So what is the kerfuffle all about? I’ll start at the beginning, with twitter. I’ve written about twitter many times before, but there may be a few readers who still don’t know what it is. Twitter is microblog. It is one of many, but currently the most popular. A microblog allows users to post very short messages and links to all of their “followers” (also known as “subscribers” or “friends”, depending on the site). While it is possible to make these message private on twitter, most people keep their messages public. As with anything publically published online, this means that these messages are visible to anyone, not just followers. In particular, they are amenable to searching. A twitter search is a powerful tool. A good example is using twitter to keep track of rapidly unfolding current events. Over the last few days, many twitter users have been posting photos, news links and opinions about the bombings in Gaza, tagging them with label “#gaza” which makes them easy to find on twitter. In amongst the predictably partisan rhetoric from both sides, it is possible to stay a step ahead of reporting in the mainstream media and gain some genuine insight into the crisis. Not so long ago, a search for #mumbai provide a similar window the Mumbai terrorist attack.

As valuable as these searches are, Twitter’s strength is also its weakness. The number of twitter users worldwide is now estimated to be approaching 6 million, which means that the amount of information flowing around in “tweets” (as twitter messages are commonly known) is enormous. However, as twitter grows the signal-to-noise ratio is likely to drop and more and more tweets are likely to be spam, inflammatory bile or just nonsense. So from this perspective, having an ability to filter search results to the most “relevant” tweets (in some sense) is appealing. The problem, however, arose with Loïc’s suggestion that filtering should be based on a notion of “authority”, possibly defined in terms of the number of followers each user has. Not unreasonbly, many took issue with this measure of authority. As Robert Scoble (@scobleizer) argued:

Here’s why it’s a stupid idea: everyone is gaming the number of followers. And, even if everyone weren’t, popularity on Twitter isn’t a good way to measure whether a Tweet is any good or not.

From there discussions moved on to the distinction between the number of followers and the quality of the people you follow.

The ensuing debate leapt from blogs to twitter to FriendFeed, but to my mind part of the reason for the controversy is that a number of different issues were being conflated:

1. Is there merit in being able to filter search results based on characteristics of the user posting the tweet?
2. Is the number of followers you have a good measure of the quality of your tweets?
3. Is it valuable to have a large number of followers?

Most people debating the issue combined the first two questions, only allowing answers “yes and yes” (the Loïc/Arrington perspective) or “no and no” (the Winer/Scoble view). My own answers are, respectively, “yes”, for the reasons outlined above, and “no”, as I agree with Scoble on that mere follower count is a poor measure of “authority”. And the conflation doesn’t end there. Most people answering “no” to question two means that attempts to cultivate a large number of followers are misguided. But I don’t agree with that either.

While having a large number of followers may not give any indication of your authority, it does give you access to an extremely powerful mechanical Turk. The original mechanical Turk was an 18th century machine that purported to be able to play chess. It was, however, a hoax as a human hidden inside the machine was actually doing the thinking. The term has had a new lease of life online to refer to the practice of crowdsourcing, which involves harnessing the power of large numbers of networked humans. Now that I have over 850 followers (a very modest count by twitter standards) I have begun to sense the crowdsourcing power of twitter. If I post a question to my followers (aka my “tweeps”), the responses are impressive. Over the last couple of days I used twitter for two different pieces of use for friends. The first was to seek advice on the best wireless broadband providers in Sydney. The responses were immediate. Here is an example:

My next task was to find out about fertilizer for azaleas and camelias. This was a more obscure question, so I was less optimistic. Yet, here is the response I received.

Later I had to clarify what the numbers meant (amounts of Nitrogen, Phosphorus and Potassium, if you were wondering), but was extremely happy with the effectiveness of my own personal mechanical Turk. Of course, quality is as important here as well as quality. If I had not been following @pazaq, my question would still be unanswered. Nevertheless, as my follower count increases, I expect my Turk to become more and more useful.

So while growing your follower count certainly comes behind developing a community inside twitter and engaging in thought-provoking conversation and debate, there is no doubt that there is strength in numbers.

Now each of these cases in isolation may well be legitimate interpretations of Australian law, but taken together the implications are rather ridiculous. As Pesce observes:

[It] means that viewing a clip of The Simpsons on YouTube will soon be as illegal as watching it on television. In particular, videos showing the various times Homer has strangled Bart - which exist - would be very illegal, the equivalent of the most severe child abuse materials. And God help you if you should flip a link of that video to one of your friends. That’d be “distributing” child-abuse materials, because, where we are now, distribution has expanded to include link-sharing.

