the internet! It’s unnatural!

But this distribution method is vitally important in a battle against the RIAA. It’s certainly the most visible and accessible method of free distribution (the bands control what songs they upload, and whether they’re available for download or just streaming), helped in no small part by its vast secondary community of non-musicians. Aside from the glaring banner ads everywhere, Myspace is completely agnostic to financial backing in its site capabilities. There’s no “Myspace Plus” for paying customers; the garage band down the street can use Myspace just as well as Nickelback themselves.

This is the power of internet democratization. We may get blinking text and animated GIFs, but isn’t that preferable to an Orwellian world of content controlled by copyright conglomerates?

China for centuries has been using a tactic called Panda Diplomacy to endear themselves to whichever country they feel the need to. Basically, they loan out pandas (since Chinese law forbids actually giving away pandas to foreigners) for foreign zoos as an act of goodwill. Even the US has received pandas under this policy – President Nixon got two of them. It’s certainly a nice gesture in most cases, but recently it’s been used for more devious purposes. In 2005, after decades of disputes with Taiwan as to whether they were independent or Chinese property, China offered Taiwan two pandas – not under a loan, but as a free gift. This seemed like a very magnanimous move on China’s part, and was even very popular among the Taiwanese public, but implicit in the deal was a concession by the Taiwanese government that Taiwan was in fact a Chinese property, since the pandas were not on loan. Despite the popularity of the gesture, Taiwan’s government did refuse the pandas in the end, thus preserving their dignity as an independent state.

Likewise, Microsoft has just struck a deal with a longtime enemy, Novell, makers of SUSE Linux. On the surface, it seems like an equally magnanimous deal: Microsoft gives Novell hundreds of millions of dollars for SUSE licenses, agrees to support customers running SUSE, and promises protection for patent infringement.

Microsoft and China are both great at putting on these benevolent façades. But just as China had no interest in endearing themselves to Taiwan, Microsoft has no interest in promoting SUSE. This is not a peace: Implicit in the MS-Novell deal is the concession that SUSE, and Linux on a broader scale, does indeed infringe on Microsoft’s patents. Think the Arbys commercials, except instead of the Arbys logo, there’s a giant blinking sign that says “ULTERIOR MOTIVE” floating above Steve Ballmer’s head. In this case, it’s not even speculation as to Microsoft’s intent: Ballmer is notoriously loose-lipped. “only a customer who has Suse Linux actually has paid properly for the use of intellectual property from Microsoft”. Like China’s (arguably false) position that it owns Taiwan, Microsoft is of the (arguably false) opinion that Linux infringes on its intellectual property.

Taiwan was smart enough to resist the smooth talking, but Novell bit the bait hook line and sinker. This is a terrible precedent for free and open software as a whole – and thankfully companies like RedHat and Samba are openly condemning the deal. But now that Microsoft has seduced a key player in the open source community into submission, their legal bludgeon could carry far more weight in future battles.

As great as the economizing potential of the internet is, we must be careful not to put our stock (literally and figuratively) in unsustainable or doomed business models. The “dotcom bust” of the late 90s was a mild economic crash caused by entrepreneurs getting excited by the potential of this new medium of the internet – excited enough to put billions of dollars into hundreds of ambitious companies like WebVan, an online grocery shopping site, and boo.com, a fashion retail site with a 3D avatar (from PCWorld’s The 25 Worst Websites), which promptly went bankrupt without sustainable business models.

If history teaches us anything, it’s that people don’t learn from history. Whereas the first dotcom bust was limited in scope because it burst before it could build itself high enough to do any serious economic damage, the internet at large seems to be headed for another, exponentially more massive economic bust barely a decade after the first, for exactly the same reasons.

The company that pioneered this business model has become immensely popular in recent years, and has skyrocketed in stock value from an initial $85 just over 2 years ago to $401 as of this moment (CNN Money). It has pioneered amazing innovation in areas such as webmail, sattelite photos and maps, and most obviously, websearch, all from a single income source. The company? Google, and their income solely from advertising.

Now Google is an amazing company, but it exhibits remarkable similarities in many ways to doctoms of the late 90s. For example:

• Vastly inflated stock prices due to investor excitement over an income method
• Extravagant spending: The Googleplex campus is equipped with a fleet of Segways, an army of masseuses, all-you can eat snacks nearly everywhere, and free meals provided by the former chef of the Grateful Dead, who has since left Google (CNN)
• Gigantic investments with no revenue potential: Google has bought the companies Keyhole (Google Earth) and Sketchup (a 3D modeling program), and has developed programs like Picassa and Google Desktop – none of which bring in any revenue

Now I’m as much a fan of Google as the next person, but their revenue model as an advertising producer, which is also being employed in more or less the same manner by companies like Yahoo, cannot last for much longer.

On the consumer end, people are becoming less and less tolerant of advertising. No matter how targeted ads may become, most people simply ignore anything that looks like an ad – and the particularly savvy users may block them completely. Programs like PithHelmet for Safari and Adblock for Firefox are becoming increasingly popular as people get increasingly sick of online advertisement. Advertising is unpredictable enough to obfuscate any earnings that may come from it indirectly (for example, did a user visit this site because of an ad, or for another reason?), but eventually advertisers will realize that the cost of advertising isn’t made up for by increased revenue.

In addition to decreased revenue from placing advertisements, there’s an increasing market for clickfraud, increasing advertiser costs with zero increased revenue. According to the article, it’s a booming business despite efforts to squash it, and advertisers are signing off en masse because of it.

Whether this happens all at once or gradually, it’s practically inevitable that it will happen. Google can’t last forever on an advertising supported revenue model, and whether its fortunes crash or crumble, the impact will not be small. Thousands of sites are supported solely by advertising money paid out by Google, Yahoo, and other advertising providers, and in many cases make a good bit of money off it. Advertising money from displaying ads is becoming more popular as a business model for immensely popular sites like Facebook and Youtube, and most of the internet makes money in some way or another from ads. Even this site displays Google ads for some quick money (though it’s hardly dependent on them; I’ve made all of $9 so far). Sites like these dependent on ad revenue will go down with Google and the other ad providers that pay them, leaving a scarred internet and a broken economy.