Another Australian twitter luminary, Stilgherrian, is fond of seeking out modern day inheritors of King Canute (not Stil’s preferred spelling) who try to turn back the tide. So it seems that Australian courts are joining the RIAA, television stations and the Australian Government in vying for the Canute mantle and attempting to put Pandora’s internet back in the box. They should face reality and give up. As Pesce says, we have reached the end of the age of the gatekeepers.

So 5% does seem to be a very unsatisfactory target. If you are a climate-change skeptic, even a 5% target is a needless waste of time and money, while if you take forecasts of climate-change seriously it seems woefully inadequate. However, rather than focusing on the target itself, in this post I will look at the implications that the Government’s plan will have where consumers will see it most directly, on the price of petrol.

In their White Paper on the carbon reduction scheme, the Government proposes a cap on the price of carbon of $40 per tonne for the next 5 years while, for their financial impact modelling, a price of $25 per tonne has been assumed. In an earlier post I calculated the impact of the price of carbon on the price of petrol. Here are the results for a range of carbon prices.

So, if the Government’s assumption is correct that the price of carbon will initially be around $25 per tonne, we can expect an increase in petrol prices of 6 cents per litre. Even if the price of carbon reaches the $40 cap, the impact on petrol prices will only be around 10 cents per litre. I say “only” because that 10 cents is a small compared to extraordinary moves in petrol prices seen over the last year due to movements in the price of crude oil. From July to November, price of petrol in Sydney fell by almost 40 cents per litre, according to prices published by the Australian Automobile Association, and based on my observations has fallen another 20 cents since then. Even compared to the 38 cents per litre fuel excise, 10 cents seems a modest figure. The chart below shows the dramatic moves in petrol prices along with projected prices based on the daily price of Singapore 95 refined oil, based on a regression model I have used in a number of posts in the past.

Introducing an emissions trading scheme for carbon will eventually affect a wide range of consumer prices, but based the relatively small increase petrol prices that it will produce, the scheme is not likely to have a significant impact on consumer behaviour. The scheme will do all its work on the behaviour of businesses and, given the dire financial straits we find ourselves in today, this is presumably why the Government has been so unambitious with their target. But this does also highlight that there is a lot more that the Government could be doing to reduce consumer carbon emissions beyond the trading scheme itself.

Photo Source: Foto43 on flickr (Creative Commons).

We’ve put a year of work into Mixwit so this choice wasn’t taken lightly. I won’t go into the details of our situation but state simply that we boldly marched into in a position best described as “between a rock and a hard place.”

Reading between the line, it looks as though they too have fallen at the hands of the RIAA. Under the cover of claims to be protecting artists, claims that do not bear close scrutiny, the RIAA is building an impressive track-record of stifling innovation. While it is possible to take comfort from the fact that attempts to stem the tide of progress always fail in the end, it is neverthless frustrating to see the suffering of victims of this pernicious organisation in the meantime, whether those victims are single mothers sued for file-sharing or the creators of sites like muxtape and mixwit.

While these sites appeared to be on shaky legal ground from the start, that seems to be a reason to change the rules to fit the new technology, not the other way around. Larry Lessig eloquently summed up the issues years ago in his presentation <free culture>, and the challenges he laid down then are yet to be addressed. I can only hope things begin to change soon and, in the meantime, I hope that blip.fm does not become the next victim of the RIAA.

There are a lot of different types of auction. In a Dutch auction, popular at wholesale fish markets and also known more prosaically as a descending price auction, the auctioneer starts with a high price, which is then reduced in increments until a buyer is prepared to pay that price for the fish (or whatever is being sold). Bond market tenders are closely related to Dutch auctions.

Another type of auction is a sealed bid auction, where buyers submit a single secret bid to the seller and the highest bid wins. I seem to recall that property sales in Scotland are something like a sealed bid auction (Scottish readers, please correct me if I have that wrong). Sealed bid auctions are also used in the bond market when investors are trying to sell illiquid bonds. In this context, the process is known as a “bid wanted in competition” (or BWIC) and banks will provide the investor with a single bid invisible to the other banks.

One problem with sealed bid auction is that bidders may be concerned about over-bidding, since they do not know what anyone else will bid, and may therefore place lower bids. The economist William Vickrey came up with a variant of the sealed bid auction designed to address this problem. His solution, known as the second-price sealed bid auction or Vickrey auction, still awards the auction to the highest bidder, but the bidder only pays the price submitted by the second highest bidder. The aim is to encourage buyers to bid the maximum price they are prepared to pay, with less fear of over-paying. Although popular with academics, Vickrey auctions are rare in practice. Still, given how bad liquidty is in bond markets today and how cautious banks are when providing BWIC prices, perhaps Vickrey auctions would be a good idea.

The most common type of auction is the English auction, also known as an ascending price auction. Bids at an English auction are made publically, increasing progressively until no further bids are offered and the highest bidder wins the auction. Typically English auctions are subject to a reserve price below which the vendor is not prepared to sell. If bidding does not exceed the reserve price, there is no sale.  Australian property auctions use the English auction system and also adopt the practice that if the reserve price is not met, that the highest bidder has the first right of negotiation with the vendor to attempt to agree a sale price.

Before my recent house purchase, I spent a lot of time thinking about the best bidding technique and now that I am about to sell, I am thinking about how best to set a reserve price. When it comes to bidding techniques, I suspect that most of the time technique is irrelevant. Most people approach an auction with an upper limit in mind and either your limit is higher than everyone else’s limit or it is not. However, people are emotional and not everyone will stick to their limit. In the heat of the moment, with the property of their dreams apparently in reach, a bidder may stretch past that supposed upper limit. The primary aim of any auction bidding technique is to stop this happening. A popular approach is to wait until close to the end of the auction, when the bidding has all but run its course, and then jump in with a firm bid. The idea is that the other bidders, who though that the property was almost sold, will be dispirited by the appearance of the new bidder and will be discouraged from further bidding. Advocates of this approach often go further and recommend waiting until the auctioneer announces that property is “on the market” (i.e. the reserve price has been reached).

The problem with the bid last approach is that everyone seems to want to use this technique. As a result, at a number of auctions I have attended recently, no one wants to start the bidding and so the auction takes a painfully long time to get started as the auctioneer desperately tries to drag a bit out from the potential buyers. So, I decided to adopt a different approach. My aim was to appear to be an extremely confident bidder who was not prepared to be outbid. To achieve this I wanted to have the opportunity to make as many bids as possible, so I decided to start the bidding straight away at an almost ridiculously low price. The auctioneer appeared shocked first by how quickly bidding started, but then by the very low start. He attempted to brush off the bid as too low, so I simply shrugged and stepped back. Obviously keen to get the process moving, the auctioneer decided to accept the bid after all. The low price quickly attracted other bidders and after every other bid I immediately followed with a counter bid. In making these bids, I stepped up in smaller increments than the auctioneer was looking for but again, while trying to talk me into higher increments (”you won’t impress anyone with a bid that small”), he would never reject a higher bid. The aim of this exercise was simply to be very visible with my bidding. As the bids rose, the other bidders started to get nervous and partners had intense whispered conversations to determine their next bid. But again, when they did come up with a bid, I simply bid again without hesitation. Of course I had my own limit, but the plan was to bid as though I would never stop right up until I hit the limit and then simply stop. Whether it was the success of the technique or not, I ended up winning the auction, although the reserve was not met and so there followed and hour and a half of negotation with the vendor (via the intermediary of the agent) before we finally bought the new house.

Compared to selling, that process now seems quick and easy. Selling is far more stressful. Our auction is next week and we are yet to decide on a reserve price. While we have a good idea of the minimum amount we would accept, and we certainly would not set the reserve any lower, the question is whether it would be sensible to set the reserve higher. One line of reasoning is to set the reserve low to ensure that the property gets onto the market during the auction and then let the heat and enthusiasm of an auction where the property will definitely sell do the work to push to the highest price. On the other hand, it may make more sense to set a higher reserve in an attempt to take advantage of anchoring bias. The idea here is that if the property passes in (i.e. the reserve is not met) and we proceed to negotiate with the highest bidder, that bidder is then informed of the reserve price. While they will not want to pay that price, it may anchor their expectations of a fair price. Regardless of how realistic the reserve price, a bidder negotiating a price below the reserve will tend to think that they got a good price. So a higher reserve could tempt someone to pay a higher price than they would otherwise have reached if the auction completed with a lower reserve.

I have yet to decide which of these two theories I favour and, since I have brought up the subject of cognitive bias in decision making, I would have to concede that it feels even harder to make a rational decision about selling your house than about buying one. If anyone has any suggestions, I would welcome them!

Early signs of this phenomenon appeared today with announcements that the social networking site Pownce, to-do list manager I Want Sandy and virtual Post-It note site Stikkit  will all be closing down.

Twitter is a common theme behind these closures. Despite the backing of welebrity Kevin Rose and rich media sharing features, Pownce ultimately failed to grow at the same rate as twitter. When initially launched, the mystique generated by the invitation-only private beta version of the site attracted attention for a while, but interest seemed to wane after the site went public. Personally, I have been using twitter more and more and pownce less and less over the last year, but I will miss the friendly alien (pictured above) who appeared on pownce pages when something went awry. Somehow he is more endearing than twitter’s “fail whale”.

As far as I Want Sandy and Stikkit are concerned, the man behind both sites, Rael Dornfest, explained that he was moving to work full time for twitter after spending some time consulting for them. Twitter also acquired the intellectual property underlying Sandy and Stikkit, so enthusiasts mourning the demise of the two productivity sites may have the consolation of some familiar features popping up in twitter at some point.

Social networks, new media and other Web 2.0 offerings have been gathering momentum with the help of enthusiastic adopters and are now poised to move into the next phase of development in which they will receive broader user acceptance. In the process, more closures and mergers of the current bewildering array of web sites can be expected. Current harsh economic conditions are simply accelerating an inevitable consolidation phase in the industry.

UPDATE: it is also interesting to track the reactions of the twitterverse to the pownce news.

Those who have never written a blog may not be away of the phenomenon of blog comment spam. The basic idea is the same as email spam: to drive traffic to websites featuring pornography, viagra or worse. Fortunately, spam filtering software works as well, if not better, for blog comment spam as it does for email spam.

So far, the Akismet filter I use has caught 2,572 spam comments (which compares to 462 legitimate comments) and perusing the spam gives an interesting and occasionally amusing insight into the various approaches used by spammers. Most spam is simply long lists of websites with salacious-sounding titles. More ambitious spammers try to beat the filters with vaguely plausible sounding comments like “Excellent post!” or “I’m a long-time lurker and thought thought I’d say “Hi”. Of course, the text is just the bait. The hook is the web-link that a few unwary readers may be tempted to click.

Since the aim is really only to beat the filter not a human (in something of an inverse Turing Test), many spammers seem happy to try posts that are little more than gibberish. Perhaps these are the work of automatic text generators or non-English speakers using computer translation, but whatever the source the results can be hilarious. While I will not give the spammer the satisfaction of sharing the target web address, I can’t resist sharing the latest gem I received.

Hi. I repeatedly be familiar with this forum. This is the head period undisputed to ask a query. How multifarious in this forum are references progressive behind, knavish users? Can I worthiness all the communication that there is?

To worthiness all the commication that there is sounds like a worthy goal for all dedicated web-surfers (even the knavish ones)!

Over the last few years, Porsche has been building a stake in Volkswagen. By November 2007, the size of their stake had reached 31%, much of which was achieved by means of share options* rather than direct share purchases. Significant increases in the Volkwagen share price meant that these options delivered large profits for Porsche, prompting criticism that the company was acting more like a hedge fund than a car manufacturer.

In response, many real hedge funds took the view that, in the light of the ongoing financial crisis, the share price had risen too far and so began betting against Volkswagen. For critics of short-selling, this should have been very bad news for the Volkswagen share price. But things do not always go the way hedge funds plan and events turned out very differently.

In October 2008, Porsche revealed that they had effectively built their holding in Volkswagen up to 74%. In most countries, share-holdings of this size would be subject to continuous disclosure requirements. While Germany is no exception, Porsche had taken advantage of a loophole which exempted cash-settled options (as opposed to options which allow the holder to purchase shares) from these reporting requirements. This had allowed them to build their enormous stake while leaving the rest of the market in the dark.

The problem for the short-selling hedge funds was that all of the banks who had transacted these options with Porsche would had been buying Volkswagen in order to hedge their positions. So, although Porsche did not directly hold 74% of Volkswagen, these shares were effectively tied up. Add to this the 20% stake held by the German state of Lower Saxony and only 6% of the shares in Volkswagen were available for trading in the market. Given that hedge funds had short-sold around 12% of shares in Volkswagen (unwittingly selling to the banks hedging the options they had sold), the Porsche announcement was the equivalent of shouting “Fire!” in a crowded theatre. Every hedge fund manager started running for the door, desperately trying to buy back Volkswagen shares to close out their short positions.

As a result, the Volkswagen share price soared, briefly trading over €1005 (Euro), then closing on 28 October at €945. This put the market capitalisation of Volkswagen at around US$370 billion, more than Exxon Mobil’s capitalisation of around US$340 billion, thereby making Volkswagen the biggest company in the world for a day.

Humiliated hedge fund managers cried foul, claiming the event made the German exchange the laughing stock of financial markets. While the share price has since fallen back to a mere €392, it has been estimated that the experience cost hedge funds around the world over US$35 billion** and, needless to say, generated further profits for Porsche. No doubt some of the fuming hedge fund managers would have found insult to add to their injury as they stared at the Porsche logo on their steering wheel as they drove home.

*UPDATE: Michael Michael has asked for an explanation of share options, so here is a brief explanation. A “call” option is a financial contract which gives the buyer of the option the right to purchase shares at a specified price (called the “strike” price) on a specified date (called the “expiry” date). For example, consider a call option on Volkswagen with a strike price of €200 expiring in three months time. If the share price of Volkswagen at the time was €185, this call option might cost around €2. In three months time, the share price had risen to €220, the holder of the option could “exercise” the option, buying shares from the option seller for €200. Since these shares could immediately be sold for €220 in the market, the option holder has made a profit of €18 (€20 less the €2 cost of the option). If the share price at expiry was only €190, there would be no point exercising the option and they would expire worthless. Exercising these options involves the direct purchase of shares and they are referred to as “physically settled”. A variation would be a “cash settled option”. This is very similar but, in the €200 call option example, rather than buying shares from the option seller, the holder of the option would be paid €20 (the difference between the market price and the strike price). If the Volkswagen share price goes up, the value of a call option goes up as well (whether physically or cash settled), so the buyer of the option makes money and the seller of the option loses money. For this reason, if the seller of the option wants to “hedge” this risk (i.e. reduce the risk as much as possible), one approach is to buy shares, which is exactly what the banks which sold options to Porsche did. Since a holder of a call option has the right to purchase shares in the future, it is common for regulators to require such options to be subject to disclosure rules for large holdings. At first glance, it may not seem necessary to include cash-settled options in this requirement as the options do not involve any direct share transactions. However, as this Porsche/Volkswagen example shows there are in fact very good reasons to include cash-settled options.

**UPDATE: This figure is almost certainly an over-estimate and the real figure is likely to be closer to US$20 billion (thanks for pointinf this out Mark).

On the eve of the US election, occasional commenter here at the Stubborn Mule, Michael Michael, sent me links to a couple of articles on Slate on the merits of voting.  Of course, as an Australian citizen, I don’t have the option of voting in the US election, but the issues raised are relevant to democracies around the world.

In the first, Don’t vote, Steven E. Landsburg argued that the chances of your vote determining the result of the election are so slim that it would make more sense to play the lottery. In the second, Vote!, Jordan Ellenberg responds with a detailed mathematical analysis (including a dose of Bayesian inference) to argue that the odds of affecting the result, while long, are better than winning the lottery.

Landsburg gives passing comment to the most obvious counter to his argument:

The traditional reply begins with the phrase “But if everyone thought like that … .” To which the correct rejoinder is: So what? Everyone doesn’t think like that. They continue to vote by the millions and tens of millions.

This is rather peculiar logic. If you write a piece arguing against voting you would expect, if the argument was sound, that readers would heed the advice. So arguing essentially on the basis that no-one would heed the advice seems rather like admitting defeat from the outset.

That is as much as I am prepared to say on the argument Landsburg makes because as far as I am concerned, asking whether your vote will decide the outcome is simply too narrow a measure of value in voting. I say this as someone who has always lived in safe seats (I grew up in one of the most blue-ribbon Liberal seats in the country and now live in a solid Labor heartland), so I have had plenty of opportunity to reflect on the value of my vote. So rather than fall into Ellenberg’s trap of arguing on the ground Landsburg has marked out, I will instead give some thoughts on broader reasons for voting.

The first of these thoughts centres on the notion of “mandate”, a term much beloved of a former prime minister here in Australia. Of course whoever wins an election has the right to make any and all decisions conferred by their office. However, in practice, the margin of the victory is very significant. Any new leader winning by a landslide will, rightly, feel they have a mandate for sweeping change. A victor by a narrow margin is often more cautious, with an eye on the next term. So whether or not your vote is the deciding one, it can add or detract from the strength of the victor’s mandate. This idea is one understood very well by the many voters in my electorate who vote for the Greens not because they are very likely to win, but to send a message to the winning Labor candidate.

Another consideration is the effect of low voter participation. Australia has compulsory voting, which means that voter participation rates are very high by international standards. In the US, however, participation hovers around the 50% rate. This means that much can be gained by campaigns to “turn out the vote”, which often target the more extreme ends of the political spectrum and leads to posturing by candidates which has little bearing on what will happen after the election. The “socialism” tag used by the McCain campaign to attack Obama is a good example. It may sway some voter on the right, but the reality of an Obama presidency would have little to do with socialism just as a McCain presidency would have little to do with combatting socialism. If more people were to vote in the US, the effectiveness of pandering to extremes would be diminished and candidates may be forced to focus more on their actual policies.

The last argument I will offer in favour of voting is perhaps an old chestnut, but a worthwhile chestnut nevertheless. It is the notion of civic duty. For those of us living in democracies, the means of determining who will run our country (or State, or school board, etc) is central to our way of life. Stepping out of the house on the odd occasion to participate in that process should not be seen as an annoying waste of time, but as an essential part of ensuring the continuation of our way of life. That may seem an overly-dramatic way to put it, but when you come to vote, it is worth taking the time to reflect on the significance of the act.

Whenever I come across a new Web 2.0 site/application/service I cannot help but sign up. A quick search for the phrase “welcome to” in my gmail archives throws up about 100 messages, representing only some of the debris of this obsession: sites I have signed up for, explored briefly and mostly never visited again.

Among these, however, is a recent discovery that has quickly become an indispensable tool. Alongside gmail and google calendar, Dropbox is now one of my favourite examples of “cloud computing”. In a nutshell, it provides synchronised offsite storage in an extraordinarily seamless way. For a new service, still only in beta, it is very impressive.

Dropbox is by no means the only offsite storage system around. I have investigated many others, including XDrive, Mozy, Carbonite, and Box.net. Until now, my favourite had been Jungle Disk, which essentially turns space on Amazon Simple Storage Service (Amazon S3) into a virual drive on your computer, but now I have come to rely on Dropbox.

Getting started with Dropbox is straightforward. It is free to sign up and download the software for PC, Mac OSX or Linux. When installed, the software creates a conveniently located Dropbox folder on your computer (e.g. under “My Documents” on a PC). Any files you create in or copy to this folder are automatically backed up to the Dropbox servers. The back-up is fast (depending, of course, on the speed of your internet connection) and unobtrusive. When browsing through your Dropbox folder, it is immediately clear when the backup is finished as a green tick appears on the folders or files. But it is when you work across multiple computers (e.g. home and office) that Dropbox comes into its own. Changes on each machine are automatically synchronised and, better still, if you accidentally delete or change a file, Dropbox gives you access to all the older versions of the file. If you are using a laptop that is not always online, you can work with the local copies of all of your files, which will then be synchronised next time you are online.

You can also access all of your Dropbox files through a web browser. Once you log into the Dropbox site, you can download the current or older versions of any of your files, create new folders and upload new files. The website also provides some additional features, such as sharing individual folders with other people which provides a straightforward approach to collaboration. Also, any images saved in a folder called “Photos” will automatically appear as photo albums which can also be shared with others.

The first 2GB of storage at Dropbox is free, but after that is costs US$10 per month for up to 50GB of storage. That does make the paid option more expensive than alternative services (I would not be surprised to see the price fall if Dropbox becomes successful). Amazon S3 costs US$0.15 per GB, so 50GB would cost $7.50, while Mozy costs only $4.75 per month for unlimited storage. Nevertheless, so far I am well within my 2GB limit and find Dropbox invaluable as a virtual briefcase, eliminating the need to email documents to myself or copy files to a USB drive. For now I will continue to use Jungle Disk for routine offsite backup as it is the most cost effective solution for data up to around 30GB, but the more I use Dropbox, the more tempted I will be to upgrade to the paid plan.

* Global Financial Crisis